Karl Dean: National Dairy Chair says low wheat prices are driving farmers to switch to dairy

Repeatedly low wheat prices are driving more farmers to turn to dairy.

The Canterbury Regional Council says up to 25-thousand more dairy cows could be added to the region this year - with 32 new farms given the green light.

Federated Farmers' confidence survey in July found 81 percent of dairy farmers surveyed were making a profit, compared to just 40 percent of arable.

National Dairy Chair Karl Dean told Mike Hosking that dairy has a more consistent cash flow.

He says arable farmers are the ones with the land to convert.

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Not surprisingly we're seeing a lot of interest in dairy
farms of the conversion. To Canterbury Regional Council alone are
given the green light to thirty two new farms, it's
another twenty five thousand cows for the region. Numbers don't lie.
I mean forty percent of aariable farms make money, whereas
it's eighty one percent for dairy Calding as the Fair
Farmer's National Dairy Chair. And as with this calm morning
to you, good morning. This major historically, this conversion. Have

(00:22):
we seen something like this before?

Speaker 2 (00:25):
Ah? I think what we have to remember is that
this isn't a large scale conversion like we've seen in
the past. This is what happens when there's been a
memorandium of land use change that's been three years pent
up demand. So now when we've had three years of
not being able to choose the best land us thirty

(00:49):
farms is still not going to change the livestock numbers
back to anywhere near what the peak was dairy about
ten years, won't you?

Speaker 1 (01:00):
I mean, where are we at with the whole scenario?
In other words, are we are peak cow and where
the dairy market is globally and so on, or are
there just there's a massive cure of people waiting to
convert if they could.

Speaker 2 (01:12):
I think peak cow in New Zealand was reached de'l
like I said, about ten years ago now, so we're
well past that point. We actually have more land use
out of dairy hectare and cow numbers than what we
do having coming into it. So this is effectively three
years with conversions or land use change. But in that

(01:34):
time we've had countless farms in the Northoland, some in
the Southold they've gone from dairy to horticulture, to housing,
to other uses that outside the dairy sector. So again
it's not it's not really a massive change, but it's
it's not the numbers that people are thinking it will.

Speaker 1 (01:56):
Be, no indeed not. So this is Canterbury that I
gave the example of. Are there other regions in which
conversions are taking place, can take place, or will take
place like the Waycato in Southland etc.

Speaker 2 (02:07):
There may be some conversions that will happen in other areas,
but again if it's not economically viable or environmentally worth
doing where you have to remember that all these farms
in Canterbury are still going to have to have a consent.
They're still going to have as much as you can, says,
it's only the discharge consent. Canterbary Land Regional Water Plan

(02:29):
limits discharge of not strong and the de STI have
to meet those targets. So it doesn't matter what land
usue you change it to, you still have to be
decreasing your usage.

Speaker 1 (02:41):
So I know there's been pent up demand as you've explained,
but how many of them look at the market currently,
what we've gone through, the ten dollars per kilo, et cetera,
and think this is going forever versus I just wanted
to get into dary no matter.

Speaker 2 (02:55):
What I think. As my colleague David pointed out that
you know, obviously Arable farmer's artmaking great money at the moment,
and the are the the other ones that have got
the irrogard land that are potentially able to convert some
to dairy. There is a much more consistant cash flow

(03:16):
and then you send milk every for ten months of
the year, You send a product and you get paid.
Unfortunately it doesn't work from much of the rest of
the agricultural sector.

Speaker 1 (03:26):
Exactly all right, cal Nlson, So I appreciate it very much. Caldeen,
who's the Confederative Farmer's National Dairy. For more from the
Mic Asking Breakfast, listen live to news talks. It'd be
from six am weekdays, or follow the podcast on iHeartRadio