Dairy farmers under pressure to reduce their herd sizes could look at planting oats – diversifying and helping out a new industry at the same time

New Zealand wasn’t always a nation of cows.

For most of the 20th Century, the white gold our farmers traded in was wool, boosted by related products – mutton, lamb, and so on.

But in the late 1980s, a market shift changed the face of our economy – and in many ways our landscape – utterly.

“Agricultural subsidies were stripped away from New Zealand farmers,” says journalist Pete McKenzie.

“They were exposed to the competitive pressures of the global market in a way they had never been before.

“At the same time, the price of mutton, the price of wool, of lamb, started to decline.

“One of the few agricultural products that stayed stable or grew was dairy. So thousands of New Zealand’s farmers made the simple economic choice: they would shift away from the farming practices they’d had until then – largely balanced, but with a bit of a focus on sheep and other products of that sort – to intensified dairy.

“To make that shift, they had to spend a huge amount of money. So they took out an extraordinary amount of debt – something like a 260 percent increase in dairy farm debt over the last few decades – to a total of about $40 billion today.

“So now, we have this huge increase in dairy cattle in New Zealand. It’s nearly doubled, from about 3.4 million to about 6.3 million. And the amount of debt those farmers are holding is staggering.”

In 2021, dairy farming faces a big issue: while the switch to dairy has been financially beneficial, with dairy exports rising by 1000 percent in 30 years to more than $20 billion, Aotearoa’s Climate Change Commission has recommended a reduction of about 13 percent over the coming decade in dairy herd sizes. But with such sizeable debt to service, a wholesale pivot to a different product isn’t viable.

But waiting in the wings is a burgeoning industry which could easily be integrated into existing farms, providing a way of softening the blow of reducing cattle numbers: oats.

McKenzie has written a piece for the Sunday Star-Times about the burgeoning oat milk industry, which is predicted to grow to a $US1 billion over the next five years, and the ways New Zealand’s oat growers, oat milk companies, and local investment funds are manoeuvring to try to get a slice of that pie.

In today’s episode of The Detail, McKenzie speaks to Emile Donovan about the past and present of oat growing in New Zealand; the complicated way oats are turned into ‘milk’; issues with processing and scale which are hampering growth; a bold move from Southland’s regional development agency which could be a game-changer; and the hopes that a more diversified use of land could help reintroduce a sense of balance into farming in Aotearoa, without crippling the agricultural sector.

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