New Zealand Dairy Farm

Friends and family,

Weather: sunny and hot. High of 82 degrees and a low of 52 degrees. Sunscreen needed! I haven't blogged about this yet, but people in New Zealand have the highest rates of skin cancer due to the thin ozone layer here. Without sunscreen, you can burn within 10 minutes.

Yesterday the study tour headed west from Christchurch for Mount Peel, New Zealand for a whitewater rafting experience. On the way we stopped a dairy farm to learn more about the New Zealand dairy industry.

The operation we visited was Clovernook Farm, LTD. The owner, Jeff Stevenson, described how the dairy is set-up and answered all of our questions. The dairy milks approximately 750 jersey cows two times per day in a carousel type milking parlor. The cows are on grass nearly the entire year due to the paddock grazing system that is used. The pastures are irrigated using wells with a pumping capacity of about 1,000 gallons per minute, but rarely operate at full capacity. Any hay produced or work that requires outside machinery is hired out. It was made very clear that, "steel does not make money." Is this the case in the Midwest?

The New Zealand dairy industry is unique due to an agreement called share milking. Share milking is very common and involves full ownership of the dairy by one person (Jeff) and managed by another person (Derek). For every dollar the dairy takes in, 70 cents goes to Jeff and 30 cents goes to Derek. Jeff invests his money into capital and Derek uses his for the day to day management costs associated with the dairy. Veterinarian and some other miscellaneous costs are shared on a percentage basis between the two. Derek owns three percent of Clovernook Farms, LTD. with this share milking set up and hopes to generate enough revenue to obtain a 50 percent share in the future. It was interesting see the distinctly different duties of Jeff and Derek. Although Jeff does own the operation, he is in charge of the bottom line; i.e. milk sales, purchasing cows, the budget, etc.

The milk sold from Clovernook Dairies is sold through a co-op of milk producers called Frontier. An amazing 24 percent of New Zealand's Gross Domestic Product (GDP) is dairy. Wow! Milk is sold a bit differently here than in the United States, being sold by a milk solids price here as opposed to being sold by the pound. Market volatility is not a large factor with the milk market in New Zealand. A milk price estimate is produced by the Frontier dairy cooperative for dairy producers to generate a budget. The price paid to the producer is only modified by the co-op if a change occurs in the international trends of the export market. This would cause Frontier, in this case, to backdate the newly adjusted milk price to an earlier time.

Profitability for Clovernook Farms, LTD. is approximately 2 to 3 percent of the total cash flow. Jeff compared this to an 18 percent average return on an investment in with a broker. Like the agriculture I am familiar with on our farm, you have to enjoy what you do. Farming does make money, but we aren't going to become extremely rich.

This has been the best part of the trip so far. It was great to spend one-on-one time with a New Zealand producer and have the opportunity to ask questions about their operation. Be sure to visit http://sites.radiowebservices.com/kp_unlstudy/ for the latest radio interviews from the UNL Study Abroad Tour to New Zealand.

After touring the dairy farm we loaded the bus and headed for our whitewater rafting destination, Rangitata Rafts. We stopped to take a look at the Rakaia River where we would be rafting the next day. The river is truly a beautiful site. It is a wide river similar to the Platte in Nebraska with much more water flowing at a higher rate of speed. The water was murky due to the sediment being carried into the river from heavy rainfall in the Alps. Rock layers of different colors stacked up in the canyon providing lots of color in the river basin.

When we reached Rangitata Rafts, bunk-bed accomodations and family style dinning were available for the group in our cabin. A group of six guys took a hike up the nearest mountian to take in the view. A relaxing evening of supper and multiple games of "pitch" followed. Tomorrow we will be ready to hit the rapids!

Having fun in the sun,

Matt