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RT2022

Can A Northland Dairy Farm Be High Input and Remain Sustainable?

Stephen Bell Kellogg Report
Stephen Bell Kellogg Report

Executive Summary

Dairy Farming in New Zealand comes in many different forms. Every farm business has to decide what level of input is best for them to be profitable and sustainable. Historically, the primary constraint on moving to a high input system has been the financial and management ability of the farm and business operators. While this is still a significant factor, the environmental impacts of dairy farming have come under increased scrutiny.


New policies such as the National Policy Statement for Freshwater Management 2020 (NPs-FM) are designed to improve New Zealand’s freshwater quality and include a series of minimum standards for specific attributes. Regional councils must have updated freshwater plans in place by December 2024 that reflect the desired state of the region’s freshwater, with attributes being at or above the stated National Policies bottom line standards. Farms will be required to have certified Freshwater Farm Plans in place that align with the regional councils freshwater targets (Ministry For The Environment, 2020).

What do these policies mean for Northland dairy farming? And does it alter the viability of adjusting to a higher input farm system?

Analysis of financial data (2010 to 2020) in the Dairy NZ Economic Survey shows, on average, higher input systems were more profitable than medium and lower input systems with a higher operating profit/ha and higher return on dairy assets. It should be noted that while higher input systems are more profitable on average, there is a wide range of results within each system. Case studies in this report modelling high input systems highlighted this variance with a range of profitability outcomes.

Analysis of freshwater river testing in Northland comparing sample results to various standards, including bottom-line standards set out in the NPS-FW, showed that sediment in Northlands rivers is the biggest concern, along with elevated phosphorus levels resulting from sediment loss. In the majority of testing sites, nitrate and ammonia levels met the policy bottom-line standards (Stats NZ, 2020).

The implementation of Freshwater Farm Plans will result in farms putting practices in place to limit their effects on the freshwater in their catchment. If sediment and phosphorus contamination is of concern, the farm business may be required to adjust management practices, including investment in infrastructure such as standoff areas and feedpads to reduce sediment loss.

This report concluded that a Northland dairy farmer could adopt a high input system under certain circumstances. The profitability of a Northland dairy farm business is heavily influenced by the level of investment required to meet environmental standards. Increasing the system’s intensity requires a higher level of investment to meet the increasing demands of environmental regulations, potentially reducing profitability. The case studies in this report reflected this, with farms requiring a higher level of investment being at higher risk of being financially unsustainable.

Should a Northland dairy farm business choose to move to a high input system, it is recommended that they:

  • Understand the level of investment required to move to the new system and remain environmentally compliant.
  • Be aware of any further environmental impact the change will have, particularly regarding nutrient and sediment loss.
  • Understand the freshwater concerns in the catchment the farm influences and what limitations may be placed on their business.
  • Understand their current and proposed greenhouse gas emissions and factor in a potential cost to the business once the policy comes into place.

How can the NZ dairy industry design workplaces to attract the best of the next generation?

Executive Summary

In 2019, my partner Isaac and I were offered an 1100 cow contract milking job in the beautiful Bay of Plenty. We were 23 and 24 years old, I hadn’t been dairy farming full time before and Isaac had roughly 3 years experience, in primarily a farm assistant role. We received a lot of great advice prior to our first season. And what was the most common piece of advice we received?

“Cows are easy, people are hard”

After having many discussions with friends around a beer and being sick of asked “Do you guys really work eight days in a row?” or “Are you really waking up at 4am?” I began to wonder if we were doing right by our team, or if we were just accepting what had always been done.

This research project investigated what is being done in our industry and how we can learn from industry leading employers, and out of industry leaders. The question is, “Learning from global workplace trends, how can the NZ dairy industry design workplaces to attract the best of the next generation into our workforce?”

Over the past 20 years the dairy industry has seen huge expansion, with the herd size doubling in a twenty year period. As of 2018, the NZ dairy industry workforce was made up of roughly 40,000 people with 22,500 of these being employees.

Nationally 88% of employee are either satisfied or very satisfied with their jobs, and research by StatsNZ identified six key metrics driving work satisfaction. These were hour and times of work, flexibility, job security, workplace autonomy, workplace relationships and work related stress and tiredness.

From my twelve semi structured interviews with leading employers the key common themes across both in and out of industry employers were the need for clear communication, importance of developing a competitive workplace and the importance of flexibility and work life balance.

