The Country 28/04/25: Riley Kennedy talks to Jamie Mackay

BusinessDesk's primary sector journalist on another potential wave of dairy conversions.

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Episode Transcript

Speaker 1 (00:00):
He describes himself as just a journalist, but he's far
more than that. His name is Riley Kennedy and he
does a lot of the rural stuff on Business Desk.
Go to his site every morning. Riley, you're one of
my go to guys and you've written a really interesting
piece on Business Desk this morning about dairy conversions. Are

(00:21):
we going to have another dairy boom?

Speaker 2 (00:23):
Well, it's amazing what a ten dollar milk price can
do to convert the struggling sheep and beef farmers to
reconsider their options, isn't it.

Speaker 1 (00:31):
Yeah, Well, I would have thought the government obviously wants
to double export income in the next decade, and a
dairy's the biggest industry, it has to do some heavy lifting.
But I would have thought environmental constraints would have been
the problem for expansion of the dairy industry.

Speaker 2 (00:48):
Well, you would think so, but it doesn't appear to
be stopping people at least considering it. I mean, he
can have had quite a rise and people looking at it.
I mean, since the start of the year have granted
three consents in the Canterbury area to convert, so people
are definitely looking at it and taking it quite seriously.

Speaker 1 (01:06):
Well, three conversions as a drop in the ocean, to
be perfectly honest. But I'm hearing that there could be
fifty conversions coming up in Canterbury. Any truth to that.

Speaker 2 (01:18):
Well, I've heard at least up to twenty five about
a month ago at the south Old Field Days and
that this kept coming up, that there was conversions happening.
I was talking to at least one farm who was
seriously considering it after battling with low land prices for
a long time. But it depends what you talk to.
But there could be fifty, there could be twenty five.

(01:39):
But there's definitely going to be a lot more milk
and Canterburry by the sound of it.

Speaker 1 (01:42):
Yeah, and not only Canterbury, also interests in Otago and
South London, some regions in the North Island. You've spoken
to all the processes. I'm assuming they would welcome expansion.

Speaker 2 (01:53):
All the processes like more milk, and of course it's
a good opportunity for them to say that they've got
more milk than the rest of them. But Fonterra, they
has said that there's a number of conversions and restarts
joining them in the currencies and has reached double digits,
didn't they, which of course only just retain their current
milk supply, claim to be signing up some for not
this season coming but in twelve months time, so that

(02:17):
there's definitely a lot of interest for the processes. The
cost of milk for them is so high and it's
so competitive now with all the independent processes that they'll
be looking to get as much milk in in the
cans as possible.

Speaker 1 (02:29):
Well, some of these potential conversions maybe look to supply
the likes of Sinlay or Open Country Dairy are simply
because there is no share entry requirement.

Speaker 2 (02:40):
Yeah, you would think for some of those, maybe younger farmers,
that there may be more of an attractive option because
of the cost of buying the shoes and in the
shoe price is quite high for Frontier at the moment,
which is good for the current farmers, there's no doubt
about that. But there may be some particularly in the
Canary area or Southland, that are looking at those independent
processes thinking wow, we can get the premiums milk rice

(03:00):
and not have to buy the Sheares Dairy.

Speaker 1 (03:02):
Conversions of Riley Kennedy are not a one way street
because in recent times we've had conversions going the other way,
especially in horticultural areas such as the Bay of Plenty incidentally,
where I was last week, we're seeing dairy farms going
to Kiwi fruit.

Speaker 2 (03:19):
Yeah. I remember asking well Harrel about this at the
half year result that we're probably still nipped down on
dairy farms because a lot of those dairy farms and
the bad plenties have gone to Kiwi fruit. So across
the board were possibly still down on. In Canterbury you've
got the TNG and Superbund farm that are ripping out

(03:41):
the dairy farm and they are going to plant apples
in the Canterbury So there is definitely a movement the
other way as well in certain parts of the country.

Speaker 1 (03:47):
Are the regulations going to be no bad pun intended
watered down to make this easier?

Speaker 2 (03:54):
Well, yeah, I mean there's probably a question for the government.
But the I've forgotten what it's called yourself on the head,
but that was the National spot what it's called, but
there was removed from from January one, which essentially makes
it easier for people to convert. I've just forgotten what
that's called.

Speaker 1 (04:15):
Well, now I forget about these regulations all the time.
Don't worry about that, Riley. You're not alone there. But
you know, I'm considering like intensive beef operations going to dairying. Effectively,
you've got cattle. What's the difference exactly.

Speaker 2 (04:29):
But it's beed pointed out to me that this is
not just a broad People have been quite targeted about it.
They're not just ripping out the wallsheeds and putting up
a cash. Some of them may be looking at having
an intensive beef operation that complements a dairy operation. So
it's not a broad sweep, it's more of a targeted

(04:51):
changing their land.

Speaker 1 (04:52):
You all right, Riley Kennedy from Business Test, thanks for
some of your time. I did accuse you our fear
of being a latte sipping Auckland and I know used
to be down here in Dunedin at the ODT, but
you're in Northland today a bit wet.

Speaker 2 (05:05):
I'm north of the Auckland border for a change. It is.
The sun's just come out, but it definitely has been raining.

Speaker 1 (05:11):
Well good on you, hey, thanks for some of your time.
Keep up the good work on business desks. You're doing
a great job.

Speaker 2 (05:16):
Thanks Jermy