Dairy industry making steady though sometimes controversial progress at eliminating killings of baby calves

Farmers are inching their way towards a permanent end to the killing of bobby calves on dairy farms. 

Many farmers support this in principle, but admit it is costing them money and say it is not always practical.

New Zealand’s biggest dairy processor by far, Fonterra, has thrown its weight behind this reform and says good progress is being made. 

The issue stems from the fact that dairy cows must give birth in order to lactate. After birth, the calves are separated and reared as replacements for the dairy herd or for veal or petfood, or as raw stock for beef farms. But a small number of surplus calves were euthanased in the past because there was no room to rear free-ranging cattle on small, intensive and costly dairy farms.  An alternative, sending them to professional calf-rearers, could be unaffordable in some cases. 

Two years ago, Fonterra announced a ban on the killing of surplus calves by all its farmer-suppliers, except for humane reasons. The company took this stand to ward off scare stories about dairy farm “cruelty” from animal rights activists who might use social media to deter customers abroad from buying New Zealand products.

The company supports this decision by saying 60% of dairy consumers consider animal welfare to be important. In addition, the number of food products making animal welfare claims in their marketing rose by 90% in five years.

So, farmers selling milk to Fonterra have often had to truck surplus calves to farms in cattle country, which can be far away.  This can cost a lot of money, but it has still met with some success.  According to Dairy NZ, around 70% of animals on beef farms now have their origin in the dairy sector. Supporters say this sort of synergy makes economic sense, and it reduces total greenhouse gas emissions among other benefits. 

Federated Farmers dairy chief Richard McIntyre takes a philosophical position on this. He says the last thing most farmers want to do is kill their calves, because they naturally seek to make a profit from all output on their farms, not just from the adult cows. But it was not always realistic – there were sometimes too many surplus cows to be easily saleable, and calf-rearers facing hard times might not take extra calves or would charge high prices that a farmer could not afford. 

Despite these problems, McIntyre accepts that ethical assessments of agriculture are here to stay. 

“That is the reality, you just cope,” he says. 

“Ultimately, it is the way everything is going and we have got to adapt. If you think about the evolution of the industry, you know it is about getting better every year and doing it in manageable pieces. It is the real world that we live in.”

McIntyre says farmers have taken many steps to comply with the new rules. One is to try to squeeze out Jersey cow genetics by careful breeding of their herds to produce saleable calves with better meat.  Another is to breed calves at different times of the year to avoid a seasonal rush which can overcrowd calf-rearing farms. But he also says a number of farmers have switched supply contract from Fonterra to other companies.   

“There is some annoyance at this additional thing that Fonterra is making them do that has no impact on milk quality per se, and other milk companies are less inclined to do that. Some farmers have decided that it is just much simpler to supply their milk to another dairy processor, not Fonterra," says McIntyre.

“Personally, I rear calves that are born on my farm.  We have a dry stock farm that we use to finish off (our stock). So, I am personally in a very different situation, but I know that a lot of farmers around the country,  in specific areas with specific situations, have had a lot of issues with this new policy.”

McIntyre adds Fonterra should be helping farmers to adapt to its policy.  Fonterra says it does just that, and suggests the problem is not as big as it seems. 

“The majority of farmers didn’t need to change their practices when we made the change,” says Anne Douglas, Group Director of a Fonterra subsidiary, Farm Source. 

“In the lead up to it, we worked closely with meat processors, transporters, petfood processors and other industry groups on changes which could be made to support farmers meet the new standards. That collaboration continues today," says Douglas.

“Two years on, we’re pleased with how things are going.”

Douglas adds special provisions have been made to help farmers who find Fonterra’s requirements challenging, but the number needing this help is declining year-on-year. 

She says the new requirements have never been given as the main reason for a farmer quitting Fonterra, and have been brought up only a few times in exit interviews.  And Fonterra’s total milk take is forecast to increase, not decline. 

“We’re working alongside farmers to make things easier where we can. Looking ahead, we will continue to look at ways of improving existing options and developing new solutions for farmers to ensure all calves enter a value stream,” Douglas says.

However, another Federated Farmers officer, Keith Holmes from Waikato, is sceptical, and argues Fonterra’s time frame for these changes was unrealistic.

“To suddenly say to all your suppliers, 'you’re going to have to raise your calves on the farm to a beef stage,' requires infrastructure, it requires staff, it requires an adjustment of the total amount of animal feed,” he says. 

“Dairy production would probably have to drop by 30% to 40% to make it all work.”   

Holmes adds many milk producing farmers would quit Fonterra if the circumstances were right.

“Fonterra has to be realistic, they want to be retaining their suppliers.  And the reality is if they make it too hard for farmers and there’s no money on it, it becomes a no-brainer (to go elsewhere).”

Holmes also worries about the unsuitability of dairy-rich Jersey cows for beef.  

“You can probably say 70% of New Zealand herds have got 50% Jersey cow genetics. Jersey can be used on meat, but it requires an awful lot of effort and care,” he says.

“We have got Wagyu beef and it took 50 years of development from Japan to be identified. To develop a New Zealand based Jersey beef industry would also require 50 years. It doesn’t happen overnight. You are not going to get people to go to a restaurant tomorrow and ask for a Jersey steak.” 

Despite these worries, the State-Owned Enterprise, Landcorp, which trades under the name Pāmu, is an enthusiastic supporter of the new rules.      

The company says it has increased the percentage of calves reared for beef to 56% in the 2024 year and forecasts a success rate of 63% in 2025. But it has been costly, adding $2 million in farming costs in the six months to December.  

The company’s CEO Mark Leslie says his firm began the move to full usage of calves before Fonterra issued its injunction. Pāmu has integrated dairy and cattle farms on the West Coast to achieve this goal, and aims to complete this process by 2030.

Leslie adds the last 10% to 15% of changes will be a challenge, but it is important for the company to comply with public expectations around animal welfare.