2025

This report, developed as part of the Kellogg Rural Leadership Programme, investigates the feasibility and future potential for New Zealand dairy farmers to diversify into raw and pasteurized milk sales directly from the farm gate. In an era marked by volatile international dairy markets, increased regulatory pressures, environmental accountability, and shifting consumer expectations, the traditional reliance on milk payouts alone is becoming increasingly unsustainable for many farmers. As such, exploring alternative income streams is both timely and necessary.

The study employs a mixed-methods approach, including in-depth interviews with seven onfarm milk producers and industry experts, a consumer survey, and a comprehensive literature review. It aims to provide a practical, evidence-based overview of how direct-to-consumer milk sales can supplement farm income, enhance resilience, and support a values-driven food system.

Key findings reveal that while on-farm milk sales are still a niche sector in New Zealand, there is growing consumer appetite for local, traceable, minimally processed dairy products. Consumers purchasing directly from farms are motivated by a combination of taste, health perceptions, sustainability concerns, and a desire to support local agriculture. Products like raw milk and A2 pasteurized milk in reusable packaging appeal especially to healthconscious families and environmentally aware buyers. Many farmers report strong brand loyalty, repeat purchasing, and willingness among consumers to pay a premium for these products.

However, the report identifies significant barriers to entry, especially regarding compliance with New Zealand’s regulatory frameworks. The 2015 Raw Milk for Sale to Consumers Regulations and the Animal Products Act impose substantial financial and administrative burdens on small-scale producers. Farmers selling raw milk must register under a Regulated Control Scheme (RCS), undertake rigorous microbial testing, and restrict sales to direct, nonretail channels. For those processing pasteurized milk on-farm, compliance involves establishing a Risk Management Programme (RMP), meeting stringent facility design and hygiene requirements, and undergoing ongoing audits.

Operational demands are also considerable. Farmers must invest in fit-for-purpose infrastructure, including pasteurizers, bottling lines, cold storage, and delivery vehicles. They must also manage customer relationships, logistics, marketing, and compliance records— often requiring a shift in mindset from solely farming to running a multi-faceted small business. Many interviewees emphasized that these ventures are not “side hustles” but second full-time jobs requiring dedication, adaptability, and business acumen.

Through case studies, the report highlights a range of successful on-farm milk ventures, from Village Milk’s raw milk vending model to Canterbury’s Choice pasteurized milk delivery service, and Happy Cow Milk’s modular, tech-enabled processing concept. These case studies illustrate that success in this space depends on innovation, regulatory navigation, and strong consumer engagement. Farmers who succeed often possess an entrepreneurial mindset, a deep connection to their customer base, and the ability to differentiate their product through ethical branding and storytelling.

The study concludes that on-farm milk sales are financially viable and socially valuable, but only for farmers who can access capital, manage compliance, and build consumer trust. For broader adoption, structural support is needed. This includes more scalable and riskproportionate regulation, access to appropriate small-scale processing equipment, shared infrastructure models, and extension services or mentorship networks to reduce the steep learning curve.

Recommendations are grouped into three categories:

1. For farmers: Start with feasibility assessments and pilot models; seek peer mentorship; invest in fit-for-purpose infrastructure; and plan for intensive customer engagement.
2. For industry and policymakers: Introduce more flexible compliance models for small operators; support innovation through funding or co-design; and develop regional networks to share knowledge and infrastructure.
3. For future research: Investigate modular processing solutions, test consumer willingness-to-pay at scale, and assess the long-term sustainability and environmental impacts of on-farm milk ventures.

Ultimately, on-farm milk diversification is not a universal solution—but for the right farmer, in the right place, with the right support, it offers a compelling pathway toward financial resilience, consumer connection, and sustainable food production.

New Zealand has a milk pool which is no longer growing, which means that all exporters must extract as much value from each drop of milk as possible. It is imperative that independent dairy manufacturers find customers willing to pay premium prices for products to optimise the value they generate from their decreasing (and increasingly subject to poaching) milk pool. Large dairy co-operatives can change the nature of their portfolio to meet market trends and make volume to satisfy significant customers to ensure their success. Meanwhile, independent dairy manufacturers are more likely to be significantly impacted by market changes or trends, without the operational means to adapt their business model dynamically in line with market or consumer behaviour.

