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WHAT OUR FUTURE LOOKS LIKE
Considerations for future planning
These aren't strict rules or requirements. They're simply frameworks to navigate any potential issues that are likely to affect the future and things to consider in your future planning.
We've developed them from our conversations with customers, overseas markets, communities and our regulators and we'll review these regularly to make sure they're up to date.
Co-op and Prosperity
Consider how you can more actively give to, or participate in the Co-op:
- Open Gates host;
- Be on a farmer panel;
- Host a Co-op shed talk;
- Governance Training;
- Stand for Shareholders’ Council;
- Stand for the Board.
Organisations that have the ability to adapt, change and innovate to overcome challenges and seize opportunities will increasingly thrive. The Co-op will need to challenge existing structures and operating models to ensure that it is well-placed to compete on an ongoing basis.
The agricultural growth model we have had is changing and increasingly profitability will come from efficiency - not capital growth.
In some cases, this will require diversification or changes in land use with implications for both individual farmers and the Co-operative.
Full farm assessments will play an increasing role in ensuring the success of farming businesses by ensuring they are fit for the changing regulatory, financial and societal structures they are operating in.
Changing the Capital Structure will allow farmers to make different business decisions.
Get ready for the future now by adopting the practices of our leading farmers:
- Understand the history of the Co-op, why was it formed and why it’s important.
- Understand the key points of the Co-op’s purpose and strategy.
- Be a strong and vocal advocate for your Co-op within your community and networks.
- Keep up to date through the various communication channels provided and engage with other Co-op members on how you think the Co-op is performing.
- Ask questions of your Shareholders’ Council, Directors, the Senior Management Team, and your Area Manager.
- Vote in the Board and Shareholders Council elections.
- Upgrade your tanker entrance and turning circle to the ‘Upgraded and New Farm Dairies’ standards to improve tanker safety and efficiency.
- Provide input when requested by the Co-op.
- Attend Co-op meetings.
- Support other farmers in the Co-op when they need it the most.
- Consider the implications for the Co-op in your decision-making.
- Have a business plan covering your goals, finances and succession planning.
- Share the plan with your Area Manager; this way the Co-op knows how it can best support you.
- Undertake ongoing reviews of your business plan, especially prior to making any major changes or new investments.
- Join DairyBase to allow you to compare your farm's performance with other farm businesses.
- Attend DairyNZ's Mark and Measure course.
- Understand the benefits that can be obtained through Farm Source.
- Know what the break-even milk price is for your business.
- Understand the operating profit of your business compared to similar farm businesses.
- Maintain debt levels at an appropriate level in relation to the business’ ability to service debt.
- Review cashflow budgeting monthly to help make farm management decisions.
- Improving feed quality, efficiency and conversion of feed to production are important skills for low-carbon food production.
- Participate in the DairyConnect network to access a suitable mentor to support farm practice and business planning advice and guidance.
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Environment
- The agricultural growth model we have had will continue to change. Efficiency will drive impact reduction and support some on farm diversification.
- There will be pricing of emissions from 2025 and these costs will rise over time; this may provide an opportunity to recognise on farm carbon sequestration.
- There will be increasing pressure from customers for farms to improve biodiversity, soil health and management, adopt regenerative farming practices and incorporate these future requirements into your Farm Environment Plan.
- There may be an increased focus on contaminated soils and how these are managed on farm.
- There will be restrictions on the use of refrigerants with the use of high global warming potential by 2030 (e.g. R404a, R134a, R407c).
- Application of feed additives and rumen methane inhibitors and vaccines.
- Development and commercialisation of new nitrification and urease inhibitors.
- Genetic selection for lower-emissions animals, lower emissions fodder and forage varieties.
- Exposure to emissions pricing mechanisms.
- Diversification of land use.
- The Co-op is focused on reducing waste and increasing sustainable packaging across its supply chain, including through our Farm Source retail network.
- There are increasing regulations around on-farm waste and the burning of refuse.
Get ready for the future now by adopting the practices of our leading farmers:
- All good farming practices are being met.
- Increase riparian, wetland and tree planting; utilise the Co-op’s Plant for Good service; retire marginal and/or erosion-prone land.
- Understand and manage your farm's nitrogen loss, biodiversity and soil health degradation. Consider reducing your footprint by:
- Reducing & optimising nitrogen fertiliser use and supplementary feed inputs;
- Optimising manure management;
- De-intensifing your farm system.
- Protect existing indigenous biodiversity on your farm, including having pest management actions in your Farm Environment Plan.
- Understand Mātauranga Māori (traditional Māori knowledge and practices) and include in your Farm Environment Plan.
