The NZ Dairy Industry - A Wise Investment
Why invest in the New Zealand dairy industry?
Investing in the New Zealand dairy industry is a wise choice. Over the years it has provided farmers and investors with strong, consistent returns and a secure and stable investment.
Dairy consistently leads the top 10 exports from New Zealand. In the year to April 2006, dairy export returns increased by $400 million - a match for the $400 million that New Zealand expects to make from hosting the Rugby World Cup in 2011.
The economic returns to dairy farmers regularly outperform other agricultural sectors.
| Gross Margin per Hectare (after interest and feed) | |||||
|---|---|---|---|---|---|
| Dairy | Dairy Heifer Grazing | Bull Beef | Intensive Sheep | Deer Finishing | |
| Northland | 1942 | 741 | 441 | 385 | 531 |
| Waikato/Bay of Plenty | 2778 | 848 | 1234 | 803 | 750 |
| Manawatu | 2705 | 852 | 1024 | 741 | 716 |
| Canterbury | 2298 | 1564 | 1336 | 818 | 853 |
| Southland | 3208 | 1124 | 438 | 968 | 517 |
Source: Fonterra-commissioned report prepared by AgFirst (2006).
When you compare the returns of dairy farming with other pastoral uses, the benefits of dairying become apparent.
The gross margin per hectare of a dairy farmer in Northland is more than three and a half times higher than that of a deer farmer, almost four and a half times more than a beef farmer and five times that of a sheep farmer.
In Southland the differences become even more pronounced, with the margins almost three and a half more than for sheep farmers, six times more than a deer farmer and more than seven times more than for beef farming.
As a whole, the New Zealand dairy industry produced 14.7 billion litres of milk in the 2005/2006 season from 3,832,145 cows in 11,883 herds. Over 1,267 million kilogrammes of milksolids were processed into products, mainly for export.
