Tuesday, January 11, 2011

Summary of Day 1: Bank of New Zealand and Wills Dairy Farm

Good day from down under!

Our day started with a meeting at the Bank of New Zealand with three of their ag bankers. Their presentation on the issues and trends of NZ agriculture was extremely well done. We agreed with all their issues and thought they share a lot of the same concerns that we see coming. They will be sending us a hard copy and I would recommend reading through it.

We then traveled a couple of hours south of Auckland to the Grant Wills dairy farm. He grazes 650 cows on about 600 acres with three employees. The cows rotate through the pastures on a 25-30 day schedule in the summer and 70-80 day schedule in the winter. He plants a little corn for silage and uses 150 day maturity hybred, planting a 44,000 population in 20 inch rows. His land is some of the most expensive in NZ @ $42,000 NZ/hectare, which equates back to $10,000 US per acre. It takes about one acre per cow per year. His land value is down from $65,000 - $75,000 two years ago.

He is director for and markets all his milk thru a farmer owned coop called Fontera. Fontera markets 96% of all the milk produced in NZ and ships it all over the world. He sells his milk by the kg. of milk solids. We are still trying to convert it over to pounds of milk sold like we do in the U.S. But each hectare will produce 1,000 kg. of milk solids per year. The price they receive is determined annually by an independent third party, so the price is the same all year long.

He shared with us that their national income tax top rate has decreased from 38% to 30% and they pay “rights” (which we would call property taxes) of about $8,500 NZ annually on his 600 hectares. Grant was very well spoken, very open, and one of the top dairymen in NZ. He is working with a share milker to take over his farm when he retires as none of his kids are planning on farming.

We loaded up and headed to Roturua for a gondola ride up a mountain for a very nice dinner overlooking a beautiful lake.

If this first day is any indication, this is going to be a great trip!! We have heard the weather reports there at home and hope the storm is short lived . . . we are thinking of all you!

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