Abstract

The New Zealand dairy industry has experienced significant changes over the last ten years. The number of dairy farms has decreased 6%, while the average herd size has increased by sixty percent. The type of farm systems dairy farmers operate are also diverse, ranging from predominantly pasture-based to more intensive operations that are driven by resource availability. An independent report in 1997 on the dairy industry concluded that for the New Zealand dairy industry to retain its competitive advantage it had to achieve an annual increase in productivity of four percent. In order for this to occur it proposed some major structural changes of the industry.

One such change was the formation of an integrated research, development, extension and education organisation, today known as Dexcel. Dexcel extension understands the industry has changed and has changed alongside it, linking the four percent productivity target to farmers profit and lifestyle goals. In order to achieve this, four key project areas were developed that focus on planning, labour productivity, on-farm systems, feed and forage production and farming sustainability. These project areas are aligned with programmes from Dexcel’s research team. Dexcel’s extension team now includes eight business developers and five product developers alongside its twenty-seven consulting officers. This facilitates information transfer from research down to farmers and vice versa. Dexcel extension is changing its method of information delivery. Previously, sixty percent of dairy farmers were contacted through 400 geographic discussion groups. Geographic discussion groups are still the mainstay of communication with farmers, however, information is also transferred through specialist events, field days, seminars, short courses, monitor farms, electronic media (internet) and partnerships with other rural professionals.

Keywords

Extension, dairy farming, New Zealand, Dexcel, extension programmes, on-farm productivity, technology transfer, discussion groups. industry good.

Media summary

The dairy farming environment in New Zealand is changing. Dexcel is working in a different way to better meet the more sophisticated technical and business needs of New Zealand’s dairy farmers.

Introduction

In February 2001 Dexcel was formed by combining Dairy Research Corporation and Livestock Improvement Consulting Officer Service as the result of implementing recommendations outlined in a report produced for the New Zealand Dairy Board in 1997.

Dexcel is a provider of research, extension development and education. Dexcel has an obligation to attain 4% productivity as set out in the Dexcel Deed of Trust through the uptake and adoption of current and existing technologies.

In the last 10 years NZ dairy industry has expanded milk production by 73% (Dairy Statistics 2001/02). During the same period the average herd size has increased by 46% to 271 cows (Dairy Statistics 2001/2002) as a result of large scale conversion of land to dairying from other land uses, and amalgamations of small farms. Dairying has changed from being predominately family run farms to a variety of operations ranging from large scale, sometimes multi-site operations to technologically advanced operations and various combinations in between.

The range of farm systems has also grown over this period. Ten years ago the vast majority were operating under a low cost all grass regime producing bulk commodity milk to the present day where a variety of different systems operate. These systems range from intensive feeding to all grass, and from commodity product to specialist product (for example organic, colostrum, A2 milk). Systems will be more driven in the future to respond to market signals from dairy companies and capital requirements to supply and process different product ranges.

Consumer and general public perception also have a more significant influence over farming practices. This is reflected in areas such as traceability of products and environmental expectations. It is likely that these expectations will increase in the future.

Funding of Dexcel Extension

Dexcel’s extension revenue comes primarily from a levy on milk solids production. Dexcel has an obligation under the Dexcel Trust Deed and Commodities Levies Act to report to its beneficiaries (directly and through Dairy InSight as Levy collector) on the:

• Industry good extension strategy
• Allocation of funds to valuable activities
• Outcomes of the strategy and activities

Dexcel Extension is the industry good solution development, packaging and delivery service to New Zealand dairy farmers. The service encompasses all activities from the output from Research projects to behaviour change on-farm, and vice versa.

As part of Dexcel, Extension shares in Dexcel’s obligation to attain 4% productivity, within industry sustainability targets. For Extension to fulfill its obligations, the group:

• Is delivering on four key programme strategies and a delivery strategy;
• Operates a nationwide delivery service network;
• Is the only organisation in the NZ dairy industry with the capability to capture an integrated whole farm system approach to dairy farming;
• Promotes a culture of integration and sharing to take a lead coordination role for industry service provision to farmers;

The nationwide extension delivery service includes a self-funding vocational training arm that currently operates in several regions.

Extension Programmes

Background to Programmes

Programmes are strategic focus areas that provide overall context and rationale within which specific projects are developed.

Programmes will deliver the magnitude of gain required to meet specific productivity targets using a series of focused, integrated projects coordinated to deliver the overall objectives of the programme.

While projects are executed in time spans of months, it is often unlikely that the outcomes of projects will realise industry benefits in periods shorter than years. Therefore, while project management reporting will be provided for the duration of the project, it is also appropriate to manage outcome measurement and reporting at the 5-year programme level.

Dexcel also uses the programme structure to manage it’s delivery activities, namely its regional extension services and measurement and reporting services.