My call to action is for our industry to question current practices. The areas that I believe are worth focusing on:

  • Encourage flexible rosters and pay scales.
  • Foster leaders not managers on farm.
  • Develop safe workplaces cultures that allow autonomy and innovation.
  • A share purpose on every farm.

I have put forward many ideas in the final section, and my hope is that any farmer who reads this report considers each idea and whether they could implement one on farm. My key recommendations are:

  1. Look within.
  2. Ask your people.
  3. Try something!

 

From the Back Paddock to the Board Room

Executive Summary

New Zealand’s current protein production is dominated by meat and dairy. There are ongoing and increasingly growing challenges for sustainability, environmental limits, and pressure for greater efficiencies. Emergent and developing trends in plant-based proteins are creating movements and shifts in consumer demand and food production. Health and nutrition are influencing consumer demand more than ever, therefore the value proprositions in the food market have to meet this demand. The current alternative protein industry is still in its infancy in New Zealand with some sectors such as Hemp and Quinoa rapidly growing. However, in general, New Zealand is behind the main growth countries producing plant based protein like Canada and the Netherlands. This presents an opportunity to take learnings and develop potential collaborations, to advance New Zealand’s progression.

Throughout this study, a greater understanding was sought in the global positioning of alternative proteins and within the New Zealand context. This was then used to identify the considerations required to evaluate the importance of alternative proteins to the Agri-industry in New Zealand.
Key findings and discussion points raised are:

  • Food production needs to increase by 70% to feed the world population of 9.7 billion in 2050.
  • New Zealand has a natural bioeconomy as there is low fossil fuel use and more energy produced by renewable sources (80%) such as wind, geothermal, hydroand biomass, but New Zealand needs to move into a new bioeconomy charactarised by biotechnology and greater cross -sector thinking and actions.
  • The Fourth revolution is here and characterised by building on the Third, the digital revolution, that has been occurring since the middle of the last century. The fourth is combining human and machine where technology is embedded in our societies enabling artificial intelligence, renewable energy, 3D printing and autonomous vehicles.
  • Sustainability is key in all aspects of food production. Using the fourth revolution and utilising plant-based opportunities to create products that fill market gaps or outperforms the rest of the world will enable New Zealand to be a global leader in food production.
  • The steps that enable New Zelaand to be a global leader should concide with achieving goals in climate change (the Paris Agreement) and mitigating the affects of green house gases and the other pollution occurring like high nutrient loading in water bodies.
  • “Farmers are motivated by a diverse range of drivers  and constrained (and enabled) by a range of social, cultural, economic, and physical factors. Farmers will therefore react in different ways to external drivers of change and will respond differently to encouragement, incentives, and legislation aimed at influencing their farming practice.”

From the above findings and conclusions , the following recommendations have been suggested:

  • Keep monitoring consumer trends & food markets to increase awareness of markets and consumer change
  • Maintain and grow our reputation/ story of being food producers of high value and highly nutritious ingredients or wholefoods.
  • Leverage our competencies of current successful sectors especially as meat and dairy innovators
  • Seek expertise where knowledge or skills are low and empower people to become experts in new alternative proteins.
  • Encourage and develop coalitions with the government departments such as Ministry for Primary Industries, the Ministry for the Environment and farmers to provide incentives and/or support in areas where New Zealand can deliver the world’s best produce.
  • Reward and support leaders paving the way for the nation and their peers in agricultural and especially in new products or production that adds value to the New Zealand Agricultural Industry.
  • Develop a New Zealand plant-based food strategy for New Zealand agriculture
  • Create and develop a greater understanding and technical expertise in plant-based opportunities to enable greater diffusion of adoption to farmers.

What is the true cost of transience to the New Zealand dairy industry?

Executive Summary

This report investigates whether the dairy industry has an issue with labour transience and what it truly cost a business to lose and retrain a new employee. I needed to firstly find out If, when, where and how transience has become a problem in the dairy industry. Then what it truly cost a dairy farm to lose and replace an employee. Finally, I investigated the reasons people were leaving a job and was it preventable.

There were two parts to this research project 1) a literature review and 2) a survey of 23 dairy farmers to see what they thought about the cost of transience in the dairy industry.

