Economics of hill country schemes
A report published in 2017 investigated the benefits of installing stock water reticulation systems on hill country farms throughout New Zealand. Benefits included:
- an increase in stock units per hectare
- increased animal productivity
- better grazing management
- greater pasture production
- better environmental outcomes
- greater ability to implement farm environment plans
- increased drought resistance.
Financial analysis showed:
- an average rate of return of 45% over 20 years
- an average payback period of 3 years.
The AgFirst report was prepared for MPI, MBIE (Ministry of Business, Innovation, and Employment), Te Puni Kōkiri, and Beef + Lamb NZ. The report was based on results from 11 case study farms around the country. Included in the report is advice and tips from the case study farmers to help others thinking about installing a scheme.
Download the report or summary
A summary of the report is also available.
- Summary brochure [PDF, 1.8 MB]
Video – Stock Water Reticulation Study (5:12)
Transcript – show/hide
[A photo of cows looking towards the camera followed by a photo of Mendip Hills Station are shown before station manager, Simon Lee, starts talking]
[Simon Lee] I'm Simon Lee. I manage Mendip Hill Station, which is a hill country property in Cheviot, North Canterbury.
We're 6,240 hectares, running 33,000 stock units of sheep, beef, and deer.
Because of the lack of reliability of water that we had on our hill country, which was impacting on cow and calf weaner growth rates in our cattle, and more so on our hinds lactating on our hill country.
And the decision was really based around our January, February, March, autumn periods, with lack of water, and having to cart water to stock on our hills in dry seasons.
The benefits I've seen mostly from the system are the weight gain, animal health of the stock that are on the system.
Being able to graze the property a lot better by utilizing all those paddocks and blocks on the hill.
And being able to also utilize more so the feed, and grow more feed because of it.
I put a lot of research and analysis into different water schemes that I'd seen around the local community on other sheep, beef and deer properties.
I talked to a lot of different water consultants, and came up with a plan that was going to be sustainable for us, cost-effective, and very long term that we could add on to over the years.
The advice that I would give to other farmers on putting a water reticulation system on hill country would be to seek good advice from people in the know and also looking at the AgFirst analysis on hill country water reticulation systems.
Apart from that, just get on and do it!
[William Morrison] Hello my name is William Morrison, of Morrison Farming in the Rangitiki of the North Island.
We have 1,500 hectares, wintering 16,000 stock units, on a flat finishing farm and a hill country breeding farm, which is where the new water reticulation scheme was built.
As Morrison Farming tried to figure out how we were best going to develop this property, we quickly worked out that we couldn't do much without getting water to all the paddocks that we were going to create.
So whilst fencing and fertiliser were really important, we figured out that getting a water reticulation scheme was the number one priority. We built the water reticulation scheme in the winter of 2014.
It uses a small pump and a big pump, both powered by one diesel generator, to lift water approximately 200 metres from stream level to 4 high points around the farm where there are 4 storage tanks that then gravity feed down to water troughs that will be covering approximately 80% to 90% of the property.
There's been heaps of benefits from our water reticulation scheme, these include being able to implement our farm development project to make more paddocks, to grow more dry matter in those paddocks, to improve our livestock rotations, and as a result improving our livestock performance and production.
As well as being able to fence off our streams and our bush areas, creating areas that we can actually take more fences to.
The advice that we used were; talking to other farmers that'd built water schemes, talking to our local contractors and including them, and the most important bit was actually talking to the pipe company representative.
For farmers looking at building a water reticulation scheme, I'd say just get stuck in and do it.
You need to be very clear on your water source, your energy source to move the water, and your geography.
Once you have a clear idea of all of those things talk to your pipe company representative for the reputable pipe companies around the country.
[No audio] 'Summary of Findings' slide shows the following bullet points:
- Significant returns were realised by all 11 case study farmers.
- Net Present Value ranged from $282,000 to $4,759,000.
- Internal Rate of Return ranged from 14% to 85% over 20 years with a weighted average of 53%.
- Average increase in stocking rate of 0.5SU/ha.
Average increase in lambing percentage of 12%.
Increased number of animals finished and at heavier weights.
'Observed Benefits' slide shows the following bullet points:
- Improved grazing management and stock performance.
- Animal welfare improved.
- Opened up new opportunities for development (e.g. cropping).
- Peace of mind during drought and real savings from reduced dam maintenance, and no longer needing to pull stock out of dams.
- Environmental gains with fenced off waterways, bush and wetlands.
Acknowledgements. Thank you to all the farmers who generously gave us their time and information to enable this project to the completed.
This project was funded by the Ministry for Primary Industries, the Ministry of Business, Innovation & Employment, Te Puni Kokiri, and Beef + Lamb New Zealand, with thanks.
The full report can be found at www.mpi.govt.nz/growing-and-producing/stock-water
Report authors: Phil Journeaux and Erica van Reenan, AgFirst.
[End of transcript]
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