Dairy News 11 November 2014

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DAIRY NEWS NOVEMBER 11, 2014

NEWS  // 3

Attending to detail will pay off PAM TIPA pamelat@ruralnews.co.nz

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mating are on track throughout the country, says Craig McBeth, DairyNZ’s general manager extension. “So attention to detail in the core drivers of farming systems is working for farmers,” he told Dairy News. Reports from teams around the country show the season has been pretty good, but “a bit stopstart” with temperature fluctuations. “We got off pretty well but then it got a bit cold. There’s been quite variable pasture growth so it makes it difficult for farmers to manage pasture with precision when things can change dramatically from 80kg/ ha one day then pull back sharply and then race away again. “So that’s been the story of the season in the consistent feedback I’ve had from throughout the country.” As temperatures fluctuate “you go from thinking you are a bit short of grass, then you have bit of surplus because it warms up and roars away. You shut up some silage then find the grass and silage

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In the challenging times, looking more often at grass will give farmers better returns, McBeth says. On the economic side of things farmers must be prepared to do their sums, he says. The latest GDT showed prices had not yet turned a corner. Farmers must understand the financial state of their business, and talk to people who support them such as their bank and tax planners. “Assessing what they need to be spending this year and what they can avoid spending money on is what farmers will be focussing on.” Farmers under extra pressures, e.g. floods in Northland or cows dying in Southland, have been through economically damaging and emotionally stressful events. Rural Support Trust and DairyNZ have been working hard in those areas. Farmers under pressure this year need to come up with a plan, share the plan and talk to their bank and other rural professionals. “Work through your options, communicate to the people who matter, is the best advice.”

Mixed-bag dairy auction – economist LAST WEEK’S dairy auction

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have slowed down because it has cooled off again”. However aside from the floods in Northland in July there have not been too many significant weather events. “But the variability of temperatures has made it challenging for farmers to make decisions about what grass they will have in a couple of weeks, therefore what grazing decisions they should be Craig McBeth making today. “There’s no substitute for attention to detail and having a good look at what is happening on a regular basis because as it changes you need to adjust your management decisions a bit. “If you’ve got plenty of grass that’s the cheapest feed in what’s obviously a low payout year. Having high utilisation of seeds you’ve already paid for and grown is one great way of optimising your profitability. “Keeping a close eye on your pasture condition… and maintaining the quality of that grass as a priority is always good advice. Then filling the gaps in the cows’ nutritional or energy needs with supplement comes after that.”

result was a mixed bag for farmers, says ASB economist Nathan Penny. He notes that prices fell in all categories except whole milk powder, which rose 1.6% compared to the previous auction. “The WMP price increase is good given that it is important for our exports and milk price calculations,” Penny told Dairy News.

“It seems WMP prices are showing signs of bottoming out, but cheese, butter and other products are yet to do the same. So, it’s a bob each way for farmers.” But farmers will breathe a sigh of relief as there hasn’t been another “chunky fall” in prices. The average price at Fonterra’s Global Dairy Auction rose 0.3% or US$9 to US$2649/t; the volume

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traded fell by at least 5000t to 45,499t. The key WMP price rose to just over US$2500. Fonterra has said the price needs to rise to about US$3500 by March next year if it is to maintain its forecast payout to farmers of $5.30/kgMS. Penny believes there is still downward risk to Fonterra’s forecast payout.

“The prices have to start coming back but right now we are not seeing too many signs. While the dollar is playing ball, it also needs to drop.” Fonterra will hold its annual meeting in Palmerston North this week where the board is expected to give an update on the forecast payout. @dairy_news facebook.com/dairynews

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DAIRY NEWS NOVEMBER 11, 2014

4 //  NZ GRASSLANDS ASSOCIATION CONFERENCE

Diverse dairy topics help draw crowd ANDREW SWALLOW andrews@ruralnews.co.nz

DAIRY FARMS are few and far between in Central Otago but the New Zealand Grassland Association’s 76th annual conference in Alexandra last week still had plenty of papers relevant to the sector, and not just in the session designated dairy. The rising star of forage crops – fodder beet – featured in three papers and several of the environmental research works reported related to dairy. For instance, Iris Vogeler’s presentation headed ‘Effects of fertiliser management on nitrate leaching risk from grazed dairy pastures’. By modelling losses

over 20 years, Vogeler and Agresearch colleagues Mark Shepherd and Gina Lucci conclude, “…risk of direct leaching from applied fertiliser was generally low, but at an annual rate of 220kgN/ ha exceeded that from urine patches in one out of 10 years”, confirming the general wisdom that it’s when the nitrogen gets concentrated into urine patches that most losses occur in most years. Among the usual solutions of avoiding fertiliser use during high leaching risk periods based on soil moisture and plant growth, they suggest using “duration controlled grazing”, ie on-off systems, to prevent excreta deposition on pasture at critical times from an N

loss perspective. Their work used the Agricultural Production Systems Simulator which factors actual weather data rather than the longterm averages written into Overseer’s calculations. On the fodder beet front, Gavin Milne of DLF Seeds presented results from trials in Mid Canterbury, North and South Otago, and Southland, showing that in 201213 there was nothing to choose between the top five of the seven cultivars tested across all four sites – Enermax, Magnum, Bangor, Troya and Kyros all coming in with 17.419.4tDM/ha yields, while Feldherr and Brigadier did 15.2 and 14tDM/ha respectively. While they were

grown only at three of the four sites, yields of Suga and Energaci were also up there with the top five, reflecting their high dry matter contents averaging 22.6% and 19% respectively. Both are listed as lifting, not grazing types in the paper, as are Enermax and Magnum.

Delegates on a field trip.

Bangor, Troya and Kyros get ticks in both boxes thanks to dry matter

content of 17.5%. Feldherr and Brigadier’s dry matters were 15.4% and

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LARGE TURNOUT THRILLS MAYOR CENTRAL OTAGO is one of the least densely populated districts in New Zealand but last week’s Grassland Association conference still attracted about 360 delegates. “Alexandra is completely full,” said mayor Tony Lepper opening the conference. “When you bring in 360 people like this

it really stretches our town but we’re not complaining: it’s great to be full.” Roughly a third of delegates were from research organisations, a third from commercial companies and a third farmers, said organisers. “We have over 20 students registered this year which

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13.6% respectively.

is fantastic for the future of NZGA,” said association president Warwick Lissaman. More from the conference, including a powerful presidential address from Lissamann and evidence that many dairy farms miss grazing management targets, in next week’s Rural News.

DAIRY NEWS NOVEMBER 11, 2014

NZ GRASSLANDS ASSOCIATION CONFERENCE  // 5

Choose feed crop to fit system yields than kale but by sowing forage oats behind the late sown kale and harvesting them as green chop silage in November, annual dry matter yield on that system was a match for the beet. The first year’s beet yields were also not significantly higher than either kale crop due to “lower than intended plant establishment” and moisture stress during December and January. All the crops were fed with supplement to mimic

Conference delegates enjoy a break.

tests possibly overstating feed energy content. andrews@ruralnews.co.nz “There’s also some evidence emerging that the energy requirement of THERE’S NOTHING dairy cows over winter has to choose between kale been underestimated,” and fodder beet as winter noted Edwards. feeds, so long as you feed Extra intake to meet plenty of them, research protein requirements, from Lincoln University’s or compensate for antiAshley Dene farm shows. nutritional factors such as Relaying the findings of SMCOs in the kales, could two seasons work, Lincoln be other explanations for professor of dairy prothe apparent surplus ME duction Grant Edwards intake, he added. showed how cows on kale, Answering questions, either early or late sown, Edwards stressed and fodder beet, all transition of cows achieved well over “The drivers should be onto winter crops the target 0.5 gain how cheap is the crop needs care, with in body condition to produce, how well alternative feed score through June can you grow it on your offered during the and July. Conseallocation, while the cows late-sown kale, and 12c/ quently crop choice farm and how it fits the transition to keep kgDM for the forage oats. going onto fodder beet intake at about should be driven by farm system, rather While Edwards didn’t were transitioned over a 150MJ of ME/day, fit-to-system and than how well it will put as it should be reveal the cost of the balefortnight. cost, he told attendcondition on the cow.” throughout winter age supplement used with Costings from the ees at last week’s the fodder beet, he said trials, run on a field scale if that target of 0.5 New Zealand Grasstypical farm systems (see the net cost/cow/day of BCS gain is to be achieved. with two replicate mobs land Association confertable) and utilisation was of 50 on each diet, came in all the diets was similar at In the trials the cows ence in Alexandra. high – 85-92% in the case $2.30-2.50/cow/day. at 9-10c/kgDM for fodder going onto kale got “The drivers should of the kales, and near beet, 13c/kgDM for early2kgDM/cow more per day be how cheap is the crop @dairy_news 100% with beet. Edwards sown kale, 15c/kgDM for until they reached their to produce, how well can facebook.com/dairynews explained the difference you grow it on your farm Feed Apparent ME Calculated ME in apparent ME intake and and how it fits the farm allocaiton/cow/day Ave winter BCS gain intake requirement 14kg early-sown kale + cow requirement – calcusystem, rather than how 0.68 168MJ 127MJ 3kg barley straw lated according to maintewell it will put condition 11kg late-sown kale + 0.75 157MJ 129MJ nance, pregnancy, activity on the cow,” he said. 5kg greenchop oats and weight gain requireIn the trials, fodder 8kg fodder beet + 6kg 0.72 155MJ 129MJ grass baleage ments – as being due to beet produced higher ANDREW SWALLOW

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UHT milk shipment off to China.

Containers roll out of Miraka A STEADY stream of containers loaded with UHT

milk are leaving the Miraka dairy factory near Taupo headed for the China market. Miraka is contracted by the Chinese dairy giant Shanghai Pengxin to produce the UHT milk in 250ml branded packs for Chinese consumers. The Miraka plant can produce 240m of the packs annually, requiring an extra 60m L of milk to be processed by Miraka, in addition to the 240m L made into milk powder. Miraka chief executive Richard Wyeth told Dairy News that they have employed 30 extra staff to produce the UHT for Shanghai Pengxin. Some of this milk used in the UHT deal is coming from farms owned by Shanghai Pengxin (the ex Crafar farms) and some from regular Miraka suppliers. “It’s good to be underway and shipping regularly to our Chinese clients. We started slower than I would have liked but that’s the nature of commissioning plants sometimes.” The UHT plant can have additional Tetrapak lines added as markets develop. Two lines are now operating to meet the Shanghai Pengxin demand. Miraka is seeking to expand its UHT operation in the next two or three years and two extra processing lines are likely to be commissioned. Wyeth says Shanghai Pengxin is satisfied with the product. – Peter Burke

DAIRY NEWS NOVEMBER 11, 2014

6 //  NEWS

‘They’re killing Rotorua’ PETER BURKE peterb@ruralnews.co.nz

THERE’S FIGHTING

talk by Rotorua dairy farmer and former Federated Farmers Dairy chairman Lachlan McKenzie over proposed nitrogen limits on dairy farmers in the Rotorua Lakes catchment. He told Dairy News some council staff are “fixated”on reducing nitrogen, an approach he insists is wrong and not backed up by science. The Bay of Plenty Regional Council is running a consultation process on setting new N leaching limits in the Rotorua Lakes catchment and farmers including McKenzie are not happy. “The regional council is still wedded to the notion that they’re going to fix Lake Rotorua by

Lachlan McKenzie

significantly reducing the amount of nitrogen that enters it. But the science is telling us the lake is now phosphate-limited – a lack of phosphate in the lake is [inhibiting algae growth].” McKenzie says the council wants to restrict dairy farms to a loss of 35kgN/ha/yr and drystock farms to 13kgN/ha/yr. He

says such restrictions will lead to destocking on all properties including lifestyle blocks and uneaten grass will introduce a risk of fire in summer. He says the catchment is a complicated one with vastly different soil types and variances in the amount of rain that

falls, all of which affect N leaching. “The council staff detest me because I go to public meetings and when they’re economical with the truth I stand up and challenge them. At the last meeting when I challenged some of their ‘facts’ they backed down. But they continue to perpetrate

myths to support their beliefs and wishes for what should happen in the catchment – not what is going to achieve the values and desires of our community.” McKenzie says councils too often focus on environmental issues and not on the other three pillars of the RMA – social, cultural and economic. People need jobs and farming provides these, McKenzie says. “Rotorua is in a state of decline. There are 100 empty shops in the middle of town and that’s a sign of a dying community. The regional council with its proposals on nitrogen are determined to shut down agriculture – not just dairying. “I’m not going to stand around and let some bureaucrat in the regional council destroy my community.”

