By Paul McBeth
June 18 (BusinessDesk) - Industry body Dairy NZ sees fully automated milking as a major opportunity to lift on-farm productivity, but doesn't expect it to be commonplace for several decades.
About 44 percent of the country's dairy herd are milked in more efficient rotary dairy sheds, despite the style accounting for just over a quarter of the nation's sheds. About 72 percent of the country's dairy sheds are the less efficient herringbone style.
In its submission to the Productivity Commission's inquiry into the impact of technology on the future of work, Dairy NZ said rotary dairy sheds have the highest uptake of automation, with 77 percent using automated technology. However, out of New Zealand's 12,000 or so dairy farmers, there are just 25 fully robotic dairy sheds.
"Fully automated milking represents a large opportunity for farmers, but currently adoption is low (about 25 farms in total) due to factors such as cost of technology and poor fit with large pasture-based dairy farming," chief executive Tim Mackle said in the submission.
Dairy NZ expects automation will free up farm workers from early starts and long days, and while there might be a small reduction in total labour per farm, the industry body group said the European experience tended to shift that work to other tasks.
"We expect milking will be more automated in the future, this may still take several decades to be commonplace in NZ. The extent to which fully automated systems will become commonplace will depend on the adaptability of the technology to pastoral systems and economic considerations," Mackle said.
Dairy NZ said there had been a significant amount of public and private research attempting to adapt automated milking to pastoral farming techniques.
A Frontier Economics report prepared for government officials as part of their review of the dairy sector's legislative framework found local dairy processors' investment in research and development had been modest relative to international peers. The report noted that farmer shareholders of the dairy cooperatives were likely constrained in their ability to encourage investment in processing, given their own rising levels of debt.
In its submission to the future of work inquiry, Federated Farmers said the elevated levels of debt among farmers - especially new dairy conversions - meant interest costs were one of their biggest expenses and undermined their appetite to invest.
"This may be an impediment to investment in expensive and new (to New Zealand) technology, where there is no clear value proposition for the investment," Federated Farmers policy analyst Nick Hanson said in the submission.
The Feds said dairy farms provide the majority of on-farm employment and greater mechanisation and use of robotic sheds is the best short-term answer to labour shortages.
"A number of barriers to their uptake in New Zealand could be speculated on but probably the major issues at this stage are currently high cost and the fact that they do not integrate well with pasture-based farming that is common to New Zealand," Hanson said.
The Feds also said farmers will be reluctant to shift away from pasture-based techniques because of constraints created by the Resource Management Act consenting process, and because it provides a marketing tool in setting New Zealand farmers apart from their European and American rivals.
Both industry groups also identified increased use of data as an opportunity for farmers to better understand their systems and techniques, with a view to more productive and sustainable practices.
Federated Farmers said a labour shortage was a significant issue for the primary sector, with low unemployment rates and increased urbanisation shrinking the pool of available workers.
Dairy NZ said government support of innovation and technology will support the dairy sector to upskill the workforce and raise productivity, and wants to see education and migration policies recognise the ongoing technological change.
"Technology ultimately helps farmers utilise modern systems and tools that will not only increase productivity but can represent a more attractive lifestyle change for workers, with a gradual shift away from more manual tasks, fewer hours worked and a shift of focus on the farm," Mackle said.