Transforming the Dairy Value Chain

Transforming the Dairy Value Chain aimed to create new products, increase on-farm productivity, reduce environmental impacts, and improve agricultural education.

Key facts

cows in a field

Programme start: April 2011 
Programme end: 2018 
PGP funding: $85 million 
Industry funding: $86 million
Estimated economic benefits to NZ: $2.7 billion per year by 2020
Commercial partners: Fonterra, DairyNZ Ltd, Livestock Improvement Corporation, Synlait Ltd, Zespri Ltd, Landcorp Farming Ltd, Fertiliser Association of New Zealand, Agriculture Services Ltd, New Zealand Federation of Young Farmers Clubs Inc.

Programme outcomes

Outcome logic models

Final programme reports


Background to programme

Dairy is New Zealand's most significant industry. Innovation throughout the dairy value chain (from dairy farms to manufacturing) is essential to both New Zealand dairy and our economy.

The solution

This programme aimed to transform the dairy value chain through investment in building capability and knowledge.

It contributed to building 2 platforms in food research and training that could be used by all New Zealand food and primary industries. This will also strengthen the position of New Zealand's food science community.

Fonterra invested in this scientific capability and led work to create new premium dairy offerings, including products with specific health and wellness benefits.

DairyNZ invested to build capability in rural professionals so they can better support farmers to improve their nutrient, effluent and business management. Other on-farm work focused on improving productivity.

The programme consisted of 2 sub-programmes covering the dairy value chain. 

Pre-farm gate sub-programme

DairyNZ led this sub-programme. It had the following co-investors: Synlait, Landcorp, LIC, New Zealand Young Farmers and Agricultural Services Limited. The 2 themes within the pre-farm gate sub-programme were:

Theme 1: On-farm innovation and research

The projects undertaken in this theme aimed to increase the productive potential, resource use efficiency and product value behind the farm gate.

Activities included:

  • discovering the relationships between animal phenotype and genotype to increase the rate genetic gain in New Zealand's dairy herds
  • developing fundamental knowledge on pasture persistence to extract greater value and certainty in the development and farm management of new forage cultivars
  • understanding and realising the potential production and resource use efficiency gains available to dairy farmers through the application of Precision Agriculture on-farm
  • supporting industry wide information capture and utilisation through the development of the Dairy Data Network.
Theme 2: Building capability for a sustainable future

This aimed to improve on-farm decisions through building industry capability, upskilling rural professionals, development of supporting networks and attracting more people into the industry.

Activities included:

  • development of rural professional capability and systems to provide enhanced and credible advice to farmers assessing their farm system and planning changes in key areas of effluent, nutrient, animal welfare and people management. This included development of codes of practice where needed, training and industry owned certification systems for agribusinesses and accreditation systems for rural professionals
  • development of Whole Farm System rural professional capability. Considerable expertise is required to provide advice on changes to dairy farm systems under environmental and other constraints. Alongside NZIPIM and agribusinesses the training and certification systems were being developed and implemented
  • assistance with developing industry support networks that provide career services, professional development and wellbeing to recruit, retain and develop resilient dairy farmers.

Post-farm gate sub-programme

Fonterra led this with Zespri as a co-investor. The 3 themes involved approximately 30 major projects and over 100 milestones.

Theme 3: Transforming the dairy value chain through world-leadership in food structure design

Food structure design is an emerging discipline blending food science and technology and food engineering with the non-food discipline of materials science. This provides a new way to attack the challenges of food design that will enable New Zealand's food industry to develop and manufacture increasingly complex foods and ingredients required to meet the demand for healthier foods, customisation and individualism.

Theme 4: Transforming the dairy value chain through world-leadership in processing and food quality management

This theme looked to deliver transformational science and technology that could:

  • result in a robust platform for the delivery of cost and efficiency gains throughout the supply chain
  • enable profitable growth in emerging dairy regions.
Theme 5: Transforming the dairy value chain through robust human nutrition and health benefits

High quality nutrition that is demonstrated to deliver health benefits provides the best opportunity to add value to New Zealand's food exports. The targets were maternal and paediatric nutrition, and mobility. The work undertaken would help provide robust scientific evidence to support claims on the general and specific health benefits of dairy products manufactured by Fonterra.

Audit and progress reports

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