New Zealand’s dairy export industry has historically been heavily reliant on large, single markets to consume the volume of dairy produced. While New Zealand produces only 3% of the total dairy in the world, it comprises approximately one third of the dairy exports globally, making our nation a key, trusted player in the global dairy trade despite our relatively small size and distance from key markets.

This report will investigate how small independent dairy manufacturers in New Zealand, with limited financial resources and inability to flex production in line with market behaviour can best future proof themselves for f inancial sustainability and build reliable trade relationships.

My research method has been a combination of literature review as well as conducting semi-structured interviews with industry experts from a variety of backgrounds. From my interview data I prepared a thematic analysis to compare key outputs from my interviews, with key themes from my literature review.

Through my research I discovered that New Zealand’s independent dairy manufacturers are in a good position to attract capital investment from external investors. Māori owned companies are in a particularly favourable position, with the current government’s prominent drive for supporting the Māori economy. However, independent dairy manufacturers need to be able to maintain strong relationships throughout the value chain to ensure their products are truly valued at all points, for both the food quality and nutritional value it provides, as well as the intrinsic values that the company upholds, such as sustainability.

Developing nations are more are more likely to place a higher value on “credence attributes” such as sustainability and animal welfare. This suggests that independent dairy manufacturers who wish to extract value from these attributes should concentrate their market development in these areas. Within these developing nations, where there are indigenous peoples, Māori owned businesses who apply te ao Māori principles in their business interactions may more easily find alignment, as these values are commonly understood and respected.

Alternative methods of market access should be investigated both to circumvent tariA barriers, as well as combatting the “tyranny of distance” that New Zealand exports face. This can be a deterrent both due to cost of shipping as well as time to market. If co-manufacturing or establishing operations within target markets is economically feasible it can be a successful means to combat this diAiculty.

Strong and well sustained relationships are key to mitigating geopolitical risk, as well as ensuring value is realised for New Zealand’s independent dairy manufacturers.

This report examines the challenges and opportunities surrounding farm ownership in New Zealand, with a focus on financial accessibility, succession planning, and emerging ownership models. Traditional pathways such as sharemilking are declining in viability, while high land prices, poor returns, and slow equity growth continue to hinder new entrants.

Farmers are adapting by employing diverse equity building strategies. Aspiring owners rely on financial discipline (43%), surplus animal rearing (41%), off-farm income (41%), and investments (35%). Established farmers favour sharemilking (61%), cost control (44%), and surplus stock rearing (30%). Despite these efforts, access to capital remains a critical barrier, with Tier 1 banks (89%) and family loans (38%) being the primary funding sources.

Alternative models such as equity partnerships, vendor financing, and lease-to-own offer flexible pathways but require strong governance and alignment. Generational shifts are also reshaping ownership expectations, with younger farmers prioritising sustainability, work-life balance, and purpose driven business.

A key concern is the projected capital shortfall: by 2050, the sector faces a gap of $110–$125 billion between available and required capital. Addressing this will require coordinated industry and policy action, including improved financial education, succession planning, and innovative ownership structures.

Case studies confirm that with strategic planning and support; farm ownership remains achievable. However, broader sector challenges such as environmental regulation, climate variability, and market volatility must be addressed to ensure long-term resilience and locally owned agricultural enterprises.

On a personal level, this subject resonates profoundly with my own experiences and upbringing. Having grown up within a male dominated family structure, it became apparent to me from an early age that family succession in rural enterprises was often regarded as an expectation reserved for male members. This was not merely a passive assumption; rather, it was a firmly established norm shaped by generational attitudes and societal frameworks. Decisions pertaining to succession were frequently made in a manner that could only be described as authoritarian, reflecting a regime that operated more as a dictatorship than a collaborative or egalitarian process.