The key findings of the literature review were:

  • New Zealand dairy farms have changed drastically throughout the last 29 years in size. They have increased in average area from 220ha to 372ha,herd size has over doubled from 170 cows to 440 cows, and production has increased from 250kgms/cow to 385kgms/cow. Resulting in more labour being required on farm.
  • The dairy industry has similar transience to all other industries in New Zealand. This means that transience is a big issue for the whole of New Zealand not just the dairy industry.
  • 21% of a dairy farms budget is from labour costs.
  • The average dairy business has quintupled its farm debt in the last 28 years.
  • Dairy farmers are working 11 hours/week longer on average than the country’s 2.7 million people work force.
  • It takes a lot of time and effort to replace an employee.
  • Inducting an employee is costly and time consuming. It takes up to 2 years to fully induct an employee to the same as where the previous person employed was, depending on the level of experience of the position. Costs involved are not only the cost of off farm training such as ITO, but also the cost of time taken from other employees/manager/owner’s day, to train/oversee the inductee until they are competent at the tasks at hand.
  • It varies on how much it costs to lose an employee depending on experience lost. 30% – 200%. There is big difference in losing an assistant position to losing a second in charge or manager. A more senior role can more easily fill in for an assistant role as they already know the job. But an assistant cannot help with 2ic role, because they have not learnt the knowledge of things like farm walks, feed budgeting etc.
  • Working on a baseline of the cost of transience. You are looking at least 30% of the persons annual salary cost to your business for one person’s turnover.
  • Not all the cost of transience is monetary. Working longer hours, the stress of filling the skill gap lost, loss of sleep worrying how to get through until a new team member can be found and trained. These do not cost the business directly monetarily, but they are very costly to the rest of a team, family and individual.
  • 7 out of 10 reasons people leaving a job could have been prevented. They are:
    • Career development – this has been the number one category for 10 straight years. Employees who are satisfied with their development are likely to stay.
    • Work-life balance – this was up 23% since 2013. Flexibility of the job, long shifts, and suitability of hours
    • Manager behaviour – General behaviour and communication have each increased (gotten worse) in the last year.
    • Job characteristics – this was the number one rising category of turnover, up 117% since 2013.
    • Well-being – to promote work-life balance consider flexitime and telecommuting, assistance with childcare/eldercare, financial counselling, and flexible leave options.
    • Compensation and benefits – many think compensation is the reason for turnover. Sometimes it is and sometimes it is not. Find out the real reasons for turnover in your organisation. 
    • Work environment – applicant selection assessments and interviewing must include person-environment and person-culture fit as company culture becomes increasingly important.
  • Preventable reasons for turnover equate to 78% of our transience if we could solve this it would change our turnover rates from 24.5% down to 5.5%. This would be an astonishing change to our businesses.

 The key findings from the survey were:

  • 96% of dairy farmers surveyed agree transience is a cost and there is a problem.
  • 70% surveyed believe it costs their business up to $20,000 to replace a staff member. Reasons stated were from loss of productivity, induction, and training costs to get the new employee up to the same level, advertising costs and the loss of time, selection and interviewing of potential candidates.
  • It takes a lot of time and effort to replace an employee.
  • That the respondents thought most of the costs for employing a new employee was in induction and training costs.
  • 5% of the respondents thought it takes at least a couple of months to induct a new employee.
  • There was no clear trend for transience from respondents.
  • 95% of the respondents indicated that they worked over 40 hours per week.
  • The reasons for people leaving a job were Lack of support, long hours, pay not good enough and management not treating them well.
  • There were three main themes for why people stayed on farm they were good culture, Good employer, progression, fair remuneration package.
  • The results from the survey did not vary to much from the position held. Be it owner, manager, share-milker, or employee.

The main conclusions of this research project were:

  • Transience has become worse because the dynamics of dairy farms have changed drastically throughout the years, with increased farm size, resulting in the need for more labour on the farm.
  • Dairy farm turnover rates on average are relativity the same as the national average.
  • That transience is costing a considerable amount both in the way of money and stress, fatigue and over work to a dairy farm business.
  • Three quarters of transience can be prevented. Which would result in considerable savings to a business turning over employees.

Recommendations:

Turning over employees is costing dairy farming business and most of the reasons they are leaving are preventable. To capture the benefits of retention each farm needs to understand why people are leaving their farming business. Each farm needs to analyse the environment they provide for their people. Is the farm inclusive, asking their people what they want in the workplace and driving it from their needs and wants? 

