Canterbury Approves 32 New Dairy Farms Amid Industry Shift

The dairy sector in Canterbury has seen a significant increase in farm approvals, with **32 new dairy farms** receiving consent this year and an additional **15** in progress. This shift comes as farmers navigate persistent low wheat prices while benefiting from a high milk payout, prompting some to convert arable land into dairy operations.

Canterbury is a vital region for New Zealand’s agriculture, known for producing the majority of the country’s wheat, barley, and oat crops. The regional council, Environment Canterbury, has reported that this year could see an increase of up to **25,000 dairy cows** in the region’s herd, following the end of a temporary ban on intensive dairy farm conversions. Data on new dairy discharge consents acts as a proxy for these conversions.

According to the council, the approved consents indicate that the maximum number of cows that can be milked is **25,818**. David Birkett, chairman of Federated Farmers’ arable group, noted that approximately half of the new consents are likely to come from arable farmers transitioning part of their farms to dairy.

“It’s a two-sided sword,” Birkett explained. “On one hand, it draws people out of the arable industry, reducing the number of growers. On the other, we risk losing the critical mass of the industry.” He emphasized the importance of maintaining infrastructure, such as drying machinery, which is essential for the arable sector. Birkett warned that as the number of growers declines, the industry could reach a point where the necessary support for this infrastructure becomes unsustainable.

Many farmers are seeking ways to diversify their income. One farmer from Leeston integrated sheep into his cropping system, highlighting that strong meat prices have been a significant advantage. “Most farmers are around the break-even point, but much of the additional income has likely come from livestock,” he added.

A recent twice-annual farmer confidence survey conducted by Federated Farmers revealed that **81%** of dairy farmers are currently profitable, a stark contrast to the **1%** reporting losses. In comparison, only **40%** of arable farmers are making a profit, while **29%** are operating at a loss.

Despite a recent reduction in the farmgate milk payout forecast by **Fonterra**—from **$10** to **$9.50** per kilogram of milk solids—dairy farming remains a strong industry. The breakeven forecast from **DairyNZ** sits at **$8.68**. Nationwide, the number of dairy cows has decreased by **0.5%** in the **2024/25** season, totaling **4.68 million**, which is approximately **2%** below the five-year average.

Canterbury alone is home to over **940,583 dairy cattle**, making up more than **20%** of New Zealand’s dairy cow population. The South Island hosts larger herd sizes, with **30%** of the total dairy herds and **43%** of the cow population.

In **2020**, legislation was enacted to temporarily limit the expansion of intensive dairy farming under the **National Environmental Standards for Freshwater** as part of the **Resource Management Act (RMA)**. This legislation was expected to lead to new freshwater plans from regional councils before the moratorium on dairy conversions expired in January.

However, in July, the government halted all plan changes, as **Chris Bishop**, the RMA Reform Minister, stated this would prevent councils from wasting resources ahead of a major overhaul of the RMA. Consequently, consents are no longer required for changes in land use to dairy, although permits for animal effluent discharge remain mandatory.

Legislation to replace the RMA is anticipated to be introduced to parliament in the coming weeks, potentially reshaping the landscape of dairy farming and agricultural practices in New Zealand.