Federated Farmers: The big dry Mainland winter to be a challenge

Farmers in the Eastern South Island are praying for intervention from the skies above. There has been rain, but not enough to lift the drought.

Farmers' resilience in the drought-stricken regions of Otago, Canterbury and Marlborough will be tested further with the onset of winter. The impact of the summer's big dry is still unravelling as farmers deal with the loss in pasture, stock and income streams. The fall-out makes for a difficult winter. John Donnachie reports

Federated Farmers' South Canterbury president, Ivon Hurst, is in a bullish mood when talking down the phone. He's cursed droughts many times before; his tone is exasperated but philosophical: "The rain usually comes in April, best to just sit back until then, a good bottle of Scotch works wonders, you know."

That might seem a rather alarming disclosure, but when one considers the dire circumstances drought-affected farmers are facing, you can perhaps relate to Mr Hurst's sentiments.

Fellow local, dairy farmer Ryan O Sullivan, appreciates a fine whisky too. Unlike Mr Hurst, he's not a veteran of droughts and is coming to terms with the 2015 version -- the worst for many decades.

"Some older farmers said it's as bad as 1968/69. I've been dairying for seven seasons but this is definitely a whole new ball game. If the rains don't come soon, we'll have another event -- an autumn drought, and that will be apocalyptic. It's a very long time till spring when you have no feed," he said.

The outlook is foreboding: the long-term weather forecast and restricted winter feed apart, some Canterbury farmers have dried off their cows and ceased milking.

Drought means hard decisions have to be made, and fast.

"We've been without irrigation for virtually two months, and with feed covers decimated, we've had to offset it with supplementary feed, reducing stock demand where we can."

Reducing stock this summer from 1200 to 850 was a big blow and he can't afford to quit anymore numbers. Destocking is limited with few Mainland farmers wanting to increase stocking rates as they share the same predicament.

"You can't procrastinate; I recently had to cull around 150 cows three months early -- that's $100,000 just gone -- but there's no use beating yourself up over it."

Many dairy farmers were relying on silage and palm kernel for feed, but the reality is, the cost benefit isn't there at present. While it's been an optimal harvest for grain, financial viability is driven by production returns from feeding stock predominantly on pasture -- that's not viable when you have to buy in seven or eight kilos per cow.

"With reduced payout this year, you have to be extra careful. Most farmers simply can't afford to keep buying supplementary feed in," Mr O'Sullivan said.

The situation was still unravelling, but greenfeed crops are well behind and many not healthy enough to make the catch-up.

Throughout Canterbury, the winter feed budget would be very tight and worsen, if stock came into winter in poor condition or the weather deteriorated.

The conversation with graziers and some realistic forecasting towards planning should have already taken place.

The daily farm operation ultimately bares the brunt too. With fewer animals and less feed available, the workforce is likely the next casualty.

Mr O'Sullivan said labour hours were slashed, typically down by 50 to 60 per cent on what they would normally be.

The deficits were considerable, with a big hole in production affecting income returns and rising costs combining to create redundancies.

The situation created two camps. The older, more established drystock farmers were not panicking just yet -- they built farm systems to cope with the summer dry.

Many had enjoyed "ten consecutive good seasons with viable payout" and had anticipated the run was going to dry up eventually.

Established farmers had some good deferrals going into this season from last year's payout, but the new conversions and some sharemilkers are worse off.

"Those guys are definitely doing it tough," said Mr O'Sullivan.

When reliant on irrigation, the implications were fraught. The higher the stocking rate, the more exposed you were. The reality was, farmers were saddled with the same amount of resources to satisfy feed demands, which now averaged two and half times more.

A drought or adverse event subsequently tipped the balance, plunging highly-geared farmers into financial strife.

"You don't tend to farm any different if you have less reliable irrigation, you just assume restrictions will occur late in the summer and you can deal with it."

This year restrictions came early and have remained. It was worth looking at your risk exposure and to consider some mitigation.

The Fairlie cockie is unequivocal about a solution: "Access to alpine water and storage is the silver bullet. That's the only answer to combat future droughts."

South Canterbury farmers relied on foothill and spring fed river catchments for their water supply with no access to alpine water and few deep wells.

"This is not a good place to be long term for adequate environmental flows in these rivers, let alone irrigation," he said.

Mr O'Sullivan described this summer's Opuha Dam shutdown as, the first time since its inception in 1998, "unbelievable".

It was predicted once every 20 years but to actually witness it was something else. He believes, though, there should be less future reliance on the resource.

He suggests the nearby Lake Tekapo is a gateway for storing diverted alpine water through the foothills from the perennially wet main divide.

There were numerous options for bringing alpine water into the region, including the Waitaki and Rangitata rivers, but there are other considerations.

"It's not all about irrigation anymore, we need to look at the environmental benefits, respect cultural values and even consider things such as urban supplies. Above all, the irrigation supply needs to be reliable and bankable," he said.