Dexcel’s Extension programme overview

Farmer consultation undertaken by both Dexcel and Dairy InSight, reinforced by the Economic Survey of Dairy Farmers, identified five strategic focus areas. These have been grouped under the following work programmes. The first four of these programmes are dedicated to development and delivery projects, as follows:

History has shown that the traditional role of Dexcel Extension and it’s predecessor focused predominantly (but not solely) on shared farmer learning around the traditional farming subjects of “cows and grass”. This has delivered step change productivity increases through applied farmer learning.

To increase farmer awareness and sustained higher-level productivity increases requires a change in Extension focus to:

• Include the full spectrum of planning across financial, human resources, and environment as well as the physical farm production system.
• Include strategic and tactical level management, not just operational (see figure below).
• Products and services that can be shared amongst a wide range of farmers;
• Extension delivery techniques that include a wide range of farmer channels, marketing, reinforcement and measurement of farmer learning.

Where possible, farmer solutions, whether internal to Dexcel or external will be packaged into “farmer solutions” which will represent a complete set of actions, instructions, industry contacts and information needed by a farmer to take up an opportunity or resolve an issue. For example a solution will provide the steps and tools to answer the question “How do I employ a good person for the farm?”

Delivery of Extension Programmes

Delivery of industry good and suitable for-profit tools, processes and services, using both industry good and for-profit channels requires clear guidelines and close working relationships and a trust between providers. These partnerships will be developed and led by Dexcel, as described under Interaction and Liaison with partners¹.

Service delivery at all levels will be undertaken directly to farmers through Dexcel’s delivery network and through Rural Professionals, including for-profit organisations (e.g. farm consultants) and other industry providers

The four programmes, Plan4Success, Farm4Tomorrow, Feed4Profit, and People4Dairying, support the development of a sustainable farm business that delivers on the farmers’ business goals, and enables the farmer to achieve their personal goals and aspirations.

The Extension programmes are reflected and supported by Dexcel’s research programmes which are about Future Farm Systems, Sustainable Development, Milk Production and Products, and People & Technology.

Dexcel Extension’s Programmes of Work

Programme area: Plan4Success

The move to larger farming units and the increasing number of non-family run farms suggests that there is growing need for skill development in business planning.

With the trend to grow and specialise farm businesses there is a stronger financial focus to modern farm businesses. Consequently, farmers are looking to develop specialist skills and knowledge around the structure and long-term operations of their businesses.

Contribution to productivity and sustainability

Plan4Success is focusing on two main areas:

• Dairy farmer recognition of the value and use of planning.
• Using benchmarking as a tool.

Programme area : Farm4Tomorrow

Farmers are placing increasing pressure on the environment to produce more from their farms to offset the relative decline in milk price arising from international competition and consumer market growth, and to offset increasing farm ownership and operational costs. Against this, pressure is being exerted by environmentalists and consumer markets to maintain and improve environmental conditions. The New Zealand dairy industry trades on its “clean green” image and, to remain internationally competitive and acceptable as a milk producer, must continue to do so.

The Ministry for the Environment reports that: if New Zealand’s environment was perceived as being degraded, on average consumers [surveyed] would purchase 54% less [Dairy sector] consumer products. The actual loss in revenue would depend on how much of the lost product could be redirected, so the potential loss would vary between $241m (all lost product redirected to less environmentally discerning markets) and $569m (none redirected).

Further work on the use of fertilisers and supplements has reinforced farmers understanding that farm pollutants, such as fertiliser run off, are a direct cost to the farm where the cost of applied nutrients returns no value to milk production.

Farm4Tomorrow is focusing on three main areas:

• Stream health and water usage
• Efficient use of nutrients and energy on farm
• Animal Welfare and public perception

Programme area : Feed4Profit

Fertiliser and feed costs broken down by $/kg MS form the highest and second highest farm operations cost for dairying.

Continuing development of our farming systems through more specific management of the traditional pasture-based systems and increasing specialisation of high input systems is required to maximise the production benefits. Against this, animal health and welfare, impacts on animal reproduction and environmental issues all need to be balanced to provide a holistically sound farm systems environment.

Research undertaken over the last two decades continues to produce results that, once turned into farmer consumable products and adopted on-farm, will provide significant production, productivity and profitability advances in the New Zealand systems.

The wide variety of farm practices in New Zealand is producing considerably different performance results. There are still considerable learning opportunities to be capitalised by sharing farm system practices between farmers.

Feed4Profit is focusing on four main areas:

• Improving milk production efficiency
• Analysis and modification of farm production systems
• Efficient utilisation of forages and supplements
• Using information technology to benefit farm production systems

Programme area : People4Dairying

Labour costs broken down by $/kg MS form the third highest farm operations cost for dairying.

With continuing growth in average farm size through amalgamation and large-scale conversions, the requirement for non-family, employed farm staff will continue to increase.

With pressures being added to our farming systems through more specific management of pasture-based systems and increasing specialisation of high input systems, higher skill and labour performance levels are required on-farm. With increasing on-farm skill and labour demands, farmers are developing higher expectations of their Rural Professionals.

Personnel costs are increasing as farmers employ higher skilled people and compete with other industries in a tight labour market. Consequently more must be made of all human resources within the industry to remain competitive.