Next steps for the dairy farm employer:

  • Become clear why your people are leaving – remember that on an exit interview they may not give you a clear explanation.
  • Become clear on why your people are staying – what are some strengths?
  • Identify what you are doing to prevent people from leaving your business – ask yourself would you like the same working environment?
  • Look at the history of employment on farm, is there a pattern? Could some turnovers have been prevented? Was this in your control to prevent?

Next steps for industry:

  • Identify good employers in industry who have a high retention rate and showcase these.
  • What are they actively doing to prevent turnover? Can strategies be created and adopted?
  • Focus on the intangible as well as tangible drivers – people are human beings not doings.
  • Commitment five is far reaching and will need engagement at all levels to become real. It will only be driven by those employers who see the benefit in looking deeper into their own behaviour and environment they provide on farm.

 

The industry, the farm, and the people: Who will own our dairy farms in the future?

Executive summary

Dairy farming in New Zealand has undergone rapid growth over the last two decades. Land values have increased. This increase in value is making it difficult for progression to ownership for many who are still in the industry. The total number of available sharemilking positions has been steadily decreasing, with an increase in owner operators choosing to employ Contract Milkers to run their farms. To reach the goal of dairy farm ownership, those in the industry are becoming creative around the pathway they choose for progression.

What has not changed during this growth of the industry are the people. Those who reach the goal of dairy farm ownership have key characteristics in common and when these characteristics are examined, they become keys to success.

For this study, rural professionals were interviewed, in a semi-structured format. These rural professionals were from reputable farm advisory firms and rural banks. There were four farm advisors interviewed and four rural banks, each giving their professional opinion on the progression to dairy farm ownership. A thematic analysis was then done on the results. Four dairy farmers were interviewed, using semi-structured interviews. These dairy farmers had progressed to dairy farm ownership in the previous five years, all using different methods of progression.

The results from these interviews were analysed with a thematic methodology. Results from the rural professionals’ and farmers’ analysis were compared and contrasted, to ascertain the common links.

Those who have reached the goal of dairy farm ownership in the last five years have all exhibited:

  • Determination
  • Respectable reputations
  • Sound financial ability
  • Knowledgeable and knowledge seeking
  • Been a part of a strong team

The pathway that they undertook to reach the goal of ownership differed between all the farmers. The pathway chosen was what was best suited their individual circumstance, rather than taking the pathway that the prior generation had travelled.

Recommendations for those who are starting out in the New Zealand dairy industry, with the aspiration to own a dairy farm, are:

  • Stay focussed on your goal of dairy farm ownership.
  • Be good with your money. If you do not know how then learn to be.
  • Maintain a good reputation.
  • Knowledge is power, always take opportunities to learn.

“You can’t solve today’s problems with yesterday’s solutions”

 

Corporate Social Responsibility in Aotearoa Dairy Farming

Executive summary

Corporate social responsibility (C.S.R.) is maturing rapidly in modern times as a way for companies to reflect the values of its customers, employees and investors. The United Nations (U.N) begun working alongside corporate organizations to encourage C.S.R. integrity in 1999 with the most ambitious development by the U.N being the 17 sustainable development goals agreed upon by 193 member states in 2015.

Much of this maturing of C.S.R has been in response to societal pressure and consumer demand. Perhaps no industry has felt the effects of this pressure more than dairy farming. Dairy is facing rising compliance as expectations of consumers and the public grow. Society is putting more emphasis on the impact of their food purchasing decisions resulting in rapid change for Aotearoa dairy farmers.

Dairy farming in Aotearoa is a unique business in that it is non-competitive at the supplier level. Farmers are not competing with their neighbour or any dairy farm, as they are all collected by a processor. Creating an environment where some low performing businesses have been able to survive that may have not in other more competitive industries, i.e. building firms; this will change. The impact potentially will have a positive effect on the standards within the industry as top-performing farmers who are more adaptable to change in compliance and ethical standards will rise. 

The industry must prepare to exit a large number of farmers gracefully. With current debt levels and the stagnation or loss of land asset values, many farms will not have strong financial resilience for a drop in milk price (something history would suggest inevitable) while still holistically meeting their standards in C.S.R. Additionally; others will not adapt to changes in compliance and ethical responsibilities and exit the industry due to these changes. From this will be an immense opportunity for those farmers with healthy debt to asset ratios and who can operate in the top 20% of profitability.