Albury farmer Bill Wright farms drystock and has a plan, at least until June. He has contracted dairy graziers to May 1. After that, he's not sure what he'll do. He said it wasn't smart to operate your farm on the basis grain supplies will be sufficient.

"I have two feed budgets in place and we are now supplementing stock 100 per cent. There is no autumn growth yet but I'm hopeful the strategy I'm adopting will work."

That strategy involves growing maize and storing barley in the silage pit and not fallow.

He's looked at growing trees.

"I've just harvested a block, but there's no money in it," he said.

In the worst-case scenario, the dairy heifers will go and he will maintain his capital stock.

At least he has options. Some farmers had insufficient winter feed if autumn grass growth failed.

"This is part of farming, everyday is different. Have a plan -- a good one. There is plenty of information out there on feed budget options and the returns you can expect from stock which has lost condition," he said.

AgResearch senior scientist David Stevens says with drought management, farmers should be prepared to "pay for the cost of the drought in the year it occurs".

Letting production drop in subsequent years "keeps you poor".

Drier conditions are likely to be an increasing occurrence, he said, so farmers must develop resilient approaches to ride out these conditions.

Emergency silage pits, flexible stock buying and selling policies have to be considered.

Planning is knowing the cost of not doing anything, or conversely, the value of intervening.

Dunedin-based Mr Stevens, who specialises in optimising feed systems, said feed budgeting was as important as a financial budget when planning for droughts.

"For example, a typical 50kg ewe needs 1kg of dry matter to maintain condition, as opposed to high-performing flocks, which need at least 1.2kg dry matter per stock unit.

"You can calculate how much feed you need by measuring the animals (actual weight and range), the paddock size and the grass. And by checking how many stock are feeding from that area."

It was also possible to calculate what animals were likely to consume of available feed. What growth might be and pregnancy requirements.

Even with enough feed, farmers should be aware that feed supplements varied and the quality was determined by the rate and efficiency of the animal's digestion.

This requires careful management of supplements when added to the animal's diet.
By balancing rations, farmers had greater opportunities of ensuring quality feed to preserve the animal's longevity.

Feeding out with poor-quality hay and straw was detrimental to animals, especially around mating or later stages of pregnancy, when silage and baleage should be used sparingly and supplemented with grain.

Mr Stevens recommends using urea to enhance protein levels in low-quality feed. Mixed with molasses, this improved dry feeds such as straw and dry hay. Timing of supplements was crucial too. High-protein supplements would help engender multiple births and survival.

Oamaru vet David Robertson said reduced stocking rates, ewe ovulation rates, lighter lamb kills and the unknown impact on beef production meant the true economic fall-out was still unravelling.

Beef cows were losing condition and calf growth rates were struggling. The question was, where is all the young dairy stock grazing this year?

"Dairy grazing for young stock and cows this winter is going to be a bit of a scramble. The flow-on effects for autumn and winter feeding has now come to a head," he said.

The pressure points were surfacing with less baleage and brassica crops behind on yield.

Palm kernel was harder to source, with only contracted orders being supplied. However, it's not too late. Farmers could apply some rural cunningness - drilling and stitching in short rotation green feed (oats, rye-corn, or Italian rye-grass - whatever suited best) was means to producing quality winter feed.

Mr Robertson said a local farm consultant had advised, "you'll grow a lot more feed and recover faster if you get the drill out and sow something - even if its dry - rather than just letting old paddocks recover."

Grass recovery through paddock maintenance was another priority. It was best not to open all the gates for a month after rain if possible. If a recovering grass gets eaten too early, it gets exhausted.

Farmers he spoke to were resilient and could find positives from what was virtually a crisis in making.

The irony being there was less animal health issues from lack of parasites and foot rot.
"Farmers are finding out about their animals and how they cope in these circumstances. Besides, the situation means there is more stock available to purchase with potential bigger trade margins," he said.

For many, it was an ideal opportunity to finally prune back capital stock.

The condition of dairy cows now should be the focus as there's not likely to be the opportunity to maintain the recommended BCS 5.0 during winter.

In Marlborough, farmers endured the driest period in living memory.

Since last winter (July) through to mid-March rain has been a rarity, with just 131mm, barely a third of the historical average for that period.

"It's very serious, we have thousands of hectares lacking sufficient moisture to grow anything," said Greg Harris, Federated Farmers Marlborough president.

With days getting shorter and nights cooler, the situation was critical.

"Without water, you can't grow anything and the soil can't be stimulated, and that's one of the biggest on-going costs to New Zealand agriculture.

"We have an abundant quantity of sun and water which other countries would envy, and yet it's just ridiculous that we don't utilise it more. At least with water the natural cycle does not cease keeping nutrients alive and plant growth," he said.

For Ryan O'Sullivan, another challenging Mackenzie country winter beckons. "We need more rain. September's a long way off before the grass grows again down here, but it will - the grass will grow again."