People4Dairying is focusing on four areas:

• Professional employment
• Labour productivity improvements
• Stable workforce management
• Personal development

At a farmer level the mix of expectations of business and personal goals that they will achieve from their business has also changed. Historically dairy farmers were prepared to accept long hours of work and low short term financial rewards for the building of significant asset values.

Increasingly there is a more diverse group of stakeholders who are involved in the business who have a different expectation of returns received and lifestyle for the short, medium and long term. This diversity is reflected in changing expectations and demands from Dexcel Extension beyond physical farm management to include business, human resources and environmental issues.

These demands translate into changes as to how extension is delivered to these diverse groups. Meeting these changing needs involves a shift from general and geographically based events to special interest based events and topics. This creates greater expectations for in depth specific knowledge and materials which Dexcel Extension is driving through the four development programmes Plan4Success, Farm4Tomorrow, Feed4Profit and People4Dairying.

Delivery strategy

The target audience for Dexcel Extension’s strategy is dairy farmers and Rural Professionals who influence and service NZ dairy farmers.

Key messages

Dexcel Extension will promote key messages to farmers from each of the programme areas. This will offer farmers opportunity to identify key areas on farm for improvement and select appropriate solutions to make on farm improvements.

Through analysis of the ProfitWatch and Economic Survey information the difference between an average farmer and a top 10% farmer (based on EFS) is the ability of the farmer to be above average in all aspects of their business. Historically Consulting Officers offered farmers predominately “cows and grass” products. In recent times farmers who were already high achievers in this area found this information of limited value. With the diversity of farm systems, sizes and milk products the ability of farmers to select relevant areas for improvement is becoming increasingly important.

Specialist groups

Dexcel Extension will operate specialist groups and events for farmers to gain specialist knowledge in an area. These groups and events will contain “like minded people” who want to gain more results from attending the group or event.

Dairy farming is becoming technically complex. Specialist groups and events offer the opportunity to drill down into a topic in detail rather than a broad topic overview. These groups and events will consist of farmers who want to make more rapid progress in a specific area and will have members that draw from a wider geographic area. It is likely that members will need to divulge more information within the group to gain maximum value.

Geographic discussion groups

Dexcel Extension will operate geographic groups nationally. These groups will be used as a forum for farmers to learn off other farmers. During the course of the groups key messages from each programme area will be introduced to create awareness and demand for specialist group and topics.

Geographic discussion groups have been run in NZ for decades. During recent times attendance levels at these groups has been declining. Farmers with specific needs will be encouraged to attend specialist groups or events. However geographic groups are still a key component of information transfer for farmers. This is particularly true of new or/and relocated farmers who need the opportunity learn district specific knowledge, and farmers who require a broader level of information. Groups will be encouraged to set objectives and operate at a more formal level to ensure value to participants.

Delivery of programmes

There are approximately 14,000 dairy farms in New Zealand and some 30,000 people physically involved in the farming business. Dexcel Extension has a staff of 50 people, of which 27 are Consulting Officers who have direct day to day contact with farmer clients. The remainder include 8 business developers and 6 product developers who have a mix of programme development, project management, product development and direct farmer contact. Obviously the ratio of Dexcel staff to farmers (and their farm staff) does not allow for all farmers to be contacted directly.

For Dexcel to impact on the productivity of dairy farming businesses through improved uptake and adoption we need to use internal and external channels. This will allow farmers to receive consistent messages and a reduced level of duplication. Farmers make changes not only from attending extension events. They make changes with the support and approval of other influencers in their business (Rural Professionals, influential farmers).

Media

Dexcel will provide dairy farmers and Rural Professionals with access to Dexcel research, technology, innovation and information through a range of media.

Consulting Officers and their supporting staff have a long history of contributing material to and reporting on innovation in the NZ Dairy Exporter and other rural media. They have also helped establish and have supported the major dairy farming conferences as significant forums to exchange and collect ideas. These will continue but be linked to the programme strategies and the delivery plans within each programme area to provide clear and consistent key messages.

Groups and events will also provide farmers with take home resources to enable application in home situation. All resources and information will also be available on the Dexcel website.

Role models and leadership development

Dexcel will identify and develop progressive and leading farm staff, managers, sharemilkers and farmers to ensure continued growth.

Farmers learning from farmers as role models will increase the level of uptake and adoption. By nature New Zealanders and in particular the farming fraternity are modest although many of them are high achievers. New ideas can be generated from these people then disseminated through the industry. Leading farmers can also be utilised for promotion and as mentors.

Summary

Dexcel as the dairy farmer-owned research, extension and education organisation, has positioned its specialist extension teams to address the issues farmers told us were important, capture the knowledge created by farmer investment in industry good activities and turn it into products, services, tools and technology with direct benefits for farmers. Combined with world class research facilities, staff and resources, Dexcel’s extension activities are well placed to make a huge difference - not only to the productivity of the New Zealand dairy industry, but also to the profitability and lives of thousands of New Zealand dairy farmers.

¹ See Function / Programme investment matrix