Carroll’s pyramid, a model for investigating a company’s C.S.R. requirements, was used to analyze the Aotearoa dairy industry’s current position. Dr Carroll, who was awarded a lifetime achievement award from Humboldt University, Berlin, Germany for services to corporate social responsibility has written a large amount of academic literature on C.S.R. Carroll broke the C.S.R. of a business into four pillars using a pyramid model. The four pillars are:

Philanthropic Responsibilities, voluntary or discretionary activities for the benefit of others or their environment. Farmers participate in wide and varied philanthropic activities; these acts are not undertaken for strategic reasons. There is potential to leverage these acts to improve perception and build on social license to operate.

Ethical Responsibilities, standards and expectations that reflect the concern for what consumers, employees and stakeholders regard as fair. Dairy farming has been slow to respond to ethical concerns of stakeholders, which has seen a loss of trust capital within relationships. As a result, in five years, positive perceptions of New Zealand dairy farming have slipped from 78% to 47% (U.M.R. Research, 2017). A social license to operate has become a vital topic in recent years regarding ethical responsibilities. In response to this, milk processors, have implemented several ethical agreements with their suppliers setting standards above and beyond legal compliance standards, to meet public and consumer pressure.

Legal Responsibilities, business is expected to comply with laws and responsibilities set by the Government; economic returns must be achieved within the framework of the law.  Compliance is rising, and the cost of this is high. Top farmers will rise to the challenge, and many low performers will fall out of the industry due to increasing compliance. The increase in specific laws is a result of the loss of trust in stakeholders’ views towards dairy achieving its ethical responsibilities. Ethical trust must be rebuilt with stakeholders to reduce growing legislated compliance. The industry will be held to account of its worst producer, not its best. The bobby calf scandal (Max Towle December 6, 2015) highlights this and shows the media will portray most of the industry by the actions of a minority.

Economic Responsibilities, It is essential that a successful firm be defined as one that is consistently profitable. The average return on asset of 0.5% for 2018-19 season, with a breakeven milk price returning between a $9,000 and $48,000 per 100,000Kg of milk solids, is not a worthy reward for the effort and is unsustainable long term. Capital gain on land can no longer be anticipated, operating profit is all that can be relied on, and this is volatile due to milk price. To be resilient and last long term, farms need to target the profitability performance of the current top 20% and continually improve.

To win in the future of Corporate Social Responsibility, farmers and the industry will need to achieve the following:

  1. Reinvent their business constantly, the end goal may be the same, but the tools and methods are constantly evolving. Embrace change.
  2. Removal of farmers that risk tarnishing the industry, one farmer is a danger to the reputation and acceptance of all. Milk processors and Government must take responsibility of this. This will increase ethical approval by the public.
  3. Invest with the head and not the heart to be sustainable and ensure a more acceptable return on assets and manageable debt to asset ratios. Purchasing a farm must be made as if investing in a commercial building or other investment utilizing similar financial models.
  4. Acquire greater financial skills and drive profitability. Farmers should target to perform at the level of the current top 20% of operating profit. Action by the wider industry, including milk processors, must occur around educating farmers on profitability. If they do not, farmers will struggle to meet ethical and legal expectations of the industry. These all work in harmony.
  5. Understand the “why” behind compliance better, were compliance instigates from and what it enables. Conversely, the industry must explain the reasoning behind compliance clearer and more intentionally to farmers.
  6. Formulate successful plans and models to exit a large number of farms gracefully from the industry. Support in planning and strategic decision-making is lacking at the end of many farmers careers. Banks, milk processors and industry good organizations must take accountability to support in this.

Farmer change: Dairy farming in Northland

Executive summary

Bob Dylan’s prescience comments from some 60 years ago capture today’s environment exceptionally well with ‘the times they are a-changin’ and you’d better start swimmin’ or you’ll sink like a stone’ (Dylan, 2020).

The dairy sector is a significant contributor to Northlands regional economy and has a vital role to play in the regions social, economic, and environmental prosperity. However, change is coming down the tracks like a freight train and is likely to shape the nature of the industry for years to come, change at a scale and pace arguably not seen for over a generation.

