Waitohi Pastoral Holdings
Waitohi Pastoral Holdings Ltd is in its third milking season after development in a district which has few dairy farms. It is located beside the Opihi River and in the irrigation area of the Opuha Dam and SCFIS irrigation scheme, a privately funded scheme that has not only enhanced the environmental values of the river system but is also delivering guaranteed irrigation water to the region and transforming the local economy.
Waitohi PH is an equity partnership with three equal shares of ownership. Two neighbouring farming families contributed land and a former sharemilker came to the partnership with cows and equipment.
The McDougalls and the Robinsons were the original land owners and the Taylors were the herd owners, although now all three couples have equal shares in the farming company and its assets. The company used bank finance to develop the conversion, which involved a 54-bale rotary, fence removal, earthworks, laneways, new fences and two centre-pivot irrigators (one at 700metres long and the other 550metres). K-line irrigation is used in the corner areas inaccessible by the pivots.
Bruce and Judy had a 212ha farm, of which 93ha went into the dairy farm, and they have retained 120ha which is leased to the company for a run-off and as back up grazing to the dairy platform. Bruce is a former contest manager of the Young Farmer Competition, based in Timaru, and is now general manager of marketing at PrimePort, Timaru.
The Robinsons also contributed 93ha and WPH bought an additional 40ha of adjacent land to bring the milking area up to 225ha. All the land is flat and the bulk of the soils are heavy, unlike most of Canterbury dairying which is on light land.
Dave was development manager for the conversion and researched systems and plant with Kyle and visited different styles of farm.
Kyle and Rebecca Taylor came from a sharemilking position in Canterbury and were invited to join the partnership on the back of their strong performance as sharemilkers.
They had eight years as sharemilkers, the last four at Rangitata Island Dairy Partnership. Their contribution to the equity partnership was 700 cows, 180 yearlings and plant, plus their skills as dairy farmers.
The first year of milking was with 700 Friesian and Fr-cross cows, and annual production was 286,000kg MS or 1271 kgs MS per hectare. This year the target is 305,000kg MS or 1355 kg MS per hectare.
Expansion of the operation is now planned with a third pivot irrigator going in later this year, on some of the remaining McDougall land. This will be used as a dairy support block for dry stock.
The whole farm was sprayed out, ploughed, disced and sown with new ryegrass and clover in the six months before the first calving in 2003.
The scheme was the vision of local farmer Tom Henderson and construction begun in the mid 1990s with an earth dam across the Opuha River. A flash flood. during construction on Waitangi Day 1997 caused significant damage to the dam and almost put the future of the scheme at risk. However it was completed a year later and the water stored and allocated to farmer shareholders. The potential irrigation area of 16,000ha, is supplied by a 700ha lake, which is enhanced by a surrounding 200ha wetland and nature reserve.
The McDougalls and the Robinsons took the maximum water allocation for their properties, which amounted to one scheme share at $250 for every 4ha to be irrigated.
They also paid annual water charges of $80/ha from the start of the water availability, for 5 years without using the water before WPH began the on farmalthough they hadnt yet done any irrigation development. However those tradeable shares are now selling at over $5000 each and the Opuha company is fully subscribed. Each share entitles the owner to 25mm (1 inch) of water per hectare per week of 22 weeks of the irrigation season, starting on September 1.
Water from the storage dam is released into the river system and Waitohi Pastoral Holdings is adjacent to the Opihi River. WPH has three pumps, one at 15 litres a second and two at 45 litres, taking the water out of the Opihi.
The 750m long centre pivot does half a circle and the 550m one does 270 degrees.
On the farm all fencing was replaced to create 10ha pie-shaped paddocks under the centre pivots. The property is rectangular with the farm dairy in the centre.
The western end of the property drops down to a lower terrace with lighter soils, where 25ha is irrigated by K-line system, fed by the smallest pump.
The pivots are capable of laying down 2 to 26mm of water per day, but WPH runs them at quite fast travelling speeds so that 5-6mm/day is applied two or three times a week to keep up with evapotranspiration.
