Waikato Region - Economy

Economy

The Waikato Region is the fourth largest regional economy in New Zealand after Auckland Region, Canterbury Region and Wellington Region. Gross regional product (GRP) for the year ended March 2007 was estimated to be $15,606 million compared with $12,493 million in March 2004.

Between 2000 and 2004, Waikato economic growth was lower than the national average. But from 2004 to 2007, real gross regional product for the Waikato Region increased by 5 per cent per year compared with 3.2 per cent for the national average. This faster growth can be attributed to rapidly growing dairy and business services industries, facilitated by proximity to the Auckland city, the main international gateway for New Zealand.

Given the suitable geography and climate, the Waikato economy is strongly based on agriculture, especially dairy. Dairy farming has been the main agricultural activity since the late nineteenth century. Within the Waikato region, small co-operative dairy companies where widespread during the 20th century. Towards the end of the 20th century, frequent mergers of co-operative dairy companies occurred, which ultimately ended in the formation of New Zealand wide dairy co-operative Fonterra in 2001. In 2007, dairy farming and dairy processing combined contributed $2 billion (13%) to GRP. Business services is the second largest sector in the Waikato Region, contributing $1.2 billion or 8 per cent of GRP in 2007.

Dairy farms are mainly family owned with owners employing sharemilkers in many cases. The size of the average dairy herd in the Waikato has progressively increased and is now about 320 cows, milked in either a herringbone or automated rotary cowshed so a large herd can be milked in under two hours. The cows are kept on grassland pasture all year due to the mild climate. In the Waikato the original English grasses used by earlier settlers – browntop, fescue and Yorkshire Fog – have been replaced with higher producing Italian ryegrass and nitrogen-fixing white clover. Farmers use a variety of supplementary feeds in winter or during the infrequent summer droughts. Main feeds are hay, grass silage and chopped corn feed. The later is often fed out on a concrete pad to save transportation and wastage by trampling.