Future farm management options for smaller dairy farms

Abstract

In the last thirty years the size of the average New Zealand dairy herd has almost tripled (Dairy Statistics, 2013). Despite this growth, 36% of herds are considered small with less than 250 cows. It is important to develop an understanding of the goals, future business and farm management strategies of owners of small farms. In the Waikato region of New Zealand owners of small farms (n=13), were interviewed using a semi structured qualitative approach. The main research questions and scope for this project were: 1.1 To develop an understanding of the goals and objectives of small to medium sized dairy farms in New Zealand, 1.2 To describe the strategies that farmers plan to use to achieve their goals, and why farmers selected their particular strategies, 1.3 Within the strategy identified by individual farmers, where relevant, identify the particular farming system that the farmer wishes to use to achieve their strategy and to explore why the farmer believes that farming system is the optimum for their strategy. The farmers’ two key goals were flexibility and time for non-farming activities, and sufficient funds for the family and business. The business strategy was to generate a strong annual cash surplus and reduce debt to a low level by retirement. Then funds previously used to repay debt could be used to employ staff to milk the cows.

Farmers’ future preferred farming system was one which could be managed by the family and a maximum of one staff member. Farmers didn’t specify a farming system, but were balancing workload, capital requirement and production/profit when considering any changes to their current farming system.

The key lessons were that farm owners with small herds have objectives centred on time and sufficient cash for the family. They follow a business strategy that focuses on generating a strong cash-flow and debt management or minimisation and prefer a system that can be comfortably managed by a family and a maximum of one employee. The workload, capital cost and production/profit were all important factors when farmers were considering their future farm management system. This information will allow extension programs and commercial products and services to be tailored to the needs of owners of small herds.