Dairy News Australia December 2014

WATER BUYBACKS: Government enters water market PAGE 5

40 YEARS New Holland’s roll-belt balers PAGE 33

PASTURE FOCUS Assessing feed options in NSW PAGE 22

DECEMBER 2014 ISSUE 54 // www.dairynewsaustralia.com.au

EXPORT BONUS Strong prices for excess cows PAGE 6

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Dairy NewS AUSTRALIA december 2014

news  // 3

UDP open to approaches rick bayne

UDP’S PARENT company Five John Fairley lifted soil carbon levels by 25% four years after cutting back inputs. PG.23

Gippsland dairy farmer Alex McArthur (left) says herd health is influenced by correct staff management. PG.24

Hayden and Charlie Coote have bought a Tow and Fert Multi 1000 fertiliser and now liquidise their urea for spraying. PG.32

News ������������������������������������������������������3-15 Opinion ���������������������������������������������� 16-17 markets �������������������������������������������18-19 breeding management ����� 20-21 management �������������������������������22-23 animal health �������������������������� 24-28 idw 2015 preview ���������������������� 29-31 Machinery &   Products �������������������������������������� 32-34

Star United Food has been placed in receivership and is expected to be offered for sale, with several of the major players in Australian dairy likely to join the bidding war. However, suppliers hope the company retains independence to keep competition in the marketplace. Marcus Derwin, recently appointed as UDP managing director by receivers PPB Advisory and the company’s financier, Rabobank, has met dairy farmers in a series of supplier meetings. Mr Derwin said his main priority since taking on the role on November 10 was ensuring the business continued to run successfully. “First and foremost I’ve got a business to run,” he said. “That’s 99% of my focus, to stabilise the operation and deal with all the stakeholders. At the end of day we have to make sensible, appropriate commercial decisions. “The trading operations I’m managing are not in receivership or administration so I have free reign to operate the business.” Mr Derwin said there were no issues about suppliers getting paid. “There was some nervousness with the changes here in the past six to 12 months but one of my priorities has been to calm any concern, that’s why we’ve held forums to communicate to stakeholders,” he said. Mr Derwin confirmed there was interest in buying UDP but he wouldn’t release details. “I’ve received a number of

UDP says it’s business as usual for now.

approaches. It’s up to me to ascertain if there is interest and what is the nature of that interest,” he said. However, he wouldn’t comment on “rumours and speculation” about potential buyers. He also said it was “premature” to comment on whether UDP would potentially remain as a separate entity after any sale. “As I’ve said to the stakeholders, don’t listen to rumours and don’t listen to speculation. At the end of the day I’ll have a look at it if some of this interest turns into substantial or tangible offers.” Mr Derwin has also retained the PBB corporate finance arm to assess interest. He said a key message to the forums was that it was “business as usual” for UDP. “We’ve had good forums and open dialogue and at this stage we haven’t lost any suppliers, which is reassuring,” he said. However, some farmers have emerged from the forums without a clear picture of what’s happening. Carpendeit farmer Donna Edge attended a meeting in Camperdown

in south-west Victoria and said suppliers learned “bugger all” but left the message that they wanted to be front and centre of considerations. “I guess there isn’t a lot they can tell us, but you come away thinking there probably wasn’t anything they couldn’t have communicated in a letter to us,” she said. The suppliers stressed the need to protect their interests. “We told them you’re nobody without us,” she said. Ms Edge said suppliers wanted to stick with UDP but were concerned about the uncertainty. “We left the others because we didn’t like them. If they sell to someone else that doesn’t mean we’ll stay,” we said. “We want some stability and certainty. We’ve stuck with them through the last six months and some pretty ordinary headlines. Two weeks ago we were led to believe Rabobank thought it was a good investment and they weren’t in any rush to move it along. Now we’re reading that it’s going to be sold.” Suppliers are continuing to be paid, however some at the meeting

called for more regular payments – possibly every fortnight - rather than the usual monthly payment. They were told the monthly system would remain. Ms Edge said she knew some suppliers who left at the end of June “for various reasons, but that happens with every company”. “At this point we’ll stick with them and most that we know are sticking with them. We get paid quite a bit more than others in the area and that’s the attraction.” Ms Edge said the payment system suited many suppliers who produce a lot of off-peak milk. She added that most suppliers would be happy if any new owner kept UDP as a whole and separate entity. “Competition is good,” she said. “Smaller factories popping up here and there keep the others honest. “We just want it to keep going as it is. It has been good for us. I think we’ve done better here than where we were previously.” UDP operates in Victoria and South Australia and processes about 200 million litres a year.

