Day 4: Down to Southland

Sarah here bringing you day four of the NZ study tour!

After an early night we were all rested from yesterday and ready to tackle another jam-packed day! Following a hearty breakfast it was straight in the bus for a 3.5hr drive from Oamaru, down the east coast through the beautiful university town of Dunedin and onto Edendale, the site of Fonterras’ largest milk processing site.

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The site, which processes 15.1 million litres per day at peak is also the largest dairy processing site in the southern hemisphere! Amazingly during winter the site completely ‘dries off’ (does not receive any milk) and this is when they attend to maintenance of all that stainless steel!

Currently operating on the site is 1 cheese plant, 4 driers, 2 protein (casein) plants plus a lactose & whey processing capacity. On top of this is an additional high protein milk powder plant, reverse osmosis plant and AMF plant under construction for completion in September.

In total the factory directly employs over 600 staff and very little appears to be contracted out. All milk comes from 1325 farms in the ‘southland’ region. Average herd size is 595 cows on an average of 210ha.

Unfortunately due to hygiene and confidentiality we were not able to go into the plant for a tour but we did get to go for a drive around the massive site which gave us a sense for the scale of things! New Zealand wide Fonterra collects 20 billions litres annually from over 12,000 farms with over 500 tankers. Thats’ 300,000km travelled per day – nearly a trip to the moon!!

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Fonterra are a bit concerned about their declining market share in NZ – from over 95% down to 87% and are taking a range of measures to attract new farms. This seems to be mainly around flexibility of buying shares as it is no longer compulsory.

Following Fonterra we made our way to Invercargill for afternoon tea with Ryan & Andrew from Rabobank Invercargill. The invercargill office has seen tremendous growth in the last decade on the back of growth in the dairy industry in the region. They have seen land prices sky rocket from $4000/acre to $14000/acre in little over 10 years. This has lead to very favourable lending conditions which means they haven’t lost a cent in 10 years but it is also causing problems for young farmers looking to get into the industry.
Interestingly th reduced milk price was not seen as a huge concern for rabobank in NZ as land prices were so buoyant they could weather it.

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The Southland environment is so stable with almost guaranteed monthly rainfall although they sure don’t see much of a summer!!

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Perhaps the highlight of the day was meeting up with a group of Southland young farmers for dinner that evening. We met with the group of around 30 mostly young farmers or people working in support services following their monthly meeting and were overwhelmed by the optimism and passion shown by the group for their industry. We all had many tales to share from our different backgrounds and I for one walked away wanting to go and buy some cows!! It was so exciting to talk to young men and women with backgrounds not necessarily in dairy planning their futures in the industry.

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