Head Office
7B Sophia Street
Timaru 7910
New Zealand

Postal Address
PO Box 549
Timaru 7940
New Zealand

P: (03) 687-9258
F: (03) 684-7965
E: Contact

Company Overview


Printable version of Dairy Holdings Ltd - Company Profile - pdf

Go to - Group Production Summary 

 

1. BACKGROUND

1.1 Dairy Holdings Limited (Dairy Holdings) is a New Zealand registered company with 100% of its farming assets in the South Island of New Zealand.

1.2 Dairy Holdings’ registered office is in Timaru.

1.3 The extensive South Island operations are undertaken through wholly owned subsidiary companies and are managed from the Group’s Timaru office.  These operations commenced in June 2001 following the purchase by the Group of the major Canterbury and North Otago dairy properties from the corporate farming entities Tasman Agriculture Limited and Dairy Brands Limited.


2. OPERATIONS

2.1 Structure

Since June 2001, the South Island operations have principally been located in Canterbury and North Otago, although 8 dairy units are located in West Otago/ Southland and 5 dairy units are at Springs Junction/Murchison on the West Coast.

The corporate structure of the New Zealand operations is as follows

a. Dairy Operations:

Own and operate 59 dairy farms (14,330 ha)

54 farms supply Fonterra Cooperative Group Ltd

5 farms supply Westland Co-operative Dairy Company Ltd

Milking 49,000 cows of which 35,748 are owned by the Company and the balance are supplied by Sharemilkers and Contract Milkers 

b. Dairy Support Operations:

Owns or leases 4 large scale special purpose heifer grazing blocks (1,361 ha)

Rear and grow out approximately 9,900 heifer calves and 9,000 in-calf heifers each year

Leases one 271ha bull unit that supplies 1,400 service bulls to the dairy farms

Owns or leases 11 grazing and dry stock blocks (2,992ha) utilised for carryover cows and winter grazing

c. Contracting and Earthworks Operations:

Machinery operations that:

Establish 2,195ha of winter crop
Establish 377ha of whole crop silage
Sow 2,000ha of regrassing per annum
Construct on-farm effluent storage systems
Assist with fencing and repairs

 2.2 Profile of Operations

The New Zealand dairy operations of Dairy Holdings are conducted through four autonomous wholly owned subsidiary groups, Dairy Farm Holdings Ltd, Clumber Farms Ltd, Livestock Holdings Ltd and West Coast (Dairy) Ltd.  For the 2017/18 season, these groups will operate 59 dairy units on 14,330 effective hectares, milking 49,000 cows to produce approximately 17.26 million kilograms of milk solids.

Of these dairy farms, 10 have been operated from 1 June 2017 under 50/50 Sharemilking agreements, whereby Dairy Holdings supplies the land, buildings and infrastructure, and the Sharemilker provides the livestock, plant and machinery necessary to operate the farm; 3 under Lower Order Sharemilking agreements, where the Sharemilker provides the plant and machinery necessary to operate the farm and may provide some of the livestock; 46 under Contract Milking Agreement where the Milker provides the plant and machinery.

Under the 50/50 and Variable Order Sharemilking agreements, Sharemilkers are paid 42-50% of the value of milk solids produced and receive all livestock sale proceeds as the owner of the majority of the stock.  The Sharemilker is responsible for 42-50% of all feed and grazing costs, all labour and dairy shed operating costs, and all repair and maintenance, insurance and ownership costs in respect of the Sharemilkers plant and machinery.

Under the Lower Order agreements, Sharemilkers are paid a fixed percentage of the value of milk solids produced and provide the labour to operate the farm and pay a fixed percentage of the milking cow feed costs.  Revenue from calves over the replacement numbers, accrue to the Sharemilker, but, as owner of the livestock, Dairy Holdings Ltd retains proceeds from cull cows sold.  All animal health and breeding expenses are paid by the farm owner.