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DAIRY NEWS NOVEMBER 11, 2014

NEWS  // 7

Water scheme in the news ANDREW SWALLOW andrews@ruralnews.co.nz

IF YOU wondered why Canterbury’s Central Plains Water has been back in the news in the past few days, it’s because the 60,000ha irrigation company held a media morning last week to showcase work on its first stage. Introducing the day CPW chief executive Derek Crombie opened with the environmental positives, explaining how water from the Rakaia would help recharge lowland streams and restore Lake Ellesmere / Te Waihora to health. “The reason for the scheme is that most of this area is using groundwater for irrigation,” he told the posse of TV, radio and print journalists gathered for the jaunt. “The amount of groundwater that can be taken is restricted and it is over-allocated and needs to be replaced for environmental reasons.” Water taken from the Rakaia by canal will run across the top of the Canterbury Plain to feed a piped

CPW chairman Doug Catherwood.

network running down to State Highway One delivering water at a minimum of 400kpa. As scheme chairman, Doug Catherwood later noted, that’s enough pressure “to drive all irrigation machinery” so there will be no pumping costs. Nor are there pumping costs to get the water out of the river: from an in-river intake, the canal traverses the river’s terrace for 10km to reach the top and break north-

east at about 235m above sea-level. Stage one will initially water 20,000ha, though the potential is 23,000ha. Shareholders in that area have invested $1750/ha in shares to fund the construction and will face annual charges of $700/ha from next September when the scheme’s commissioned. They will also need 12 water shares/ha which when issued were sold at $10/share, but now trade for

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$30/share, Catherwood told Dairy News. Shareholders in the remaining 37,000ha will be approached during the next year for capital to fund extension of the canal across to Coalgate, Darfield, Kirwee and the Waimakariri. The aim’s to have that built by September 2019. “It will take a year to get the canal past Coalgate.” Shareholder equity in stage one is about 28%. That’s also the target for the whole scheme, leaving about $330m in borrowing which will be paid off over 35 years, says Catherwood. In the stage one area some irrigators pump groundwater from 200m deep. Crombie says on average that costs them $800/ha/year in electricity so CPW will save them $100/year, or more as power prices rise. Replacing groundwater takes with river water will also help recharge aquifers, lowland streams, and in turn help restore Lake Ellesmere (Te Waihora). Of the schemes 390 shareholders about quarter are dairy, says Catherwood.

IrrigationNZ buoyed by farmer response IRRIGATIONNZ SAYS it is heartened by the support from Hawke’s Bay farmers and growers who attended last week’s ‘It’s Now or Never’ meeting to discuss the future of proposed Ruataniwha dam. Chief executive Andrew Curtis says over 250 turned up to hear the ‘real life’ scenarios presented by South Island farmers with experience of irrigation development. ”We had farmers from Canterbury and Otago breaking down how they make irrigation pay and what it’s done for their farming operations. “They weren’t large scale dairy farmers either.” Rab McDowell and Nick Webster showed how sheep finishing, beef, cropping and speciality seed, alongside dairy support operations can all benefit from reliable irrigation. Local irrigators, Arthur Rowlands and Hugh Ritchie also spoke on how and why they would make it work for them. The feedback we’ve had is that it’s opened up new possibilities and thought processes for those considering Ruataniwha water, says Curtis. “That’s a great thing as we wanted the evening to be all about information-sharing from those who have comparable priced models and have been there and done it. Theoretical economics being spouted by detractors of the dam just can’t compete with the reality. It was noticeable how quiet the naysayers were during the evening.”

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DAIRY NEWS NOVEMBER 11, 2014

8 //  NEWS

Winter contracts to SUDESH KISSUN sudeshk@ruralnews.co.nz

Fonterra chairman John Wilson (left) takes Nathan Guy (centre) on a tour of the new plant.

FONTERRA IS offering winter milk contracts in Waikato to keep its new $120m UHT plant in yearround production. The plant at Waitoa has eight lines and can

produce 28 packets of UHT milk and cream per second; it needs 100m L of milk every year. The plant produces cream for food service clients in Asia and pineapple flavoured ‘Kids Milk’ for China. Year-round milk supply is needed for high value,

HELPING CO-OP STAY COMPETITIVE FONTERRA CHIEF executive Theo Spierings says the Waitoa UHT project demonstrates performance, people and pride. Speaking at the opening, he said “this type of plant is needed [for Fonterra] to stay competitive around the world.” The plant is structured to double or treble production capacity if needed, Spierings says. He thanked Fonterra staff and contractors involved in the project. “This project has been a real teamwork.”

short shelf-life products. Fonterra chairman John Wilson says some farmers are moving off the strict grass curve and milking cows throughout the year. “This gives us an opportunity to work with

these farmers. We have signalled we need more milk for this plant over the next 18 months,” he told Dairy News. “Farmers in Waikato will now plan for that.” Winter milk suppliers are paid a premium and

Pineapple milk hits the sweet spot in China NEW ZEALAND milk sweetened with pineapple

juice is a best-seller to children in China, Fonterra reports. UHT ‘Kids Milk’ is the first product of its kind imported into China. It is made at Fonterra’s new $120 UHT plant at Waitoa which also makes Anchor cream for global food service clients. Fonterra said in China last week the product was the top seller on the online shopping site Tmall; 1800 packs sold in eight hours. Chairman John Wilson says Kids Milk meets the tastes of Chinese markets. “We have to constantly innovate to meet the demand of our consumers,” he told Dairy News. The UHT plant will have five production lines when fully operational. So far two lines are running and there is provision to expand to eight lines. “We expect that to happen… in a couple of years… once we fill the existing lines and when there is demand,” Wilson says. Demand has recently surged for UHT products. “We know with this plant we are two or three years too late because the market is changing rapidly. Any business case we looked at as recently as three or four years ago wasn’t supporting this sort of investment but now it is.”

DAIRY NEWS NOVEMBER 11, 2014

NEWS  // 9

keep UHT plant humming

Happy shareholders: Fonterra chairman John Wilson (centre) flanked by Lloyd Downing (left) and John Walsh.

get “deferential” transport pricing. They must spend heavily to commit to year-around milking, most needing to calve two or three times a year to produce quality milk in autumn and winter. In addition to a premium price for winter milk, the suppliers need good returns from such a

deal, Wilson says. “They are proud to see quality milk turned into high value products for export [but] also need to see returns coming in above milk prices.” The Waitoa UHT factory was opened by Primary Industries Minister Nathan Guy last month. It has five production lines

with provision for three more lines. Fonterra global director operations Robert Spurway says 1200 staff and contractors completed the 12-month project. “We are proud of the finished plant.” No milk is stored at the plant. Fresh milk arriving is immediately processed

Fonterra shareholders and workers at the opening.

by heating for the required shelf life then turned into products. Tetra Pak supplied the plant, which has a helixshaped accumulator that allows filling lines to keep running during minor repairs and adjustments. @dairy_news facebook.com/dairynews

Anchor cream production line.

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DAIRY NEWS NOVEMBER 11, 2014

10 //  NEWS

Feds fear water allocation issues This is because the land owner, Wairakei Pastoral, now converting large tracts of former forestry land into dairy farms, has been allocated most of the available water in the Upper Waikato catchment. Landcorp is doing the conversions for Wairakei. Federated Farmers Rotorua/Taupo president

PETER BURKE peterb@ruralnews.co.nz

FEDERATED FARMERS is to discuss

with Landcorp the possibility that as many as 60 dairy farmers in the Upper Waikato River catchment may not have enough water to wash down their dairy sheds.

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Alan Wills acknowledges Wairakei Pastoral, via the consenting process, got rights to the water legitimately by getting in ahead of local farmers. The process of allocation is in its final stages. Wills says long-time local farmers fear they may go short of water because of Wairakei Pastoral’s likely allocation. He and

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National Feds president William Rolleston hope a deal can be reached with Landcorp. “The Wairakei Pastoral Landcorp partnership needs to be part of the solution,” Wills says. “Every farmer has to have consent to use water for cleaning stock sheds. Stock water and domestic water is guaranteed but the problem is with water for irrigation and shed wash-down. We believe 40-60 farmers could have insufficient consents for the water to run their cowsheds. Those farmers are living with a lot of uncertainty and are quite unsettled. Somehow water is going to have to be found for them.” Technically Wairakei Pastoral has done nothing wrong, Wills says, but he questions the ethics involved, “as when

Landcorp has been allocated most of the available water for its Wairakei farm, leaving some farmers worried.

Waikato catchment. someone with a surplus of humus in the soil, during The welfare of the which nitrogen leaching food takes it somewhere Waikato River is now a can be a big problem. He and invites people to help priority, he says. With the intends to query this with themselves according to beef market going through their needs. In such a case Landcorp. Wills says he and other a purple patch and good the first person there has money being taken everything “Farmers are living with paid for grazing and left nothing for the others.” a lot of uncertainty and dairy heifers he thinks there are Wills, whose are quite unsettled.” alternatives to family has been 60 – Alan Wills converting forest years in Reporoa to dairy farming. district, queries “Given these options farmers are concerned some of the conversions. and Landcorp’s huge that the $80 million Because a lot of the resources, surely they can dollars spent to clean land was brought into do something else without production years ago using up Lake Taupo may be burdening other farmers for nothing when the lucerne, ordinary pasture in the Upper Waikato water leaves the lake if doesn’t always work with water allocation and despite irrigation, he says. there is large scale dairy nutrient discharge issues.” Time is needed to build up conversion in the Upper

We want to talk – Landcorp LANDCORP CHIEF

executive Steven Carden says while he is aware of Federated Farmers’ concerns about water allocation, it is the regional council that oversees this. He told Dairy News that Wairakei Pastoral, as the owners of the land in question, applied for consent for the water in 2011 and were granted this in 2012. The water is chiefly for stock to drink and for shed wash-down, with

some provision for irrigation. Only about 14% of the Wairakei estate is irrigated, he says. “The owners have followed a process in getting the water. How we deal with the overall water allocation is something the industry, Landcorp and Wairakei Pastoral will have to… work out. It’s certainly not Landcorp’s aim to see people disadvantaged.” Carden says the meet-

Steven Carden

ing with Federated Farmers in early December will be part of a wider dialogue between Landcorp and its stakeholders. Landcorp wants to

be open about what it is doing, give others opportunity to engage and see what can happen as a result of talking. – Peter Burke.

