Land costs barrier to farm ownership

The most comprehensive census of the nation's dairy farmers ever undertaken has confirmed industry fears about its ageing population and the increasing difficulty young farmers face in attaining farm ownership through traditional means.

The survey - jointly commissioned by Fonterra's Shareholder Council and Dairy InSight - found that the median age of Fonterra shareholders is between 50 and 54.

Conducted by research company Colmar Brunton, the survey attracted 5004 responses - 34 per cent of Fonterra's shareholders - and had a margin of error of just over 1 per cent.

The results highlighted concerns about the cost of land - particularly for sharemilkers who are finding it increasingly difficult to achieve farm ownership. The median age of sharemilkers was 35-39 years.

Shareholder Council chairman John Monaghan said the results were timely, with the co-operative embarking on a process of capital restructuring next year in a quest to resolve some of those problems.

This research would provide the Fonterra board with a clearer picture of the issues they faced, he said.

One positive outcome was confirmation that farmers now overwhelmingly supported the Fonterra model, he said.

A majority of farmers agreed Fonterra was doing a good job building New Zealand's dairying reputation overseas. Most viewed Fonterra as a global business and supported the focus on value added products.

However some farmers - particularly those with smaller operations - still viewed the co-operative as complex and inefficient.

Confidence about future returns from dairying remains strong, with 28 per cent of farmers saying they planned to increase the size of their herd in the next five years. A further 21 per cent said they would like to buy a neighbouring farm in the next five years.

More than 70 per cent were comfortable with their level of debt.

"Its heartening to see that Fonterra farmers are in general feeling positive about the dairy industry and the co-operative," Monaghan said. "There is a real spirit among the dairy community."

Most farmers now feel more positive than they did five years ago about the wider impact the dairy industry has on the economy and the environment.

Farmers provided valuable feedback on the industry good investment that they wanted to see DairyInsight making on their behalf.

Disease eradication, animal reproduction, feed production and animal welfare rated as key areas for investment. Farm management and promotion of the industry were also rated as important.