From Manitoba to NZ – differences are more than just the weather

We had been home in Scotland for a month over Christmas and I thought the country was looking well, but the TV was full of Brexit and then about three days was spent in parliament arguing whether someone had said 'stupid cow' or not.

This, in the country which just two generations ago ruled the biggest empire that the world had ever seen! I know that we no longer live in Scotland, but as a holder of a UK passport I still have a keen interest in what is going on and maybe I have a different perspective of Brexit.

From where I'm looking, the whole concept of the EEC (as it was then) has been lost in top heavy bureaucracy and is beginning to look like a runaway stagecoach, and the UK has dropped the reins. Britain looks like losing its sovereignty and becoming a member state in a federation, and would be negotiating against Germans and French etc.

But I digress. In Canada we are having a normal (?) winter, probably around 4-5 feet of snow up until now, with temperatures seldom above zero°C and sometimes as low as minus 50°C with wind chill. Our cows are still grazing standing maize/corn but will probably be confined to the corals by end of February when they start calving, and they consume considerably more energy in cold weather.

Grain prices have been fairly stable, here, apart from weather concerns. We have about 85 % of old crop either hauled, or priced and haven’t sold any below our target of £155 for top quality wheat £260 for canola/rape and £245 for soyabeans. We have some of 2019 crop already priced and a few targets in which will trigger if the market gets there.

We had decided to have one more trip to New Zealand – while we are still fit – so after being home from Scotland for only 10 days, we headed to the 'Land of the long white cloud'.

We have been to New Zealand four times now, 1997, 2007, 2013 and this time and what a wonderful country it is – Scotland with better weather, Jean said – with beautiful and diverse scenery, high mountains and flat plains.

We were staying again with Jean’s niece, Seonaid, and her husband and three daughters, near Tirau, in the Waikato plains, one of the best dairying areas in the world. I noticed quite a few differences since our previous visits, with a lot more maize being grown, a lot of it contracted by the growers to dairy farmers, price based on quality. It had the potential to be a bumper crop but was needing more rain when we left.

There were also more open sided sheds, or 'herd homes', going up as the calving pattern has changed a wee bit and they want to be able to house the cows when needed and feed maize silage under cover.

Russel Tye, our niece’s husband, builds milking facilities and he had just finished building two 70 stall rotaries side by side on one farm, but he told me that there are a few robots being installed. Some of the people I talked to, told me they only milk once a day, mainly lower yielding breeds with naturally higher solids and it appears to be mostly smaller farmers who also have off the farm jobs.

I remarked to my niece that there were a lot more calves and yearlings in the fields than there were six years ago and she replied that farmers were becoming more aware of consumer concerns about bobby calf slaughtering and were now keeping most of their calves, some for replacement and some for beef production, with the majority of the steers sold for NZ $200 to rearers who in turn sold them on to finishers at 600 lbs, who then sold them as 'fats' for around NZ$ 2000. One couple who don’t milk any cows buy and rear 12,000 calves every year.

I asked her if this extra beef production detracted from the traditional home beef prices, but she said most of the dairy beef was sold to the USA for burgers. Russel took me to a huge building which, when I had a tour of it back in 1997, had been an assembly line lamb slaughter plant. His business had been hired to convert it into a bakery for 'Yarrows', a very large bakery business who as well as supplying bread and tarts all over the southern hemisphere also produces the dough for most of Subway's branches all over the world.

The New Zealand dairy business is still evolving, farmer co-ops have always been the main organisational structure in the industry, pre-WW11 there were more than 500 independent milk processing plants. Since then, due to amalgamations which were accelerated by the government’s decision to abandon subsidies, by the 1990s that number was down to four. They were the NZ Dairy Group, Kiwi Co-op dairies, Westland milk products and Tatua dairies, all under the umbrella of the NZ Dairy Board which was responsible for all marketing and export.