To develop an understanding of the implications of this change – the scale and breadth of it along with the potential opportunities this report looks to develop context, perspective and a deep understanding of the subject by exploring the past, present and future of the industry, understanding what influences farmer change, work through current strategies in place and then consider some of the potential pathways ahead and finally discuss some conclusions and recommendations.

This is approached via a mix of in-depth interviews, selected readings, and critique to develop the context, perspective and deep understanding desired.

It is apparent the region and sector have already experienced significant change and, in many ways, has proven to be stubbornly resilient and adaptative. Nevertheless, there are challenges ahead with the scale and pace of change significant, more far reaching and very different from what’s been experienced before.  Amongst this change there appear to be multiple trigger points that potentially provide the opportunity to move beyond simple adaptation of a specific technology or practice towards a much deeper and enduring change of hearts and minds.

For Northland farmers, the industry and the region opportunities will exist amongst this change and a pertinent challenge for leadership is that it intentionally contributes to help shape and influence the direction of the response. Strategy, programme and project development, research and development extension, demonstration and design are all urgently needed.

The potential opportunity this change offers will not necessarily be easy and will require grit, determination and innovation, but the status quo is no longer be an option.

 

Can the dairy industry’s tarnished cousin reinvent itself to help with our ticking time bomb

Executive summary

The New Zealand dairy industry has a growing risk with social licence to operate due to increased pressure from both customers and the public on the practice of slaughtering between 1.8 – 2.5 million surplus calves at an early age, either as a bobby calf or euthanised on farm.

Internationally there is a significant veal market, with much of the production for this coming from surplus dairy calves. However, despite having the highest global numbers for bobby calves, New Zealand does not yet have a veal industry here to further utilise some of these.

The purpose of this report was to provide some context and further understand the issue with bobby calves and the risk to social licence to operate, and then understand what the opportunities, benefits, challenges, and implications might be at the various points of the value chain with establishing a veal industry in New Zealand as a partial solution to reducing the number of calves slaughtered early.

There were two components to this research. A review of existing literature including research, industry reports, articles and opinion pieces was used in order to evaluate the current international veal systems that exist and how these compare to the opportunity to establish a veal system in New Zealand, where the challenges may be, and what may need to be adapted to suit our country. In addition, semi-structured interviews were conducted with various value chain participants and industry voices including; dairy farmers, calf rearers, finishers, farm consultants, meat processors, dairy processors, research institutes and universities, retail and some international voices. The interviews were used to understand their views on current practices and the associated risks, and then the potential for a veal industry here in New Zealand, how it might fit our systems and what the opportunities and challenges would be.

A veal industry in New Zealand has the potential as a partial solution to help reduce the number of surplus dairy calves slaughtered at a young age. There are a range of benefits and opportunities including a reduction in bobby calves, reduced risk to social licence, improved on-farm mental welfare, improved sustainability outcomes, environmental benefits, and additional revenue for the country through exports of another red meat.

However this a complex topic and includes a number of challenges and barriers that need to be addressed in order to establish a veal industry here including developing the integrated farm systems that suit our country and result in a product that is fit for the desired veal markets, finding sufficient land to incorporate these systems, market development and consumer education, processing capability and capacity, and reduced volatility in pricing to ensure sustainability of supply chain partners.

Further, the whole transition to fewer bobby calves needs to be carefully managed to ensure the current risk to the industry is not further heightened until solutions of scale are available.

The key to any success at scale will be good collaboration between industry sectors and partners. There are a number steps that need to occur for a veal industry to be established here including significant research, modelling and development of farm systems and markets, as well as some trials to develop the supply chain systems. It appears there is movement starting to happen at both industry and commercial levels and it is likely we can expect to see some change in the near future. While there are significant challenges to overcome, I think we may see innovation within the industry and a veal supply chain in New Zealand in the future.

 

Regaining Control of Our Narrative

Executive summary

This research and affiliated report asks the question:

Can New Zealand Dairy farmers re-gain control of their narrative from inside the farm gate?

The dairy industry is New Zealand’s largest good exports sector, contributing 20% of total exports while bringing in $17.1 billion dollars into the New Zealand economy (NZIER, 2018). As dairy has grown in scale, the sector has increasingly become the brunt of social discontent. The current social climate places media platforms in misplaced control of narratives with the growing apprehension stemming mainly from questions around the sustainability and historical poor practice highlighted in the media. The New Zealand Ministry for Primary Industries conducted a study to explore urban and rural New Zealanders’ views of the primary sector and rural New Zealand.

