Business options and strategies: a study of small herd owners views in the Waikato, New Zealand

Abstract

In the last thirty years the size of the average New Zealand dairy herd has almost tripled. Despite this growth, 36% of herds are considered small with less that 250 cows. It is important to develop an understanding of the goals and future business strategies of owners of small farms. In the Waikato region of New Zealand, 13 owners of small farms were interviewed using a semi structured qualitative approach. The farmers' two goals were flexibility and time for non-farming activities, and sufficient funds for the family 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. The key lesson was that farm owners with small herds follow a strategy that focuses on generating a strong cash-flow and debt management or minimisation. This information will allow extension programs and commercial products and services to be tailored to the needs of owners of small herds.