Key Findings

This study identifies a range of critical factors influencing the accessibility and sustainability of farm ownership in New Zealand. One of the most significant barriers is the high cost of land, which, alongside poor returns and slow equity growth, has made traditional pathways to ownership such as sharemilking less viable for many aspiring farmers. Access to capital remains a persistent challenge, particularly for new entrants who often lack the financial backing or collateral required by conventional lenders.

To overcome these barriers, both aspiring and established farmers employ a variety of equity building strategies. Aspiring owners frequently rely on personal financial discipline, rearing surplus animals, off-farm income, and diversified investments. In contrast, established farmers often leverage sharemilking, cost management, and surplus stock rearing to strengthen their financial positions. These strategies reflect the adaptability of New Zealand farmers and underscore the importance of tailored approaches to equity growth at different stages of the ownership journey.

The report also highlights the growing relevance of alternative ownership models, such as equity partnerships, vendor financing, and lease-to-own arrangements. These models offer more flexible and inclusive pathways to ownership, though they require clear governance structures and alignment of values among stakeholders to be successful. The emergence of these models is particularly important considering generational and cultural shifts within the farming community. Millennials and Generation Z, who represent the future of farm ownership, place a high value on worklife balance, sustainability, and purpose driven work. Their digital fluency and preference for collaborative, values-based business models are reshaping the expectations and structures of farm ownership.

Current farm owners play a pivotal role in supporting the next generation by initiating succession planning early, offering flexible ownership arrangements, and providing mentorship. The report emphasizes the need for industry-wide and policy level support to facilitate these transitions. Recommendations include enabling the use of KiwiSaver funds for farm investment, introducing tax exempt savings schemes for farm purchases, and expanding financial literacy and mentorship programs.

Case studies included in the report validate the effectiveness of these strategies, demonstrating that with strategic planning, financial discipline, and strong support networks, farm ownership remains an achievable goal. These real-life examples also reveal that equity growth is the most rapid in the early years of a farmer’s progression and tends to stabilize over time.

Finally, the report underscores the broader challenges facing the sector, including environmental regulations, climate variability, and market volatility. These pressures necessitate coordinated action across industry bodies, government agencies, and farming communities to ensure the long-term resilience and sustainability of New Zealand’s agricultural sector.

As an industry, we must respond to a growing headwind that we all acknowledge is upon us. It’s time to take decisive action by:

• Addressing financial barriers that hinder farm ownership and growth.
• Supporting equity-building strategies for both aspiring and established farmers.
• Promoting alternative ownership models that offer flexibility and inclusivity.
• Adapting to generational shifts, embracing values like sustainability and work-life balance.
• Empowering current farm owners to mentor and support the next generation.
• Securing policy and industry support to build resilience across the sector.

Background

The food and fibre sector represents a cornerstone of the New Zealand economy and our rural communities. It is confronted with unprecedented and interlinked challenges; environmental and regulatory change, consumer driven climate pressures, volatile global markets, geopolitical instability and rising demands to demonstrate sustainable practices.

Rural managers play a critical role in supporting farmers, specifically in achieving goals, business resilience and financial wellbeing. However recent evidence points to challenges in farmer-bank relationships. This leads to the question; how do we enable trusted, high value relationships between rural managers and clients?

This report is directed at rural banking leaders, rural managers, and rural professional organisations concerned with the future of New Zealand’s food and fibre sector.

Aims and Objectives

The aim of this research project is to identify key factors that enable high-performing rural managers to build trusted, high value relationships with their clients.

Methodology

The methodology comprises of a literature review to understand the key elements in establishing strong, trusted relationships. Semi-structured interviews were then conducted with the aim to explore the perspectives of three distinct groups: clients, rural managers and external stakeholders. The data was then analysed to identify common themes.

Key Findings

Thematic analysis of semi-structured interviews, combined with insights from the literature review, resulted in these findings.

