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Ag Research - Can it stop the Decline in Farm Fortunes?

Greetings Readers

The presentation of the McKinsey Report on the Wool Industry has set out what is possibly a now or never plan for a structured change in the way the industry manages its product research, sales and marketing functions. Producers have the opportunity to improve the efficiency and redefine who is responsible for the costs and benefits down stream of the farm gate. Wool producers need to become involved, improve their understanding and then exercise their judgment by voting for what they see is the best structure.

The poor state of agricultural research in NZ shows in a number of today's news items. Fragmentation and lack of coordination and drive from a bewildered research community appears to be showing up in declining farm economic performance. Funding competition has been used as the reason for the decline of actionable research that benefits the producer. Both McKinsey and the NZ Dairy Board have identified a research and extension plan that may lead to slower decline of farmer fortunes.

The optimism pervading the pastoral producers has many similarities to the 1994 period of improved farmer fortunes. The warnings from that period were the speed with which costs increased to absorb the increasing returns.It was that glorious period in dairying where advocates high priced feed inputs had a brief period in the sun. The lesson shouldn't need to be relearned but probably will. NZ's farming success is based on using the lowest cost feed available - pasture - profitably.

Modelling of the total farm system is becoming an increasingly important tool for successful farm management. It is mentioned in the proposed Centre for Dairy Excellence proposal. Others are developing modeling systems for use by the farm manager for day-to-day management.

Since the introduction of computers many attempts have be undertaken by the use of programs for financial analysis of past performance to predict the future of the farm business.

Pastoral system modeling approaches the problem from a different perspective - now. This new system approach takes the resources of land; pasture growth, stock growth, operating costs and sale prices plus the cost of available additional feed or grazing and then models the optimal use of the resources to give the best stock classes to farm and their optimal times for sale in a systematic manner to match the grass growth curve of the particular property.

Readers interested in more information on such a modeling system should contact the editor at the address below.

Enjoy the mild winter.

The Editor


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