Are Dairy Farm Workers Well Paid?

I often hear dairy farmers say "farm workers work hard, but they are paid well too"

Well are they?

I thought I would look at three scenarios and compare them to a few jobs in town. 

They are:

Entry level dairy farm worker 

18 years old
1 years dairy experience
No tertiary qualifications 
Is likely to break things/crash things/stuff things and generally do stupid things at any time with no reasonable explanation.

Herd manager/experienced dairy farm worker

25 years old
3-4 years dairy experience
No tertiary qualifications
Good understanding of pasture management
Competent operating all farm machinery
Can run farm unsupervised for a week if given good instructions

Farm Manager

25 Years old+
Competent at all aspects of running a dairy farm
Can manage staff
Can plan all aspects of farm management such as wintering, mating etc
Capable of financial budgeting

The three aspects of a dairy job that are important are, the total wage, the hours worked and the value of the accommodation provided.

Accommodation

Housing is provided on a dairy job, simply because most farms are a long way from towns or villages where rental houses may be present.

What constitutes accommodation varies wildly from, a one bedroom prefab placed in the middle of the tanker track. To a typical New Zealand style 3 bedroom home.

Laing Homes have been selling a lot of these 3 bedroom houses as farm worker accommodation.

They are 84 square metres which is small by NZ standards for a 3 bedroom house, but they are ok. They are warm and keep the rain out.

They cost about $120,000 installed. Which includes everything such as services, drive way & council documentation.

I'll assume one of these houses is used for our calculations.

So what is this accommodation worth?

Whats the rental of a three bedroom house 30 minutes drive from the closest town worth?

We could say that it costs the farm owner $120,000 to build, interest at 7% equals $8,400/year.

Or we could assume the farm owner is like a land lord and should get a return for the investment.

A 10% yield from a total investment of $120,000 equals $12,000/year.

I'll take a figure halfway between the two and say that the 3 bedroom home is worth $10,200/year or $196/week.

If we look at townships surrounding Christchurch the rental rates for a similar home would be about $300/week. Which is in post earthquake conditions where rental properties are in hot demand.

The Total Wage

I'll assume the following yearly salaries. I think they are about right. Please leave a comment if you think they are wrong.

Entry level dairy farm worker
$35,000/year

Herd manager/experienced farm worker
$45,000/year

Farm Manager
$80,000/year

Total Hours Worked

I visited a friend from my university days over the Christmas holidays. He is a farm worker on a 800 cow dairy farm near Oamaru.

He arrives at the cowshed at 3:30 am. One worker get the cows in and the other washes the vat and gets the shed ready for milking. He has 1 hour for breakfast and 1 hour for lunch and finishes at 5:30 most days.

Thats a 12 hour day when you take off 1 hour for breakfast and 1 hour lunch.

While these hours are not uncommon, I'll assume that a 12 hour day is the top end of the hours worked range.

At the mid point of the range I'll work on a 5:00 am start and a finish time of 5:00 pm, with 1 hour for breakfast and 1 hour for lunch.

Thats a 10 hour day

The bottom of the range I'll work on a 5:00 am start and a 5:00 pm finish but assume a 2 hour lunch.

Which is a 9 hour day.


I'll assume a roster of 11 days on and 3 days off.

I'll compare the farm workers wages to those of the building industry. This is because they are both outdoor practical type jobs and people could slot into either industry quite easily.

I would love to compare other sectors but I'm short on time.  

The building wages have been sourced from the Hayes 2012 Salary Guide.

Wage Comparison- Entry Level Dairy Farm Worker

At 55 hours per week the dairy worker is $0.50 cents above the minimum wage, which I would classify as a low paid job.

If this person is working a 66 hour week the hourly rate is $11.68. If they work a 60 hour week then the hourly rate is $12.85. Both rates are below the minimum wage. Which is illegal. 

At 50 hours per week this person would be earning $15.42/hour which I would classify as an ok pay rate for the skill level.

I am yet to find a dairy farm worker working less than a 50 hour week, if they exist then let me know. I won't be holding my breath though.

I have included a hourly rate before and after rent costs as this allows us to compare with a dairy worker more accurately.