Key attributes of high-performing rural managers:

• Build trust first – they listen, show genuine curiosity, and invest time on farm
• Blend technical insight with strong interpersonal skills
• Are proactive, prepare well, bring solutions and anticipate needs
• Understand growth mindset, owning their learning and resilience
• Collaborate and share knowledge.

Factors enabling high performance:

• Leaders who recruit for empathy, curiosity, integrity and ability to collaborate
• A performance framework that links clear competencies to remuneration, progression and retention
• Consistent coaching, feedback, and accountability
• Supportive culture that values training, autonomy and empowerment.

Recommendations for Rural Managers:

• Build trust through demonstrated understanding, consistent follow-through and clear, empathic communication.
• Prepare thoroughly and turn data and information into proactive, client-specific insights.
• Seek feedback, reflect regularly, be visible, use and share best practice.
• Use internal tools, and team expertise to deliver fast, coordinated client support.
• Schedule time for self-care, planning, learning, and relationship building.
• Maintain a growth mindset.

Recommendations for Leaders:

• Actively role model values and desired behaviours.
• Provide targeted training in storytelling, structured communication, courageous conversations, and interpersonal skills.
• Complete regular one on one sessions, including field based feedback to embed training into business as usual activities. Ensure two-way communication.
• Be consistently courageous in identifying and addressing underperformance.
• Celebrate success.

Recommendations for Organisations:

• Recruit for empathy, curiosity, character and collaborative mindset.
• Define excellence with a clear evidence based three tier matrix, and link remuneration accordingly.
• Embed growth mindset training covering resilience, change management, and learning from setbacks.
• Hold leaders to account.
• Recognise that high performance is supported by physical and mental wellbeing.

Background

Farmers are facing challenges such as environmental regulations, inflation, and price volatility, leading many to seek land use changes and diversification. Agritourism has emerged as a popular option, integrating tourism into farming and providing opportunities for experiencing real farming life in New Zealand and re-connecting with nature.

Aims & Objectives

The research aimed to understand why farmers diversify into agritourism and what opportunities exist in this sector. The question addressed was, “What opportunities lie in New Zealand agritourism?” The goal was to provide information for farmers considering agritourism to diversify their farming businesses and investigate how the agritourism sector could grow.

Methodology

A literature review established definitions, drivers, benefits, and challenges of agritourism globally and compared them to New Zealand. Qualitative interviews with agritourism operators and stakeholders identified motivations, benefits, challenges, and success factors in the sector.

Key Findings

• Agritourism diversification is driven by financial and social factors.
• Diversified income and resource optimization enhance business resilience and facilitate business growth.
• Agritourism provides opportunities for non-farming partners and family members, enabling personal growth and offering flexibility.
• Challenges include operational considerations such as balancing farming and tourism activities, health and safety, weather implications and staffing requirements.
• Authenticity is the key to success in the agritourism sector. Providing experiences unique to individual businesses and the resources they have available.
• Agritourism helps bridge the rural-urban divide and helps educate urban people on the primary sector.
• Agritourism can also help promote New Zealand farming and products on an international scale.
• New Zealand lacks agritourism leadership compared to countries like Australia and Scotland. No national strategy exists to support sustainable growth of agritourism.

Recommendations For Farmers

• Investigate agritourism as an option to optimise land use, improve profitability and create a role for non-farming partners or other family members.
• Undertake robust business planning and market research to and develop products that suit the land, region and people in the business.
• Ensure offerings are unique and authentic to avoid “cookie cutter” experiences.
• Consider the effects on your local community, both positive and negative. Minimise any negative impacts to maintain social license.
• Connect with Regional Tourism Organisations for local tourism information and collaboration opportunities.

Recommendations to stakeholders

• New Zealand government needs to recognise the opportunity within agritourism and develop an agritourism strategy for sustainable growth. Pulling inspiration from existing international strategies such as the Australian “Agritourism 2030” national framework.
• Tourism New Zealand needs to redirect funding from marketing to destination management and infrastructure development in the regions to support sustainable growth of agritourism.

