New Zealand’s dairy industry is one of the largest in the world, which makes it attractive to investors and aspiring farmers. Usually, aspiring farmers should have rural land first to engage in dairy farming activities, but in New Zealand, all you need is a herd.
According to seasoned herd owners and farmers, a dairy farming business should not necessarily begin by purchasing a grazing property. A more feasible option is sharemilking. As a matter of fact, this option is a better start on their path to dairy success.
Sharemilking is a type of sharefarming that operates in the dairy sector. It is quite popular throughout New Zealand. It is an agricultural model that does not involve owning rural property, or not yet, at least but is profitable nonetheless.
Large dairy corporations provide countless sharemilking opportunities for Kiwis. This is to ensure that big companies don’t control the monopoly and aspiring farmers can enter the market easily to encourage healthy competition. Through sharemilking, new farmers can earn and build equity, instead of spend years of labour and profit to pay off debts.
Understanding the System
Sharemilkers buy their own herd, which they will then take with them as they shift between properties on “Gypsy Day”, which occurs on the first of June. Gypsy Day is the time for dairy farmers to move their herd, along with their equipment and families, to another farm.
This traditional path of progression is ingrained in the dairy farming culture and over the years, it has shifted to less invasive ways of moving herds. Progression is essential in dairy farming so that farmers stay in the farm system for long.
It is very important that newcomers understand sharemilking agreements as it involves a lot of planning and physical labour. But the long-term goal here is that starting farmers can save up until they can afford their own farmland.
To get started with sharemilking, an aspiring farmer must first buy enough cows to have 60% equity in the farm. A wide range of sharemilking contracts exists today for those who can’t yet afford big herds. But having more cows means higher equity and a faster progression towards ownership.
Help and assistance are abundant. Farmers can apply for government and private funding to buy more cows, while some can apply for fast cash online to cover other costs, such as equipment and logistics. These financing options are made available so it wouldn’t take a sharemilker too long to gather equity to purchase his or her first farm.
Sharemilking is a great milestone toward the path to farm ownership and success. The dairy industry has been showing continuous growth over the decade, and predictions show promise, so now is the right time to start building equity.