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DAIRY NEWS NOVEMBER 11, 2014

12 //  NEWS

Fonterra ‘raids milk price to pay dividends’ ANDREW SWALLOW andrews@ruralnews.co.nz

AN AGRIBUSINESS academic says Fonterra’s 2013-14 payout was unfair to sharemilkers and unshared suppliers as it ‘dipped’ the milk price to fund dividend-driving assets such Waitoa’s UHT plant and more milk hubs in China. “The problem was they had to reduce the milk price to farmers to help fund these investments,” Lincoln University professor of farm management and agribusiness Keith Woodford told Dairy News. “For most, that was simply a retention which became an asset, but for sharemilkers and those farmers who are not shared up it was non-compensated and hence an unfair transfer from them to those who do hold shares, including outside investors.” Woodford says that with assets of $15.5 billion and liabilities of $9 billion, there are limits to how much Fonterra can prudently spend but if the cooperative wants to “stay up with the game” in international dairy or other FMCG markets it has to keep spending and its current and proposed investments

Keith Woodford

are logical. “Fonterra has good reason to believe whole milk powder will be the most profitable commodity product in the next few years, hence the focus on increasing capacity of whole milk processing. In this last year it was the limits on WMP processing that stopped the payout from being even higher,” he points out. Powder investments such as Lichfield (circa $300m) should benefit milk price more than div-

idend but value-add investments such as Waitoa ($120m), a third Chinese milk hub ($340m split with Abbot) and the Beingmate partnership ($615m for a 20% stake), are for profit and dividend. “The Waitoa UHT investment is important for Fonterra’s value adding strategies, particularly as they relate to China,” Woodford notes. Similarly, more milk hubs in China will drive profit because good quality local milk there sells

for exceptionally high prices, even at the farm gate. “The co-investment with Beingmate also has a sound logic. It is far from risk free, but if Fonterra wants to move into value added activities it had to find a local Chinese partner and Beingmate is the obvious one.” Woodford says Fonterra still suffers from having not retained earnings in its first few years and even now lacks mechanisms to acquire enough capital to put most of its milk into value-added consumer products. Consequently, it “has little option” but to persist as a commodity seller for the most part. “But being a producer of dairy commodities is not necessarily bad. This is particularly the case for Fonterra, given that Fonterra remains the world’s most efficient processor and marketer of dairy commodities. It is also lower risk than investing in consumer products for overseas markets.” If Fonterra again raids the milk price to fund value-add investments it seems it will be doing little to endear itself to sharemilkers who, traditionally, would be the shareholders of the future. “It will be grossly unfair to sharemilkers,” Woodford says.

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PRODUCING A low-fat cheese that wasn’t rubbery and retained taste has won the Fonterra R&D centre the top hospitality, food and beverage award in the 2014 NZ Innovation Awards. The cheese is Mainland’s Noble reduced fat cheddar, produced at the Clandeboye site. The cheese had taken three years development, in response to people’s changing attitudes towards diet, a co-op spokesman told Dairy News. Research shows that as people get older they become more concerned about their diet and eat less cheese. Noble Tasty Cheddar was launched in Australia in September 2012 and in New Zealand in April 2013. It’s sold in block form in both countries and with grated and sliced options in Australia. The co-op’s researchers first created “world-class” starter technology, leading to the cheese. “Many reduced fat cheeses lack flavour and have a rubbery texture,” the spokesman says. “The challenge was to produce a cheese that didn’t compromise on flavour and texture while reducing its fat content by 30%.” Projected growth for the New Zealand market for the next year is about 20%. In July it won an award at the International Cheese Awards in Nantwich, UK (silver, mild cheddar). The Innovation Awards evaluators agreed it is a classic R&D-led solution that addresses a problem and creates an opportunity and has great potential in global markets beyond Australia and Japan. Fonterra was also highly commended in the same category with its functional whey WPC550 and My Food Bag Ltd.

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FONTERRA HAS passed the peak milk production this season without any hitches at its plants. The co-op was expecting 90m L of milk daily at the peak, which normally last from mid to late October. Milk supply has levelled out at 88m L/day. In recent years the co-op has been forced to dump buttermilk as milk supply exceeded processing capacity at its plants. Fonterra managing director global operations Robert Spurway Robert Spurway told Dairy News it had come “very close” to peak milk target. “Based on current weather and volume we have passed the peak, only just,” he says. Spurway says milk supply has become flat at top of the curve; the co-op has been collecting 55m L in the North Island and 33m L in the South Island at the peak. Supply has been strong, thanks to good grass growth, he says. “Farmers seem very happy with grass growth. We have seen milk supply right through the shoulder of the season and leading up to the peak 5% ahead of forecast.”

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DAIRY NEWS NOVEMBER 11, 2014

14 //  NEWS

Nervous farmers set to accept limits PETER BURKE peterb@ruralnews.co.nz

PASTORAL FARMERS

in the Lake Rotorua catchment await with trepidation the outcome of new

Farmers around Lake Rotorua are bracing for rule changes.

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to have to farm differently when the rules take effect next year. Bay of Plenty Regional Council has a set of rules out for consultation, on which submissions will close shortly, leading to a final version next March or April. Wills says the many lifestyle farmers living in the catchment weren’t aware the proposed rules would affect them. Under the proposed rules dairy farmers are allocated a nitrogen discharge allowance of 35 units, dry-stock farmers 13 and lifestylers (2-40ha) 10 units. Lifestylers are getting a shock as they discover the changes they will have to make to meet the new requirements. Says Wills, “This issue has been going on for a long time and even into the late 1960s when an American named Dr Fish described Lake Rotorua as ‘an unflushed toilet’. For

many reasons it is a complicated catchment where 2.5m of rain falls and this combined with free draining pumice soils and the rolling contour of the land add to the problem. Most of the dairy farmers have made changes to reduce their nutrient loss since 2007 when rule 11 was implemented and there has been a reduction of stocking rates and feed pads have gone in.” Wills says dairy farmers are well aware of the issue and recognise the need to ‘farm within limits’. He hopes the issue with lifestyle farmers can be settled amicably but accepts there is tension between them and the dairy farmers. The regional council will have to take into account the effects of the rules on the ‘economic and social fabric’ on the region around Lake Rotorua and the city itself.

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Federated Farmers Rotorua/Taupo president Alan Wills.

WILLS’ LONG HISTORY ALAN WILLS and his wife Alison run two dairy farms near Reporoa. One they own and the other they lease from his mother. The Wills family has farmed in the area since 1952. His father Bryan was prominent in the primary sector in the 1970s, 80s and 90s. He served on the Meat and Wool Board electoral committee and was later chairman of AFFCo. Wills was last year elected provincial president, having previously served on the provincial management committee.

DAIRY NEWS NOVEMBER 11, 2014

NEWS  // 15

Fonterra not flinching in Sri Lanka FONTERRA CHAIRMAN John Wilson says the co-op remains committed to Sri Lanka despite its challenges over past 15 months. The situation has stabilised, he says; sales volumes have returned to levels before the co-op’s run-in with Sri Lankan authorities. “We have been in the market for many years and we have a strong footprint; but it’s a very competitive market,” he told Rural News. Fonterra has been in Sri Lanka for about 50 years and its Anchor brand commands at least 60% market share. But last August it faced product bans, court cases and angry demonstrators over its milk products. The company was banned by a Sri Lankan court from selling or advertising its products after the food safety authorities said they

found high levels of the agricultural chemical dicyandiamide in two batches of milk powder. Fonterra vigorously disputed the finding and a court order later removed the ban, allowing the trade to continue. Two months ago the Government again suspended the sale of some Anchor milk powder over food safety fears. Fonterra’s testing had cleared the product and the ban was lifted. Sri Lanka produces only 42% of its milk requirements and imports the remainder at a cost of US$300 million a year. The Government has a long-term commitment to increase domestic milk production. Wilson insists Fonterra supplies

Stephen Fleming and Nathan Guy at a cricket coaching session for Sri Lankan children. Inset: John Wilson.

“high quality milk… appreciated by consumers of Sri Lanka. We have also invested alongside our farmer suppliers in Sri Lanka; we are working with them to improve animal husbandry and farming techniques and to get high quality milk off those farms.” Last week Primary Industries Minister Nathan Guy was in Sri Lanka and met President Mahindra Rajapaksa and

several Sri Lankan ministers. “Our two countries are building a stronger relationship through the New Zealand-Sri Lanka Dairy Cooperation Arrangement (DCA)… our commitment to the development of Sri Lanka’s dairy industry,” says Guy. “New Zealand has one of the world’s most efficient dairy industries, and a lot of valuable expertise to share with Sri Lankan dairy producers. “There are only 280,000 cows in Sri

Oz eyes 22,500 heifers for export AUSTRALIAN DAIRY

farmers will benefit from the Sri Lankan Government’s plan to boost its domestic milk production by importing 22,500 dairy heifers from Australia. Wellard signed two contracts late last month to supply 22,500 cattle for almost A$100 million. Sri Lanka produces only 42% of its own milk and imports the rest at a cost of A$345 million a year. The government has long wanted to raise domestic milk production. Wellard dairy general manager Colin Webb says the company, a big livestock exporter, will supply Friesian Jersey-cross heifers as best suited to the local environment and production systems. It expects to send five ship-

ments over the next two years, sourced nationwide at market rates. It will source and supply 20,000 animals in the next two years under the larger of the two contracts, and will provide management and veterinary support. Under a second contract, supported by Rabobank and Australia’s Export Finance Investment Corporation, Wellard will supply 2500 Friesian Jersey-cross heifers for a Sri Lanka farm it will build from the ground up – sheds, milking parlour and machinery. The deal includes technical management and capacity building by employing and training of vets, farm management advisers and supervisors. Wellard recently sup-

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plied 2000 heifers, renovated existing facilities and provided management and education. The cattle

are said to be producing well and the dairy plant is running efficiently. “All parties to the origi-

nal supply agreement [are] delighted… and we are pleased to have… a much larger contract.”

Lanka compared with 5 million in New Zealand and they are keen to improve their productivity. Genetics, animal husbandry, feeding techniques and technology can all play a part in this.” Initiatives under the DCA include five years of veterinary education costing $2.2 million, animal nutrition and veterinary exchanges. In Sri Lanka Guy laid a foundation stone at the new Fonterra milk chilling station in Gampaha.

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DAIRY NEWS NOVEMBER 11, 2014

16 //  NEWS Matthew Mikaere and Stacey Cowdell check out some calves while IHC’s Anne Jacobsen looks on.

Calf donations reap $28m for charity FARMERS HAVE this

year donated 130,000 calves to be sold as fundraisers for people with intellectual disabilities. IHC has run the Calf & Rural Scheme for 30 years raising $28 million over

the years; PGG Wrightson is a major sponsor. The first sale of the year was at the Paeroa saleyards on October 24. Peter Moore, general manager of PGG Wrightson Livestock

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and Adele Blackwood, IHC national manager fundraising development, were on hand to see 118 calves sold. Blackwood says the scheme was launched by the families and supporters of IHC. “Norm Cashmore, Te Kuiti, and IHC Calf & Rural Scheme patron Sir Colin Meads developed it with other volunteers around the country. This was soon followed by the partnership with PGG Wrightson… attracting farmer support for IHC and people with intellectual disabilities. “We are fortunate to have the loyal support of about 5000 farmers who each donate one or more weaned calf (a virtual calf or even a cull cow) to the scheme each year. “We arrange transport to saleyards at one of the 19 IHC stock sales organised by PGG Wrightson.” Helpers include farm-

ers, canvassers, truckers and PGG Wrightson staff. PGG Wrightson’s support includes promotion, farmer awareness, advertising of the sales, and the sales process, Blackwood says. “IHC does a tremendous job for people with intellectual disabilities and our sponsorship of this scheme is a way to help those people, their families and the communities which donate the calves. “The funds raised from the Paeroa sale, for example, come back to that community to enable services and support not funded by Government.” Blackwood says the scheme generates about $1.5 million per year. “This helps create a better life for people with intellectual disabilities through… advocacy, selfadvocacy, one to one volunteer friendship and the free IHC library, the biggest of its kind in the southern hemisphere.”

From left: Anne Jacobsen, IHC, Adele Blackwood, IHC and Peter Moore, PGW at the launch.

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ENCOURAGING STAFF to enter the 2015 New Zealand Dairy Industry Awards will assist their progress in the dairy industry. Richard and Joanna Greaves have always had staff members enter the awards – the Sharemilker/Equity Farmer of the Year, Farm Manager of the Year and Dairy Trainee of the Year competitions – and expect two of their staff to enter the 2015 awards. Entries in the awards are now being accepted online at www.dairyindustryawards.co.nz and close on November 30. The Greaves are currently 50% sharemilking 1400 cows at Darfield, Canterbury, after beginning their dairy farming career in Hawkes Bay in 2007. With professional backgrounds and the assistance of the dairy industry awards, the couple has made rapid progress. Greaves was runner-up in the 2009 Hawkes Bay Farm Manager of the Year contest and the couple won the 2011 Hawkes Bay Sharemilker/Equity Farmer of the Year title.

