Considering it is New Zealand’s biggest corporate dairy farmer with $1 billion in assets, Dairy Holdings Ltd has a surprisingly low profile.
That is something that probably needs to change as the dairy industry looks to get better at telling its stories about what it is doing to improve its environmental footprint, says chief executive Colin Glass.
Dairy Holdings’ 75 farms – 59 dairy and 16 grazing – are all in the South Island and predominantly in Canterbury. It is Fonterra’s largest supplier with 54 farms, with the remaining five supplying Westland Milk Products.
The figures are impressive: in the 2017-18 season its 59 dairy farms milked almost 50,000 cows on 14,300 hectares, producing an estimated 17.26 million kilograms of milksolids.
DHL is owned by three New Zealand farming families – Colin and Dale Armer, of Tauranga, who also own North Island dairy farms, the Waikato-based Wallace farming family and Murray and Margaret Turley, of Temuka, South Canterbury, large-scale potato and arable growers. A previous shareholder, Alan Pye, exited in 2014.
Formed in 2001, it started with about 30 previous Tasman Agriculture and Dairy Brands farms, with Glass its chief executive since its inception. He also owns and operates his own 650-cow dairy farm and another two irrigated properties that rear and finish bull beef at Methven in Mid-Canterbury with his wife Paula.
DHL is largely self-contained, with its 16 grazing blocks growing about 2500ha of winter feed each year. This winter only two of its dairy farms will graze their herds off DHL land.
DHL even leases its own bull unit to supply 1400 service bulls as well as owning or leasing four special purpose heifer grazing blocks.
“Because of our size and scale we have to plan a year in advance for most things. For service bulls we buy 18 months before we need them. The market sees us coming.
“Being relatively self-contained this leaves us as insulated as we are able to be from other events,” says Glass, referring to Mycoplasma bovis, with estimates 150,000 cows may have to be slaughtered in a bid to rid New Zealand of the disease.
“At the moment we are clear of M bovis, but it is reaching far and wide and you just don’t know.”
In response, DHL has developed protocols for sharemilkers and contract milkers that bring stock into the herd.
“Currently MPI are carrying out all the blood testing for M bovis and it is not something individual operators like ourselves are able to do. In the absence of that we have had to develop protocols around Nait (national animal tracking) records and closed herds,” says Glass, a DairyNZ director. Of its 49,000 cows, 35,750 are owned by the company with the balance supplied by sharemilkers and contract milkers.
“If your Nait records are in order, and you have had no MPI trace follow-ups then you can have some confidence that you are able to insulate yourself as best you can.”
Within a month of the disease being first detected at the Van Leeuwen Dairy Group farms near Waimate in July last year, DHL had double fenced all its boundaries with a 1.5 metre margin on its South Canterbury and North Otago farms. This was rolled out across all its other properties in October and November.
“So it has had some significant impacts on the wider industry.”
Other precautions include padlocking all gates along roads and with neighbouring properties so the only point of access is into the yards.
“Initially we were disinfecting where people were going out to the wider property. However, we have since learnt that the risk of transfer in that case is relatively low.”
While trying to be as self-contained as possible, DHL’s farm expansion has meant some buying in of cows and movement of sharemilking herds in the last few years. It completed one dairy conversion in Southland in the last year and another two conversions in the last four years. The biggest growth has been in dairy support, with another four blocks added in the last four years.
“While this has helped us gain control of the wider parts of the business it allows us to take full responsibility for our environmental footprint.
“The challenge is the wintering and farming the total nutrient load.
“Overseer computer modelling shows that wintering is the part of the dairy system that has the most exposure to the highest rates of nitrogen loss. But at the end of the day you can’t have a dairy business without this.
“One thing dairy farmers can do is winter-off in another catchment. All that does is transfer the problem. That is why we are taking full responsibility for the grazing blocks as well as the dairy farms.”
Wintering strategies include growing more fodder beet, a lower nitrogen feed. “This has a similar nitrogen level to kale, but the crop yield is double, so on a per cow basis it is much lower.”
The group is also using oats and grass as catch crops after winter feed crops, particularly kale, to soak up nitrogen before it potentially leaches through the soil.
“What was regarded as good practice in the past is now the minimum requirement. So there has been massive change. For an operation the size of Dairying Holdings we need to be right across that.”
DHL is right in the firing line when it comes to reducing nitrogen loss limits, with many of its farms in Canterbury’s most sensitive catchments, Hinds and Selwyn-Waihora. Both catchments are red zones, defined by Environment Canterbury as catchments where water quality outcomes are not being met. DHL has 26 dairy and dairy support farms just in the Selwyn-Waihora zone.
Significant reductions in nitrogen loss figures have been set by ECan for both catchments: a 30 per cent cut in Selwyn-Waihora by 2022 and a staggered cut in the Hinds catchment of 15 per cent by 2025 and 36 per cent by 2035. The reductions are calculated from a 2009 to 2013 baseline average.
To help meet these nitrogen loss reduction targets, DHL has invested heavily in more efficient irrigation systems, installing 110 centre pivot spray irrigators in the last 10 years.
“This investment continued through the low payout years and has left us better positioned. It is not only reducing our nitrogen losses, it is improving profitability. A lot of our farms were converted to dairy in the late 1980s and early 1990s and watered with borderdyke (flood) and Roto-rainers (travelling spray). We now only have five farms at Waitaki to convert to pivot.”
Water savings were up to 50 to 60 per cent using the pivots, with saving in nitrogen loss per hectare also significant.
“It’s been a game changer for us and brought a new skill set. People think it’s easy as you only have to push a button on an irrigator but it’s brought a whole raft of things to measure and manage.”
When it comes to new technology, rather than being the first adopter, DHL prefers to be the fast follower, says Glass.
DHL champions a low-cost, pasture-based dairy system. “We try and harvest as much pasture as possible.
“We are not big importers of feed. Last year we used about 60kg of drymatter of purchased feed per cow. The window we put it in is tight, for an adverse weather event and a tight growth period. We don’t use supplementary feed to increase production.
“Purchased feed and grazing are the two areas that have increased in cost the most over time. By being self-contained we can control these,” says Glass.
By: HEATHER CHALMERS