In practically every country throughout the world there are industries that locals depend on as a source of income and opportunity.
Animals play a big part in the economy in certain countries, particularly New Zealand which boasts a 3rd of the dairy product industry.
According to 2009 records, there were 4.3 million dairy cows being milked from a total herd of 5.9 million dairy cows. In 2008/09, New Zealand dairy cows produced around 16 billion litres of milk. Just over 35% of these dairy cows are located in the Waikato and Southern Auckland, with many also located in the Wairarapa and North Canterbury region. The average dairy farmer has around 350 dairy cows, which each produce around 3800 litres of milk per year.
With all these facts in mind, it’s easy to see how heavily New Zealand relies is on the dairy industry for economic health. Being that there is so much worldwide demand for whole milk powder, casein, butter, cheese and skim milk, it’s understandable why so many people are looking to dairy as an investment farm opportunity.
Dairy farms represent a prime investment opportunity for both Kiwis and foreigners. Over the past 10 years the dairy farm industry has provided farmers and investors with excellent, consistent returns and a secure investment.
The economic return to dairy farm owners regularly outperforms other agricultural sectors. The dairy industry consistently leads New Zealand’s top 10 export trades. As an example, dairy export returns increased by a massive $400m in the year to 2006, which is about the equivalent of the expected income from hosting the upcoming Rugby World Cup. There’s no wonder dairy investment farm popularity is continuing to increase.
There was a time in New Zealand when the beef and sheep market used to rule the roost. How things have changed. A good example of this is in Northland, where the gross margin per hectare of a dairy farmer is almost four and a half times more than that of a sheep and beef farmer.
There’s no doubting just how lucrative and prosperous the dairy farm industry is. If you are looking to invest in an industry that is forever improving and is likely to turn your copper penny into a gold coin, then it would be worth contemplating dairy as your investment farm of choice.
Being that New Zealand is so dependent on the dairy export industry, the government is always going to come to the rescue should things start to sour. This is just another reason to jump onboard the farm investment train.
