Dairy Farmers Stick to the Plan

Dairy farmers aren’t jumping for joy, despite the prospect of a record payout. We spoke to Farmlands shareholders about their plans, while getting some expert nutrition and agronomy advice for the year ahead.

Dairy Payout Strength and Farmer Response

Fonterra has revised its farmgate milk price forecast to $9.50-$10.50/kgMS, with most processors targeting a $10 midpoint payout. If this holds, it would surpass the previous record of $9.30/kg from the 2021-22 season, injecting billions into the New Zealand economy. However, farmers remain cautious due to high debt levels and, in some regions, drought conditions.

Chris Stephens, Farmlands Team Lead - Nutrition, notes that while a strong payout is positive, many farmers are prioritising debt repayment rather than expanding. “Instead of buying more land or increasing herd numbers, farmers are focused on maximising production and profitability from their existing operations.”

Rather than taking on further financial risk, many are investing strategically in agronomy and nutrition to improve efficiency, with extended lactation and careful crop planning key to optimising milk production.

The Importance of Planning

Regardless of weather conditions or payout levels, careful planning remains crucial. Dr. Elena Duter, Head of Agronomy - Technical Field Growth at Farmlands, highlights the need for strategies that manage feed shortages while maintaining animal health and milk production. Farmlands’ agronomy and nutrition teams provide tailored solutions, incorporating resilient pasture mixes, advanced genetics, and crop recommendations suited to individual farm needs.

In Waikato, agronomist Brian Richards notes that while a wet spring delayed maize planting, good summer conditions should compensate for any lost time. Farmers in the region have also stockpiled silage and baleage to buffer against potential dry conditions.

Evolving Crop Strategies

Climate change is influencing cropping choices, with maize now being grown in areas previously unsuitable for it. There is also a resurgence of cereal crops in the central North Island, a trend not seen for years. However, pasture quality remains a concern. “We've had good growing conditions for two years, but this has led to poor-quality summer grass,” Brian says. He sees an opportunity for farmers to improve feed quality through regrassing programmes.

Chris Stephens adds that paddock performance is often overestimated, with testing showing actual dry matter production is often lower than farmers assume. Understanding true feed availability is critical for making informed decisions.

Quality and Sustainability in Dairy

Farmers like Tony and Nic Chamberlin, based north of Taupō, focus on milk quality as much as quantity. As suppliers to Māori-owned dairy company Miraka, they adhere to high standards in milk quality, sustainability, and animal welfare. “Sustainability is a big part of what we do,” Nic says. The couple has a long-standing relationship with Farmlands, valuing the co-op’s honest and practical advice.

Adapting to Changing Conditions

Dairy farmers are becoming increasingly aware of shifting climate patterns. Tony Chamberlin notes that predicting weather conditions is one of the biggest challenges, requiring proactive planning. Warmer winters and drier summers are creating new opportunities and challenges for pasture growth.

Despite this uncertainty, Tony sticks to a consistent cropping strategy, ensuring he grows what he needs rather than reacting to short-term weather patterns. “You can’t afford to wait and see—you need to be proactive,” he says.

Maximising Payout Opportunities

Matamata-based farmer Ryan Wilson initially took a conservative approach to the strong payout forecast but has since decided to push production while conditions are favourable. With sufficient on-farm feed reserves, he is increasing milk output for the remainder of the season.

Ryan’s family operates a 170ha dairy block alongside a drystock farm and a leased property. They previously experimented with sheep milking but ultimately returned to dairy, deciding to focus on what they do best. Their goal is to become fully self-sufficient in feed production, reducing reliance on external suppliers.

Investing in Efficiency and Work-Life Balance

Ryan has focused on efficiency by investing in equipment, such as their own baler, which saves costs and improves flexibility. While running an intensive system, he prioritises reducing workload for himself and his team. “Our staff are the heart of the business,” he says, ensuring they have enough flexibility to maintain a work-life balance.

Farmlands’ agronomy and nutrition teams continue to work closely with farmers to align production goals with sustainability and profitability, helping them navigate challenges while maintaining long-term success.