Under the Contract Milking Agreement, the Milker is paid a fixed payment per kilogram of milk solids produced and provide the labour to operate the farm and pay a fixed percentage of the milking cow feed costs.  Revenue from calves over the replacement numbers, accrue to the Milker, but, as owner of the livestock, Livestock Holdings retains proceeds from cull cows sold.  All animal health and breeding expenses are paid by the farm owner.

On managed farms, all income accrues and all costs are borne by the farm owner.

Three Farm Operations Managers and Four Farm Supervisors oversee the day-to-day dairy farm operations and are generally responsible for about 10 farms each.  Five of the Farm Supervisors also operate their own dairy units or farm under Sharemilking agreements with the Group.

Dairy Holdings dairy farms are budgeted to produce 17.26 million kilograms of milk solids in the season ended 31 May 2018 supplying the processor, Fonterra Cooperative Group Limited with 16.09 million kilograms and 1.17 million kilograms of milk solids to Westland Co-operative Dairy Company Ltd.

In addition to its dairy farming operation, Dairy Holdings through its wholly owned subsidiary Livestock Holdings Ltd operates 16 large-scale grazing and dry-stock properties in Springs Junction, Mid-Canterbury, South Canterbury, Northern Southland and West Otago.

The dry-stock operations are responsible for the management and return of approximately 9,000 in-calf heifer replacements to the dairy units each year.  In addition to the dairy heifer operations, the grazing blocks also provide dairy cow winter grazing and carry dairy service bulls and carryover cows as seasonal conditions allow.

 

2.3     Business Objective

The Dairy Holdings’ operations are driven by the overriding objective of maximising profitability by adopting systems that increase the quantity of pasture grown and harvested.

This business ethos is based on research conducted through Ruakura and more recently the Lincoln University Dairy Farm that provides the base system for successful and profitable dairy farming.  This system initially promoted by Dr C P McMeeken and subsequently by Dr Arnold Bryant, continues to be supported through the use of high comparable stocking rate systems by DairyNZ.

Dairy Holdings’ Shareholders, Directors and Management are committed to achieving consistent and repeatable levels of profitability predicated on simple, pasture based management systems.

To ensure systems are followed and that Dairy Holdings is regarded as an “employer of choice”, Supervisors, Sharemilkers, Managers and Staff are interviewed annually by Investors in People NZ (IIPNZ) to ensure minimum standards are achieved or exceeded.  Accredited farms are able to use the Investors in People logo when advertising for staff.

This simple pastoral based farming approach has already enabled a significant number of the Group’s 300 farm staff to progress through the Group’s employment structure to Contract Milking, Lower Order Sharemilking and 50/50 Sharemilking positions, and subsequently farm ownership.

The drive to maximise shareholder profitability, while at the same time satisfying staff career progression, has resulted in approximately one-quarter of the Group’s New Zealand farms being operated by 50/50 or Variable Order Sharemilkers that own greater than 50% of the herd on the farm.  The balance of the farms are operated by Managers, Contract Milkers and Lower Order Sharemilkers.  This structure ensures all operators remain focused and motivated while growing their businesses within the Group.

This systems based approach to dairy farming, enables the Group to now operate a significant corporate farming operation in New Zealand.

 

3.  OUTLOOK

The Board believes the outlook for Dairy Holdings is sound. 

New Zealand is an active participant in the international dairy commodity market and commodity prices for dairy products have strengthened significantly since the limitations on export subsidies under the WTO came in to being around 2000.  Over the past few seasons, dairy commodity prices have been extremely volatile as reflected through the Fonterra trading platform, global Dairy Trade (gDT).  However, the growth of the world’s population, strong growth in Asia and an increase in dairy consumption, general increase in energy costs and the international grain shortage, which has been accentuated by the worldwide move towards ethanol and bio-diesel production, should ensure dairy commodity prices appreciate overtime.  This is most evident with the growing exports of whole milk powder to China.