Veterinarians in the Ministry for Primary Industries’ (MPI) Verification Services (VS) are essential to New Zealand’s food safety, biosecurity, and export assurance systems. Despite their essential role, MPI faces ongoing challenges in attracting, retaining, and supporting veterinarians, especially in rural, shift-based, and sole-charge positions. This research, conducted through the Kellogg Rural Leadership Programme, explores these challenges and identifies practical strategies to enhance veterinary retention, engagement, and workforce resilience.

Key Findings

Eight interrelated factors influence veterinary retention at MPI:

• Leadership visibility and recognition: Limited connection with senior leadership and inconsistent recognition practices.
• Line manager capability: The quality of local leadership significantly shapes daily job satisfaction.
• Career development: Limited clear pathways for progression and inconsistent access to Continuing Professional Development (CPD).
• Organisational structure and agency: Centralised decision-making reduces veterinarians’ ability to influence their work environments.
• Workload and flexibility: Rigid rostering and inadequate relief cover negatively impact wellbeing.
• Onboarding and early attrition: Inconsistent induction processes lead to early disengagement.
• Career adaptability and return: Opportunities for flexible roles can retain veterinarians who initially leave.
• Purpose alignment: Lack of clarity regarding the regulatory nature of roles contributes to early dissatisfaction.

Recommendations

To strengthen veterinary retention and resilience, MPI could:

• Reinstate structured onboarding and mentorship programmes.
• Develop transparent, flexible career pathways across VS and MPI.
• Standardise and promote equitable access to CPD, focusing on both technical and soft skills.
• Enhance rostering, relief planning, and leave management.
• Empower Veterinary Technical Supervisor 1s (VTS1s) and provide comprehensive leadership training.
• Encourage peer-led innovation to increase frontline agency and ownership.
• Reassess the requirement for full-time on-site veterinary presence.
• Strengthen recruitment communication and purpose alignment during onboarding.
• Align Remuneration and Responsibility for VTS1 Roles

Additionally, veterinarians themselves are encouraged to proactively engage in professional development, peer support networks, and contribute positively to team culture.

Improving retention involves more than keeping staff, it requires designing supportive, engaging systems where veterinarians thrive. Addressing these structural and cultural factors will enable MPI to sustain a resilient, future-ready veterinary workforce.

As the New Zealand dairy sector navigates increasing consumer scrutiny, technological disruption, and regulatory expectations, the role of on-farm event data has come into sharper focus. This research set out to answer a simple but nuanced question: Are dairy farmers incentivised to know about and share accurate on-farm event data, or do they prefer to present data that is favourable in the eyes of downstream consumers?

Drawing on interviews with dairy farmers, milk processors, and agri-tech firms, this study reveals a nuanced landscape shaped by incentives, trust, control, value perception, and the broader data ecosystem. It introduces the “make/save/comply” framework, a practical model that captures the motivations behind farmer engagement with data.

Key Finding: Farmers Are Rational, Not Resistant

The overwhelming conclusion is that farmers are willing to share data however it is conditional, based on a rational assessment of:

• Control over who sees the data and for what purpose.
• Trust in the requesting party and the data’s intended use.
• Tangible value returned from sharing, whether financial, operational, cultural or strategic.

Data sharing occurs within a spectrum rather than a binary choice. When these three conditions are met, farmers demonstrate a high degree of professionalism and transparency. When they are not, farmers may lean toward selective or minimal disclosure, not to deceive, but to protect their business from misinterpretation or unintended consequences.

Introducing the “Make/Save/Comply” Framework

A central contribution of this research is the “make/save/comply” framework, which emerged from interviews across all stakeholder groups. It categorises the perceived value of data sharing as:

• Make – Increasing productivity, accessing incentive programmes, genetic gains, or market premiums.
• Save – Reducing cost, time, and complexity (e.g., lower vet bills, automated compliance).
• Comply – Meeting industry, regulatory, or processor obligations to operate.

This model resonates strongly with both farmers and agri-tech firms and provides a common language for discussing the incentives underpinning data sharing. Importantly, compliancerelated data (the “comply” category) was identified as the most sensitive, often invoking hesitation unless communication and support are strong.