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DAIRY NEWS NOVEMBER 11, 2014

18 //  WORLD Nestle’s first ‘zero water’ dairy plant.

‘Zero water’ plant recycles twice NESTLE HAS turned

one of its dairy plants in Mexico into the world’s first ‘zero water’ factory. New processes and equipment at the Cero Agua factory, in the watershort state of Jalisco, enable it to use recycled

water from its dairy operations. Nestlé plans to do this in its factories in other countries. The daily water savings equal the volume needed to fill an Olympicsize swimming pool or to supply the daily needs of

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6400 Mexicans. For 60 years the water available for each person in Mexico has declined drastically due to population growth, Nestle says. Saving groundwater is therefore important, says chief executive Paul Bulcke. “In Mexico and around the world water is a vital and fragile resource.” The Cero Agua dairy factory takes fresh cow milk, normally about 88% water, and heats it at low pressure to produce water vapour. This is condensed, treated and used to clean the evaporating machines themselves. Once the machines have been flushed out the water is collected once more, purified and recycled a second time. The water can then be reused for watering gardens or cleaning. The amount of groundwater the Cero Agua dairy

saves each day – about 1.6m L – equates to about 15% of the total water used by Nestlé in Mexico each year in its factories and offices. Such water savings are part of Nestlé efforts to promote the “conservation, treatment, recycling and water efficiency in our operations and among farmers, suppliers and other partners in its supply chain,” says Marcelo Melchior, who heads Nestlé Mexico. The Cero Agua project, and others, have allowed Nestlé to reduce total water withdrawal in absolute terms by almost onethird globally over the past 10 years, while increasing production. Water use per tonne of product has fallen by half. Worldwide, Nestlé aims to further reduce its water withdrawal per tonne of product by 40% by 2015, compared to 2005.

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A NEW on-line training program created by Dairy Australia is intended to help Australian dairy farmers enhance their communications skills. The free, nationally accredited ‘Developing Legendairy Champions’ course equips farmers to speak confidently in public to, say, the news media, a local council or a local primary school audience. A pilot group of 13 farmers took the course through Dairy Australia’s education partner, National Centre for Dairy Education Australia (NCDEA). A participant, dairy farmer Ali Duckworth, of Swan Creek, NSW, said “I don’t think there was a topic the course didn’t cover, and it encouraged us to think about conversations we may have. It was beneficial to get training on how to effectively respond and communicate on a range of topics we get approached about.” The program supports the industry’s Legendairy communications platform, launched last year to publicise the Australian dairy industry and its people. Participants do the training at home at a time that suits them. They learn how to write media releases, participate in a mock media conference, and make a video of themselves to use online and on social media. The NCDEA’s Jillian Goudie, who runs the webinars and helps students during the program says it has immediate benefits. “I don’t know of any other industry in which you can so effectively pick up such relevant skills in such a compact format with real outcomes.” According to REDgum communications facilitator and coach James Freemantle, who led the webinars, the course can help ‘recast’ public opinion. “Having these skills can enhance other people’s experience of what dairy means.” www.legendairy.com.au/dairy-farming/our-people/ developing-legendairy-champions

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DAIRY NEWS NOVEMBER 11, 2014

20 //  OPINION RUMINATING

EDITORIAL

Put people first

MILKING IT... Enviro rules and farm sales

AN ADVERTISEMENT for a small South Canterbury farm caught Milking It’s eye. “Mitigate your nitrate liability” ran the heading, over the message. “Farmers looking to mitigate some of their nitrate leaching liability may choose to use the feedpad and barn as an option.” It’s a sure sign environmental restrictions are starting to influence land markets. The name of the land agent: Murray Groundwater. You couldn’t have made it up.

Milk cart before the cow?

MAINSTREAM MEDIA are often lambasted for leading with dairy’s bad news while burying the good or counter arguments downpage and back of paper. But a dairy expansion story, with a positive spin, led the Timaru Herald front page: ‘250 more Fonterra jobs’ trumpeted the headline. Hold on there. With Fonterra only now starting consultation on a first of two possible new dryers at Studholme – the pocketsized plant it acquired out of Russian-owned New Zealand Dairies’ receivership – Milking It reckons the newspaper is counting its tankers before they’re booked. A second dryer, which would take that job tally to 250, is five to 10 years away, if it happens at all.

Cows could combat malaria

COWS COULD help eradicate malaria if Brazilian entomologist Agenor Mafra-Neto gets his way: A mosquito carrying the parasite that causes malaria buzzes around a cow, whose smell differs from that of other cows. Mosquitoes only consume human blood, and the scent of this cow signals ‘boy’, not ‘bovine’ —the cow has had artificial lactic acid treatment that misleads the mosquito into thinking its prey is human. So the insect feeds and flies, apparently unaffected by the experience. (The cow won’t get malaria.) The bug will soon die – poisoned by a second compound in the cow’s blood – unable to spread malaria to a human. This ‘trojan cow’ could help in malaria hotspots, if testing goes well and it’s not too expensive. Bill Gates seems to believe in it: his foundation granted the researchers US$100,000 to continue their work.

Cow-free milk coming your way

THE WORLD’S first artificial cow milk could hit the shelves by the middle of next year. Made from genetically engineered yeast, it is the product of work by two vegans to put offer a more environmentally sustainable option. Earlier this year a synthetic dairy start-up called Muufri (prn. ‘Moo-free’) was founded by two bioengineers in California – Perumal Gandhi and Ryan Pandya. They’re working on perfecting an artificial cow milk made from yeast genetically engineered to produce milk proteins. This ‘out-of-body udder’ produces ‘milk’ with the taste and health benefits of real milk, setting it apart from soy, rice, and almond varieties. They’re hoping for a mid-2015 launch.

THE ATTEMPT by the Bay of Plenty Regional Council to impose new and tighter limits on how much nitrogen farmers in the Rotorua Lakes catchment will be allowed to leach is clearly running into trouble. Dairy farmers have known of the issue for some time, taking note of what has happened in the Lake Taupo catchment and in Manawatu with the One Plan. What makes this situation different is the nature of the Rotorua Lakes catchment. There are hundreds of lifestyle farms virtually on the shores of the lake and on the hills above – those who love a pony or three, or a few sheep or cattle for the freezer. They will be hit hard and they can be stroppy. The message coming through is that this consultation process, like many others in the past, is not going to plan. Or is it that the council is not getting its own way and that its science and modelling is being seriously challenged? Sadly, too many regional councils have been captured by ‘green elements’; Lachlan McKenzie is right in saying too little attention is paid to the economic impacts of decisions made by councils. The need is to get the balance right, and farmers more than anyone else in the community have made huge strides in mitigating the impacts of their work on the environment. This must be said of Rotorua. Farmers have changed their systems to reduce their environmental footprint, but if councils persist in hammering them too hard the economics of farming will not stack up and the wider community will suffer. Highly qualified professional farm advisors in Rotorua are uneasy about the council proposals on N leaching and what impact these might have long-term on a region with high unemployment and many social problems. Idealism about the environment is noble stuff, but if it destroys communities and puts people out of work is it doing any good? Regional councils need to balance their plans by looking hard at the impact their decisions will have on people – not just on lakes and waterways.

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DAIRY NEWS NOVEMBER 11, 2014

OPINION  // 21

More pasture the answer ANTS ROBERTS

DAIRY FARMERS

searching for efficiencies in their operation know that homegrown, fully utilised pasture has always been the most cost-effective feed. Even before the current downturn, many farmers were not only looking at output ratios such as milk solids per cow, but also at feed efficiency ratios such as the cost of producing a megajoule of metabolisable energy per kg of dry matter. High-fertility grass/ legume pasture is also an excellent quality feed. As Dr John Roche, principal scientist at DairyNZ has written, “high quality pasture is high in energy, has good quality protein relative to cow requirements, adequate amounts of fermentable and physically effective fibre and reasonable mineral and vitamin levels.” Of course, depending on season and cow condition, there is a role to play for supplementary feed, i.e. when it becomes substitution feed – replacing pasture – and waste and risk creep into the system. So pasture should be prioritised in good times or in bad and good soil fertility is a key to stimulating and maintaining that pasture growth and quality. When it comes to deciding on how much of which fertiliser to put where, it pays to make an informed choice, knowing where you stand before figuring out the implications of any change. Withdrawals can potentially be made from a farm’s soil nutrient ‘bank’; when it comes to phosphate levels, you must consider all the essential nutrients, as well as soil pH, rather than purely P. It pays to soil test strategically. For example, if living with current Olsen P levels is being contemplated, not applying a product like potassic superphosphate could lead to potassium and/or sulphur deficiency which may have a marked effect on production. Your nutrient advisor should have the tools to evaluate the effect of withholding an applica-

tion of P in respect of Olsen P levels and pasture productivity. If and when a change in fertiliser policy is being contemplated, in order to get the most effective use of your expenditure, soil testing all your paddocks will give you a much clearer picture of what nutrients are required in which paddocks. Invariably you will find paddocks which could have less of one or more nutrients applied this year without any loss in pasture production and quality. Conversely, there will be underperforming paddocks which will require more than maintenance fertiliser to get the best out of the pasture. Negatively impacting on next year’s production through inappropriate changes to their fertiliser programme could eventually deliver a double whammy if dairy farmers are scrambling to make up for lost ground this season. Putting every blade of pasture to optimum use means good utilisation practices, but also tracking pasture performance and reviewing residuals relentlessly. There are four ways to capture pasture performance data that can be married up with soil fertility data to give insight on soil nutrient needs: where to invest, where to maintain and potentially where to cut back. Direct observation Walking the paddock with a qualified nutrient advisor is a valuable start to the fact gathering. Another pair of eyes can help scan for the evenness of pasture growth and colour, urine patch contrasts and the pasture’s recovery after grazing. Soil testing Howard de Klerk writing in the Southland Demonstration Farm’s October update said, “spending the money on all paddock sampling was adequately rewarded by efficient use of fertiliser.” Taking as many tests as possible on many carefully selected transects will highlight inpaddock variability which can lead to the right nutrients applied at the right rates to the paddocks that require them. Pasture quality testing A plant with more chlo-

rophyll will reflect more near-infrared energy than an unhealthy plant. So analysing a plant’s spectrum of absorption and reflection in visible and in infrared wavelengths can provide information about its health and productivity. In its herbage analysis, ARL uses near-infrared

spectroscopy to reveal the nutritional value of the pasture being grown. Pasture quantity testing Devices like a C-Dax pasture meter can capture dry matter data and highlight those areas that need more attention. The laser scanning tow-behind device takes 18,500 read-

ings per 500m compared to the 250 of a rising plate meter. • Dr Ants Roberts is Ravensdown chief scientific officer.

Ants Roberts, Ravensdown urges farmers to fully utilise pasture.

DAIRY NEWS NOVEMBER 11, 2014

22 //  AGRIBUSINESS

Four Nuffield scholars from dairy industry FOUR OUT of five of the

From left; Bede O’Connor, Sharon Morrell, Ben Allomes, Satwant Singh and Dan Steele.

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latest Nuffield Scholarship winners are from the dairy industry. They are West Coast dairy farmer Bede O’Connor; Woodville dairy farmer Ben Allomes; Rotorua DairyNZ regional

leader Sharon Morrell; and Fonterra employee Satwant Singh from Morrinsville. The other winner is Whanganui sheep and beef farmer, entrepreneur and conservationist Dan Steele. Says Nuffield NZ chair-

man Julian Raine, “Only a handful are awarded each year so a Nuffield Scholarship is one of rural New Zealand’s most valuable and prestigious awards. To be a scholar is a life-changing experience.” The Nuffield NZ Scholarship offers the opportunity for overseas travel, study of the latest developments in leading agricultural countries and an introduction to leaders and decisionmakers not accessible to ordinary travellers. A current 2014 scholar is Palmerston North dairy equity farmer, potato grower and agricultural contractor Paul Olsen.

“It has been a brilliant experience for me, seeing other countries and a variety of cultures – mind boggling and eye opening. New Zealand has a huge opening… in food proteins and niche products; it’s there for the taking.” Nuffield Scholars travel internationally for at least four months in their scholarship year (not necessarily consecutively), participate in a conference with 60 Nuffield Scholars from around the world and attend a six-week global focus in several countries with other scholars. They also have individual study and a research report due at the end of their travels.

