2026 Nuffield NZ Farming Scholarship. Apply by 17 August 2025. Read More...

Apply for 2026 Nuffield NZ Farming Scholarship by 17 August 2025. More details...

kellogg

How can New Zealand dairy farmers thrive in the face of milk price volatility?

Executive summary

New Zealand is a significant participant in the global dairy export market, making up 30% of this market. The major dairy export item from New Zealand is currently Whole Milk Powder (WMP), which is one of the most price volatile commodities in the world. The United States and European Union regions have become prominent competitors in the global dairy market. Farmers in these regions have access to a variety of price risk management (PRM) tools, which they utilise to protect their profit margins. New Zealand has been very slow to develop similar tools, and is at risk of being left behind by these larger competitors.

Around the world there are a variety of exchange traded futures and options contracts for dairy commodity products. In addition many overseas dairy companies and cooperatives, as well as banks and share broking firms, offer ‘over the counter’ (OTC) type price risk management products. These include fixed milk price offerings. The first example of a PRM tool in New Zealand was Fonterra’s Guaranteed Milk Price scheme, which was introduced in 2014, but has since been discontinued. Following the discontinuation of this scheme, the New Zealand Stock Exchange (NZX) has recently developed and launched a range of Milk Price futures and options contracts. This is linked to the Fonterra farmgate milk price, and is a bold and exciting step forward in price risk management for New Zealand dairy farmers.

It is essential that the New Zealand dairy companies/ co-ops, as well as banks look at offering additional OTC type hedging products to dairy farmers as soon as possible. This will enhance the variety and accessibility of PRM tools to farmers, as well as helping maximise the liquidity of the NZX derivatives markets. Stock feed companies, fertiliser co-ops and rural supply organisations also need to broaden their existing offerings and/or introduce packages for farmers to hedge some of the large farm operating expenses. For effective profit margin insurance from PRM tools, it is important that dairy farmers have the ability to hedge both their revenue, through milk price; as well as their largest expenses.

As a primary price risk management strategy, all New Zealand dairy farmers need to operate a sound business. The key principles to this are:

  • Operate a farming system that achieves Gross Operating Expenses low enough, and Production high enough to achieve a regular Operating Cost of Production as low as possible- preferably close to or under $4.
  • Keep debt levels of the business at manageable levels -less than $20/kgMS.
  • Utilise the increased profit during high payout years to reduce debt, and accumulate/manage cash reserves within the business for use in less profitable years.
  • Utilise the Income Equalisation Scheme offered by the IRD to smooth tax obligations.

When these strategies have been implemented, then further price risk management through the utilisation of derivative type products may be appropriate, but will vary for each business. Farmers need to ensure that these tools are used to insure profitability in a low payout, rather than for speculation with the aim of increasing profits.

The Rural Professionals sector needs to significantly upskill in the area of price risk management. These Professionals form an important link between the derivatives market, third parties and farmers, and will be required by farmers to ensure that the best solutions are found for each farm business.
For New Zealand to retain and strengthen its place in the global dairy export market, the New Zealand dairy industry as a whole needs to move to a new level of sophistication in price risk management.

Paul Martin

What does it take to effectively lead a group of volunteers: an exploration of the research and resources on leading volunteers.

Executive Summary

Volunteering by the individual and society at large brings benefits across the social spectrum. The contributions it makes socially and economically are very important and volunteering contributes to a more cohesive society by building trust and reciprocity among citizens.

In 2014 44% of New Zealanders did some form of voluntary work – that put us first in the OECD countries for the proportion of population involved in volunteering. In 2015 voluntary workers added nearly $7bn of value to New Zealand’s GDP. This makes volunteering big business and while our volunteering numbers are going up, poor leadership can disincentivise people from volunteering and that has a negative impact on society. The question then begs to be asked: What does it take to effectively lead a volunteer organisation?

