Changing landscape for dairy

New Zealand’s dairy sector has been a mainstay of this country’s prosperity for generations. It remains our largest goods export sector, supporting regional communities, jobs and stable economic activity across the country.

At the same time, it’s an incredibly fast-moving sector to be part of. The market conditions farmers operate in are changing rapidly – led by consumer expectations that continue to grow and evolve.

Technology is moving quickly and closing the gap between consumers and where their food comes from. Our generally ageing and more discerning consumers are seeking out nutritionally dense foods that support their changing life stages. They’re also asking more questions about how food is produced.

At the same time, within the communities where we farm, freshwater expectations are evolving and climate pressures are increasing.

New Zealand dairy is one of nature’s superfoods and is incredibly well placed to take advantage of these trends. Demand for premium dairy products continues to grow across almost every key market, while New Zealand’s reputation for quality, safety and pasture-based farming gives us a significant competitive edge.

“We may not have challenged ourselves as hard as we could have as a sector – enjoying both a brief respite in regulatory burden and the limelight that comes from propping up the national economy.” – Campbell Parker, DairyNZ

The opportunity is there for us – if we choose to take it. It’s important to acknowledge that, arguably, dairy farmers have done more to lift standards than any other sector. We’ve spent years investing in environmental improvements, better infrastructure, planting, effluent systems, genetics and more resilient farm systems. That progress provides a strong foundation for the next phase of change.

But standing still is not an option. Our competitors see the same opportunity as we do. They are innovating and adapting at an incredible rate and by comparison, we may not have challenged ourselves as hard as we could have as a sector – enjoying both a brief respite in regulatory burden and the limelight that comes from propping up the national economy.

To protect value and stay ahead of global competition, our challenge is to grow and evolve the sector in ways that strengthen environmental outcomes and social licence, while enhancing the provenance and sustainability attributes that underpin the premiums high-value customers and consumers are willing to pay for New Zealand milk.

The reality is that future value growth will look different to the past. There will be an abundance of opportunities for dairy systems that are supported by modern infrastructure, better environmental management, improved genetics and emerging technologies.

Innovation and practical solutions

New Zealand has an opportunity to lead globally in demonstrating what highly productive, lower-impact pastoral farming systems can look like.

That means continued investment in science, innovation and practical on farm solutions. It also means closer collaboration between sector, government, researchers, technology providers and farmers themselves, alongside a willingness to put the consumer at the heart of our sector and constantly adapt. Encouragingly, many of the tools needed are already emerging:

• Precision farming technologies are enabling more targeted nutrient use.
• Advances in genetics are improving animal efficiency.
• Methane reduction technologies continue to progress.
• Nature-based solutions such as wetlands and riparian planting are increasingly being integrated into productive farm systems.
• Better data and environmental modelling are improving understanding of catchment-level impacts and opportunities.

All of these tools protect value by helping us to maintain our emissions and compete on sustainability. Most also improve resilience, productivity and long-term farm performance.

As a sector, the next decade will also provide an abundance of opportunities to show customers, and our country, the difference these tools are already making.

New Zealand dairy has spent decades adapting to changing markets, regulations and expectations. Farmers have consistently shown they are capable of innovation and improvement when given practical tools, clear direction and the right incentives. The next phase of that evolution is already underway.

The challenge now is ensuring New Zealand moves quickly enough, collaboratively enough and strategically enough to remain globally competitive while continuing to improve our environment.

That is not just a challenge for farmers. It is a national challenge and a NZ Incorporated opportunity.