- Undertake ongoing reviews at least annually of your Farm Environment Plan to address new and emerging issues and plan for the uptake of new technology.
- Use minimum tillage or direct drilling in place of regular cultivation.
- Implement ‘precision farming’ options to improve water efficiency, nutrient management and pasture utilisation.
- Monitor and manage use of agrichemicals and minimise as much as possible. Ensure stewardship with an integrated pest management strategy.
- Improve the efficiency of pasture and crop production.
- Minimise nitrogen surplus through reduced use of nitrogen fertliser and/or supplementary feed.
- Manage timing and placement of nitrogen fertiliser applications and select inhibitor coated nitrogen fertilisers to reduce the amount of nitrogen applied.
- Reduce total feed eaten on-farm.
- Identify and cull less productive stock early.
- Reduce wastage rates (unplanned losses) so replacement rates can be optimised and total feed eaten reduced.
- Utilise genetic selection to increase animal performance and decrease maintenance requirements.
- Manage animal health to improve efficiency and productivity.
- Match feed demand with pasture growth and utilisation.
- Optimise pasture quality and production to meet feed demand; ways to do so include conducting regular pasture assessments, feed budgeting, and setting and managing pre- and post-grazing covers.
- Optimise supplementary feed inputs to meet feed demand by maximizing the use of home-grown feed.
- Use alternative forages to reduce protein in diet.
- Improve the management of effluent.
- Avoid storing effluent in anaerobic conditions by actively managing effluent ponds to lowest level and regularly remove and apply solids to pasture.
- Use all collected effluent as a fertilizer to reduce external inputs.
- Capture and store carbon in vegetation and soil.
- Consider converting less productive land into vegetation or forest.
- Minimise time soils are left fallow.
- Increase duration of pasture in crop rotations.
- Consider your on-farm energy use and ways you can reduce this. Genesis Energy can provide a free on-farm energy assessment.
- Take all measures to reduce unnecessary packaging and ensure recyclable materials are chosen and recycled where applicable. For example:
- Utilise products that have a longer life-cycle and/or have end-uses to minimise waste.
- Participate in an accredited product stewardship programme – avoid the use of on-farm ‘dumps’ and burning of waste.
- Dispose of hazardous substances in accordance with best practice guidance.
- Dispose of carcasses and biological material following DairyNZ's guidance, with use of a collection service preferred wherever possible, to manage environmental and biosecurity risks.
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Animals
- Increasing assurance and verification of on-farm animal welfare practices (including management of welfare impacts around end-of-life), real-time farm monitoring for customer and consumer assurance, and new advanced wellbeing metrics updated for our 'Cared for Cows' initiative.
- Mandatory regular body condition scoring and action plans to maintain condition.
- Encouragement of positive experiences: enrichment, grooming, choice and an expectation that we can demonstrate enrichment of the cows’ quality of life.
- Pressure to implement alternative farming systems that reduce the impact of calf/dam separation, and/or new farming systems that reduce bobby calves.
- Increasing use of automated animal monitoring systems such as collars, cameras and drones.
- Increasing need for more shelter from the environmental extremes resulting from climate change.
- Continued focus on dehorning/disbudding, with the encouragement of polled genetics.
- The Biosecurity Act is being reviewed. The Co-op is actively engaged in this and seeking to understand the possible implications to our farmers - this may see links to compensation and biosecurity plans and activity on farm.
- There will most likely be a requirement for all farms to have an audited Biosecurity Plan.
- Climate change will bring an increased risk of tropical organism establishment in NZ.
- The Co-op will continue contributing to the proposed future work plans under the Biosecurity Business Pledge, alongside other New Zealand businesses and Government to strengthen the biosecurity framework. Through DCANZ, Fonterra will continue to work in partnership with the Government on dairy-specific joint readiness activities.
- NAIT will be extended to include disease status.
Get ready for the future now by adopting the practices of our leading farmers:
- Proactively monitor animal health and wellbeing and continuously improve in accordance with an Animal Wellbeing Plan.
- Regularly undertake body condition scoring, with corrective actions to improve the condition of cows falling below target.
- Animals are handled in a manner that fosters a positive relationship between humans and animals and should not cause injury, panic, lasting fear or avoidable stress. Staff receive training around how their behaviours impact the wellbeing of animals on farm to support this.
- Increased use of appropriate pain relief for painful conditions.
- Antibiotics are only used when needed and under a vet's guidance.
- Drenches are only used when they are needed and in an appropriate manner.
- Animals have access to appropriate shade and shelter.
