Dairy NZ

Dairy farmers' investment in industry good activity has to date delivered a considerable return on investment to your business. While it is difficult to quantify the benefits that are a direct result of industry good investment by farmers, it is clear that without it, we would have seen considerably less growth in the percentage of on-farm profit that has been achieved via productivity gains.

As at the end of 2005-06 the value of productivity gains in the dairy industry since 1998-99 was $1.17 billion.

This means that for the average owner-operated farm, this was equivalent to $834/ha of the total operating profit of $1,239/ha achieved for 2005-06.

The value of productivity gains made on New Zealand dairy farms over an eight-year period is illustrated below.

The value of productivity gains made on NZ Dairy farms since 1998-99

Through DairyNZ, farmers are investing in research, development and on-farm delivery activities that aim to help farmers increase their profitability through productivity and efficiency gains on farm. This will add an estimated further $2.4 billion each year to the value of goods exported by the dairy industry by 2015.

Further verification of return is provided by an independent study of industry good activity from 2004-2006 carried out by Nimmo-Bell to evaluate the return farmers have been getting from their levy investment.

Twenty projects were independently selected and analysed each year. The economic analysis was based on the estimated benefit the projects bring to the dairy industry.

The selected projects (including the costs of the Consulting Officer service, but excluding Tb eradication and containment money invested with the Animal Health Board) cost levy payers a total of $82 million over the three-year period. Nimmo-Bell estimated the industry net benefit for the selected projects to be $631 million over a period of 15 years.

This means for every dollar dairy farmers invest via the levy on research and development and the consulting officer service, Nimmo-Bell estimates a quantifiable net benefit to the industry of $7.70.