THE 2015 SCHOLARS Bede O’Connor, West Coast WEST COAST dairy farmer Bede O’Connor (43) milks 340 cows on 170ha near Westport and is an elected director of Westland Dairy Co-op. O’Connor has increased production 25% in three seasons after buying his family’s farm in 2011. He aims for self-sufficient farming to combat weather ups and downs. He is a member of the West Coast TB Free Committee, West Coast Rural Support Trust and the West Coast Focus Farm Trust. He was a regional judge for the Dairy Industry Awards Trainee of the year and is active in West Coast Federated Farmers. Sharon Morrell, Rotorua SHARON MORRELL, BAgSc, is a regional leader with DairyNZ, Rotorua, interacting with farmers and helping run discussion groups, field days and workshops. She works with partners such as the BOP Dairy Stakeholders Group. She has worked as a MAF farm advisor. With husband Ross she has worked on farm and raised four children. She did supervisory and consultancy work before moving to DairyNZ in 2010. She attended the Kellogg Rural Leadership programme in 2011. Satwant Singh, Waikato SATWANT SINGH, BMS (Hons), (30) works weekdays for Fonterra’s commodity risk and trading team, and weekends on the family dairy farm near Morrinsville. Singh and her husband Sunil Krishna live in Auckland. One of her achievements is the guaranteed milk price programme for farmers. She was a service specialist for Fonterra (2006-2008), and an area manager in Morrinsville (2008-2012). Ben Allomes, Tararua DAIRY FARMER Ben Allomes and wife Nicky own a half share in an 850-cow farm at Woodville, are 50/50 sharemilkers on a 400-cow farm at Woodville and a 215-cow farm at Ruawhata, and lease two other properties. Allomes is a farmerelected DairyNZ director and on their local school board of trustees. He has been involved with NZ Young Farmers, Primary ITO, Dairy Industry Awards, Fonterra Network and DairyNZ. While president of Young Farmers (2007-2009) he helped reorganise it and jointly led the development of the NZYF leadership ‘Pipeline’ programme. Dan Steele, Whanganui DAN STEELE is a farmer and conservationist living and working on Blue Duck Station, a 1460ha sheep and beef station.

DAIRY NEWS NOVEMBER 11, 2014

AGRIBUSINESS  // 23

Dairy Womens awards entries to close soon

Thinking about a barn? DAIRYNZ IS running

workshops aimed at helping Canterbury dairy farmers decide on whether to build off-paddock cow shelters. Costs loom large and there’s more, says DNZ regional leader for Canterbury/North Otago Virginia Serra. “The decision usually involves a big capital cost…

so it needs to be based on sound analysis of the farm business. “We’ve put these workshops together to help farmers understand how to use physical and financial modelling to investigate the impact of different options on their farms. “A detailed investment analysis should ideally also be completed using tools

such as net present value calculations.” The workshops will work through key questions such as: What are the main drivers behind the decision to build? What are the right tools to evaluate this decision? What research has been done and how does that help with analysing

options? The workshops are at the Hinds Community Hall, Hinds on Monday 17 November and at the Dunsandel Sports Centre, Dunsandel on Tuesday 18 November. Both workshops run from 10.30am to 1.30pm and lunch is provided. www.dairynz.co.nz/ events

NOMINATIONS CLOSE this week for New Zealand’s biggest industry award for women in dairying. The Dairy Women’s Network (DWN) Dairy Woman of the Year Awards close on November 15. Sponsored by Fonterra, the prestigious award includes the chance to attend the 12-month Breakthrough Leaders Programme run by Global Women, worth $25,000. DWN chief executive Zelda de Villiers said the award celebrates and advances women who are making a difference in the dairy industry, in their dairy businesses and in their communities. “Dairying women play a vital role in their businesses, not to mention their communities. We know amongst our members we have talent, passion and drive and we want to develop and reward those women for what they offer to the industry. “So whether you are a husband, a family member, a friend or colleague of a DWN member who is deserving of this awesome opportunity, please get your nominations in.”

Zelda de Villiers

Finalists will be individually interviewed in December by five judges including representatives from DWN, Fonterra, Global Women, DWN gold partner ASB and 2013 award winner Justine Kidd. The winner will be announced at the gala dinner at the DWN annual conference on March 18, 2015 in Invercargill. www.dwn.co.nz

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DAIRY NEWS NOVEMBER 11, 2014

24 //  AGRIBUSINESS

DairyNZ manager seeks change of pace GARETH GILLATT

FEW PEOPLE have been more prom-

inent in Northland dairy farming in recent years than DairyNZ Northland regional manager Tafi Manjala. Through three droughts, eight floods, a global financial crisis and payout fluctuations Manjala has been there with information and events relevant and timely. What a surprise, then, to farmers and rural professionals in Northland when Manjala resigned his DairyNZ role to become a business manager at Rabobank, Whangarei. Telephone calls and emails came thick and fast the day the news came out. The Zimbabwean migrant has spent 10 years helping advance Northland’s dairy industry, first as a consulting officer then for seven years as regional manager for DairyNZ. The bank asked him to fill a place on its business manager team and he decided it fitted his long-term career

plans for local and international roles in agriculture. The post will allow him to explore aspects of the industry not accessible to him while working for DairyNZ. The role will allow him to get up close and personal with many aspects of agriculture – drystock pastoral farming, cropping, horticulture and viticulture. “It will also give me the chance to work more one-to-one with farmers, helping them achieve their goals.” “A drawcard was that Rabobank is the only 100% agri-bank in NZ, hence it takes a longer-term view and understands the up-and-down cycles of agriculture. “It has a co-op structure and more importantly the Whangarei branch has been the top performing branch in the country for two years.” A quest for continual learning led him to accept the position which he says came out of the blue. ”The Nuffield scholarship in 2013 increased my appetite to keep growing professionally and personally. The business manager posi-

tion will give me the next skills I need to develop.” Taking on a business manager’s job will also give him more time for family and to expand the livestock rearing operation he runs on 40ha of leased land near his home. “The scarcest resource is time.” A chance meeting on a soccer pitch in 2005 led to his leasing the land where he runs about 200 drystock. The animals include week-old calves and two year-old bulls he seels to dairy farmers as terminal sires to put over the tail end. Manjala says he won’t miss intensive demands on his time: he sometimes had to work 60-hour weeks during crises – there had been a fair few of these. But he will miss the advisory nature of the work with DairyNZ. He finds managing people extremely rewarding but always a challenge. He hopes to be remembered for his passionate commitment to progressing dairy farming, for his timeliness in responding, and for leading two Northland DairyNZ’s great success stories

Tafi Manjala is taking up a role with Rabobank.

– the Candy Focus Farm and the RepoRock project. The projects’ success had depended on first getting the right partners on board (farmers and professionals) then working out as a team what the real issues were and how to influence behavior change by first influencing how farmers think about issues. “Keeping farmers in the driving seat of project development and delivery is the silver bullet if ever there is one.” Manjala believed in the principles so much he put them into his Nuffield

report on influencing change (see it on the Nuffield website). “I have thoroughly enjoyed my time at DairyNZ and I’m thankful for the opportunities and support the organisation has given me.” A new Northland regional leader for DairyNZ is likely to be named before the end of November. Manjala says the appointee will take on a team that makes up for any shortages in experience with their positive attitude and robust farm systems training. “Mission accomplished, but there is more work to be done.”

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DAIRY NEWS NOVEMBER 11, 2014

FEED/MANAGEMENT  // 25

Global feed grain supply up AMY BELLHOUSE AND JOHN DROPPERT

BOUGHT-IN FEED

costs are a major influence on farmgate margins in many dairy exporting regions, and are a key driver of global dairy supply. After year-long downgrades, recent estimates put the Australian 201415 wheat crop at about 23m t (Rabobank) to 25m t (USDA), compared to an estimated 27m t last year. This is a sobering trend, but exposure to international grain markets has given Australian dairy farmers some relief, as expectations of good global feed grain availability have depressed global markets since September. While good overseas supplies may help lessen the pressure on domestic feed grain stocks by lowering the prices exporters are willing to pay, they may also support continued strength in northern hemisphere milk production. The US is the ‘poster child’ for production systems driven by intensive feeding. According to University of Wisconsin data, bought-in feed accounted for, on average, 52% of total input costs for Californian dairy farms between 2006 and 2010. CBOT December corn futures rose during October, but with harvest underway they remain relatively low, supporting milk:feed price ratios in favourable territory even as milk prices come under threat from falling commodity values. Consequently, a strengthening supply response is being observed in the US, with September data from the USDA indicating milk production 4% higher than September 2013; bringing year-to-date growth to 2%. Abundant feed grain will help the US industry in the face of intensifying dairy commodity-driven headwinds, likely keeping production strong into the first half of 2015. By its very nature, the European industry is much more diverse: boughtin feed costs for the top five milk producing states range from 25% of operating costs (Poland) to at least 50% (Italy). Feed

expenses thus represent a big chunk of operating costs – and falling grain prices are helping cushion margins. European milk production is now expected to reach a record 151 million tonnes (up 4%) in 2014, despite the impact of falling dairy commodity markets beginning to reach the farmgate. The USDA revised expected EU wheat production up 3m t to 154m t in October (compared to 143m t last year), and cheap grain continues to come out of France. Upward pressure is emerging however: international benchmark grain prices have risen in recent weeks, and UK Nov 14 feed wheat futures have followed suit. The Black Sea wheat crop is generally thought to be much smaller than expected, also reducing grain available for export from the region. Generally recognised as representing ‘the other end’ of the scale, net feed ‘made, purchased or cropped’ represented only 20% of a typical New Zealand farm’s working expenses in 2011-12 (DairyBase), suggesting an even smaller share for bought-in feed alone. New Zealand relies on international grain markets, producing about 1m t of grain annually, and importing 300,000-450,000 t, plus palm kernel expeller meal for use in stock feed (MPI). Given the seasonal nature of most New Zealand production systems, world grain price fluctuations are most relevant to whether purchases of supplementary feed will prove economic later in the season, or whether unfavourable weather will trigger early dry-off of herds. With a farmgate milk price forecast of $5.30/kgMS – and most analysts tipping this will fall further – the economics are less likely to stack up in 2014-15. At about 5% growth to September, milk production growth in New Zealand has so far outpaced earlier expectations. However, a slight lessening in the pace is still expected, with full season forecasts in the range of 3-4% growth, relative to 2013-14. Back home, data from the Victorian dairy farm monitor project shows

average spending on grains, concentrates and other feeds accounted for 29% of cash costs during 2013-14, demonstrating the potential for a spike in grain prices to impact on margins. Milk production is currently about 3% above last year in data to September, however dete-

riorating seasonal conditions are increasingly likely to weigh on production heading into summer. In particular, dry conditions in southwest Victoria are already undermining pasture production and cutting into crop yield potential. Feed prices remain a challenge in

northern Australia, however yields and quality of early harvested grains have generally been acceptable, while sorghum planting will be supported if rains forecast for early November eventuate. • Amy Bellhouse and John Droppert are analysts with Dairy Australia.

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DAIRY NEWS NOVEMBER 11, 2014

26 //  MANAGEMENT

Robot brings flexibility, insights MANY DAIRY farmers in the Gippsland region of Victoria, Australia, are caught in the same position as Trevor Mills a year

ago. He was grappling with issues of farm scale on his 180-cow unit, trying to balance a need to increase the flexibility of his time

against the economic realities of volatile milk returns and labour costs. “We had done the maths on our options,

Trevor Mills is enjoying the flexibility of robotic milking.

