A linear programming study of the Lincoln College town supply Dairy Farm

Abstract

Providing "an adequate continuous supply of milk of good quality for human consumption", is the goal of the New Zealand town milk industry. For this purpose town supply dairy farming is practiced in proximity to all urban areas. Farmers supply the local producer associations with milk necessary to meet the local domestic demand.

The New Zealand Milk Board requires the local associations to provide sufficient milk for the local market while the associations allocate the total quantity amongst their producers in the form of a quota which each supplier must meet. Farmers are paid "quota price" for their quota milk and excess production known as surplus milk, is sold at approximately half the quota price for processing.

The quota milk price is set each year by the Minister of Agriculture after consultation with the N.Z.M.B. Associations have the freedom to adjust the local price seasonally to take into account the differing seasonal costs of production but the average must be that set by the Minister. The price continues to be linked with changes in the average manufacturing price for whole milk for all major uses but an increment is added to this basic price to allow for the extra costs associated with year-round milk production as opposed to seasonal factory supply dairying.

Historically technological management and economic research has been concentrated on the seasonal milk industry because town milk supply dairying is a relatively small proportion of the total dairy industry. Due to the seasonal nature of the seasonal milk industry capital cost structures and feeding regimes are significantly different to those in the town milk industry. Hence, studies related specifically to town supply dairying are essential.

Nuthall (1967) used linear programming to determine an optimal farm plan for a case study farm in Canterbury. This study did not closely examine the alternative regimes of feeding, or the effect of variations in calving dates on the optimal farm plan.

Alternative feeding regimes and alternative calving dates would appear to be critical factors in the optimization of management on town supply dairy farms. The purpose of this study is to evaluate the possibilities of using alternative feeding regimes and calving patterns to optimise town supply farm management. Linear programming was the technique used for this analysis.

The farm used for the study was the Lincoln College Dairy Farm. This farm can not be considered to be a representative farm. Rather it was chosen because the farm's current management policy is under review. However, by varying parameters in the model, results can be obtained that are relevant to most town supply dairying situations.

This study concludes that high producing cows should be farmed and that they should be fed high quality rations. To do this in Canterbury demands the growing of a limited amount of high quality forage. In addition, to provide satisfactory transfer of low quality feed between seasons pasture silage should be made. These results are due to the high fixed cost component of town supply dairy farming, i.e. the land and building.