October 19, 2007
High cow prices stall New Zealand sharemilkers
High dairy cow prices are forcing many would-be sharemilkers to look at other options for the coming season and this could possibly create a shortage.
Those contemplating buying herds need much money double as they did a year ago.
Last year, cows were selling for NZ$1100 (US$822) to NZ$1600 (US$1,195). Now they are fetching more than NZ$2000 (US$1495), with top herds costing hundreds of dollars more than that.
Lower order sharemilkers Jason King and Louise Cowper were one couple intending to go 50/50 share-milking this season. They got approval from their accountant and bank manager in August to buy 180 to 200 cows at NZ$1750 per cow.
However, the high prices have put a stop to those plans. King said they are always for a lookout for a lower order milking 300 to 600 cows and employing staff. It is always a worry, he said, to find good staff.
The couple have friends who are in the same predicament.
Taranaki Farmers dairy coordinator Kim Harrison says he also knows of people who were going sharemilking this year.
He said fifty percent will not get into the industry this year and it would be reasonable if these farmers would delay their plans for 18 months. Though there is still the opportunity for sharemilkers, Harrison said there will be nowhere near the number moving in this year.
However, he believes many existing sharemilkers will be able to grow their businesses.
The lower number of people going into sharemilking, and the increased number selling their herds because of the high cow prices, is creating another problem, according to Harrison.
He said there is a growing concern on replacing the sharemilkers as few cow farm owners may buy their own cows and put lower order managers.
Though dairy heifer grazing is a good idea, it is not suitable yet, he said.
Harrison has heard of some owners who are increasing their contracts to keep their sharemilkers. The contract will likely change to 60/40 from 50/50 and may well create a benefit to stay on.