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including share farming, leasing or employing labour. Unfortunately none of it really added up to leave enough in it for us as owners,” he says. Add the complications of health issues, and it was clear the choices were narrowing to possibly even having to exit dairying altogether, not a prospect he or his wife Anne-Marie were keen on. “I had never seriously considered a robotic milker as an option, thinking that was more something the next generation could consider, but if we were going to stay on the farm, we did not have a lot of viable options open, and robotics was one of the most obvious.” His decision coincided with the launch of the WestfaliaSurge MIone robotic milker in Australia. Mills acknowledges he was cautious about becoming the test farm for the technology, but after six months is starting to enjoy the flexibility and insights the system delivers. The MIone is not the first robotic system developed, but Mills liked its configuration. He opted

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for a system with three ‘boxes’ and appreciated a layout with cow access on one side and easy operator access on the other. He also liked the capacity of the MIone to accept additional boxes for cows without having to buy a lot more technology to power and manage those additions. A key point of difference for the MIone system is a single robotic arm that moves between the boxes to work with a 3D camera. The camera coordinates the position of individual teats and determines where to place the cups at the start of milking. It guides the teat cups on the milking rack to the cow’s teats The camera’s monitoring provides a more human-like response to unexpected events, like cups being kicked off, with a rapid movement back to the problem box to correct the problem. Mills spent the first six months getting himself and his herd used to the system, and is starting to see how his herd are responding to the freedom choosing their own milk-

ing times brings them and him. “We would have the majority of cows, about 75%, milking twice a day, and about 15 cows on once a day, with the rest three to four times a day.” He has noticed the cows that are limiting themselves to once a day are only producing about 15L a day at spring peak, but when offering themselves twice a day that jumps to 22-25L. “I am starting to build a picture of performance, and we will make some decisions at the end of the season about what we will do with those once a day cows.” Meantime his top cows that produce over 40L being milked three times a day will sometimes leap to 50L when they come in for a forth milking over a 24 hour period. Overall he believes production has not suffered much, and the MIone’s capacity for recording means he is getting a better profile on his herd’s health. “Conductivity testing highlights those cows that are getting mastitis,

and the MIone will separate them out to check. Identifying and treating cows is that much simpler. Lameness is also reduced because the cows are coming in at their own time and own pace.” His herd is registering a bulk somatic cell count of 150,000 this season. The farm has been configured for eight hour grazing, with three laneways with drafting gates to control cow movements. Mills says after 17 years of conventional milking it has taken him some time to get his mind around accepting that cows will determine the milking period. “I have learned it’s sometimes better to just leave the machine and the cows to it, and walk away.” A text alert system provides him with updates on any technical issues, and these have proven to be relatively easily fixed in the early stages of operation. GEA FT sales engineer Brian Monteith says most new milking systems installed in Europe are now robotic systems, with a number of five box MIone systems operating in the UK and Europe. “Like Trevor the motivation there has been primarily labour availability and getting the freedom to do other work in the business.” Being solo on the farm, Mills says he now appreciates not having to interrupt another job at the conventional milking time, and is starting to enjoy the shift in perspective and time management the MIone brings.

DAIRY NEWS NOVEMBER 11, 2014

MANAGEMENT  // 27

Field days will talk nutrients, soil CANTERBURY WILL

host two EnviroReady field days this month to help farmers prepare for changes under Environment Canterbury’s land and water regional plan. They will be held in Hinds (November 25) and Dunsandel (November 27), covering environmental risks onfarm and advice to farmers on good management practice. DairyNZ spokesman Tony Fransen says the events are intended to lift farmers’ confidence that their systems will meet regulations. “Farmers will get practical solutions to take home and implement on their farm,” says Fransen. There will be four sessions daily: nutrient management, R&D, soils,

effluent and irrigation, and land management. The nutrient management session will cover nutrient budgeting as a tool for understanding nitrogen movement through a farm system and the key drivers for nutrient loss. Options to reduce nutrient loss and the financial implications of changing systems will be covered by DairyNZ scientist Dawn Dally during the R&D session. Paddock sessions will include understanding soil types and moisture levels, managing effluent and irrigator systems efficiently, the benefits of on-farm planting, waste management and identifying high-risk areas on-farm.

Weed threat sneaks in with new pasture BREEDING NEW fast-growing grass varieties that produce more seeds and are resistant to drought, pests, grazing and disease may inadvertently be creating the next generation of invasive weeds, researchers say. More robust grass varieties introduce a risk to the environment. For instance, new varieties can invade adjacent areas and spread across the landscape or they can interbreed with existing invasive weeds. So says Philip Hulme, co-author of a research paper published in the latest Proceedings of the National Academy of Sciences (PNAS). He is a professor of plant biosecurity at Lincoln University and lead researcher at the Bio-Protection Research Centre. “Pasture species such as ryegrass and fescue may not strike people as major threats to the environment but they are regarded by the Department of Conservation as environmental weeds,” says Hulme. The researchers stress the need for government and agribusiness to ensure pasture plants are of low risk to the environment. “Pasture is big business in New Zealand and a large part of our economic success arises from agribusiness developing more productive or persistent varieties,” says Hulme. “As a result there is a clear conflict between economic and conservation outcomes.” Agribusinesses do not have to assess the environmental risk of the new grass varieties they develop, but some consideration in this area might prevent the spread of environmental weeds. “It is probably those varieties being developed for greater persistence, especially in the face of drought, that might pose the greatest risk,” says Hulme. The researchers have made four biosecurity recommendations: governments should manage a list of prohibited varieties (not just species), develop a weed risk assessment, ensure rapid detection and control of invasive weeds, and develop an industry-pays system.

Certified professionals will be available to provide one-on-one advice to farmers. These include effluent and irrigation designers from accredited companies, effluent WOF

assessors, nutrient management advisors, soil specialists, native plant suppliers and recycling depot representatives. A list of staff training courses will also be available.

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DAIRY NEWS NOVEMBER 11, 2014

28 //  ANIMAL HEALTH

Don’t let unhealthy DANYEL HOSTO

Fertility, mastitis and lameness are the top reasons a cow will leave a herd in New Zealand.

UNHEALTHY ANIMALS ruin any farmer’s

Good all round product that supplies minerals directly into the animals and is better than water based minerals supplements. MULTIMIN® is good for the all-round well being of the herd. [ NATHAN ANDREWS | LUMSDEN ]

ARE YOU PICKING UP

WHAT THEY’RE PUTTING DOWN? Veterinary Practice MULTIMIN® + Cu purchases 2013 - 2014

MULTIMIN® + Cu is proven to enhance reproductive performance through the unique injectable combination of Copper, Selenium, Zinc and Manganese. This is backed up by New Zealand farmer’s feedback and trial work1 demonstrating MULTIMIN® + Cu injected 4 weeks before PSC and 4 weeks before PSM decreases the number of lost pregnancies, improves conception rates by over 3%, delivers more days in milk and provides a 4:1 ROI.

day. The extra time and out-of-pocket costs for treatment add up, especially as your herd grows. Most health issues your herd faces can be managed, monitored and improved through management and recording processes. There is also a genetic percentage, about 25%, that needs watching to improve the baseline performance of your herd. Fertility, mastitis and lameness are the top reasons a cow will leave a herd in New Zealand. Each of these animal events attracts an array of treatment costs, opportunity costs, and labour costs. DairyNZ estimates an empty cow costs the herd $500-700 in lost milk production and replacement costs to maintain the size of the herd. Likewise with mastitis, DairyNZ estimates each season this illness costs the industry up to $280 million. If you think about your herd and the number of cases of mastitis you treat, this figure may seem too large. But a study in the US by Philpot and Nickerson shows 70-80% of the costs associated with mastitis are tied to

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what your BW looks like on paper. Where do you start with this challenge? Starting with your herd will ensure you have the foundation in place to capitalise on improved animal health. Breeding for health Depending on the part of the herd you want to improve, there are breeding values that can be selected for, to make the most improvement in your herd. Based on the largest opportunity for your herd, you should select a goal

ity, mastitis and lameness – selecting for specific breeding values will help you make the most genetic gain. In New Zealand, farmers have accessibility to a fertility and somatic cell breeding value. Selecting the best bulls for these specific traits will help your herd improve most rapidly for cow fertility and mastitis, respectively. In other countries, for example the Netherlands, there is a breeding value available on bulls called

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to breed for. Examples of goals include, but are not limited to, more milk solids production, more fertile herd and improved milk quality. Once you establish a goal for your herd, you can most effectively use the genetic information available, in the form of breeding values, to select mating sires that will best help you to reach your herd’s goal. To tackle the main issues we see in the New Zealand dairy herd – fertil-

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subclinical mastitis, ie, the cases you never notice. Finally, it comes down to simple common sense that a cow with any degree of lameness isn’t going to graze as much, limiting what she can produce due to her limited feed intake. Each case of lameness is estimated to cost the farm $300 to $1200 based on the severity. Add up all these costs and see there is a big opportunity to gain more income from your herd performance, outside of

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DAIRY NEWS NOVEMBER 11, 2014

ANIMAL HEALTH  // 29

animals ruin your day in your herd, everything from calving and mating, to treatment of a sore foot on a cow. At busy times of the year, recording might seem like more of a hassle than a help to your herd performance. To identify what you need to

Improving herd health comes down to recording, managing and monitoring progress.

Hoof Health. Information collected by hoof trimmers is used to measure the number of hoof problems that cause lameness in the dairy herd. Selecting for the Hoof Health breeding value minimises the number of hoof problems in your herd. This can be a lot of detail and information to sort through, whereas it would be easier just to select from one overall index. However, resources are available to help you achieve your herd breeding goal. Field consultants, like the ones available from CRV Ambreed, are well-equipped to sort through all the information out there to help you achieve your goals, and select the right bulls to meet your herd needs. Facial Eczema In many parts of the North Island, facial eczema (FE) is a challenge farmers face, especially at calving time. Caused by fungal spores that are ingested, the liver becomes damaged. An infected animal typically

will have a drop in milk production, sensitivity to light, and peeling of skin, and could eventually lead to death. Research by herd improvement companies like CRV Ambreed has led to new genetic tools for the farmer to deal with FE. Genomic research has identified a group of animals (FE+) tolerant of FE. Breeding your cows to FE+ bulls will result in offspring that can resist the impact of the spores, maintaining their profitability in your herd. Record and manage The genetic foundation of your herd accounts for about 25% of your overall herd performance. The other 75% is the day to day management in your farm operations. Improving your herd management and animal health comes down to recording, managing and monitoring the progress. Participating in herd recording programs like CRV InSight provides the essential platform to properly record what happens

improve with your herd to be more profitable, you need to know what your baseline performance is; which is exactly what herd recording programmes can do. Incorporating herd recording with management tools like metrichecking, pregnancy

diagnosis and herd testing provide a slew of information for you to make the best herd decisions. • Danyel Hosto is product manager herd services at CRV Ambreed. This article first appeared in Getting the Basics Right 2014 edition.

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DAIRY NEWS NOVEMBER 11, 2014

30 //  ANIMAL HEALTH

Rising cell counts lowers profits ADRIAN JOE

ARE YOUR cell counts

Normal teat: no ring.

increasing and above 100,000 and is your clinical mastitis above 10% of the herd for the whole year? If so, it will be cost-

Very rough teat.

MULTIMIN® + Cu We used MULTIMIN® prior to calving and can see better animal health through the first three months. A very good product. Will use MULTIMIN® in the future. [ ANDREW DALTON | TAUPIRI ]

We use MULTIMIN® just before mating and dry-off. It’s an easy to use, all-inone shot and a great supplement. [ JENNY McGIVEN | TE AROHA ]

We’ve kept using it and can’t see a reason to stop. We use MULTIMIN® coming out of winter and it helps to get them growing flat out. [ GREG MARSHALL | FAIRLIE ] We’ve had the lowest dry rate in the last four years. I would recommend MULTIMIN® if you are looking for another way to get minerals into your animals. [ HAMISH PIRIE | GERALDINE ] Good all round product that supplies minerals directly into the animals and is better than water based minerals supplements. MULTIMIN® is good for the all-round well being of the herd. [ NATHAN ANDREWS | LUMSDEN ]

ARE YOU PICKING UP

WHAT THEY’RE PUTTING DOWN?

