Dairy's role in sustaining New Zealand - Fonterra

Figure 4 Model structure of the sector
Figure 4 Model structure of the sector
Source: NZIER
At each stage of production there is also labour, capital and other intermediate employment.
At each stage of production there is also labour, capital and other intermediate
employment. 1.7.2 Dairy farming
The structure of the farming industry is shown in Table 3. The farming sector produced around
1.7.2 $7.5 Dairy billion farming worth of raw milk in the 2009/10 production year for sale to the processing
operations. As expected, farming uses a lot of land and the labour is not a large part of the
The structure of the farming industry is shown in Table 3. The farming sector
farm’s costs. The on-farm sector employs around 24,000 full time equivalent (FTE) workers. The
produced around $7.5 billion worth of raw milk in the 2009/10 production year for sale
primary cashflow costs for farmers are fertiliser for the land and feed for the animals. These
to the processing two industries operations. are heavily affected As expected, by movements farming in demand uses for a milk lot of products. land and the labour
is not a large part of the farm’s costs. The on-farm sector employs around 24,000 full
We can break down the $7.5 billion of raw milk into the following parts:
time equivalent (FTE) workers. The primary cashflow costs for farmers are fertiliser
for the • land $3.0and billion feed is retained for the as returns animals. to land, These labour two andindustries capital. are heavily affected by
movements • $3.6 in billion demand is spent for on milk domestically products. produced intermediate inputs, such as fertilizer ($447
million), straw and feed ($723 million), agricultural services ($446 million), financial services
We can break ($341down million), the machinery $7.5 billion repairs of ($198 raw million) milk into andthe petrol/diesel following ($80 parts: million).
• $3.0 • billion $440 million is retained is spent as onreturns imported to inputs land, such labour as fertilizer and capital. ($138 million), pharmaceuticals
($111 million), feed ($31 million), agricultural equipment ($26 million) and pesticides ($16
• $3.6 billion million). is spent on domestically produced intermediate inputs, such as
fertilizer ($447 million), straw and feed ($723 million), agricultural services ($446
• $290 million is spent on margin services such as transport.
million), financial services ($341 million), machinery repairs ($198 million) and
petrol/diesel ($80 million).
NZIER – Dairy’s role in generating growth
6 Dairy’s role in generating growth
Final report - 16 November 2010
• $440 million is spent on imported inputs such as fertilizer ($138 million),
pharmaceuticals ($111 million), feed ($31 million), agricultural equipment ($26
million) and pesticides ($16 million).
• $290 million is spent on margin services such as transport.
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