Nigel Gormack is Opuha Dam Company and South Canterbury Farmers Irrigation Society (SCFIS) secretary. He says 16,000ha is now about 90% irrigated with a 98% reliability. That reliability figure is the design target, but actually the scheme has achieved 100% water delivery to downstream users since 1988. Only a few upstream users (above the dam) have had water restrictions of any sort since the scheme started operating.
It delivers water via the Opuha and Opihi rivers and tributaries (without any races or pipes) to 13,000ha in SCFIS and 3,000ha in the Levels Plains Irrigation system, which does have some headworks of its own.
The mix of farms is approximately 50% sheep and beef, 30% dairying and 20% arable and mixed. In SCFIS there are 85 farmer members, having started at 155 members, some of whom have sold their shares, moved and the farms have been amalgamated.
All farmers either draw their water from the rivers or from groundwater bores within 1km, where the river flows and groundwater are defined as hydraulically connected. Releases of water down the river for irrigation are added on top of minimum flows for environmental reasons. This means that the Opuha and Opihi have never dried up since the dam was built.
Recent sales of shares have been at $5500, showing that the original farmers who took up allocations have done very well out of their investments.
Economic benefits to South Canterbury from Murray Cleverly, GM Aoraki Development
Unquestionably the Opuha irrigation development has been the greatest single boost to the South Canterbury regional economy over the past 15 years. We have seen wonderful job growth, as for every job created inside the farm gate there have been eight to 10 after the farm gate, in servicing, manufacturing, processing, transport etc. Examples are Alpine Energy (lines company), McCains (vegetable processing), Fonterra (milk factory) and PrimePort Timaru (exporting). None of this would have happened without the reliability of water.
Since farming first began in Canterbury and North Otago some 150 years ago the major limiting factor to unlocking the regions agricultural potential has always been water or the lack of it. Nestled in the rain shadow of the Southern Alps New Zealands largest area of flat fertile arable soil receives on average only 650mm of rainfall per year. This natural rainfall is sufficient to sustain high risk arable and extensive pastoral farming operations but its unreliability has always created a barrier to the development of more intensive and profitable forms of agriculture.
Of a total of just over one million hectares of potentially irrigable land in Canterbury and North Otago just over a third (375,000) hectares are currently under irrigation. For those farms that are irrigated there has been a significant change in land use in the past 10 years. These properties have been developed into multi-million dollar dairying or intensive arable and finishing operations or horticultural and viticultural units. With the guarantee of irrigation these farms have eliminated the largest risk factor out of the farming business and are able to protect their financial investment against the vagaries of an unreliable and deficient natural rainfall.
Until recently most existing irrigation systems in Canterbury have been reliant on drawing from groundwater wells or community surface water, run of the river schemes. With the long term sustainability of these forms of water supply unable to meet future demands, other forms of water management will need to be developed. It is therefore critical that future water resources are managed and shared on a sustainable basis so as to provide long term benefits to all sectors of the community.
Water harvesting combined with large stored water sources appear to be the way forward for the future. The Opuha Dam Scheme near Fairlie is a good example of this, where excess rainfall runoff and spring snow melt is held in a storage lake to enhance the summer flows of the Opuha and Opihi river systems and allow downstream farmers and recreational users year round benefits of a valuable resource that would otherwise have flowed out to sea and been wasted during flood and peak river flow periods.
There are a number of other similar schemes currently on the drawing board in Canterbury and North Otago which if correctly managed will dramatically enhance environmental values plus could provide a further 200,000 hectares with vital irrigation water.
The economic benefits resulting from irrigation development indicate that annual farm gate return increases of $2500 per hectare are experienced. When this is converted to the downstream flow on benefits into the regional economy increases of $9000 per year for every additional hectare irrigated are generated.
When multiplied out we see that the development of a further 200,000 hectares will potentially generate an additional $1.8 billion per year of economic activity in the regional economy of Canterbury and North Otago. Much of this additional economic activity will be generated in the servicing centres of Ashburton, Timaru and Oamaru and the stimulus provided will create population growth, plentiful employment opportunities and an increase in high income households in the region.
