Advocates warn crop farming sector under threat

One Canterbury farming advocate has warned there may be no future in crop farming, as more arable farmers leave the sector for dairy conversions.

It came after Environment Canterbury issued more than 50 dairy effluent discharge consents over the past two years, allowing more farms to convert to dairy operations. The consents — which regulate animal waste management — included 22 in Ashburton and 20 in Selwyn, while another 19 applications were still being processed.

Federated Farmers’ Arable Group chairperson David Birkett said profitability was the main driver behind the shift.

“At the end of the day, it comes down to survivability for many farmers and what land-use options remain financially viable,” he said.

Birkett said conversions have also increased since temporary freshwater regulations controlling dairy intensification expired two years ago, making the process cheaper and easier for some farmers.

“Some are applying for consents now simply to keep their options open — they have up to five years to use them,” he said.

He said crop farmers saw little sign that conditions will improve, with dry weather, rising fuel and machinery costs, and repeated crop damage continuing to hurt the sector.

“A few days of heavy rain or hail might affect a dairy farmer for a short period, but for a crop farmer it can wipe out an entire year’s income,” he said.

“They feel like converting is abandoning their industry, but sometimes there’s little option left.”

At the same time, dairy was increasingly being seen as the safer and more profitable option.

Converting an arable farm to dairy required major investment in infrastructure, staffing and land use.

“Typically, for a 400-hectare arable farm, that’s around a $10 million conversion cost — and once that decision is made, it’s often irreversible,” Birkett said.

“At the moment, dairy offers stronger and more reliable returns."

One farmer who had already made the move said the process was “not for the faint-hearted”.

Canterbury farmer Rod May’s family has been involved in arable farming for generations, but he said the economics of the industry forced them to reconsider their future.

“We’ve always looked across the fence at the dairy industry and been a bit envious of their succession plans,” he said.

May said they were ready to move once the freshwater regulations expired two years ago.

“We were the second consent to come out, and the second shed to be built in this area,” he said.

As dairy conversions gained attention last year, May said some believed arable farmers were simply chasing the next profitable industry.

“But it’s not like that — that’s not the reality,” he said.

Instead, succession planning played a major role in the decision.

“To keep the land for our children, it had to be profitable.”

He said many younger farming families are now reassessing whether arable farming remains financially sustainable long term.

“We just want a small, reliable business for the family.”

Farm management consultant Jeremy Savage from Macfarlane Rural Business said he has been involved in more than 50 farm conversions during his career.

He says converting from arable to dairy typically costs between $20,000 and $25,000 per hectare, while dairy shed construction can take around 18 months from planning through to completion.

Savage says returns from arable farming have become increasingly difficult, while operating costs continue to climb.

“The cost of replacing headers and tractors has risen 40 to 50% over the past few years, while profit margins haven’t kept pace,” he said.

Despite the scale of the transition, Savage said many farmers make the move successfully.

“Arable farmers often make very good dairy farmers because they already have strong attention to detail and good farm management systems.”

He said feedback from those who have converted has generally been positive, with some farmers expanding operations and purchasing additional land.

Associate Agriculture Minister Mike Butterick said the Government was aware the sector was operating under pressure.

“The Government continues to drive positive changes for the sector through significant and sensible reforms in resource and freshwater management, cutting red tape, and investing in innovation and climate-friendly initiatives,” he said.

Butterick said those changes include work around water storage, trade and market access, access to new chemicals, and workforce and immigration settings.

Birkett said more direct support was needed before more farmers leave the sector.

“There needs to be more focus on supporting domestic production and using New Zealand-grown products where possible,” he said.

“There’s a view the Government could do more to promote and prioritise local produce without undermining free trade agreements.”

He was also concerned Canterbury could become too heavily reliant on dairy if conversions continued at the current pace.

“If too much land is converted, it could place pressure on winter grazing and reduce the resilience of the wider agricultural sector,” he said.

Still, Birkett believed conditions could improve if weather patterns stabilise over the next year or two.

But for now, he said the financial and mental pressure facing many crop farmers was becoming overwhelming — leaving some feeling conversion was their only remaining option.