Veterinary Practice MULTIMIN® + Cu purchases 2013 - 2014

MULTIMIN® + Cu is proven to enhance reproductive performance through the unique injectable combination of Copper, Selenium, Zinc and Manganese. This is backed up by New Zealand farmer’s feedback and trial work1 demonstrating MULTIMIN® + Cu injected 4 weeks before PSC and 4 weeks before PSM decreases the number of lost pregnancies, improves conception rates by over 3%, delivers more days in milk and provides a 4:1 ROI. Pick up what they’re putting down by using MULTIMIN® + Cu 4 weeks pre-mating.

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1. The Effect Of Injectable Trace Elements (MULTIMIN® + Cu) on Health and Reproduction Parameters in New Zealand Dairy Herds, D. Hawkins, BVSc. Franklin Veterinary Services.

Your vet knows the science and benefits behind MULTIMIN® + Cu and how it can add value to your farming operation. We entrust MULTIMIN® + Cu to your veterinarian - your animal health expert.

ing you money. The first step in managing mastitis is to assess what you are doing and critically examine control measures on your farm. The most common form of transfer of bacteria from cow to cow is in the dairy shed when cups are put on a cow, because the cups will contain bacteria from milking a previous cow that had clinical or subclinical mastitis. Bacteria do not enter the teat straight away as it takes time to migrate from the sides of the teat down to the bottom and normally enters the teat canal between milkings. Teat spraying has been shown to prevent this form of transfer and will reduce cell counts and clinical mastitis by 50%. Yet poor teat spraying effectiveness would be the most common problem I see when investigating mastitis problems. In a survey of 200 mastitis problems, 35% of farmers were achieving good coverage and 35% were using the correct dilution rate, but only 12% of the farmers had both the coverage and dilution rate correct. This is despite all the communication and education on the importance of teat disinfection as being probably the most important single step in a mastitis control programme. The next most common issue is teat end damage. Bacteria that cause mastitis have to enter the udder through the teat canal and the cow is very reliant on the integrity of the teat end. A beef cow rarely gets mastitis because her teat end is smooth and supple from suckling by calves. A dairy cow is susceptible to mastitis and a major reason for this is teat end

damage from machine milking. Look at the teat ends of 50 cows and if more than 80% of the teats are not smooth and supple, and the teat opening undamaged, then you have a problem. There are many reasons for teat end damage. The machine settings or liner type may not be suitable for your herd or there may be over-milking causing excessive wear on the teat opening. If there is teat damage then it would pay to have an assessment done as to possible causes, otherwise you will continue to get new clinical infections and your cell counts will continue to rise. Another important issue is cup slip. If a cup slips, air rushes in and blasts any infection in the cluster against and into the canals of the other teats. This results in transfer of bacteria into the teat during milking and teat spraying has no effect against this form of transfer. Common causes of cup slip include poor cluster alignment, unsuitable liners and vacuum too low. The next thing to assess is how well cows are milked out. There should be wrinkles visible on the udder and you should not be able to strip more than 500ml of milk from the udder. There are multiple causes of poor milk-out, but the most common is cow discomfort due to teat damage. Mastitis happens for a reason. Critically examining your situation is the first step in achieving 100,000 cell count and less than 10% clinical mastitis. • Adrian Joe is a veterinarian and mastitis consultant. This article first appeared in Getting the Basics Right 2014 edition.

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DAIRY NEWS NOVEMBER 11, 2014

ANIMAL HEALTH  // 31

Breath of fresh air helps calves thrive air. For this passive process to happen, calf houses need adequate outlets (for warm stale air) and inlets RESPIRATORY DIS(for cool fresh air). EASE in calves and young The number and locastock can occur sporadition of outlets and inlets cally as isolated cases, but will depend on building also as outbreaks. size and design, and the The effects of respistocking rate of calves in ratory disease can last the shed. months or years. Research Some very large calf shows respiratory disease sheds require ‘active’ venin calves under 4 months tilation, i.e. fans and posiadversely affects weight tive pressure ventilation gain, age at first calving, systems, rather than ‘pasmilk production and lonsive’ convection gevity. currents. This is not RespiraThe respiratory tract common in Austory disease has several defence tralia. can be frustratmechanisms to help Note that vening and difficult to control. prevent bacteria, viruses, tilation is differBy definition, dust and other particles. ent from draught, i.e. cold air blowing the pathogens or more of a calf’s defence directly onto calves. Avoid (viruses and bacteria) this because it may drag responsible for respiratory mechanisms. Then bactedown feed conversion effidisease are often airborne, ria can invade and cause clinical respiratory disease. ciency and increase the invisible as to how and risk of hypothermia. when they are spread from The extent to which this The exact air quality, in happens depends on how calf to calf. terms of pathogens/m3 airhealthy the respiratory In contrast, the pathosystem is in the first place. space, and air movement, gens responsible for can be difficult to assess. Along with adequate calf scours are primarHowever a simple assessprovision of antibodily present in the faeces ment can be achieved by ies from colostrum, the of infected calves and cargetting down to the calf rier cows, highly visible. So health of the respiratory level. Do this in several control measures for respi- system will be affected by pre-existing inflammation pens in the shed as air flow ratory disease are based may differ in different on optimising the immune from chemical or physical parts of the shed. irritants. system of the calf and You should not be able Chemical irritants, such reducing the risk of expoto smell ammonia or peras ammonia from soiled sure to respiratory pathosistent faecal odour and bedding and poor draingens. there should not be areas age, and physical irritants, The respiratory tract has several defence mech- such as dust from bedding of the shed with coband feed, can contribute to webs (this indicates low anisms to help prevent air flow). If either of these disease by causing direct bacteria, viruses, dust and other particles from invad- inflammation of the respi- persist, ventilation needs ratory system. Viruses and to be improved. ing the lungs and causing There are many ways bacteria are more likely to respiratory disease: the to passively ventilate calf invade an inflamed respinasal passages have traps housing: whirly birds, ratory system than they against inhaled particles Yorkshire boarding, air are a healthy one. and humidify incoming Ventilation is the key to gaps near the roof line and air. In the windpipe (trahaving fresh, clean air flush offset back walls. Some are chea) a lining of cilia (tiny best planned as part of a out chemical and physihairs) move dust and bacnew calf shed, many can be teria upwards towards the cal irritants, reducing the retrofitted. risk of respiratory disease mouth to then be swal• Dr Gemma Chuck is a in calves. lowed. Coughing helps dairy vet at The Vet Group Generally, ventilation with this upward movein south west Victoria. She in Australian calf housing ment. has a special interest in calf In the lungs, if any bac- is passive, which means it rearing and is working on a teria are detected, specific relies on convection curdoctorate in this at the Unirents to replace warm antibodies are activated versity of Melbourne. stale air with cool fresh and bind to the bacteria. GEMMA CHUCK

Initially, these antibodies are transferred to the calf passively from colostrum. Therefore it is vital that all calves receive an adequate volume of good quality colostrum soon after birth. Also in the lungs, white blood cells (macrophages) find and destroy bacteria with the help of antibodies. Why do calves get respiratory disease? There are many respiratory viruses that destroy one

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DAIRY NEWS NOVEMBER 11, 2014

32 //  FINANCE

Act now to avoid a savage payout bite DAIRY FARMERS

need to act now to avoid going backwards once the forecast payout starts to bite next year, says Justin Geddes, agribusiness principal at Crowe Horwath. 2014 was a record payout season and dairy farmers have just banked the last of the retrospective payments, but this season’s advance is more than $2/kgMS below last year’s. “While accounts might look positive now,

the recent record past payments are hiding the effect of this season’s lower advance,” he says. “This drop will see a lot of pressure on farm cashflows from May to October next year.” Geddes says that, like any business facing a big drop in income, dairy farmers should be scrutinising their budget. He recommends: ■■ Looking at all variable costs to see what can be cut or improved. ■■ Being aware that

provisional tax for this year is based on last year, so a re-estimation of the 2015 tax is essential. ■■ Looking at capital spending and working around or putting off ‘replacements’ wherever possible. ■■ Revisiting bank funding to see if a change of loan term or type of debt would help navigate any shortfall. The budget review should be looking a

minimum of two years out, says Geddes. The full effect of the drop in payout will not be felt until the 2016 season. “The impact of this will see some operations struggle to reduce debt, but reward farmers who make an effort to manage the situation now. If the payout drops further, breakeven will become difficult for some.” He recommends dairy farmers schedule regular meetings with their

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A drop in income means some farmers will defer capital spending.

advisors to review actual to budget performance, with every item scrutinised. Having good advisors is important in this tough environment, Geddes says. Farmers should also keep in touch with their bankers, and highly indebted operations might have to consider a period of interest-only repayment on loans. “The bank account might look healthy at the

Justin Geddes

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the impact of the forecast low payout.”

DAIRY NEWS NOVEMBER 11, 2014

FINANCE  // 33

Good budget will help you see the way ahead DESPITE A favourable winter and early spring, this season’s lower forecast milk price shows how quickly things can change. Farm budgets are vital, says DairyNZ economist Angie Fisher. Uncertainty about the final payout is nothing new for New Zealand dairy farmers. Many commentators and farmers are discussing and speculating what the final 2014-15 payout will be. But the 2015-16 milk price is also on many farmers’ minds, as is the impact a second year of

onfarm. Plot cashflow from now until the end of May by updating or starting a new budget. DairyNZ has a budget template which works from a one-page annual cash budget to a monthly cashflow. Plan income and spending through summer and autumn, and consider options necessary if the summer is dry – feed budgets, fertiliser, repairs and maintenance, development onfarm and so on. Autumn and winter 2015 could be tight,

helps to know what you are facing before you approach the accountant, farm consultant and banker. Milk price isn’t a sure thing until after the season is complete, but having an idea about the

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Farm budgets are vital, says DairyNZ.

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“Knowing your liquidity from now until the end of the season can help give peace of mind and control over situations.” low milk prices could have on 2015 income, particularly during winter with low retrospective payments. “Knowing your liquidity from now until the end of the season can help give peace of mind and control over the situation, as you plan to monitor cash and production targets,” says Fisher. An updated 2014-15 monthly cashflow budget will show where action may be required and an annual 2015-16 cash budget will highlight risk areas for the business and spark ideas for action

long-term break-even payout, what needs to be covered this season and the business’s cashflow pattern are all part of longer term risk management.