I have assumed that the building cadet and the McDonalds staff are renting a three bedroom house and split the rent with 3 flatmates.

The McDonalds wages are based on a standard crew members rate, which is achieved after about 6 months of service.

Clearly McDonalds is a low paid job!

The building cadet and farm workers total package after rent is very similar with the farm worker receiving $63/week more than the building cadet. But the farm worker is working 10 hours per week more than the builder.

So on an hourly comparison the builder is paid $1.71/hour more than the farm worker.

Wage Comparison-Herd Manager

I have assumed that the builder and the herd manager have a house to themselves. This means the builder has to pay full market rental of $300/week.

Here we see that the herd manager is earning about $200 more per week than the builder of a similar experience. 

When we look at it from a hourly basis, we see that a herd manager working a 55 hour week is doing much better than the builder who works a 45 hour week. 

But if they worked 66 & 60 hours/week, then I'd call that average pay. At 50 & 55 hours/week, I'd consider that to be well paid in my books.

If you were my friend in Oamaru working an average 66 hour week then he would be better off as a builder, because he could earn the same money, but work a whopping 21 hours less.

Of course we haven't included the option of the builder working a 55 hour week. Which would increase his pay.

Wage Comparison- Farm manager

Its quite possible the managers house is likely to be the old farm owners house and would be a much better house than the Laing home used above. So the house value may be more than I have used.

Anybody managing a 800 + cow herd will not be working less than 60 hours per week and depending on staff numbers and the ability of the employees, it is quite possible that they regularly work 70 hours or more a week. (I know because I have done it!)

So, is $28.91/hour based on a 60 hour week, considered well paid?

This manager will be running a business with an asset value of over $10 million dollars and will be responsible for managing farm working expenses of over $1.5 million dollars and they will be managing a team of 4-5 staff.

Compared to the building foreman, the managers package looks more attractive, but again it depends on the hours worked. Even at a work week of 65 hours the farm manager is doing better on an hourly rate than the builder.

But I wonder if a farm manager of 800+ cows is better to be compared to a site manager as opposed to a foreman.

Conclusion 

To clarify, I'm talking about wage & salary employees. Not contract milkers or share milkers. Share farmers are self employed and can work what ever hours they like. An employee only has their wages to show for their time They don't benefit from capital gain of stock or a rise in the milk price. For this reason I think the hours worked is important.

Another point is, there are many varied employment conditions on farms and building sites. I think the examples above represent typical conditions. 

So, are dairy farm employees well paid?

I would say that based on a normal work week of 50 hours they would be well paid, but unfortunately a 50 hour week in the dairy industry is as rear as hens teeth.

At the entry level I would say farm staff are low paid and it is common place for these employees to be receiving less than the minimum wage. These are the positions that are being filled by imported staff such as the Filipino workers.

These workers would be better off working as a labourer in the building industry.

Herd managers are about even with a builder of a comparable experience.

Farm managers are about the same or slightly better off than their counterparts in the building industry.

I would disagree with the statement that "dairy farm workers work hard, but they are well paid". 

I think they work hard and get average pay.

But as you can see its not that hard to get the wages into the well paid zone. If farmers could knock 2 hours off each work day, then their employees would be in the well paid zone.


Almost all other professions have some sort of hourly rate and hours worked are monitored. The dairy industry is based on working until the job is done. The result is a culture of excessive hours.

A few final points

Just a quick note, I had a bbq last night and there was a guy who was a private in the army. He left the army a year ago and got a job in forestry. He is paid $22/hour up to 55 hours, everything over 55 hours is paid at an overtime rate. 

Another friend is a labourer for a construction company in Christchurch. They are looking for more labourers who will be starting on $20/hour.

I was also talking to a friend who has an agricultural contracting background. He said junior staff will start on $18/hour and the operators of the bigger equipment will be earning $30/hour.

It's clear to me that dairy farm staff have options, often paying better than the dairy industry or providing better hours of work and sometimes both. 

Dairy farmers have to compete for good staff and the fact that the industry rely so heavily on international staff is an indication that their jobs are not as attractive as other jobs. 

As the Christchurch rebuild begins to take off, I can see an exodus of farming staff flocking to the city to take these unskilled positions.