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Investigating crop and dairy complementarities within a Canterbury farming system. Case studies from the Mid-Canterbury region, New Zealand.

Research Archive

Investigating crop and dairy complementarities within a Canterbury farming system. Case studies from the Mid-Canterbury region, New Zealand.

Peel, S.
Type: Thesis
Permalink: https://hdl.handle.net/10182/5663
Originally published: 2013 by Lincoln University
Keywords: crops; case study; risk management; scope economies; conversion; systems; succession; transaction costs; milking platform; supplements; land use change; diversification; synergy; mixed farming; Canterbury; arable; complementarity; integration; dairy

Abstract:

In Canterbury, the majority of dairy farmers use their land as an intensive milking platform and rely on feed and grazing from other sources for dry cows and young stock. As a result, the Canterbury cropping sector is closely linked to the dairy sector. This thesis investigates the integration and complementarities that can occur when arable farmers take a further step and convert part of their land to an intensive milking platform. In the seven case studies analysed, the drivers of land-use change were a combination of profitability, personal lifestyle needs and risk management through diversification of income. Dairy farming was attractive because it was a simple system with a reduced workload compared to their current crop systems. Lower order sharemilkers and/or managers responsible for dairy staff were crucial to meet the lifestyle needs of the farmer. In all cases the farmers had the desire to continue cropping as it was the farming system they enjoyed. There was evidence that diversification did reduce volatility of income. The other benefits achieved through the synergies resulting from vertical integration were reduced transaction costs through reliable crop markets and access to dairy feed. The case study farmers had a higher stocking rate and per cow production than industry averages. Some of the case study farms had adjoining or overlapping crop and dairy land, whereas others had separate land parcels. The case studies were categorised by land sharing and levels of complementarity. While adjoining land may increase some synergistic benefits the level of interaction can vary. A framework was developed for the case studies allowing them to be categorized into three groups: complementary due to spatial separation, integration through amalgamation and in-transition where the case study farm was transitioning away from diversification and into full dairy farming. The case study farmers saw mixed farming as a success, six of the seven case study farmers aimed to continue both crop and dairy farming. All the case study farmers were intensive crop farmers before conversion and therefore had a specialised skill-set related to cropping. These existing skills allow the case study farmers to maintain cropping within their operations. There are implications as to whether the complementarities will pass through to the next generation if the skill-set in crop is not passed on.

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