The study, consisting of 1,245 New Zealanders, suggested both groups of respondents, urban and rural, showed a decline in positivity toward farming in general. Since 2008, positive perception of the dairy industry from urban respondents has dropped from 78% to 47%, with rural outlook on the industry dropping from 83% to 50% (Ministry for Primary Industries, 2017). These numbers highlight that collective trust is shifting. This decrease in trust and increase in negative public perception is having huge impacts on our industry inside farm gates filtering into mental health and wellbeing and staff attraction and retention.

Throughout my research, I have utilised cross-industry resources and publications which I have compiled into a literature review and broken down in to main themes. I have compiled information from marketing literature and social media research regarding consumer and market trends with support from psychology and philosophical theories. I have also utilised research from social licence experts which I have followed with case studies. I have used case studies to demonstrate how companies have dealt with consumer trust and the results of individual responses on the associated market. Throughout this research I have dissected two main themes, why consumer demands on New Zealand dairy farms are changing, and how.

My report aims to cover the effect changing values are having on trust in the rural sector and the impact it has on company and industry, it will break down the relationship between narrative and consumer trust and discuss why having control of your narrative is important, and discuss recommendations on how farmers can build trust and empathy; re-gaining control of their narrative from the ground up.

My main findings throughout my report have been:

  1. Change in industry Trust is driven by changing consumer values.
  2. Unconscious decisions affect the uptake of brand strategic narratives.
  3. Misinformation is a key contributor to dairy farmers loss of control over their narrative.

On the basis of my research, my recommendations are as follows

  1. Farmers to develop credibility and authenticity built on results, history and consistency.
  2. Step out of our echo chambers.
  3. Render authentically by humanising the industry.

Support credible, trusted social media platforms.

Dairy farming, climate change and farm diversification

Executive summary

All across the world, in every kind of environment and region known to man, increasingly dangerous weather patterns and devastating storms are abruptly putting an end to the long-running debate over whether or not climate change is real. Not only is it real, it’s here, and its effects are giving rise to a frighteningly new global phenomenon: the man- made natural disaster. (Barack Obama, speech, Apr. 3, 2006)

In the race against climate change, this report explores the possibilities of the diversification of a dairy platform into horticulture. This report was not put together to come up with an answer or find a solution, the purpose of this report is to start a topic of conversation, provoke thoughts and ideas and hopefully create some positive changes for the greater good for the future of our environment.

Throughout there report, there is a lot of work referenced by many individuals and companies that are doing some world-changing research in the space of land use change.

In this report, it is essential to note that Horticulture refers to Fruits, berries, vegetables, vineyards.

Agriculture produces nearly half of New Zealand’s total greenhouse gas emissions with one-quarter of our total greenhouse gases coming from biological dairy emissions (Methane and Nitrous Oxide). 85% of the dairy sectors emissions are also made up on the farm, with the other 15% coming from agriculture transport and processing. When breaking emissions down within the agriculture sectors in 2017, around 78% of emissions come from Livestock, 21% from soils (fertiliser applications etc.) and the remaining 1% from urea and liming. (Emissions Tracker, 2019). New Zealand also has a unique greenhouse gas profile and is unusual for a developed country, we have one of the highest rates of emissions per person, and agricultural emissions dominate our emissions profile compared to the rest of the world where energy and fossil fuels dominate them. With the difference between New Zealand and the rest of the developed world, we could assume that no other country will look to combat methane or nitrous oxide, giving New Zealand a chance to show our ingenuity and become world-leading at reducing these gases.

There has been vast research on the likely impacts of climate change in the future. All of these changes will impact our environment, our lifestyle, businesses and the economy. These impacts and changes in climate impact not only the Dairy Industry but all sectors and put pressure on the food production industry as a whole.

