Dairy Conversions in Canterbury Surge as Temporary Ban Lifted

The Canterbury region, known for producing the majority of New Zealand’s wheat, barley, and oat crops, is seeing a shift towards dairy farming. This change comes as the temporary ban on intensive dairy farm conversions has been lifted. The regional council, Environment Canterbury (ECan), reported that up to 25,000 more dairy cows could be added to the area this year.

ECan has approved 32 new dairy discharge consents, with an additional 15 consents pending. These consents, which previously were required for land-use change to dairy, are now only necessary for animal effluent discharge. The end of the ban has enabled farmers to convert arable land to dairy more freely.

David Birkett, chairman of the Federated Farmers' arable group, noted that around half of the new consents involve arable farmers transitioning to dairy farming, driven by low global wheat prices and high milk payouts. He expressed concerns about the sustainability of arable farming infrastructure as more farmers switch to dairy.

In the latest survey by a farmers' lobby group, confidence among dairy farmers reached a decade high, with 81% reporting profitability. In contrast, only 40% of arable farmers were profitable, highlighting the economic pressures on crop growers.

New Zealand’s dairy cow numbers, according to DairyNZ, have decreased slightly by 0.5% in the 2024/25 season to 4.68 million, which is below the five-year average. Despite this, milk solids production increased by 2.9%, indicating improved efficiency in dairy production.

Fonterra, a major dairy cooperative, recently adjusted its milk payout forecast to $9.50 per kilogram of milk solids, yet the dairy industry remains robust with a breakeven point forecasted by DairyNZ at $8.68. This continues to make dairy an attractive option for farmers in the region.