PR - PASTORAL DAIRY FARMING SYSTEMS AND INTENSIFICATION, CHALLENGES IN INTERPRETATION

Abstract:
The response of many New Zealand farmers to increasing and volatile global milk prices has been to intensify their farming systems. This has generated much debate both within NZ and globally with justification for and against the changes ranging from competitive advantage to profitability to environmental footprint.

Analysing nine years of farmer data  provides evidence that metrics can mislead; while profit per hectare increases and operating expenses per KgMS can increase as systems intensify the metrics that reflect resources employed, operating return on dairy assets and cost of production show no significant difference between systems. After allowing for inflation the cost of production differences between the lowest and the highest milk price years also disappear apart for the more intensive systems 4 and 5.

With no significant difference between the profitability or cost of production of systems as they intensify, industry research and extension would be better employed identifying best practice within each system than between systems.

Keywords: dairy farming systems, benchmarking, profitability, cost of production