This project reviews the available literature and resources associated with leadership and volunteering. It looks to define the common themes for effective volunteer leadership and the common capabilities needed to motivate people to engage in volunteer work. The method of thematic analysis was coupled with critical thinking, to collate the relevant literature.

All the factors and required capabilities for effective volunteer leadership found in the readings were grouped using Fullan’s (2001) Framework for Leadership. Four common themes emerged from the literature on volunteer leadership:

  • Passion for the cause

  • Communication

  • Relationship development and maintenance

  • Leader capability and leadership development

Three of the most interesting points that emerged from the literature were: Firstly the complexity of volunteer leadership. It is not just about ‘turning up and pointing a few people in a direction’ but instead it is a complex process using many varied leadership theories and styles all at once.
The result from using a combination of the effective leader’s capabilities is that volunteers will want to do what you want them to do by their own free will and the organisational goals will be achieved. Further to this they will be motivated to become more active in volunteer leadership roles instead of being ‘reluctant’ leaders or inactive members. Secondly, the skills that volunteer leaders can build over their time in leadership roles have marked synergies with leadership roles in their paid work environment. The motivation to get leadership right is more important when trying to retain or attract a team member who has no financial incentive to remain there but is present by their own personal choice. The volunteer may also get leadership opportunities that would not normally be available in a paid environment.

Thirdly, what was lacking in the resources was lack of support in the form of formal training available for volunteer leaders. The only non sector-specific course highlighted was deemed expensive for volunteers. The suggestion has to be made that with volunteering adding so much value to the economy and social fabric of New Zealand, should the Government not step into the breech and support more training for volunteer leaders?

 

The social impact of converting traditional agricultural land into horticultural land within my Iwi.

Executive Summary

My Iwi – Ngati Pahauwera.

Ngati Pahauwera is a confederation of clans centred on the Mohaka River in northern Hawke’s Bay. The tribe did not sign the Treaty of Waitangi, Chief Paora Rerepu sold large areas of tribal land to participate in the new economy, and supported the colonial government against anti-government Pai Marire (Hauhau) and Te Kooti fighters.

To be from Ngati Pahauwera is an honour that we all hold proudly. We are quick to advise strangers of our lineage to the region in order to take the front foot in Korero. Descendants of Pahauwera are global but we still have a common connection to our home through our whakapapa.

At the heart of Pahauwera are the Māori settlements of Raupunga and Mohaka. Mohaka being close to the Mouth of the mighty Mohaka River and Raupunga situated 20 minutes upriver, close to the Mohak a viaduct, the Tallest Railway Viaduct in Australasia.

In conversations with Pahauwera Leaders I have been told of the good old days when there were jobs for everyone. You were either a Farmer, Shearer, Ganger on the Railways, Driver for the Ministry of Works, Forestry Worker or you drove the short distance to Wairoa and worked at the Freezing works.

Most of the Jobs were hard labour intensive ones, jobs where you knew that you had done a hard day’s work, jobs that young Maori thrived at. Today those jobs seemed to have been scaled back or restructured in preparation to sell off to the highest bidder and this has come at a cost to our people.

Within the Raupunga and Mohaka area I remember growing up with a Fish n Chip Shop, Movie Theatre, 2 stores, a Post Office , a Police Station and a Pub, today we have none of these. The Urbanisation of our People has left the a reaunrecognisable. Most of people moved to either Napier/Hastings or Wairoa in search of employment or following family.

Today we have 180 house holds in the Pahauwera Catchment (Est under 1000 people), the average household income is $17,500 p.a. The Average household income for those of Pahauwera living outside of Pahauwera is $23,000 p.a

Unemployment or Low income jobs seem to be systematic for our people both within the iwi and those that have moved to the towns. Somewhere along the line some Maori as a race have lost their way. We are now seeing generations of unemployed families, Generations of unskilled labourers, Generations of families stricken with Health issues, generations of child poverty, violence and gang culture. Pahauwera is not immune to this trend and in some areas we would rank highly.

