1. Start now
For the past four years, Pāmu has tried to place its people, the environment and the animals it looks after at the heart of all it does.
This approach is based on a highly commercial and pragmatic view that we won't have a business if we don't. Why? Because government regulations or customer demands will make such practices compulsory.
Every industry in the world is moving towards much more sustainable practices. We'd be dreaming if we believed that, as farmers, we might be exempt from practices everyone else has to adopt. Moreover, we realised that every day we delayed would make the pain of change much greater.
Today's environmental standards are not the finish line, but the start line. They'll become more demanding. The only way to continue to grow business profitability is to embrace the change, not fight it.
2. Less is more
That said, don't believe these changes are bad. They're not.
New Zealand's traditional farming model has been a volume game. We have limited amounts of land, so our approach, in simple terms, was to put as many animals on the land as possible.
Pāmu realised we needed to change that approach. So now in almost all the regions in which we dairy farm we have a lower stocking rate than the region's average and have been piloting farm systems based on lowering stocking rates much further. We removed PKE and are working hard on optimising our home-grown feeds to get more per cow, from fewer cows, fed better, with a lower footprint, at less cost.
By focusing on fewer cows, our milk production per cow has increased and offset some of the reduction in cow numbers thanks to a focus on better feed management and animal genetics. Milk quality has improved, so we get fewer quality penalties. We have more feed on hand, creating fewer periods of feed deficits. This builds resilience and lowers our risk around bad-weather events.
For example, our organic dairy farms have a 30 per cent lower stocking rate than our conventional farms but have some of the best animal performance across our 50-odd dairy farms in maintaining a healthy stable weight, top reproductive results and milk quality. We have not used nitrogen on these farms since converting them to organics 18 months ago, yet the pastures are as healthy as ever.
Lower stocking rates take the pressure off sometimes stretched farm infrastructure and allows for more manageable staff rosters, which in turns leads to fewer injuries on the job. We have fewer animal health issues because the stock are not worked as hard.
Our experience has been confirmed by many private farmers who took the lead on this well before we did and have seen similar results. Pāmu is at the start of this journey and still has lots to learn. But our benchmarking against other farm systems tells us that this is a win-win for our people, our cows, our environment, our regional communities and our profitability.
3. Focusing on value is critical
But we can't stop there.
Key to making a lower intensity farm system strategy work is finding ways to get paid more for our milk. In parallel with our environmental push, we have been diversifying our farm systems to produce organic milk, A2 milk, grassfed milk, winter milk, and any other type paid a premium by milk companies. This adds complexity to our system, but we realised we'd never get paid sustainable premiums unless we were really good at producing unique milk our customers valued.
Our future is in higher value, lower volume. So we've also been investing in changing some farms to produce sheep milk, working with partners on deer milk and looking at plant milk options for some land.
Our belief is that to make the destocking strategy work for our dairy sector we need more investment into unique, differentiated milk brands and strategies. The days of big volume commodity milk as the only viable game in town are over. Instead we need more small-scale processing infrastructure and high value milk brands (like A2) that can carve out niches on the world market.
Finally, while Pāmu is lowering cow numbers, we are adding trees. Pāmu is accelerating its forestry planting programme of four million new trees across our hill-country farms over the next few years to lower our carbon footprint. Our modelling suggests that retiring marginal hill country on our sheep and beef farms to trees, and focusing our animals into the better land, makes not just environmental sense, with less erosion and runoff, but it improves financial returns on those farms.
We have started to embrace the future Parker talks about and like other farmers are finding it a more profitable and sustainable one.
• Steven Carden is the chief executive of Pāmu, the brand name for Landcorp.
