Dairy farmers trying to get ready for the new season are striking lockdown problems, writes Rod Oram
A farmer in Northland has a problem: his milk processor had condemned his milking shed; a new one was under construction; work has stopped because the Government has yet to classify such projects as essential; and precious time is being lost before the new milking season starts in July.
This is a real example playing out now, says Justin Thompson, DeLaval’s vice president of sales and support in Oceania. The Swedish-based company, which is one of the world’s largest suppliers of milking systems, is supplying equipment to the Northland project. But as soon as New Zealand went into Covid-19 lockdown, subcontractors packed up and left the site.
“It’s frustrating,” says Thompson. “Such work is essential to allow farmers to start the season in good shape and to maintain New Zealand’s dairy reputation.”
While some farmers have already begun drying off their cows because of local droughts, the big decline in annual production begins this month. From late May to mid-July it will be around 5 percent of its peak from October to December, hence the brief window of opportunity for major milk shed projects.
While upgrades and new sheds are on hold, farmers can still get faults repaired if animal welfare or human health is at risk, says Maria Scott, the executive director of the NZ Milking and Pumping Trade Association.
The association, which represents manufacturers such as DeLaval and dealers and contractors working directly with farmers, has asked MPI to declare capital works as essential goods and services but has yet to receive a reply.
Moreover, nor are the annual milking machine tests required by regulations yet classified as an essential service. They are valid for 12 months so farmers would have a problem if their current test expires and they were unable to get a retest done.
A second maker of milking systems said it too was concerned by the hold-up. “We’re working on plans for how we’ll respond when we do get approval.”
Likewise, Newsroom has asked MPI for an update on the issue and is awaiting a response. MPI is the lead government agency on all Covid-19 issues to do with farming and food production.
However, there is good news for farmers, says Thompson. DeLaval’s global supply chain is coping with Covid-19. There are no signs of impending shortages of new equipment and spare parts.
For example, while a third-party manufacturer of rotary milking platforms which supplies DeLaval projects is locked down here, DeLaval still has supplies from its own plants in China (which is back up to 95 percent production after its virus disruptions), Poland and the US.
Earlier in the crisis, there had been some panic-buying of parts triggered, for example, by the Australian government advising farmers to secure three-months’ supply. “We told them to put their orders in so we could tell them when we would deliver.”
There are some difficulties, though, such as an “800 percent increase in air freight costs” which apply to critical just-in-time parts weighing up to 70kg which travel by air rather than sea.
DeLaval is expecting its global revenues to plunge by 35 to 40 percent over coming months because of the virus, with a gradual recovery of the following 18 months or so.
“Personally, I think we will bounce back quickly throughout southeast Asia, and in Australia for vertically integrated businesses,” he adds.