In 2001 the NZ Dairy group and Kiwi Co-op amalgamated with the former NZ Dairy Board and formed Fonterra. The NZ government then deregulated the dairy industry, so allowing the export of dairy products to be undertaken by any co-ops. Tatua and Westland dairies, after consulting with their farmer shareholders, decided to remain independent.

Fonterra is now the world’s biggest dairy co-op, with plants all over the world, a turnover of NZ$17bn, exporting 95% of product. It is still farmer-shareholder controlled and any policy changes must have a 75% majority, shares are based on two times each kg of solids sold.

The Fonterra factory which I featured in my article in The SF back in 2007, is now even bigger and is supplying mozzarella cheese to most of the world’s Pizza Huts.

Westland Milk Products, which stayed independent, is based in the South Island and is the third largest dairy in NZ, with a turnover of NZ$588m. It is owned by 429 farmer/shareholders and has recently opened a plant in China. Tatua Dairy, which also voted to stay independent, has 114 farmer shareholders, all located within 12km of the creamery, where 37,000 cows on 10,000 ha produce 200m litres. With a turnover of NZ$ 289m, it consistently pays the best for milk, probably due to its small catchment area plus by focusing on added value products, such as high quality infant formula. They are also recognised as a world leader in the manufacture of highly purified bio-active proteins and peptides, including lactoferrin one of milk's best immune system aids which unfortunately does not survive pasteurisation and homogenising. Interestingly, some years ago 'Farmers Milk', a group of Ayrshire farmers lead by Graeme Kirkpatrick, of Craigie Mains, were trying to develop this in Scotland.

The Miraka Dairy Factory grew out of a shared vision by a Maori trust which farms a lot of land when they decided that they could add value to their product beyond the farm gate. By uniting their businesses along with some investors, including Vietnam Dairy Products, the biggest dairy company in Vietnam, in just 10 years it now has 55,000 cows on 98 farms and exports to all of the Americas, Asia, Africa, the Caribean, Australia and the Pacific.

The creamery, which was built in 2010, can process 23m kg of milk solids per year and uses renewable geo-thermal energy. At the moment it spray dries eight tonnes of milk powder per hour and produces UHT milk mainly for the Asian and Chinese markets.

In five years time it hopes to be selling 50% UHT and 50% WMP. For the second year in succession it has paid its producers more than NZ$ 3m in bonuses, based on solids, hygiene, herd health and company profit sharing.

These four companies export more than 90% of their production and the Kiwis seem to be aggressive world marketeers. For a country almost the same size as the UK but with a population of 4.7m – as opposed to UK’s 67m – does this set an example of what can be done post-Brexit when 'the world becomes your oyster'?

Diversification is now the in-word over there too. One guy we saw truly into that took advantage of when, some years back, the film producer Sir Peter Watson was looking for a location for his new project 'The Hobbit' and the 'Trilogy of the Rings'. He was in a helicopter flying over Mata Mata in the Waikato area, when he saw a magnificent tree surrounded by numerous small hills he said to his pilot: “This is it, set me down at that farm."

He jumped out and knocked at the rustic front door, no reply, he knocked again, louder this time and a burly rugged farmer came to the door, braces hanging down, Sir Peter said to him: “I’m a film producer and I would like to rent some land from you for my next production.” The farmer, Robert Alexander, replied: “Well you’ll have to come back another time, I’m watching the All Blacks rugby game on the telly,” and closed the door.

Sir Peter did come back and the rest is history, and there's now a 12-acre site called 'Hobbiton' where the Hobbits lived and The Lord of the Rings and the others in the series were partly filmed. That is now one of the most visited tourist spots in the world and in 10 years it now employs more than 300 staff and has 3000 visitors daily across 364 days of the year.

With a spend of NZ$ 84 per head that equals NZ$ 100m per annum, plus whatever is spent in the restaurant and souvenir shop. Meanwhile, farmer Robert Alexander and his sons still farm the 12,500 acres around Hobbiton with sheep and some beautiful Angus cows, plus 'a dripping roast' income.