New Zealand Dairy Farm in Chile milks 26,000 cows per day

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The Manuka Board.

Manuka S.A. was founded by New Zealand shareholders and started operating in Chile in 2005. The expertise of these farming families has given Manuka a legacy of knowledge, experience, and innovation, as well as a vision for the enormous potential of dairy production in the southern regions of Chile.

Manuka a company that milks about 26,000 cows on 22,600ha of which 9,000 hectares is dedicated purely to dairy production. The most extensive of these farms is the Hacienda Coihueco near Osorno, in the south of Chile.

The total operation of 14 farms makes it the biggest privately-owned milk producer in Chile but investors are mainly NZ-based.

Pasture growth is excellent and the volcanic soils are naturally fertile and predominantly free-draining. The milk production from the 14 farms and 35 dairies with around 380 staff.  The farms are a mix of the old and the new. Some have modern 40-a-side herringbone milking sheds, calf rearing sheds, and improved pastures.

Others have smaller, older sheds. All are on twice-a-day milking system. The top farm is producing 14,000L/ha and there is a lot of potentials to match this on other farms as they are developed. The southern hacienda area winters 5000 cows (about two cows/ha). The hacienda was bought by Manuka Farms in March 2008. Initial investments in farms by the company started in 2005. Now they are producing around 140 million litres of fresh milk per year that is then sold to multiple processing companies throughout the country.

At the farm level, Chilean administrators run up to four cow sheds each.

Cows are mainly Friesian of the USA and Dutch genetics but NZ genetics are being introduced. Mark’s job is to manage a team of Chilean administrators to implement farm policy set by the executive. Paddocks are being subdivided and the feeding system is being changed from mainly concentrate and silage-based to feeding cows on pasture for most of the year.

Farm development is cheaper in Chile compared to NZ and most materials are readily available. However, finding the expertise to build and install milking sheds and the accompanying technology can be difficult.

Rainfall across the farms is 1200-1500mm each year and the majority falls between April and August. Most herds are on 30-day paddock rotations, to match feed supply. Supplements and concentrates are being fed, which is not really economic in the short term. ”

This is particularly true for the Hacienda Coiheuco, which has low Olsen P levels (between four and 15). “They are aiming to get to levels of 25 so are investing in capital fertilizer.” Traditionally nitrogen (N) has been the main fertilizer applied, but increasingly Triple Super is being used. Nitrogen prices have fallen from considerably are picked to fall further. Winter can be long, from April through to November. The Chileans often house cattle during winter because of the wet.

The NZ approach is to winter cows on pasture but, with rain every day in August, this has been a challenge. “It’s not unlike parts of Southland in New Zealand. A goal has been to move all cows to a spring calving date, as previously calving was spread throughout the year.

Some cows are wintered off. Natural pasture species are mainly browntop and native grasses. Perennial ryegrass and white clovers have been introduced and are thriving. Annual ryegrass is used for winter feed as part of the development programme and to make silage. Educating staff is one of the most important jobs. “Some of the staff have been on the farm all their lives but lack any formal systems training. People here really enjoy their work. They are always positive and have a big smile.” Because Chile has been relatively poor compared to NZ standards, locals value education and work opportunities very highly.

Most Chilean farms are owned and run by local Chileans, although wealthy absentee owners from Santiago also own farms in the area. The lakes and mountain scenery are a big draw card. Germans who emigrated during the late 1800s make up a unique part of the farming community. Buildings, cuisine, and farming methods are quite European in nature and it is common to see blonde-haired blue-eyed Chileans.

The flow of technology and information is pretty much one way, from NZ to Chile. There is little to be found that we could say ‘hey, we could adopt this in NZ’.” As an example of Chilean ways giving way to Kiwi, horses are being phased out and replaced with bicycles, trucks, and motorbikes. “Cows were pushed too fast with horses and lameness was an issue.” Horses are still used for dry stock and it is not uncommon to see a horse and cart on the farm for transporting calf milk.

In Chile, many more people are literate than in other emerging economies so it is much easier to train them in things like treating mastitis, rotational grazing, and herd recording.

Most Chilean office workers start work late, about 9am, but work through to at least 6.30pm. Milkers start much earlier. It is standard to eat dinner at 9.30pm, washed down with plenty of red wine.

The southern part of Chile is popular with Kiwis as it has similar climate characteristics to parts of NZ. This is why you see a number of our farms being promoted for this market.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru, and Uruguay, providing expert advice on property acquisition and investment tours.

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