From several studies, results have shown that land use change into horticulture will reduce emissions and ensure maintaining lower emissions is sustainable in the future. One study prepared for Motu found that to reach our emissions targets for 2050 seems possible with no additional on-farm mitigation through new technology however if achieved without a shift towards horticulture, mitigation technology or permanent forestry then reductions would be difficult to sustain as forestry expansion is limited. With development into horticulture by one million hectares, results show the emission reductions are almost identical to those emission reductions from new technologies. By achieving a reduction through a combination of horticulture increase and new technologies, emissions will be more manageable in the future. (Dorner, Djanibekov, Soliman, Stroombergen, Kerr, Fleming, Cortes-Acosta, Greenhalgh. 2018).

A study around permanent horticulture was researched as an option for low emitting land use. Modelling work was done on a pip-tree crop, where an area of a farm was taken out to grow chestnuts. With changing the land use on a dairy farm to permanent horticulture, there is a decrease in greenhouse gas emissions as well as a positive impact on the farm businesses EBIT. While a change in land use to horticulture could be an option soil types, crops and regional climates need to be taken into consideration. (AgFirst, 2019).

Horticulture is currently planted on 190,000 hectares in New Zealand, and according to statistics established, horticulture operations have higher profitability per hectare than dairy operations ranging from $5,000 to $20,000 and above. (Resigner, Clark, Journeaux, Clark, Lambert, July 2017). Dairy operations have profitability of around $2,500 per hectare. Currently, dairy is farmed on 2.6 million hectares (ha), fruits and berries 120,000ha, vegetables 70,000ha and grains 449,000ha (Stats NZ, April 2018). According to the reports referenced in this paper, the available land to go into horticulture is anywhere between 1.5million and 3.2million hectares, taken from both dairy and sheep and beef. For dairy farmers to be able to diversify their current farming platform into horticulture, information is needed to understand what could grow best on their platform. During the time this paper was put together, from what I could find, and very much out of the scope of this report, there is no mapping around best soil types, climate and growing ability to help dairy farmers understand their potential. However, if this could be achieved, combined with the work done on how climate change will affect our landscape, these tools would open up opportunities to help dairy farmers convert land use.

From a value-add point of view to the end product of what we are producing, Customers and consumers are more interested in climate change and sustainability than ever. Terms such as Sustainable, Organic, Environmentally Friendly, all gain consumer confidence and support. There is a lot of awareness of the impact on the climate and a focus for consumers on where their food comes from, how it’s produced, and consuming food that is healthy for them and healthy for the world (Philips, L. 2019).

Although the option to diversify a farm business into other primary sectors is very dependent on soil type, farm business and location. The idea of bringing sectors together onto the same sustainable platform which tells a story of bettering the environment fits into what consumers are looking for and wanting out of their produce. For example, looking into the future where we can work out what emissions come from a dairy farm, have a full understanding of what emissions come from a crop or orchard and also what sequestration is achieved from this, what are the possibilities?

Take a farm that has reduced its stocking rate, worked on pasture management and in turn reduced overall emissions from the dairy platform. With the farms reduced stocking rate, they have been able to plant an avocado orchard on the land that has been freed up and dramatically reduce further or even offset the emissions from farm activities completely. “Carbon Neutral New Zealand Produce or Carbon Positive New Zealand Produce”. How great would that look branded on the side of a bottle of milk or a bag of avocados?

In conclusion, climate change is a complex and continuously changing subject. The science and information around where climate change is today and how we are going to tackle this as a species is forever evolving as new information comes to light. There is a lot of evidence to suggest diversification into horticulture is not only beneficial to emissions but also potentially profitable. Although the research suggests these positive outcomes, it also notes that there is no one size fits all solution.

Every farm is different; every farmer is different. We range in farm size, herd size, systems, soil type, climate, profitability, infrastructure, and management.

If we can have a better understanding of what horticultural crop can be grown where, what will the emissions be from the growth of horticulture and what positive effects will come from diversifying into horticulture, the opportunity to future proof not only farm businesses in New Zealand from climate change but also the ability to market our collaboration and success of total carbon reduction could increase the value of our products further to the world.

At the moment we do know, New Zealand dairy farmers are already doing more than their bit in the reduction of greenhouse gases and will still do more to protect the environment and our planet from further damage.

There is an opportunity to come together as sectors, from the grassroots level to industry heads, to achieve this common goal and work together and support each other in how we are going tackle this “Titanic” problem.

We are the first generation to be able to end poverty and the last generation that can take steps to avoid the worst impacts of climate change. Future generations will judge us harshly if we fail to uphold our moral and historical responsibilities. (Ban, K. 2016)