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Smaller NZ Farms Not Interested In Expanding
February 12, 2016

Many small dairy farmers are perfectly content with the size of their business but are as keen as bigger operators to lift production, new survey results suggest.  Research by Lincoln University, funded by DairyNZ, found farmers who were uninterested in expansion still targeted a production increase of at least 10 per cent in their 10 year plans.

While it was unlikely they knew how to do so right now, they indicated they would take up whatever innovations seemed economic and manageable, for instance using improved pasture species, the study for the small farmers’ organisation SMASH found.

Lincoln agribusiness and commerce faculty doctors Victoria Westbrooke and Peter Nuthall surveyed 330 randomly-selected farmers running small dairy operations.  She said the definition of small was a farm of between 200 and 250 cows.  “It was clear from this research, and similar previous work, that the farmers were content to simply carry on working their current farm,” Westbrooke said.  They were getting on with enjoying life, even if they did not have a lot of spare cash, she said.  While the surveyed farmers rated ‘making maximum sustainable cash returns’ 4.4 out of a possible 5, they also scored ‘having reasonable time off and holidays’ at 4.3.  Many of the farmers were not interested in having their children take over the farm.

However, a sub-group of younger farmers were interested in expanding, the survey found.  They tended to be looking for more land such as a bigger farm on which to expand a sharemilking business.  The ‘expansion’ farmers tended to have different personalities, being more entrepreneurial, conscientious and keener on doing everything “just right”. They were also more benign in their outlook, claiming to not get upset when things did not go their way.  An important objective for farmers with no interest in expanding was reducing debt.  About 30 per cent of the farmers had increased their herd by at least a third.  This group was considered to be in the ‘expander’ class and their expansion would have been helped by having average equity of 71 per cent compared to the ‘non-expanders’ 65 per cent, the research concluded.

All the farmers were interested in learning how to handle environmental issues. Most were not keen on getting their information through computer use, preferring face to face meetings, including discussion groups.

By: Andrea Fox
Source: NZfarmer.conz


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