Trust and Control as prerequisites

Across interviews, trust consistently emerged as a key enabler of accurate data sharing. Farmers are more willing to share when:

• They understand the purpose of the request.
• There are clear boundaries around data usage.
• They receive insights or benefits in return.
• They can provide context around the data to avoid misinterpretation.

Trust underpins the Make/Save/Comply framework. Where trust is low or the requesting party is seen as overreaching, farmers become more cautious. Examples include fears that lameness or mastitis data, without context, could unfairly disadvantage them. Some processors and agri2 tech firms are actively addressing this by developing “managed connections” features, improving transparency and ensuring farmers retain control.

Evolving customer expectations and their impact

One of the forces driving increased interest in farm-level data is the shift in customer expectations, particularly among key corporate commodity buyers such as Nestlé and Mars. While end consumers are not always seen as the direct drivers, major commodity customers now demand proof of sustainability, traceability, and animal welfare.

Milk processors have responded with incentive frameworks like Fonterra’s Co-operative Difference, Synlait’s Lead With Pride, and Miraka’s Te Ara Miraka, all of which depend on farmer-supplied data. These programmes offer financial bonuses (up to $0.20/kgMS in some cases) and signal market alignment but also raise the stakes for farmers in terms of the nature and accuracy of what they report.

Favourable vs. accurate: a subtle tension

There exists a delicate tension between sharing accurate data and presenting favourable data. This is not rooted in deceit, but in defensiveness, farmers want to avoid being penalised for anomalies that may be beyond their control or misunderstood without context. Selective data reporting is most likely when:

• Incentives or penalties are tied to thresholds.
• The data’s interpretation is unclear.
• There is a lack of trust in the party requesting it.

However, where there are strong relationships and mutual benefit (particularly with agri-tech firms providing operational insights), farmers tend to provide complete and accurate data. This reveals the importance of framing the request for data as a tool for support, not surveillance.

The role of agri-tech firms and system design

Agri-tech firms play a pivotal role in shaping the data-sharing environment. Farmers show high levels of trust when these firms:

• Focus on enabling decision-making, not just data collection.
• Design products around practical value rather than compliance pressure.
• Prioritise interoperability and reducing duplication.

Integration across systems remains a major frustration for farmers. Despite progress from platforms like LIC’s MINDA Integrations, many still report the burden of manually transposing data between platforms. This duplication erodes the incentive to share and diminishes data quality.

Reframing relationships: the coaching analogy

To help clarify roles and expectations, this research introduces a novel “coaching team” analogy to describe how farmers interact with various stakeholders, processors, agri-tech firms, consultants, and regulators. Just as a professional athlete works with a team of specialised coaches (e.g., performance analyst, strength and conditioning coach, nutritionist), so too do farmers engage with domain-specific experts.

Each coach has a role and a time horizon:

• Attach coach: Supporting national branding and premium market access.
• Sports psychologist: Driving long-term innovation.
• Rehabilitation coach: Supporting animal health.
• …and others.

This analogy helps stakeholders contextualise data requests in a way that aligns with their role and relationship with the farmer. It also gives farmers a useful mental model for evaluating the relevance of requests, helping to reduce friction and increase cooperation.

Final reflections

This research finds that data sharing is neither inherently problematic nor universally embraced. Rather, it depends on:

• Relevance: The data request must align with the role and relationship of the requester.
• Value: The farmer must see a clear and proportionate benefit.
• Trust and control: The data must be handled ethically, securely, and transparently.

Where these conditions are met, farmers are willing and even eager, to share data that is accurate, timely, and actionable. Where they are not, favourable data or minimum compliance becomes the fallback.

The challenge for the dairy sector, and the broader agri-food industry, is to build a shared data culture grounded in trust, clarity, and mutual benefit. This includes:

• Aligning incentives with outcomes.
• Investing in interoperability.
• Standardising data governance practices.
• Educating farmers on data value and sovereignty.
• And above all, respecting the farmer’s role as a steward of both land and information.