As well as the financial benefits to the economy of the region, it is important to remember that augmented river flows also provide significant environmental benefits to the community as the general health of the river system is greatly enhanced by a guaranteed constant flow even during extreme periods of drought.
While none of this will happen overnight a huge potential for the region exists provided that todays water resources are carefully managed and allocated to ensure that all sectors of the community will benefit from them in the future.
PrimePort newsletter, June 2004.
Most of the farm is heavier Waitohi silt loam, with around 25cm of topsoil on clay. They provide good water-holding capacity in summer, but can be slow to take off in the spring. Care must be taken to prevent pugging, and therefore WPH has installed a standoff feed pad area to take 400 cows at a time. It has a hard base from shingle taken from a small quarry on the property, overlaid with rolled lime. After use it is scraped with a front end loader. It has two 80m concrete troughs so that all silage and maize can be fed out during the wet, minimising wastage. Each cow receives about 500kg of silage during the season, mainly in the spring.
Effluent from the feedpad and the dairy can be pumped out under one of the centre pivot irrigators to fertilise 88ha. WPH is also feeding grain in the farm dairy, with total supplementation from maize, silage and grain.
The pasture growth is around 18,000kg DM/ha/yr under the irrigators, but would probably be half that without irrigation. The Pleasant Point area is notorious for droughts and receives just 650mm annual rainfall.
The formation of a three-way equity partnership in Waitohi Pastoral Holdings has enabled all of the partners to contribute their assets and skill levels and make the most productive use of the Opuha irrigation development.
Bruce had always been interested in dairying, with a previous involvement in replacement heifer rearing, live heifer export through PrimePort Timaru and the recent expansion of Clandeboye dairy factory for Fonterra, which is PrimePorts biggest export customer.
WPH has been advised by the Timaru firm of Hubbard & Churcher which has huge experience in dairy development and ownership structures. Advice on the equity partnership formation was also received from Phil Handford, National Bank.
For Kyle and Rebecca, the invitation to join WPH was the fulfilment of the dream of dairy farm ownership. Rebecca does the books of the partnership while at home with a young family and the partners have a monthly management meeting.
The initial equity partnership term was five years, which is now three years through, and the next formal agreement will need to reflect the planned farm expansion.
Waitohi PH is an equity partnership with three equal shares of ownership. Two neighbouring farming families contributed land and a former sharemilker came to the partnership with cows and equipment.
The McDougalls and the Robinsons were the original land owners and the Taylors were the herd owners, although now all three couples have equal shares in the farming company and its assets. The company used bank finance to develop the conversion, which involved a 54-bale rotary, fence removal, earthworks, laneways, new fences and two centre-pivot irrigators (one at 700metres long and the other 550metres). K-line irrigation is used in the corner areas inaccessible by the pivots.
Bruce and Judy had a 212ha farm, of which 93ha went into the dairy farm, and they have retained 120ha which is leased to the company for a run-off and as back up grazing to the dairy platform. Bruce is a former contest manager of the Young Farmer Competition, based in Timaru, and is now general manager of marketing at PrimePort, Timaru.
The Robinsons also contributed 93ha and WPH bought an additional 40ha of adjacent land to bring the milking area up to 225ha. All the land is flat and the bulk of the soils are heavy, unlike most of Canterbury dairying which is on light land.
Dave was development manager for the conversion and researched systems and plant with Kyle and visited different styles of farm.
Kyle and Rebecca Taylor came from a sharemilking position in Canterbury and were invited to join the partnership on the back of their strong performance as sharemilkers.
They had eight years as sharemilkers, the last four at Rangitata Island Dairy Partnership. Their contribution to the equity partnership was 700 cows, 180 yearlings and plant, plus their skills as dairy farmers.
The first year of milking was with 700 Friesian and Fr-cross cows, and annual production was 286,000kg MS or 1271 kgs MS per hectare. This year the target is 305,000kg MS or 1355 kg MS per hectare.
Expansion of the operation is now planned with a third pivot irrigator going in later this year, on some of the remaining McDougall land. This will be used as a dairy support block for dry stock.