“One of the major causes of child poverty is the relative lack of jobs for parents who have limited educational qualifications, skills or work experience ” (Working Paper no 12: Expert advisory group on solutions to child poverty, pg 2, pt 9)

For me the root of some, if not most of these issues is education and employment. The Ngati Pahauwera Development Trust have a vision to increase the household income by 50%. On current figures this will take the range from $35,000 for those residing in the Iwi and $46,000 for those that are living outside the area.

“According to Statistics New Zealand, the Average household income for New Zealand rose by 11.8% to $84,462”

To do this we need to create jobs within the Iwi, jobs that have a career path and offer opportunity to upskill and personal development in an effort to breaking the cycle that I believe we are currently in.

Amidst all this doom gloom about how we are not succeeding as a people, we do have a strong heart, we are passionate about our Turangawaewae and we do have some highly motivated members of the community that have a vision for self-sufficiency for our people, and I am one of those!

The Purpose of this report is to focus on what the Social effect of having high density employment, like Horticulture will bring to the region.

This report will give you a back story to Ngati Pahauwera, before we go forward we need to know where we come from to understand why some things are how they are.

This report is not about how I plan to introduce a Multi-Million dollar Horticultural industry into Ngati Pahauwera, giving full time employment for up to 100 people, 10 months part time employment for approximately 50 people and seasonal employment for up to 300 people at its peak, this report is more about ‘why’ do we need to do it and not the ‘How’. We need to “decentralise “ our people back to their homelands, But bring them back to what? What will the Social impact be on a community who currently have an average household income that is insufficient for the needs of a modern family in New Zealand.

It is obvious that land planted with Horticultural crops (In particular Fruit trees) requires more FTE’s (Full time Employees) than a traditional Farm will and this is the basis for this report.

Deer Farmers attitudes towards benchmarking and data recording system requirements

Executive summary

Deer Industry New Zealand is currently involved in a Primary Growth Partnership and levy payer funded project called Passion to Profit (P2P). The overall aims are to improve market returns and on-farm productivity for deer farms. One of the contributing projects to P2P is the definition and recording of Key Performance Indicators (KPIs) and industry benchmarks.

Data recording and benchmarking is important for business growth and a feature of higher performing farms. Benchmarking requires real-time management of data within an electronic database. Use of electronic data storage can be considered a “new technology” on farms which have traditionally kept pen and paper records. Adoption of new technologies follows a well described pattern amongst populations. 

This study aimed to determine the attitudes of farmers towards data recording and benchmarking and the system requirements to encourage uptake of digital data recording technology.

The study design was an online survey of seventy eight farmers using SurveyMonkey. Of these seventy five responses provided useful data. Questions related to demographic information, current practices, attitudes towards data recording and benchmarking and requirements and impediments to the use of digital data recording systems.

Deer Farmers have a high level of interest in setting targets, recording production and benchmarking. They consider previous performance on their own properties and on farms similar to themselves as the most important factors for determining what their targets are.

Respondents considered that it is not adequate to solely focus on own performance and that comparison with other farms within the same year is also necessary to help them set realistic targets and identify potential areas for improvement.

The level of uptake of digital recording of production is low and manual records using paper and diaries are the most common method. Data are more likely to be formally recorded when there is a mandatory requirement to do so. For example financial accounts for tax return purposes.

There are a wide range of reasons for limited uptake of digital production data recording and benchmarking. These reasons vary between farmers. Relative satisfaction with current systems probably provides inertia for change along with the perception that current systems on offer will not provide a significant level of advantage, are too complicated to use or have other limitations.

The most important factors for achieving a high level of uptake are a simple system that is easy to use with good support. It needs to be reasonably priced, integrate well with other systems and give immediate feedback on the situation on the farm by comparing year on year and generating graphs and printable reports. The system should be accessible to all farmers and thus allow for offline use in situations of poor internet connectivity.