In a world where market access, compliance, and competitive advantage are increasingly data-dependent, creating a farmer-centric data ecosystem is not optional, it’s essential.

Leadership in New Zealand Agriculture, with a focus on people management has only become a widespread discussion topic in recent years. There is a need for effective people management as the sector relies heavily on manual labour to achieve business success. Managers in the sector have historically been promoted from within the sector based on good technical capabilities. What may not be well understood is that the knowledge capability associated with being technically proficient, does not necessarily correspond with being an effective manager.

This report aims to describe a small qualitative study conducted on a group of farm owners, managers and leaders. It will also describe the qualities and attributes identified in these leaders and how the learnings can be utilized and applied by novice or first-time managers.

The research show that good managers prioritise the care and welfare of their employees. They ensure that good communication about work and home life is enacted to better understand how their employees are feeling. This leads to a relationship of increased trust, which helps the leader to engage with staff about the business and its operations. Leaders ensure they behave consistently with all of their staff to role model good behaviour and understand conflict. The leaders interviewed have all grown in their leadership skills and have come to value reflection and introspection. This has been used to improve further on their leadership traits.

The leaders interviewed have largely learnt and refined the skills, knowledge and tools they use to lead well through trial and error. Finding out what works and what doesn’t has been an individualistic progression for them. On top of trial-and-error learning, some of the interviewees had attended short form courses, as well as using their respective industries for support. All of the interviewees have over the course of their leadership journey, relied heavily on trusted mentors to help guide them. The ability for a leader to utilize the knowledge and advice of a more experienced leader has helped all interviewees grow.

The leaders interviewed in this study all displayed transformational leadership qualities. These qualities revolved around empowerment through trust in their employees. They recognized that they needed to understand each employee as individuals to get the best out of them, and once they truly appreciated them individually, it was easier to empower them. The leaders interviewed all dealt with conflict management as part of their role, however, most admitted to being non-confrontational people. They understood the need to display positive leadership traits during conflict management in order to have a functioning business. They had learnt to put more effort in to doing it better as they moved through their leadership journey.

The leaders interviewed recognized that good leadership was not always the easy choice when managing people, but the long-term gain made it worth it. They recognized that time, effort and focus had to be implemented on a daily basis in order to achieve good management practices. The structure and financial constraints of a business might also impact a manager’s capabilities to practice good leadership. They also warned that a manager’s ego would quickly ruin hopes of good leadership, as it restricted individualism and ingenuity of employees.

New Zealand’s sheep population has experienced a significant decline, decreasing by 21% over the past decade to reach 23.6 million as of June 2024. This trend is driven by a combination of environmental pressures, suboptimal wool returns, elevated input costs, and a transition towards a more beef-dominant system. However, the most influential factor has been the expansion of Carbon Forestry, facilitated by the Emissions Trading Scheme (ETS) policies, which has resulted in the conversion of 260,000 hectares of sheep and beef farmland into pine plantations. Since the inception of the ETS in 2007, the national sheep flock has shrunk by 40%. As lamb exports continue to generate $3.18 billion annually, optimising productivity from the remaining ewe flock is of utmost importance.

This report focuses on the significance of terminal sires, particularly emphasising the utilisation of heterosis to improve lamb carcass weights and support the industry’s sustainability in the future. This report aims to investigate the current use and effectiveness of terminal sires within New Zealand’s sheep farming systems, with an emphasis on enhancing productivity from the declining ewe flock. Acknowledging the industry’s diversity in adaptability, this report is designed to influence the middle 60% of farmers, specifically those receptive to pragmatic, evidence-based transformations. Through the implementation of a relatable Mock Farm Model and accessible analysis, this research aspires to equip this group with the knowledge to make informed, production-optimising decisions regarding terminal sire usage.