The whole farm was sprayed out, ploughed, disced and sown with new ryegrass and clover in the six months before the first calving in 2003.
The scheme was the vision of local farmer Tom Henderson and construction begun in the mid 1990s with an earth dam across the Opuha River. A flash flood. during construction on Waitangi Day 1997 caused significant damage to the dam and almost put the future of the scheme at risk. However it was completed a year later and the water stored and allocated to farmer shareholders. The potential irrigation area of 16,000ha, is supplied by a 700ha lake, which is enhanced by a surrounding 200ha wetland and nature reserve.
The McDougalls and the Robinsons took the maximum water allocation for their properties, which amounted to one scheme share at $250 for every 4ha to be irrigated.
They also paid annual water charges of $80/ha from the start of the water availability, for 5 years without using the water before WPH began the on farmalthough they hadnt yet done any irrigation development. However those tradeable shares are now selling at over $5000 each and the Opuha company is fully subscribed. Each share entitles the owner to 25mm (1 inch) of water per hectare per week of 22 weeks of the irrigation season, starting on September 1.
Water from the storage dam is released into the river system and Waitohi Pastoral Holdings is adjacent to the Opihi River. WPH has three pumps, one at 15 litres a second and two at 45 litres, taking the water out of the Opihi.
The 750m long centre pivot does half a circle and the 550m one does 270 degrees.
On the farm all fencing was replaced to create 10ha pie-shaped paddocks under the centre pivots. The property is rectangular with the farm dairy in the centre.
The western end of the property drops down to a lower terrace with lighter soils, where 25ha is irrigated by K-line system, fed by the smallest pump.
The pivots are capable of laying down 2 to 26mm of water per day, but WPH runs them at quite fast travelling speeds so that 5-6mm/day is applied two or three times a week to keep up with evapotranspiration.
Nigel Gormack is Opuha Dam Company and South Canterbury Farmers Irrigation Society (SCFIS) secretary. He says 16,000ha is now about 90% irrigated with a 98% reliability. That reliability figure is the design target, but actually the scheme has achieved 100% water delivery to downstream users since 1988. Only a few upstream users (above the dam) have had water restrictions of any sort since the scheme started operating.
It delivers water via the Opuha and Opihi rivers and tributaries (without any races or pipes) to 13,000ha in SCFIS and 3,000ha in the Levels Plains Irrigation system, which does have some headworks of its own.
The mix of farms is approximately 50% sheep and beef, 30% dairying and 20% arable and mixed. In SCFIS there are 85 farmer members, having started at 155 members, some of whom have sold their shares, moved and the farms have been amalgamated.
All farmers either draw their water from the rivers or from groundwater bores within 1km, where the river flows and groundwater are defined as hydraulically connected. Releases of water down the river for irrigation are added on top of minimum flows for environmental reasons. This means that the Opuha and Opihi have never dried up since the dam was built.
Recent sales of shares have been at $5500, showing that the original farmers who took up allocations have done very well out of their investments.
Economic benefits to South Canterbury from Murray Cleverly, GM Aoraki Development
Unquestionably the Opuha irrigation development has been the greatest single boost to the South Canterbury regional economy over the past 15 years. We have seen wonderful job growth, as for every job created inside the farm gate there have been eight to 10 after the farm gate, in servicing, manufacturing, processing, transport etc. Examples are Alpine Energy (lines company), McCains (vegetable processing), Fonterra (milk factory) and PrimePort Timaru (exporting). None of this would have happened without the reliability of water.
Since farming first began in Canterbury and North Otago some 150 years ago the major limiting factor to unlocking the regions agricultural potential has always been water or the lack of it. Nestled in the rain shadow of the Southern Alps New Zealands largest area of flat fertile arable soil receives on average only 650mm of rainfall per year. This natural rainfall is sufficient to sustain high risk arable and extensive pastoral farming operations but its unreliability has always created a barrier to the development of more intensive and profitable forms of agriculture.