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DAIRY NEWS NOVEMBER 11, 2014

34 //  MACHINERY & PRODUCTS

Kiwi effluent solution for Oz farmer RICK BAYNE

AN AUSTRALIAN first – an above-

ground effluent storage tank – is fixing problems for a Tasmanian farmer and is an aid to major research into methane gas emissions. The 2m L tank was commissioned at Jamie Berne’s farm at Meander in June and has already eased long-standing problems caused by waste over the wet winter months. Over the next three years it will also reveal whether shortterm retention of effluent in the tank will reduce methane emissions. While popular in New Zealand, this is the first above ground effluent storage tank in Australia. Such tanks could help on farms with high water tables, particularly in Tasmania and southern Victoria. It’s a practical solution for Berne’s farm, in a high rainfall area with porous land and needing a new way to store effluent over the wet months of winter

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and spring, waiting to spread it to best effect when and where it’s needed. “When it gets wet the land can’t take any more,” Berne says. “When the ground’s already wet you’ve got to try to protect it but we only had a small holding capacity and before this we had to directly apply it to the farm.” The 2m L tank is designed and made by Tasman Tanks; installation in Tasmania was managed by Laurie Hooper, AgriTech. Adrian Gardner, senior project coordinator for Tasman Tanks, referred to their “excitement” about building the first dairy effluent tank in Tasmania. “We build a lot of these in New Zealand to store effluent through the winter and we see a lot of scope for this type of setup on farms in Australia where soil types and high water tables mean building a pond is difficult.” As well as trialling practical issues of new infrastructure the tank is a demonstration site for an Australian Govern-

ment ‘Action on the Ground’ project. The Tasmanian Institute of Agriculture will look at whether short term retention of effluent in the tank will reduce methane emissions from the effluent system. PhD candidate Louise Murphy says, “We are hoping that by quickly moving effluent from the storage tank through to the irrigation system we can maximise the amount of nutrient being recycled onto the pasture, improve pasture production and reduce greenhouse gas emissions through volatilisation. It is the ultimate ‘reduce, reuse, recycle’ concept.” The overall project is being managed by Scott Birchall from AgSystems Design. Birchall has become a regular visitor to Tasmania over the past year, training Tasmanian service providers in designing effluent systems. “Commercial scale research like this using expensive infrastructure is hard to do these days so it is an opportunity to do cutting

The 2 megalitre above ground effluent storage tank at Meander, Tasmania.

edge research on effluent management and greenhouse gas emissions,” he said. Funding for the research is from the Berne family, Dairy Australia, DairyTas, Tasmanian Institute of Agriculture and the Australian Government’s ‘Action on the Ground’ programme. Berne was prompted to trial the system after hosting a field day where visitors looked at his old system and the discussed the issues he was facing with the wet ground. “There were a few suggestions about what we could do and after the field day they came to us and asked if we would be willing to be involved,” Berne said. He was keen to replace the small pond system that was struggling to cope with the wet land and a gradual increase in cow numbers over recent years to about 350 cows on 105ha. “It was mainly a problem in winter,” he says. “Once we stopped irrigating and the ground was wet we still had to get rid of the effluent somewhere and that was

the problem.” The new system basically disregards the old pond setup. “It connects to where it first runs into a little stone trap but it now comes out the other side and goes into the new system from there. It’s all delivered back to our irrigation system and we can irrigate it onto all the land,” Berne says. “We can decide where it will go and where it’s needed.” The effluent will go through the irrigation system to a much larger area than before. Any surplus will be stored in the above-ground tank through winter. “As it was, we couldn’t go too far with the hoses and pipes we had and we had trouble with the pipes blocking up.” So far the new tank is working well, Berne says. “Since it’s been opened up we’ve been able to store all our effluent.” Where the effluent was previously being deposited is already drying up. A public field day to see the tank and learn about the research will be held on February next year.

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DAIRY NEWS NOVEMBER 11, 2014

36 //  MACHINERY & PRODUCTS

Separating wheat from the chaff ADAM FRICKER

WE ALL know China makes some crap. But we also know China makes quality items – Apple i-Phones, supertankers, Red Bands and Swandris,

to name a few. The trick is knowing which is which. Cue CF Moto’s invitation to go on a dealer trip to its factory in Hangzhou, 170km southwest of Shanghai, China. “Don’t listen to us, come and see

for yourself,” the company said. So we did. At the 150,000m2 facility, complete with dormitories for workers and their families, we get the company history from Charles Ni, chief sales officer. CF Moto was started

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by Lai Guogui in 1989, making engine parts in a garage; in 1996 the company started making engines, then motorcycles in 2000 and quads in 2004. It has carved out a unique position in China in that it makes larger capacity motorcycles, not scooters, and focuses on export markets rather than the domestic market, which apparently buys 14 million motorcycles each year. Its growth has been rapid and exports hit 30,000 units in 2012 then 40,000 this year. It has 1500 dealers worldwide and big market share in Russia, Sweden and Germany. Of interest to us, many of those units are quads and in Australia they are now ranked fifth in ATV sales.

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DEALERS NATIONWIDE

The focus on export rather than domestic markets seems to be a key to their success. Exports are critical to CF Moto, in part because of the size of recreational markets in developed countries, and because there are restraints on their domestic growth: the scooter market is huge but the larger-capacity motorbike market is relatively small and two wheel vehicles are banned from freeways. Also, Charles Ni tells us owning a quad or sideby-side is illegal in China. With global expansion firmly in its sights, he says quality is a major focus for CF Moto with technical feedback from export markets fed quickly back into product development. “Engine development is continuous. R&D investment equals 9% of our sales revenue, high by most standards but important for a fast growing company like ours.” Mojo Motorcycles Australia imports CF Moto motorcycles for the Australian market. Michael Poynton, one of two founding directors of Mojo, has worked with a number of Chinese companies since setting up in 2003 and says the culture of CF Moto sets them apart. This includes their focus on overseas markets, their professionalism, strong communication and long-term approach. “They understand the importance of consistently building equity in their own brand in export markets, which many Chinese companies don’t get.” Mojo is the fastest growing motorcycle company in Australia, selling some 5000 units per year through a network of 80 dealers. CF Moto is its biggest brand, selling 2500

units in 2014, mostly fourwheeled. CF Moto is now the fifth best-selling quad brand in Australia with 10% market share and Poynter expects to achieve 15% market share in quad/ side-by-side sales – about 2000 units – in 2015. Breaking the Australian quad/side-by-side market into segments, Poynter says CF Moto has 17% of the 450-550cc quad market, 11% of the over550cc quad market, 39% of the sports side-by-side market, 18% of the under650cc utility side-by-side market and 18% of the over-650cc utility side-byside market. They are eagerly awaiting a 400cc quad in 2015 to give them an offering in the segment that many farmers shop in – the sub450cc segment. The new 550 side-by-side will also be important for Australia and New Zealand where there is a growing trend toward side-by-side sales. Poynter understands that the quad/side-byside market downunder is all about agriculture and has impressed this on CF Moto who initially focused on large capacity, longwheel base quads for the huge Russian recreational market. Charles Ni says they have learned plenty from Mojo, through regular technical reports from Mojo and bi-annual meetings with engineers, about the specific demands placed on their machines by farmers. And about the models and specifications that will best suit our markets. “We don’t do much testing specifically in farm conditions but extensive testing is done in a range of harsh conditions unique to all our markets and all engines are bench-tested for 400 hours.”

DAIRY NEWS NOVEMBER 11, 2014

MACHINERY & PRODUCTS  // 37

Luxury sedan tops safety scorecard land’s new ‘flagship’ luxury sedan, Genesis, has scored highest in 21 years of ANCAP testing, the company says. The car, due in New Zealand early 2015, gained 36.88 points out of a possible 37 and a maximum 5 star ANCAP safety rating, the ultimate measure of protection for passengers and pedestrians. The assessment includes a 64km/h frontal offset test, a 50km/h side impact test, a 29km/h pole test, a whiplash test simulating a 32km/h rearend crash, and a 40km/h pedestrian impact protection test. A minimum number of active safety assist technologies (SATs) are also required. The Genesis’ tally of 36.88 points includes a frontal offset score of 15.88 out of 16 and a side impact protection score of 16 out of 16. Genesis also scored 2 out of 2 in the pole test and a whiplash protection test rating of ‘good’. Structural integrity and strength has been a key priority of Hyundai since development of the DH model Genesis sedan began six years ago. The vehicle uses advanced

high-strength steel in its body structure, and has been designed to pass the world’s most demanding crash tests. “Genesis is Hyundai’s flagship model and as such offers a high level of physical crashworthiness and safety features as standard,” says ANCAP chairman Lauchlan McIntosh. “Seldom have we seen the word ‘standard’ listed against almost every safety feature on our checklist. Importantly, autonomous emergency braking is one of these standard features – one that has recently been left off many new models” ANCAP is supported by all Australian and New Zealand motoring clubs, the Australian Government, the New Zealand Government, Australian state and territory governments, the Victorian Transport Accident Commission, NRMA Insurance and the FIA Foundation. “The Hyundai Genesis record test score illustrates Hyundai’s… safety and innovation.” says Hyundai Motors New Zealand general manager, Andy Sinclair. “Hyundai was the first manufacturer to include electronic stability con-

trol (ESC) as standard in 2007. In July of this year we made reversing cameras standard in our entire range.” To search crash test results and learn more about safety technologies, visit: www.ancap.com.au

Hyundai Genesis.

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HYUNDAI NEW Zea-

KEY SAFETY FEATURES ■■

Autonomous emergency braking

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Blind spot detection

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Adaptive Cruise Control

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Electronic brake distribution

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Electronic stability control

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Autonomous emergency braking

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Daytime running lights

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HID headlights with static bending and high beam assist

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Emergency stop signal

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Lane support system

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Pre-safe systems

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Reversing collision avoidance

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360o around view monitor

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Tyre pressure monitoring system

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Active lift (pop-up) bonnet

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Nine passenger airbags including driver’s knee airbag.

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DAIRY NEWS NOVEMBER 11, 2014

38 //  MACHINERY & PRODUCTS

Updates aplenty for Foreman 500 ADAM FRICKER

HONDA HAS made a lot more changes to the new TRX500 over the previous model than when they refreshed the model in 2011. To name a few, the new manual-shift TRX500FM2 Foreman has a new chassis with longer-travel suspension; revised mapping for the EFI program that gives the liquid-cooled 475cc singlecylinder OHV four-stroke engine better power delivery, throttle response and fuel efficiency; and a selectable locking front differential. We handed the big 500 to a tame dairy farmer to put it through its paces onfarm. The diff lock came

into its own here, pulling the Honda through muck in the bottom of a recently emptied effluent pond. Admittedly, that’s not an everyday farm scenario, but it was as severe a test of traction as you’ll get. Our farmer also commented on the improved power delivery from the re-mapped engine, saying it pulled clean and strong from lower revs than the old model. And he preferred the manual gearbox to an automatic. The list of changes to the new 500 is extensive. It includes new bodywork that improves mud protection, keeping most of the muck away from the rider. Combined carrier capacity increases to

120kg – 40kg in front, 80kg at rear, and the heavy-duty trailer hitch has a 384kg towing capacity. The electric power steering has revised settings for lighter steering effort, improved damping and more linear steering traits. While the drivetrain carries over from the previous model, albeit with reconfigured engine mapping, the Foreman has an all-new double-cradle steel frame that is lighter and 20% stiffer. New front and rear suspension (independent double-wishbone up front and solid rear axle with single shock swingarm) features an increase in travel to 185mm at both ends plus new shocks for improved ride. All shocks

now have adjustable spring preload, and the swingarm now has an enclosed axle and new rubber pivot bushings that contribute to the better ride. Rider comfort has also been addressed by narrowing the tank so the feet aren’t so spread, making the ‘rider triangle’ a bit less cowboy. A 20mm increase in seat foam thickness and softer seat foam also help. The Honda TraxLok 2WD/4WD system now

A heavy-duty trailer hitch gives extra towing capacity. (above) and TraxLok system allows faster wheel speed in deep mud (left).

offers three drive modes: 2WD, 4WD with TraxLok torque-sensing front differential, and now a new 4WD mode with locking front differential. This TraxLok system also has a speed override mode that can be engaged when the front differential is locked, allowing faster wheel speed under severe conditions such as deep mud. There are other less obvious changes too, such as increased AC generator output of 481W

and a new meter display with added functions like a ‘maintenance minder’ system that notifies when it is time for service. And the rear brake has been moved inside the right rear wheel, improving ground clearance. Well considered details that contribute to a genuine move forward for the 500, not just an evolution. The TRX500FM2 as tested retails for $14,257 (ex. GST).

Reese Agri’s range of UFO Mowers are known for their robustness, dependability and honest ability to get the job done. With 8 models to choose from, there is a mower to suit your every requirement. Built with the quality workmanship you’d expect from a company that has been building and marketing agricultural mowers for more than 40 years, the UFO range consists of 5 drum mowers and 3 disc mowers, from 1.6m up to 3.4m cut. So if you are in the market for a mower, look no further than a UFO Drum or Disc Mower.

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UFO1600 UFO2070W UFO2400 UFO2400HL UFO3400 1.6m 2.0m 2.4m 2.4m 3.4m 2/6 2/6 2/8 2/8 4 / 12 Manual Manual Manual Hydraulic Hydraulic trailed 390kg 460kg 580kg 690kg 1180kg 30hp 45hp 65hp 65hp 80hp+

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Getting it right, together Whether you’re farming beef, dairy, deer or sheep, PGG Wrightson has the technical expertise to work with you to choose the best products for your animal health needs. When it comes to maximising livestock performance on your farm, your local team has the experience and knowledge, backed by our vets, to help you. Plus receive a $30 grocery voucher with selected animal health products between 1 November 2014 and 24 December 2014.*

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