Trevor Hamilton owns or has interests in four dairy farms in Canterbury and another four around Lake Rerewhakaaitu near Rotorua. He says despite the drought, his overall operation will be up on budget and will produce 2.3 million kgMS for the season. But he admits it’s been a challenge with the North Island farms.
“Instead of an average rainfall of 287mm from January 1 to the end of March we only had 63 so the contrast has been quite major in how the farms were managed,” he says. They priced their margins on feed all the way, and were fortunate that at Rerewhakaaitu they have support and run-off blocks from which to take silage.
He says one of his farms at Rerewhakaaitu is about to dry off but notes that the other two farms are only marginally below budget. Revenue-wise the drought won’t affect Hamilton’s operation much, but he says they will take a hit of $300,000-$400,000 in additional feed costs for the North Island.
Hamilton is sticking to his strategy of milking on. “The philosophy has been to calculate what the cows are eating per day, what it’s costing to feed them and work out a margin. So we are calculating that at the middle of March they were earning $7.20 a day when the milk price was $5.50. At Rerewhakaaitu it was costing us about $3 a day to feed them but if we priced our home grown silage in it was probably about $3.80. So we were looking at margin between $7.20 and $3.80 and on that basis we’ll milk on. We are one of the few sheds in our area that are still milking on and we will do so until the end of May.”
Normally Hamilton runs on system one or two, but this year it’ll be more like a system three or four operation. He says the big advantage for his company is that 60% of the farms are on irrigated land in Canterbury. And some of the land at Rerewhakaaitu is very good and this helps production.
“What Canterbury irrigated gives you is absolute protection of the revenue line. In the situation we’ve had – a one in seventy-year drought – it builds protection into the business. We are running ahead of budget as a group in all aspects of our operation but if we were totally exposed to the North Island as a group we would have taken a hit.”
