A management study of town supply dairy farming in the Christchurch area

Abstract

Town milk supply is produced by small groups of farmers throughout the country, each with its own particular problems. Many of the areas are not suited to dairy farming so that town milk producing farms are often isolated groups in the middle of sheep and cropping areas. Because entry to the market is restricted by allocating production quotas to selected suppliers, the major enterprise on these farms is milk production rather than some other product as might be the case in other than dairying districts. The importance of the butterfat industry has meant that most dairying research has been centred on this class of farming rather than on liquid milk production. Most of the technical research, however, can also be applied to town milk farms and as a result methods of production have altered considerably. Economic research, on the other hand, has largely been inapplicable to this industry both at the macro and micro levels and for this reason there is a need for this kind of work. There is no doubt, however, that the return to a given outlay on micro-economic research will be comparatively small due to the large number of different groups involved. In some cases the same conclusion must apply to macroeconomic research. This study is primarily concerned with analysing the profit maximising problem facing a town supply dairy farmer the Christchurch area. It also considers the setting of the price of milk received by the producer but does not critically examine the other aspects of the industry. The farm used in the study was selected so that it was representative of a section of the farm population. The presentation of this study has been divided into eight chapters. The development of the town milk industry with particular reference to the method adopted in setting the producer price is discussed Chapter II. In Chapter III the physical nature of the Christchurch area is specified and the physical management aspects of this type of farming are discussed. The farms in the area are described and the method and factors used in selecting the case study farms are outlined in Chapter IV. The linear programming tableau used in studying the farmer's profit maximising problem is defined in Chapter V. In Chapter VI the results of the analysis are presented and discussed. The results obtained by using linear programming to calculate milk supply price estimates are presented and discussed in Chapter VII. Chapter VIII the study is summarized. Finally, in Chapter VIII the study is summarized.