27 July 1994 Large Herd Dairy Units Generate Own Challenges And Opportunities

The social organisation of large herd dairy farming in New Zealand is moving away from traditional family farm organisation, says a Lincoln University report by Dr John Fairweather of the Agribusiness and Economics Research Unit.

However, he sees the character of these increasingly numerous large herd farms as supporting, rather than detracting from, farm workers and sharemilkers gaining access to land.

For his report, entitled "Social Organisation of Large Herd Dairy Farms in New Zealand", Dr Fairweather informally interviewed 29 large herd farmers throughout the country. The criterion used for large herd dairy units was farms with over 500 cows. From the interviews five distinctive types of large herd farms and operators were identified, all showing different social organisations when compared with traditional smaller farms. The five types were: -

Group 1: Farmers who were in a variety of pre-farm ownership situations such as sharemilking with a view to ultimately owning their own smaller farm.

Group 2:   Farmers who had increased the size of their holdings in order to get out of the milking shed as they enjoyed farming, but not milking cows. These farmers directed their energies towards non- milking aspects of farming.

Group 3:   Farmers who were committed to the farm and involved in milking. All were seeking to increase production per cow or per hectare or to build a new shed.

Group 4:   Farmers who had a home farm plus others and did little milking, and who has a sharemilker or manager employed on the subsidiary farms.

Group 5:   Farmers who had one very large farm and employed a large number of workers. These owners typically did little or no milking because managing and co-ordination work was a fulltime job.

Moving from Group 1 to Group 5, Dr Fairweather says there is an increase in some of the variables such as the number of fulltime workers and number of cows milked, plus a nearly uniform increase in age and production. There is also a decline in milking involvement, and Group 5, with the largest scale, is characterised by having young farmers.

The report says that the challenge of managing increasing scale is to maintain contact with milking and production and that there are four main ways of doing this. Farmers in Groups 1 and 3 do it themselves (milk at least once a day); Group 2 farmers use contract milkers; Group 4 farmers use sharemilkers or managers; and Group 5 farmers use a tightly managed hierarchy with supervisors or herd managers.

The character of large herd dairy farming tends to preclude family involvement, says Dr Fairweather. Compared with family farms, large herd dairy farms have more employees and these people play an important role in the success of the farm. Farmers have a stake in employing well qualified and motivated workers, in fact they are likely to be more concerned about this than family farm operators are, because of the importance of the employees to large herd farming success.

Employees are integrated into all aspects of farming, as they are employed to do a wide range of farm work rather than simply occupying the role of semi­ skilled labour to milk cows. Furthermore, their education is fostered either by instruction from the farmer or from attendance at cadet and other training courses, or at discussion groups or fieldays.

Work organisation on large herd dairy farms is characterised by routine work and extraordinary work co-ordinated either by close supervision or delegation. Workers may be rotated around jobs to relieve boredom and broaden experience. The farmers can also play to the strengths and talents of their workers.

Large herd farmers emphasise planning, organisation and attention to detail as some of the key success factors. Some farmers use modern staff management techniques such as Total Quality Management.

Among the work issues on larger farms is keeping track of machinery. It is easy for tools to be lost or moved to various parts of a particularly large property. In one case, mentioned in the report, all machinery was signed out to identify who had it, and when it was due back.

Communication is important in the operation of large herd units. Occasionally this is structured into regular meetings, often held at the beginning of a week. Diaries and books or noticeboards in the dairy shed are used to note relevant information. Farmers more distant from their workers usually have weekly sessions with herd managers, contract milkers or sharemilkers. Telephones are a crucial part of this communication process.

Large herd farming builds labour management skills on a base of production skills which are necessary on any farm, says Dr Fairweather. Large herd farmers frequently mentioned that the experience of working on their farm, plus receiving a good reference, ensured success among prospective farm owners.

Dr Fairweather says that farmers with large numbers of workers preferred and expected their workers to work through the hierarchy of positions available on their own farm before going on to contracting or sharemilking positions.

Successful employees are likely to be successful sharemilkers.

Contract milking potentially adds another step in the ownership pathway but the data in the study suggests that milking contracts are not in widespread use on large herd farms.

A general opinion expressed was that 50/50 sharemilking was "too generous" for sharemilkers at the present time. However, there was still a place for sharemilkers and farmers in Group 4 (home farm plus others) still managed to have them without suffering financial loss, presumably because each sharemilker unit was of modest size.

Large herd farmers are forced to be efficient in their use of time and believe they are well able to resist financial setbacks.

Dr Fairweather's report concludes by arguing that the advent of large herd farming appears not to be precluding access to farm ownership and that the character of large herds farming supports access to land through merit.

Further research is needed before the views and conditions of workers are fully known but the results so far suggest that their conditions are satisfactory.

The full report, No 222 in the unit's series, is available from the Agribusiness & Economics Research Unit, PO Box 84, Lincoln University, Canterbury.

Shannon McLeigh, Lincoln University, Canterbury, New Zealand.

Ian Collins, Journalist, Lincoln University, Canterbury, New Zealand.