Dairy sector profit still on the table, but margin gap tightens
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
Information technology will be the key to farming in the future, says DairyNZ’s general manager for research and development.
Dr David McCall says to some extent this is a generational thing: baby boomers were not brought up on computers, tablets and smartphones, but the new generation of farmers will take to using information more than older dairy farmers.
Science has progressed much in the last five years, developing new ways to help dairy farmers manage environmental issues, he says. Five years ago there was a question mark over how much science could do for farmers, but many things are now in the pipeline.
“We are now looking at the nutrient problem and finding more ways to manage this including breeding a cow that produces less N, and feeding cows pasture species that dilute their urine -- exciting possibilities.
“Science takes a while to come through and it can be a bit invisible. But we are starting to feel confident about some things that are coming even though it may take another three to five years before we hit the ground running.
The key is to break down problems and deal with them step by step and just keep plugging away.”
Science now has a significant role in changing some of the perceptions about agriculture, McCall says. A lot of dairy industry money, matched by government, has gone into greenhouse gas research and exciting scientific finds are not far from being revealed; when that happens their impact on public perceptions will start to turn things around.
“On the urban/rural issues, we need to remember we are all Kiwis with many things in common. I wonder [if rural people] get a bit too sensitive.... Many urban people back dairy.”
McCall finds it interesting to look at the Irish public perception of farming there. NZ and Ireland have much in common in their agriculture, but Irish farmers have the luxury of public backing. But he warns this may be short lived as their dairy industry expands with the lifting of EU controls on the amount of milk farmers can produce.
“They are running into the same problems we are having to deal with here.”
When American retail giant Cosco came to audit Open Country Dairy’s new butter plant at the Waharoa site and give the green light to supply their American stores, they allowed themselves a week for the exercise.
Fonterra chair Peter McBride says the divestment of Mainland Group is their last significant asset sale and signals the end of structural changes.
Thirty years ago, as a young sharemilker, former Waikato farmer Snow Chubb realised he was bucking a trend when he started planting trees to provide shade for his cows, but he knew the animals would appreciate what he was doing.
Virtual fencing and herding systems supplier, Halter is welcoming a decision by the Victorian Government to allow farmers in the state to use the technology.
DairyNZ’s latest Econ Tracker update shows most farms will still finish the season in a positive position, although the gap has narrowed compared with early season expectations.
New Zealand’s national lamb crop for the 2025–26 season is estimated at 19.66 million head, a lift of one percent (or 188,000 more lambs) on last season, according to Beef + Lamb New Zealand’s (B+LNZ) latest Lamb Crop report.

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