Back to the future for farmers managing market swings

Back to the future for farmers managing market swings

Volatile commodity prices are encouraging dairy farmers to adjust their farming systems – and many are looking to the past for solutions.

Westpac Corporate Agribusiness Manager Dave Hutchison says the recent rapid shifts in dairy commodity prices, and the greater visibility provided by the GDT platform, have highlighted that variability is here to stay – and farmers need to be ready to deal with it.

“Unfortunately, farmers can’t change their operating systems as fast as the market moves,” says Dave.

“They need a base system that can cope with the ups and the downs: one that allows them to take advantage of high prices without tying them into a high-cost model that is unprofitable when the market turns.”

While innovations such as Once-A-Day milking and reducing herd numbers have been successfully employed by some farmers, many are also looking at feed supplements that would have been familiar to previous generations.

“We’re seeing a resurgence of what I call retro-crops: things like sugar beets and fodder beets, which are in some ways replacing higher cost supplements,” says Dave.

The recent drive for increased production, which came on the back of record milk payouts, encouraged farmers to rely more heavily on inputs such as maize and PKE, rather than using them solely to bridge a gap in pasture production.

Some farmers had previously been put off using beets because of concerns about the possible implications for animal health and the need for more rigorous management, particularly during the transition to these types of feeds.

“It’s certainly more challenging to introduce beets to a feed regime than it is to introduce maize, for example,” says Dave.

“However, farmers’ understanding of these issues and how to work around them is better now.”

Dave says that the challenges and opportunities facing dairy farmers – and their sheep and beef cousins – hasn’t really changed during the time he has been involved in the industry, although the barriers to achieving operating goals have risen.

“Farmers still need to make the most out of every blade of grass: to grow good quality pasture with minimal environmental impact, then use strong grazing management techniques and targeted and profitable supplements to ensure that grass is converted into high quality protein as efficiently as possible.” 

Click here to listen to Westpac Agribusiness Manager Dave Hutchison talk retro farming systems with RadioNZ’s Peter Fowler (story starts at 2mins 31secs).

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