1. 2008 Tasmanian Dairy Conference Burnie, 8 th October 2008 South Island (NZ) Dairy Industry Development Richard Christie – Executive Director, South Island Dairying Development Centre S I D D C – Partners networking to advance South Island Dairying

2. SIDDC Partners SIDDC PARTNERS

5. South Island milk from 7% to 35% of NZ total in 17 years

8. FACTORS FOR SOUTH ISLAND GROWTH Processors wanting to grow Suitable land Well priced land Sizeable properties Expansion opportunities with adjoining land Wintering land options Reliability (rain or irrigation) Low share structure of industry (initially) Attracting the entrepreneurs and the corporations S I D D C – Partners networking to advance South Island Dairying

9. FACTORS FOR SOUTH ISLAND GROWTH North Island migration south, plus international Large farms give a range of equity possibilities: –For farm operator –For investors Loans readily available Income and capital appreciation driving continued expansion of the new entrants Share revaluations Westland model S I D D C – Partners networking to advance South Island Dairying

10. THE SHAPE OF SOUTH ISLAND DAIRY FARMS Largest herd sizes Flat milk curve Employment of staff Corporate farms Equity partnerships Individuals with multiple properties Culture of expansion and risk taking Developing into areas not traditionally regarded as suitable for dairying S I D D C – Partners networking to advance South Island Dairying

11. South Island Dairy Regions 06-07

12. CURRENT SOUTH ISLAND POSITION 2,400 herds & growing at +100 per year (21% of NZ dairy herds) 1.24 million cows & growing at 100,000 per year (31% of NZ dairy cows) 430,000 ha dairy platform & growing at 20,000 ha/yr (30% of NZ dairy land) Average herd size 525 cows (North Island = 305 cows average) S I D D C – Partners networking to advance South Island Dairying

13. LIMITS TO GROWTH Service industry support Availability of skilled and unskilled staff Ability to borrow Cost structures Suitable land: –Water –Winter support land Environmental Constraints –Water –Nutrient loss –Resource Management Act processes Cost of land in South Island verses other opportunities –Tasmania, - Uruguay, - USA, - Chile S I D D C – Partners networking to advance South Island Dairying

17. Land Price $NZ/kgMS WaikatoCanterburySouthland Sept 2006432625 Sept 2007473133 July 2008573340 Change+33%+29%+60% Agrifax

19. Lincoln University Dairy Farm [LUDF]

21. Southland Demonstration Farm

22. SI Dairying Development Centre

23. LUDF Structure SIDDC Executive Director LUDF Management Team Farm Manager Business Consultant DairyNZ Developer LUDF Business Advisory Group [BAG] Farm Staff Herd Manager Dairy Assistants [3]

24. LINCOLN UNIVERSITY DAIRY FARM LUDF conversion in 2001-02, 680 cows, 161 ha platform, centre pivot irrigators SIDDC Partnership to manage farm and leverage capabilities Research, extension, education, training for South Island dairying Best practice commercial demonstration farm Targeting top level production with low environmental impacts S I D D C – Partners networking to advance South Island Dairying

25. WHAT PRODUCTION IS LUDF ACHIEVING? 2002-03 1,414 kg milksolids/ha 2003-04 1,684 kg milksolids/ha 2004-05 1,719 kg milksolids/ha 2005-06 1,771 kg milksolids/ha 2006-07 1,703 kg milksolids/ha 2007-08 1,744 kg milksolids/ha = sustainable high production Canterbury Ave = 1,223 kgMS/ha (LUDF +39%) NZ Average = 934 kgMS/ha (LUDF +82%) S I D D C – Partners networking to advance South Island Dairying

27. Visit www.siddc.org.nz Website

28. Southland Demo Farm

29. SDF farm walk notes

31. KEY REQUIREMENTS FOR DEMONSTRATION FARM Commercial in approach and at a scale matching the district Key people – skilled, committed, champions Data collection - ongoing Transparency of information Current information – weekly web updates (farm walk notes) Focus days that farmers want to come back to Relevant and leading (cutting edge – not bleeding edge) New technologies being integrated into practical farm management New projects Research carefully integrated and non-intrusive Able to cope with visitors Correct structure –Full control of farm management and capital –Management team operating under policies –Committees (and scientists) don’t run farms –Strong input from leading farmers S I D D C – Partners networking to advance South Island Dairying

33. WHAT IS OUR RESOURCE USE EFFICIENCY? IRRIGATION M Appl Sc thesis, 2008 Detailed study of farms regarded as 10 of best in Canterbury for conversion of water to milk Centre Pivots most effective LUDF water conversion efficiency 70% higher than the average of the 10 farms Obtained in part by utilisation of technologies such as Aquaflex S I D D C – Partners networking to advance South Island Dairying

34. WHAT IS OUR RESOURCE USE EFFICIENCY? IRRIGATION S I D D C – Partners networking to advance South Island Dairying

35. GREENHOUSE GASES – RESULTS from LUDF using eco-n So are we good or bad? S I D D C – Partners networking to advance South Island Dairying

36. EMISSIONS TRADING IMPACTS S I D D C – Partners networking to advance South Island Dairying

37. WHAT IS OUR RESOURCE USE EFFICIENCY? 6-years of monitoring drainage water shows low nitrate leaching losses (< 22 kg N/ha/y) North Block lysimetersSouth Block drainage plots S I D D C – Partners networking to advance South Island Dairying

38. WHAT IS OUR RESOURCE USE EFFICIENCY? Yearly variation shows need to use multi-year average values rather than a single year result S I D D C – Partners networking to advance South Island Dairying

39. Thank you