A wide range of privately managed digital recording and management options exist. These are not well integrated with each other, except perhaps for FarmIQ and data is not directly comparable or accessible between the systems. There is a relatively small number of deer farms in New Zealand so a high level of participation in a single platform will be required for adequate benchmarking. The deer industry should investigate whether a nationally managed collectively owned database is appropriate similar to those provided by Beef and Lamb NZ and Dairy NZ.

Pania Flint

Technology use by sheep and beef farmers

Executive summary

Farming is increasing in complexity. As such technology is becoming more important in businesses to understand impacts on both financial and physical performance. Top farmers typically lead effective technology adoption. However, this is not always the case. Five Wairarapa farmers along with one Central North Island Farmer were interviewed to determine how and why technology is used in farm businesses, to be a top farmer. 

Past research in this area has been minimal, particularly in the sheep and beef sector. The majority of the research has been conducted with dairy industry funding. As such, little is really known about how and why top sheep and beef farmers use technology.

Budgeting technology was a key part of each farm business, and the only technology used by all six farmers. Farmax and Farm IQ were the two other technologies that were utilised in four of these farm businesses and were a key to their success.

Three important findings have emerged from this research. Firstly, top farmers are intrinsically successful. Technology just assists them in knowing their position to make informed decisions. Secondly, ground-truthing the results from technology with the farmers gut-feel and observations in the paddock is critical to effective decision making. Finally, technology provides some level of ‘insurance’ against events that may render the key decision maker unable to perform their duties for an extended period.

Technology use is unique to individuals, but some themes emerge time after time. Therefore, a greater understanding of these will lead to a more successful and resilient sheep and beef industry.

It is hoped this report will stimulate further discussion and investigation into technology-use on farms by farmers and industry professionals alike.

Hannah Bruce

How has the financial viability of Sauvignon Blanc in Marlborough changed over the last five years in the three major growing areas?

Executive summary

The financial viability of Sauvignon Blanc in Marlborough has never been stronger, showing returns on investment for the 2015/16 season of 24.47%, now who wouldn’t chase returns like that? Growers and investors are purchasing the remaining bare flat land to develop and keep up with world demand this is seeing record prices paid for both bare land and existing vineyards.

I undertook a literature review in conjunction with interviewing three growers, I was better able to understanding the characteristics of the Marlborough wine region its sub regions, and how these characteristics play out in the flavour of the wine, value of the land and the factors that are driving the current expansion.

What I wasn’t aware of before undertaking this report was just how well this industry was performing and had been over the last 5 years peaking last season as mentioned above, I quickly learned that if we suggest these things to be cyclic then it would appear to me that we are very high in the cycle right now, are we at the peak or do we still have room to move? This report will give you an understanding of where the market is today.

George Millar, Miller

The Urban Rural Divide

Executive summary

Dairy farmer’s rights, like those of every member of society are bound by what that society is prepared to defend. This defence is called our social licence and it is the trust that has been built up over time between two parties.

The goal of this report is to identify ways in which dairy farmers can better their social licence and hopefully in doing so build enough trust with the public that allows farmers of the future a form of negotiated autonomy.

This need for a strong social licence has always been there but has come to the fore quickly over the last few years as the rise of digital media has meant people can now quickly share or find information on anything at the click of a button. Sometimes the facts of this media are not always accurate, sometimes they are but it may be taken out of context. Trust can be broken down a lot faster than it is made.

My investigation was done with a literature review on how other industries around the world have handled their situations with diminishing trust from communities and what ways they used to improve that standing. I have also conducted a survey of the community to see if any trends were obvious and used the feedback given to formulate some of my research and conclusions.

What I found from the surveys were a difference of opinions on the state of the environment from farmers to more urbanised people with farmers thinking the environment is better than those outside of farming. I also found that people are becoming more environmentally aware.

Results pointed to farmers not wanting to educate themselves at a field day as they thought they knew enough just working on the farm. I believe this is one of the key reasons we are getting a widening of the rural-urban divide and a weakening of the social licence farmers have with the NZ public.

