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Wintering in Canterbury/North Otago: Business Relationship between Dairy Farmers and Graziers.

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Executive Summary

Winter is a critical part of the year for dairy farming as the BCS of the cows at the end of winter will significantly affect reproduction and production on the following season, In the Canterbury and North Otago area it can represent up to 20% of the operating expenses. A common strategy is for dairy farmers to graze their cows over winter off at grazier’s properties. Graziers take dairy cows in winter as it is a more profitable and reliable option comparing to the other alternatives available to them. This study explored the business relationship between dairy farmers and graziers when buying or selling winter grazing with the aim at identifying what are the main factors that will produce a mutually beneficial relationship.

Maintaining regular contact, having a long term/on-going relationship and having good communication with the other party were the top three reasons given by farmers to explain a successful business relationship. On the other hand, graziers lack of skill to feed dairy cows, wrong assessment of the feed available, cows being lighter at the start of winter than a greed and lack of regular monitoring and communication were identified as the main reasons for unsuccessful relationships. In addition a low use of written contracts, a predominant payment method as dollars per head per week, settling the price too late in the season as well as the lack of a clear and fair system to set the price were identified as some other challenges for this business transaction.

Targeted extension events for dairy farmers, graziers and rural professionals, a standardized approach to assess feed availability, and analysis of the best strategy to decide winter grazing price are some of the suggested strategies to improve the relationship between dairy farmers and graziers.

Wintering in Canterbury/North Otago: Business Relationship between Dairy Farmers and Graziers – Virginia Serra Postiglione