This is just history repeating itself - there is only one winner here and its not the dairy farmers......

I have been reading a few of your memories and think they are great - and it makes me wish a lot of these people could talk to the older generation and learn from them.

Why do people never learn.  All they have to do is look back at history to make important decisions in their lives.  One of the issues happening at this moment is the fact that dairy farmers could become depressed due to their incomes being reduced by half.  We all realise this is going to have an effect on the country and communities within New Zealand, but why has it happened?  This has happened time and time again yet we still ignore the past and continue to try and ‘reinvent the wheel’.  My father always told us as children growing up – ‘if it is too good to be true – then it usually is’.  Years ago dairy farmers were quite happy to milk say 450/500 cows which paid a sustainable mortgage, paid the bills and gave the owners a good style of living.  But unfortunately greed has reared its ugly head and yet again we do not take heed of what our former generation did, but continue to try to make massive amounts of money, which in theory is never going to happen.  The sad thing in today's scenario is the fact that the dairy farmers have been duped by their ‘so called’ banking and business mates that have invested heavily in this industry.  These people are sitting in a central heated office, punching numbers out on a calculator and would not have a clue what it is like to get up repeatedly at 4am, which I might add is the middle of the night and not even a sociable hour.  They do not know the frustration of cows getting out, water lines freezing and splitting, having too much feed, not having enough feed, losing a cow that has got stuck in the mud, workers not turning up to milk, penicillin accidently getting into the milk vat, tractor breaking down at a vital time… yes the list goes on and on.  Sorry to say but you guys are all suckers out there working your butt off to pay your interest to keep the fat cats living the dream.  I know because I was one until I saw the light and sold up and have never been happier in my life. 

I was bought up on a sheep farm and contrary to what my father instilled in me I went against all advice and converted to dairy farming in 2000.  My mortgage at the time was $350,000 and my profit was $42,000 after all expenses, including living.  I had a beautiful pristine 600 acre farm, stocking 2000 ewes and 200 cattle.  I had four children, was involved in their upbringing by coaching rugby and cricket.  My Bank Manager, visited me in 2003 and over the next few years, talked to me about converting to dairying and how I would be able to employ people and be in a managerial position and virtually just be able to work whenever I pleased  They gave me graphs, tables and crunched numbers, all of which looked great on paper.  I still remember the day that I made the decision to convert, my wife supported me and it was all go in October 2006.  We sold our stock and put in lanes, a water system, dairy shed, extra sheds, bought bigger tractors, more motor bikes, built a house for the worker, bought cows and the bank literally gave me an open cheque book.  When we started milking on 7th August 2007 my debt was $4.5million. I remember I use to hate looking at the bank statement as the sheer number of zero’s actually scared me.  The payout wasn’t great that year and I think was around $4 but the Bank Manager kept saying it would be $6 in the next two years and it would definitely be somewhere up near the $10 mark by 2010.  It did get to $8 in 2008 where I made a dent in the debt but then went back down to $5 in 2010 then back up for a couple of years.  It was one step forward and two steps back.  The Bank never seemed to worry and told me to get away for an overseas holiday to think about purchasing the next door property to expand and make more money.  The price peaked again in 2011 at $7.90 and it was at this point I decided to sell up and just have a normal life.  I was completely done in and was stressed to the max.  All my farming mates thought I was mad and had lost the plot.  I finally sold up in 2012, repaid all my debt and managed to have 1.2M in the bank, which bought us a nice home and gave us a bit of time before we had to go out to work.  I cannot believe how lucky we were to get out with some monies and for the first time in 5 years, I went to watch my children playing sport, could take them to University and get them settled in, visit family and friends and went out at night without watching the clock. 

When I could finally sit back and reflect, it came back to me, my father telling me to always ‘stick to your knitting, son’ and you will always have food on the table and a roof over your head.  His reasoning for this was the fact that he farmed through the 1950’s and saw how dairying farming was back then.  All they had to do was talk to old farmers who lived in the day and they will tell you about the downturn then.  The Dairy industries loss to the economic environment back in the mid 1950’s was approx. 8 millon pounds.  The big difference was their main products were cheese and butter whereas today it is strictly milk powder, which does not add the same value to the farmers’ returns on the farm.   We all know economics has cycles so why don’t we just stick to what we know and save in the good times and hanker down in the bad times. 

The fact is the people at the top are all swinging on the tail of the cow so money has to stretch further.  Globalisation is alive and kicking and even though economists go on that the population is increasing and we have more people to feed, the problem is that everyone else gets on the band-wagon and then supply outstrips demand.  Fonterra is still taking on new conversions, wouldn’t you think they would put a cap on their suppliers. Since the year 2001 when the farmers voted for Fonterra to be in control of their milk.  Once upon everyone felt sorry from me selling up, but now I look around and see all those bewildered looking faces wondering where it all went wrong.   As my father once told me ‘Greed is a terrible thing”.