In my opinion, the dairy industry needs to invest more into promoting its story. Farmers need to be implementing and displaying good on farm practices, principles and values. These actions need to be backed up by Dairy NZ with relatable facts to show what is being achieved on farm nationally and how it relates to the NZ public where possible.

More farmers need to play their part in educating the public. This can be done by hosting open field days, community groups and schools onto their farms to show case what happens on farms and connect the milk in the supermarket to the cow in the paddock.
A unified effort towards improving farming practices in general needs to be done as a collaborative approach by the primary producer industry bodies. The siloed approached to public perception and social license is not effective and I believe this should be a united voice.

I think using on farm certification schemes is a significant way to encourage farmers to go over and above industry requirements. More promotion and adoption of these initiatives will also go a long way to building trust of the public sector. Examples of these programs are Synlait’s “Lead with Pride” and Miraka’s “Te ara Miraka”.

Although change may be painful and costly for some in the short term, embracing the requirements of the social licence in a positive way may be the most effective way for farmers to receive continued support from the community.

Michael Woodward

Why do the All Blacks need a Coach when 76% of farmers don’t.

Executive summary

Top farmers leverage their consultants to achieve more than they would on their own. They do this in five main ways; 

  1. They have a plan.
  2. They are prepared for their time with the advisor.
  3. They have identified the skill s or tools they require.
  4. They seek advice from reputable sources.
  5. They seek options, not answers.

Consultants have the ability to significantly lift farm performance provided;

  1. They are aligned with the farmers plan.
  2. They are prepared for their time with the farmer.
  3. They have the experience and skills required to fill the identified gap.
  4. The y ask the right questions.
  5. They provide options that are the “right fit” for the farmer.

Consultants also provide an important safety net and social connection for individuals within our industry.

While a corporate background is certainly not a prerequisite for being a farmer, the disciplines, skills, and tools acquired during employment are advantageous to any business owner. Where possible,

farmers should seek out courses and conferences to enhance their business skills.

The goal is to make “their” boat go faster.

Nathan Keoghan, Keegan

Farmer engagement with Fonterra shareholders’ council.

Executive summary

The purpose of this study is to explore if there is a “disconnect” between Fonterra farmers and their Co-operative and in particular the Fonterra Shareholders’ Council. As a body one of its primary roles is to represent farmer share holder views – which raises the question of how effective it can be if there is a problem connecting broadly with the shareholder base. 

What has seemed to work well in the past has been more difficult to replicate due to the consolidation of the dairy industry from many smaller regional dairy companies. This provided shareholders with incredible access not only to the factory but also the directors and management of their Co-op.

The issue of engagement is not an issue that is isolated to Fonterra or the Fonterra Shareholders’ Council. Other sectors in the primary industry in New Zealand have similar challenges in keeping engaged with its farmer base. Whether it be Dairy NZ, Beef and Lamb NZ, the Deer industry or Fonterra – all have explored ways to engage their farmers through segmentation strategies. (Bell, 2013)

For example in 2004 Colmar Brunton sent out surveys via mail and email to 14,548 Fonterra farmers. A total of 34.4% responded. Utilising statistical techniques they conducted a segmentation of farmers. This breaks farmers up into five key groups based on their attitude to dairy farming and the industry.

  1. Strategic Investors (16% of farmers, 16% of Milk Solids)
  2. Progressive Optimists (24% of farmers, 35% of Milk Solids
  3. Passive Smaller Players (20% o f farmers, 18% of Milk Solids)
  4. Sitters (19% of farmers, 14% of Milk Solids)
  5. Striving Young Farmers (22% of farmers, 17% of Milk Solids) (Colmar Brunton, 2004)

One of the issues seen in all these groups is that farmers are a diverse group of people and will engage at different levels for different reasons. I will not explore segmentation in this report except that it is something we must acknowledge if we are to engage farmers effectively. If we want to represent their views then they will need to be engaged and communicated with on a number of different levels that reflect where they are at in the segment. For example: Passive small players felt that Fonterra was doing a reasonable job in their eyes and they have enough information and are not hoping to get more involved with their co-op. Therefore targeting this group with more information would not be as successful as targeting the Progressive optimists – for example.

