the coming dairy revolution

The attached article NZH_Agribusiness_July2017_4 was commissioned by The New Zealand Herald and published 20 July 2017 within their annual Agribusiness Supplement.

The NZ Herald is the main Auckland newspaper. Accordingly, the article was written for a largely urban audience.

The urban community which dominates within New Zealand society has diverse and often negative opinions about the dairy industry, but typically this is based on limited knowledge. Many of these urban folk  do recognise that dairy underpins much of the export economiy on which New Zealand depends, but there is an increasing overarching perspective that New Zealand has become too dependant on dairy.

In writing the article, my aim was to introduce readers to some of the challenges that the dairy industry faces, but to do so from a perspective that there are indeed pathways forward.

Addendum of 29 July 2017
In the NZ Herald article I wrote about my concern that industry leaders will remain defensive rather than pro-active. The response of Fonterra Chairman John Wilson to my article, as reported online by Farmers Weekly on 28 July 2017,  was as follows.

Wilson took issue with dairy commentator Keith Woodford, who wrote recently that the NZ dairy industry was in a pickle with the wrong cows, the wrong dairy systems, the wrong product mix, a raft of environmental issues and too much debt.
Woodford said overcapacity in whole milk powder plants was a blind alley because only developing countries used it.
Wilson said the reality was NZ dairy farming efficiency was based on the pasture curve, integrated from the farmgate to the market through a co-operative.
“That has been the case for generations, and it is why we are the most efficient and often the best-paid dairy farmers in the world.
“We take that huge volume of milk in the spring and convert that effectively into a high-quality product, by taking the water out.
“That powder is exported, often to our own businesses, to turn into high-quality dairy products.
“At the same we are driving for higher-value products – for consumers, food service or higher-level ingredients.
“We can only do that because we can deal efficiently with those high volumes of milk off farms.
“Both have to be done, not one or the other.
“Fonterra doesn’t build commodity plants – it builds high-quality ingredients plants, and the products are used around the world,” Wilson said.




About Keith Woodford

Keith Woodford is an independent consultant, based in New Zealand, who works internationally on agri-food systems and rural development projects. He holds honorary positions as Professor of Agri-Food Systems at Lincoln University, New Zealand, and as Senior Research Fellow at the Contemporary China Research Centre at Victoria University, Wellington.
This entry was posted in Agribusiness, China, Dairy, Uncategorized. Bookmark the permalink.

8 Responses to the coming dairy revolution

  1. Surprisingly, these quotes are also spot in for the dairysector in the Netherlands or Europe: “we have the wrong cows, the wrong dairy systems, the wrong product mix, a raft of environmental issues, and too much debt.”
    Both satisfying the urban consumer and the environment is adding costs which make it hard to compete in the international market in the Dutch dairysector too.

  2. Daniel viotti says:

    Estimado Keit.
    Los tiempos actuales que nos toca vivir son de grandes cambios.
    Si somos inteligentes tenemos que disfrutarlos y adaptarnos a ellos.
    De seguro es que los productores de alimentos prestamos nuestro servicio a un mundo
    global y cuántico. Todo esta relacionado.
    Lo que estoy seguro es que estoy en un mundo de incertidumbre.
    Seguro estoy que somos prestadores de servicio a seres humanos mucho mejor informados .
    Saludos .
    Desde Uruguay.
    Daniel Viotti.

  3. John Martin says:

    Hi Keith,

    I enjoy your posts which I find most educational.. U fortunately, I can’t read this one.

    Any chance of getting a copy in larger type?


    John Martin

    • Keith Woodford says:

      Sorry aboout this.
      I am unclear why you cannot read it. The pdf was supplied by NZ Herald and comes up OK on mine and some other computers I have tried it on. If it looks too smal to read, then perhaps you can use the zoom button on your computer? There is also an online version at the NZ Herald site, but this seems to have the first coupe of paragraphs missing. If you google usng my name and the article title it should come up.

  4. Pingback: Rural round-up | Homepaddock

  5. Hi Keith,

    I think you are right about the need for value add and I believe that it will lead to 12 month systems and that would best be done indoors. However I don’t believe social license will be regained by putting cows inside.

    At present the environmental focus is nutrients. However, not far behind is carbon with calls for a carbon tax. Indoor farming has better nutrient control but far higher carbon emissions which will be the next stick used against the dairy industry. Not to mention that antibiotic and disinfectant chemical use is higher in indoor systems and there is considerable concern over antibiotic resistance right now. There is also a bit of concern (rightly or wrongly) about herbicides and the increased use of chemicals for the increased cropping needed for indoor farming would be another bone of contention. Above all, however, is the New Zealand public perception that animals shouldn’t be kept inside. All of this combined leads me to believe that social license will not be improved by indoor farming. Those groups who have vested interests in attacking farming will continue to do so because that’s how they get votes, or in some cases donations.

    Having said all that, I do think that farms with light soils should have some sort of wintering barn arrangement. However I believe it is not necessary in places like North Otago where soils are fairly good at retaining nutrients and (except for the Waitaki Plains) the dairy farms have always operated with current good management practices for nutrients since conversion over a decade ago. As such every river in North Otago is swimmable (including those on the Waitaki Plains where flood irrigation has been used since 1969). This indicates to me that dairy can be done without damaging water below the swimmable standard. As such, my opinion on indoor farming is that it is not a national discussion but a catchment discussion.

    • Keith Woodford says:

      I agree that there are differences between catchments.
      In general, dairy systems that have a high ratio of production (kg MS) to cow liveweight (kg) will have lower emissions per unit of product.

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