With limited supply, around 20 Mid and South Canterbury farms converting puts pressure on market for herds

Several South Island farms are set to convert to dairy over the next few years, changes that will increase demand for cows.

Strong milk returns, alongside low profitability for grain and arable are pushing the desirability of dairy conversion.

Concentrated heavily in Mid and South Canterbury, around 20 farms are set to convert for the start of the 2027 season, with a similar number adding again for 2028.

Jamie Cunninghame, PGG Wrightson National Dairy Livestock Manager says those heading to convert are typically existing dairy support and mixed cropping farms.

“Investment is required on farm, including fencing, laneways, stock water systems, and potentially additional housing, including a dairy shed. Securing the cows is also an important step, one that needs to be taken early and taken with care, particularly for those who don’t understand dairy livestock,” he says.

Elevated demand is already impacting the market.

“In a normal year the herd selling season is condensed into a three-to-four-month window from mid-January. This year it has already started and will be spread over a much longer period,” says Jamie.

Under strong demand and with supply limited, transactions are occurring at speed.

“With multiple parties looking for cows, herds are selling between one and three days after they are offered for sale. Because North Island dairy farms are generally smaller, a farmer looking to shift to dairy in Canterbury might need to purchase and combine two or three herds,” he says.

For the new conversions herd sizes will generally range from 700 to 1200 cows, meaning between 16,000 and 18,000 additional cows are likely to be needed next year, on top of what is annually required by dairy farmers, with similar demand expected for May/June 2028.

Jamie Cunninghame says for new dairy farmers seeking cows, preparation is essential.

“Bear in mind that if you try to wing it, you will probably come up empty handed. We encourage anyone who is converting to develop an understanding of what the sale and purchase agreement would look like and what industry terms they need to consider and understand before signing. Then, when you are ready to go, in this tight market you will likely need to act quickly, which can be stressful.,” he says.

Dairy newcomers need to educate themselves.

“Let’s talk about these things now. What criteria to include in your cow wish list; what the process of buying a herd will look like; where and when will those cows become available. Understand these steps then when you need to do it, and do it quickly, you will be ready,” he says.

Contact your PGG Wrightson dairy livestock representative today.

Links to: 
https://www.pggwrightson.co.nz/our-services/livestock/dairy