There also seemed to be a need to understand farmer engagement better and explore if the disconnect was in fact real and to what extent. It is also important that the farmer define engagement . In other words what engagement looks like to them; at what level and how d o they want to be engaged. As a body the Fonterra Shareholders’ Council may have a preconceived idea of what engagement look s like but is that how farmers see it?

In order to do this a qualitative survey was carried out with 8 Fonterra farmers in Hamilton Ward 6. The survey was conducted by way of face-to-face interviews around the kitchen table on the farmers’ farms. There was a range of age, farm size, cow numbers milked and farm systems within the ward.

Although this method uncovered some great insights around engagement that could be compared throughout the country it is also acknowledged that each ward or at least region is unique and will face different issues. However there are trends that are likely to be similar throughout the country. For example: the Colmar Brunton survey the segmentation results were broken down by each ward throughout the country (at the time there were 25 wards). In every ward each of the segments were represented therefore indicating that issues regarding engagement are relevant throughout the country. (Colmar Brunton, 2004)

Overall my survey showed that although some farmers do feel somewhat disconnected from their Co-op, as it has evolved over time, there are others who are happy with their level of engagement and connectedness. However it was clear from all those interviewed that more work needs to be done on communicating timely relevant information for farmers to give them the trust and confidence they require of the group charged to represent them.

Ross Wallis

The next step: Intensification of east coast Hill country farming.

Executive summary

The meat and fibre industry is the second largest export earner for New Zealand and is a significant contributor to the local Gisborne/Wairoa economy. With the recent growth in the dairy industry and therefore requirement of dairy support land, sheep and beef farmers are being pushed back into the less productive country so intensification of this land needs to occur to maintain growth in regions like the East Coast. There is great opportunity to increase productivity and therefore improve profitability on sheep and beef properties and by doing so this may also help in a number of other important areas, such as; succession viability, attracting skilled staff into the industry and reducing the number of good pastoral farms lost to the forestry industry. 

This project sought to identify whether utilising ‘spray and pray’, as a re-grassing tool on hill country, was an option for all East Coast hill country farmers that were looking to intensify their operations. The advantages and disadvantages of such a management practice were identified, along with best practice advice and whether there was any financial gain to be had. Alternatives to ‘spray and pray’ were explored for those not willing to take such a risk. Data was collected by surveying 21 Gisborne and Wairoa hill country farmers with a range of financial performance and management abilities and from a variety of locations within the district. The data collected, highlighted some interesting results. Those farmers that currently practice ‘spray and pray’ were in general well developed, profitable farms with good fertility status and by and large had a higher carrying capacity on average than those that were not cropping/re-grassing.

The most significant finding was that ‘spray and pray’ was not for everyone. Depending on the farmer’s current position and farming ability, ‘spray and pray’ was not the best productive and profitable option when looking at intensifying some East Coast hill country – other options needs to be addressed first. From the data collected, those that are active uses of ‘spray and pray’ or those about to start a re-grassing programme through the use of ‘spray and pray’ in the next 12 – 24 months, are in general quite progressive farmers and their farms are largely well developed, with acceptable subdivision and fertility, ready to take that next intensification step.

Following the analysis, a number of recommendations for farmers were offered. It was recommended that each farmer initially utilises the resources they have available to them (i.e. AgFirst Benchmarking Database for Gisborne/Wairoa) to clearly benchmark where their business lies. Using this information and possibly some independent advice, determine what their key priorities would be from a development point of view in order of priority (i.e. starting with the lower risk, higher returning options first). If the farmer was looking to try ‘spray and pray’ as a re-grassing tool, planning and preparation, using the experts around them and learning how to manage crops and new pasture species was essential if looking to reduce some of the risk involved – and do not take short cuts, they will only increase the overall risk.

Lynda Gaukrodger