The New Zealand dairy industry will benefit from the structural adjustment occurring through the latest WTO round of trade negotiations.  To date this has resulted in limitations on subsidised exports from Europe and the United States.  This, together with other international market conditions has led to a rise in international commodity prices and an improved outlook for New Zealand’s competitive position in the international dairy market.  New Zealand’s relative position is also assisted by its low cost pasture based systems.

As one of the largest suppliers to both Fonterra Co-operative Group Ltd (Fonterra) and Westland Milk Products Ltd (Westland), Dairy Holdings Ltd is a strong supporter of the co-operative model and the need to contract and manage the marketing of milk commodities on the international market.  Dairy Holdings also promotes investment in value add initiatives that boost long term milk prices.

As a result, the Board anticipates a general firming in the New Zealand farm gate payouts over the long term. 

In New Zealand the development and growth of dairying continues.  Dairy Holdings is confident that the long-term prospects are positive.  

 

4. DAIRY HOLDINGS BOARD OF DIRECTORS

  • Gregory (Greg) William Gent (Chairman)
     Greg is a dairy farmer from Ruawai, Northland.  Greg was a foundation director of Fonterra and retired from that Board in 2011.  His current directorships include The Southern Cross Health Care Group, rural insurer FMG, and Crown Research Institute Plant & Food.  .
  • Colin Charles Armer
    Colin is a leading North Island based dairy farmer and, together with his wife Dale, holds extensive agricultural interests.  Mr Armer brings considerable dairy farming experience to the Board having been involved in the Industry for 30 years.
  • Christopher (Chris) White
    Chris is an experienced senior executive and member of the NZ Institute of Directors. With a background across a range of industries; including corporates like Carter Holt Harvey, Rank Group and AMP Financial Services, he brings considerable experience in business leadership, strategy and corporate goverance. Originally from the Waikato and with a family background in Market Gardening and Dry-stock Beef Farming, Chris also has a Diploma in Hort Management from Lincoln University. 
  • Harold (Harry) Snell 
    Harry is a Farm Consultant and serves as a Director on a number of farming companies.  Harry is the Chairman of Waikato based JD and RD Wallace Ltd which is a Shareholder in Dairy Holdings Ltd via Jagewi Ltd.  Harry is involved in the ownership of several dairy farms in the Te Awamutu/North King Country region.
  • Murray Turley 
    Murray is involved in a large scale arable and vegetable operation with farms in South and Mid Canterbury, along with his wife, Margaret.  They are involved in other value-add businesses associated with their farming enterprise.

 

5.    FURTHER ENQUIRIES

Further enquiries can be directed to the following:

 

C W Glass

Chief Executive

Dairy Holdings Limited

PO Box 549

Timaru 7940

New Zealand

T:  0064 3 687 9258

F:  0064 3 684 7965

E:  info@dairyholdings.co.nz

 

 

 

Overview Group Production Summary 

This summary shows the budgeted area and production statistics for the different farm operational structures for the 2016/2017 season.  

  Budget Budget Budget Budget Budget Actual Actual
 

Farms

Area
Milking
Cows

2017/18
Kg MS (000's)

2017/18
Kg MS / Ha

2016/17
kg MS / Ha
to be confirmed

2015/16
kg MS / Ha

Grazing Blocks        16       4,913            -              -              -               -                 -
West Coast         5       1,690  4,055         1,166             695                       679
Managed Farms
      -        -

-

         -           -                           925
Lower Order         -       -  -         -           -                         1,073
Lower Order > 50% Cows          8       2,005  7,006         2,595           1,294              1,255
Lower Order < 50% Cows        3

      850

       3,230         1,170           1,375             1,158
Contract   Milked          41         9,346        33,061           11,698

            1,241

                            1,218
50:50         2    439        1,680         638           1,452                          1,353

TOTAL

      75      19,243      49,012        17,267           1,205             

            1,131

                    1,341*             *           1,194*

 * This total Excludes West Coast

The above production has been achieved with minimal supplementary feed.  The West Coast farms are largely self contained for their wintering requirements.


Copyright 2014 - Dairy Holdings Limited