1. Agricultural and Horticultural Science 3.2 Milking Aotearoa Achievement Standard 90650 Investigate production and marketing of a nationally significant primary product Credits: 4 Level : 3

2. Contents Section 1.The NZ Dairy IndustryThe NZ Dairy Industry 2.How is Dairy Production MeasuredHow is Dairy Production Measured 3.Making Milk using food.Making Milk using food. 4.Management Techniques to improve production.

3. Te NZ Dairy Industry NZ’s biggest export earner $NZ 10 billion export earnings (2008-9) 11,735 dairy herds and 4.5 million dairy cows Holstein-Friesian is the prevalent dairy cow breed in New Zealand making up 43% of total dairy cows 2% of total world production at around 17.3 billion litres 1.5 billon kgs of milksolids.

4. Te NZ Dairy Industry New Zealand is the world’s largest butter exporter and accounts for about 44% of all traded butter. NZ exports skim and whole milk powder. 27% and 38%, respectively, of world trade. The number of cows in milk has increased by about 10% over the last 5 years.

5. Measuring Dairy Production (The first big question)… To answer this think about what a dairy farm produces.Answer = ___________ Then, what is this ‘raw’ product is made into to…Answer = ___________

6. Measuring Dairy Production Next think about what it is in the raw product that is of value to the marketer (person selling the final product) Answer = ___________ To help with the above it would be wise to consider what the raw product contains ie what makes up a litre of raw milk: Answer = ___________ Link to raw milk composition

7. Raw Milk Fat 3.9% Protein 3.4% Water 87% Other 5.7 % Link to what is in raw milk Raw milk's composition varies slightly among cow species, type of food and other conditions, so the figures are only approximations.

8. What’s in it? Compare the components of raw milk to: Raw mik contains… Water Fat Protein Other Milk powder contains… Water Fat Protein Other Butter contains… Water Fat Protein Other Cheese contains… Water Fat Protein Other The value in the raw milk is in the amount or protein and fat.

9. The key idea! A dairy farmer is not interested in how many litres of milk they produce, but rather the amount of milk solids (MS). Payment is based on A+B-C Where: A = Milk Fat B = Milk Protein C = Litres What would happen to a dairy farmer who decided to add water to their milk? Why do milk companies penalise producers who have a low milk solid / litre ratio? If a cow produces 40kg of milk fat and 60 kg of milk protein per year. How many kgs of MS does it produce?

10. Measuring Milk Production A major market force of the NZ dairy system is QUALITY of the raw milk (measured in amount of milk solids) Other market forces play a role Quantity the amount of milk solids a farm can produce Consumer preference for example organic milk Reliability of supply can the farm put out a regular amount of milk? Seasonality What happens if there is a drought? Timing is the producer able to supply all year round

11. Now we know… … that a producer gets paid on the amount (kg) of milk solids (MS). Production is measured in MS. The KPIs that he uses to see how will he is producing compared to other farms: kgMS/ cow KgMS/ ha And sometimes kgMS/ kgDM A hectare (ha) is 100m x 100m or 10,000 m 2. Most dairy farms are 200 – 500 ha. A kg of dry matter(DM) is one kg of dry grass/ hay/ silage/ etc.

12. In summary There are two aspect of marketing we need to further investigate: 1.How important is it that NZ dairy farmers produce MS at low cost to compete in the world trade of dairy products? 2.How important is it that farms produce consistent volumes throughout the year?

13. Section two Making Milk Using Food We will now explore the process of growing food and making milk

14. How to make milk

15. Cow Food Grass Hay Grass Silage Maize Silage Bi Products such as PKE or Brewers Grain Crops (such as Kale) Concentrates (such as Barley) Dairy NZ – Feed Values Feed Values - Exercise

16. Grass is cheap The NZ Dairy Industry has a major competitive advantage in our ability to produce food for cows cheaply. We call this food – pasture. Pasture is grass, clover and other paddock species.

17. Grass is cheap. Nelson 42 51 39 28 17 11 8 25 49 73 50 46

18. Grass Supply The previous slide shows the feed supply curve for a dairy farm in Victoria Australia. Exercise – Produce a graph showing the feed supply of a NZ based dairy farm. Use the data on the Dairy NZ website : http://www.dairynz.co.nz/page/pageid/2145861167/Pasture_Growth_Data http://www.dairynz.co.nz/page/pageid/2145861167/Pasture_Growth_Data Graph template: Click on map to show NZs Major dairying areas

19. In summary Pasture supply curves and pasture demand curves show the area feed deficit and feed surplus. Supplements are used to reduce feed deficit. Supplements allow a farmer to take excess food during a surplus and store until required into a deficit Different foods have different amounts of energy/kgDM. We can compare them using the MJME/KgDM