The methodology employed in this research comprised a national farmer survey, semistructured interviews, and the implementation of a Mock Farm Model. The survey collected regional and on-farm data from sheep farmers throughout New Zealand, with a particular emphasis on terminal sire usage, lamb slaughter performance, and the perceptions held by farmers. Comprehensive telephone interviews were conducted with a geneticist, a diverse group of sheep farmers, and a lamb trader to investigate the practical and commercial aspects of terminal sire application. Lastly, a Gross Margin analysis, based on a mock farm scenario, was utilised to evaluate the economic implications of heightened terminal sire adoption.

The survey findings indicate that farmers utilising higher rates of terminal sires exhibited a significantly higher percentage of lambs killed off mum at weaning. However, the insufficient availability of quality maternal ewe lambs for replacements continues to pose a primary barrier to the increased adoption of terminal sires. Apprehensions regarding lower lambing percentages and the limited integration of Breeding Values in the selection of terminal sires compound this issue.

Interviewees highlighted strategic flock selection, grouping ewes into ‘A’ and ‘B’ mobs, which enables the targeted utilisation of maternal rams for replacements and terminal rams for production enhancements. The lamb trader confirmed a premium for terminal lambs before Christmas, which contradicts certain perceptions held by some farmers. Furthermore, participants stressed the necessity to enhance the quality of terminal sires to maximise performance and improve industry outcomes.

The Mock Farm Model indicated that through increasing the utilisation of terminal sires from 10% to 50% resulted in a significant feed surplus in mid to late summer and advanced the average kill date by 13 days. This feed surplus may be allocated for baleage production, enhancing the Body Condition Scores of ewes for improved scanning results, or for fattening lambs to heavier carcass weights. Scenario modelling proposed an enhancement in Gross Margin, thereby affirming the economic viability of the strategic use of terminal sires.

To optimise production within the declining population of ewes in New Zealand, this report presents the following recommendations:

• The flock on farm is to be segregated into two distinct groups:
  • An ‘A’ flock comprised of high-performing or younger ewes intended for breeding replacements, limited according to actual replacement requirements
  • A ‘B’ flock consisting of older or less productive ewes, which will be mated to terminal sires to leverage hybrid vigour for the production of heavier, more market-ready lambs at the time of weaning.
• Align sire selection with breeding goals, focusing more on rams with high genetic merit. Investing in quality terminal sires is a cost-effective decision due to their considerable effect on production.

With constant changes in rural New Zealand, particularly when it comes to owning or operating a business, it is clear there is a fundamental shortfall in financial literacy education (McHutchon, 2021). In order to develop strong financial literacy and therefore resilient rural businesses there needs to be a refocus on priorities within rural communities.

This report examines the current levels of financial literacy in rural New Zealand and how best to develop them in a manner geared towards the learning styles of typical rural New Zealanders. The purpose of this report was to identify implementable strategies to bring financial literacy education to everyone involved rurally including farmers, growers, and rural professionals.

In order to complete this report, a survey was conducted of sixty-three participants to get an understanding of the state of financial literacy in New Zealand currently. The survey was supported by a literature review of financial literacy and financial literacy education in rural communities on a wider scale. The report shows the results of the survey as well as analysis of the themes found from a combination of the survey and the literature review.

The themes identified in the report were:

1. Financial literacy education
   
   1. What education needs to be offered
   2. How best to deliver it
2. Access to education rurally
3. Socio-economic factors impacting ability to access financial literacy education
4. Financial literacy paradox

Recommended actions to address the issues identified in the report were:

1. One-to-one education
   Fleming (2020) shows that farmers and growers learn best in a one-to-one environment free from judgement and social stigmas. This means that providing farmers and growers with financial literacy education would likely fall to rural professionals who are already meeting with rural businesses at the kitchen table.
2. Gamification
   There is an opportunity to make the education accessible to all through gamification (Czech et al., 2024). It will allow rural New Zealanders to be educated effectively and on a wider scale at times convenient to them.
3. Making an education paper compulsory for students studying agriculture degrees If we are expecting rural professionals to step in as educators in this arena, it makes sense to give them a foundation on how best to educate people. Adding a compulsory paper to agriculture degrees and perhaps to law and finance degrees would allow new rural professionals to enter the industry with confidence to support farmers and growers effectively.