- Wintering practices are adopted that minimise negative impacts on both animal wellbeing and the environment.
- Calf care and colostrum management practices are reviewed and monitored to ensure calves get the best start in life.
- Steps are taken to reduce the impact of heat stress on cattle over summer.
- Locomotion scoring is undertaken to allow early identification and treatment of mildly lame cows.
- Reducing surplus calves through sexed semen and dairy beef genetics.
- Have a biosecurity plan and procedures in place that are understood by staff and aim to make continuous improvements.
- Biosecurity plan includes procedures to update NAIT records in a timely manner.
- Ensure farm Health & Safety Plans include human health issues like zoonotics.
- Follow a pest control plan and maintain records.
- Provide adequate training on how to detect early signs of poor animal health, diseases and pests, and what to do.
- Include the active management of endemic diseases (long-term management of diseases in New Zealand at present such as BVD, Johnnes, Tb, M. bovis, Lepto) in your Animal Wellbeing Plan.
- Keep accurate digital records (e.g. disease treatments given to animals and why they were given).
- Use devices and/or technology to provide early animal health alerts.
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People & Community
Increasing expectations from our customers that we can demonstrate effective management of labour and health and safety standards.
Get ready for the future now by adopting the practices of our leading farmers:
- Remuneration or total package value paid to employees is competitive for their skills, responsibility and experience.
- Employee working hours are no more than 48 hours per week, and overtime is occasional, voluntary, mutually agreed and doesn't exceed 12 hours per week.
- The farm team consists of the right people with the right skills to ensure workloads are achievable in the allocated time, and employees feel like they are valued and respected.
- Employees have opportunities for personal growth and career development.
- Positive feedback is given regularly, and reward and recognition is given aligned to individual employee values.
- Implement strategies on farm that strive to reduce employee stress and improve efficiency.
- Employees have individual targets/goals that are regularly discussed in both informal and formal conversations, and they are aware of how the farm is tracking.
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Milk Quality & Excellence
- An increasing focus on the fact that we are producing a food product on farm. E.g. we now talk about the ‘farm dairy’ not ‘cow shed’, and how we manage our farm dairy impacts on our Co-op’s reputation in New Zealand and overseas.
- Food security is likely to have greater focus and farms may be required to put plans in place to address these concerns. Auditing of these plans may also become commonplace.
- Innovation is likely to continue in the way that farm performance is audited and assessed through the increased use of digital tools, risk assessments, desktop audits and new milk quality tests.
- Regulatory and customer expectations are likely to increase, especially as we move to implement a strategy that focuses more on provenance claims. There may be certification requirements to support these claims, potentially using blockchain technology.
- The Dairy Diary Quality Management System and farm records are managed in real-time electronically.
- There is a growing demand for specialty dairy products, ingredients, and environmental and socially sustainable food claims. The Co-op is investigating these alongside the opportunities around adding value through segregating milk pools.
- As we continue to shift to producing more differentiated, better-tasting products and/or specialty milk, we may require new milk tests and metrics.
- The Co-op is assessing the opportunities to leverage GMO feeds on a larger scale in the future if there are benefits to doing so. Our current usage of GMO feeds is small enough that we can produce non-GMO products and gain additional value through careful management of the milk supply. It may be in time that the benefits afforded by using GMO feeds will be greater than the value currently obtained.
- There may be new Speciality Milk programs that focus on providing milk with specific characteristics that attract a higher value.
Get ready for the future now by adopting the practices of our leading farmers:
- Consistently meet ‘Excellence’ across all milk quality parameters.
- Achievement of A in all Farm Dairy Assessment categories.
- Proactive use of milk vat monitoring systems (MVMS) to manage milk quality.
- Achieve average milk temperatures below 5°C (2 hours post-completion of milking).
- Maintain Te Tihi status over multiple seasons.
- The Dairy Diary Quality Management System and farm records are managed electronically.
- All staff are formally trained to manage milk quality through relevant programs effectively.
- Have systems in place to reduce your risk of external contamination impacting food safety quality.
- Maximise the use of home-grown feed and be strategic about importing additional feed into the milking system.
- Evaluate the environmental impacts of all feeds imported into the milking system before purchasing.
- Prior to feeding alternatives to pasture, carefully assess their potential to cause adverse effects on the milk's characteristics (e.g. flavour taints, residues, GMO status).
- When making decisions to change feed types, evaluate the impact this may have on milk characteristics and other parts of your farm system (e.g. animal wellbeing, productivity and profitability, GHG footprint).
- Consistently achieve an FEI average of <7.5 across the season.