Of a total of just over one million hectares of potentially irrigable land in Canterbury and North Otago just over a third (375,000) hectares are currently under irrigation. For those farms that are irrigated there has been a significant change in land use in the past 10 years. These properties have been developed into multi-million dollar dairying or intensive arable and finishing operations or horticultural and viticultural units. With the guarantee of irrigation these farms have eliminated the largest risk factor out of the farming business and are able to protect their financial investment against the vagaries of an unreliable and deficient natural rainfall.
Until recently most existing irrigation systems in Canterbury have been reliant on drawing from groundwater wells or community surface water, run of the river schemes. With the long term sustainability of these forms of water supply unable to meet future demands, other forms of water management will need to be developed. It is therefore critical that future water resources are managed and shared on a sustainable basis so as to provide long term benefits to all sectors of the community.
Water harvesting combined with large stored water sources appear to be the way forward for the future. The Opuha Dam Scheme near Fairlie is a good example of this, where excess rainfall runoff and spring snow melt is held in a storage lake to enhance the summer flows of the Opuha and Opihi river systems and allow downstream farmers and recreational users year round benefits of a valuable resource that would otherwise have flowed out to sea and been wasted during flood and peak river flow periods.
There are a number of other similar schemes currently on the drawing board in Canterbury and North Otago which if correctly managed will dramatically enhance environmental values plus could provide a further 200,000 hectares with vital irrigation water.
The economic benefits resulting from irrigation development indicate that annual farm gate return increases of $2500 per hectare are experienced. When this is converted to the downstream flow on benefits into the regional economy increases of $9000 per year for every additional hectare irrigated are generated.
When multiplied out we see that the development of a further 200,000 hectares will potentially generate an additional $1.8 billion per year of economic activity in the regional economy of Canterbury and North Otago. Much of this additional economic activity will be generated in the servicing centres of Ashburton, Timaru and Oamaru and the stimulus provided will create population growth, plentiful employment opportunities and an increase in high income households in the region.
As well as the financial benefits to the economy of the region, it is important to remember that augmented river flows also provide significant environmental benefits to the community as the general health of the river system is greatly enhanced by a guaranteed constant flow even during extreme periods of drought.
While none of this will happen overnight a huge potential for the region exists provided that todays water resources are carefully managed and allocated to ensure that all sectors of the community will benefit from them in the future.
PrimePort newsletter, June 2004.
Most of the farm is heavier Waitohi silt loam, with around 25cm of topsoil on clay. They provide good water-holding capacity in summer, but can be slow to take off in the spring. Care must be taken to prevent pugging, and therefore WPH has installed a standoff feed pad area to take 400 cows at a time. It has a hard base from shingle taken from a small quarry on the property, overlaid with rolled lime. After use it is scraped with a front end loader. It has two 80m concrete troughs so that all silage and maize can be fed out during the wet, minimising wastage. Each cow receives about 500kg of silage during the season, mainly in the spring.
Effluent from the feedpad and the dairy can be pumped out under one of the centre pivot irrigators to fertilise 88ha. WPH is also feeding grain in the farm dairy, with total supplementation from maize, silage and grain.
The pasture growth is around 18,000kg DM/ha/yr under the irrigators, but would probably be half that without irrigation. The Pleasant Point area is notorious for droughts and receives just 650mm annual rainfall.
The formation of a three-way equity partnership in Waitohi Pastoral Holdings has enabled all of the partners to contribute their assets and skill levels and make the most productive use of the Opuha irrigation development.
Bruce had always been interested in dairying, with a previous involvement in replacement heifer rearing, live heifer export through PrimePort Timaru and the recent expansion of Clandeboye dairy factory for Fonterra, which is PrimePorts biggest export customer.
WPH has been advised by the Timaru firm of Hubbard & Churcher which has huge experience in dairy development and ownership structures. Advice on the equity partnership formation was also received from Phil Handford, National Bank.
For Kyle and Rebecca, the invitation to join WPH was the fulfilment of the dream of dairy farm ownership. Rebecca does the books of the partnership while at home with a young family and the partners have a monthly management meeting.
The initial equity partnership term was five years, which is now three years through, and the next formal agreement will need to reflect the planned farm expansion.