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DAIRY NEWS AUSTRALIA DECEMBER 2014

4 // NEWS

Hope for Queensland dairy GORDON COLLIE

THE QUEENSLAND

dairy industry is celebrating one of the State’s boldest ever projects with the investment of up to $500 million in a new integrated farming and processing venture dedicated to supplying the Chinese market. Hope Dairies will have majority Australian ownership through the investment of mining magnate Gina Reinhart’s Hancock Prospecting with Asian partners taking about 30% equity. The partners made their plans public when signing a Memorandum of Understanding with the Queensland Government on the sidelines of the G20

Summit in Brisbane on November 15. The signing was attended by Ms Reinhart along with investors Daniel Liu from the Chinese government-owned enterprise CAMC Engineering, Dave Garcia and Dano Chan . The state-of-the-art processing plant which will focus on production of infant formula and other products including UHT milk will be located centrally to the South Burnett and Mary Valley farming regions where a major land acquisition targeting about 5000ha is in progress. The factory is expected to be supplied from inten-

sive dairying hubs carrying 16,000 milkers with the company committing to buy about 30% of its milk requirements from dairy farmers in the region. The venture will be a welcome stimulus to the Queensland industry which has been in decline for many years with farmer numbers shrinking and virtually all manufacturing capacity closing. Hope Dairies plans

Queensland Deputy Premier Jeff Seeney with Gina Reinhart, after signing the Memorandum of Understanding with the Queensland Government.

Queensland Deputy Premier Jeff Seeney (second from left) with Hope Dairies investors Daniel Liu, Gina Reinhart and Dave Garcia.

to process about 150 million litres of milk annually and the giant new project is expected to create about 480 full time jobs. With production and first exports scheduled to begin in the last quarter of 2016, the venture partners are already turning their minds to a second project. Queensland Deputy Premier Jeff Seeney, who signed the memorandum on behalf of the State Government, said it was an exciting project to begin reversing the decline in dairy fortunes in the north. “We welcome the involvement of Gina Reinhart with her business acumen and the scale she is bringing with her investor partners,” Mr Seeney said. “This venture gives Queensland the critical mass to become a significant supplier of high quality food to the Chinese people.” The memorandum commits the State Government to delivering a secure water allocation to the venture of about 30,000 megalitres on

commercial terms. Gina Reinhart spoke of her family’s longstanding business relationships in Queensland which helped clinch the project ahead of interstate contenders. She posed the question “Why Queensland?” and answered it with a rhetorical “why not?”. “We’ve been so welcomed in Queensland. The State Government have been very supportive with our planning and helped make sure that this project happened here.” Ms Reinhart said her family had long term involvement in the pastoral and farming industries, an interest she has expanded by entering a joint venture to export premium quality beef from Western Australia into Asia. Ms Reinhart revealed that the huge dairy project was first discussed over Christmas lunch in Cambodia, attended by Dave Garcia, who is the new Hope Dairies managing director. “Dave is an old friend and when the topic came up we met again the following day and hatched the plan.” Mr Garcia is an Ameri-

can who has been working in China for the past 27 years. He intends to relocate from Hong Kong to an office in Brisbane to oversee the early phase development of Hope Dairies. He said the location for the factory was expected to be settled early in the New Year. “I know about building infrastructure and we will bring in the dairy expertise we need,” he said. “Gina and I are friends and I was pleased to become involved in doing something with her outside the mining sector which will be able to take advantage of market demand in China. “This project will have its challenges, but it’s very exciting to be involved in a vertically integrated stateof-the art-enterprise.” Dano Chan, who is also based in Hong Kong, is a director of Hope Dairies. He said with the enterprise needing up to 20,000 head of stock, planning was already underway to engage local farmers in breeding contracts to preferentially source many cattle locally. Land acquisitions were in progress both for locat-

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ing intensive total mixed ration dairies and for growing feed. “This will be the most modern dairy enterprise in Australia. We will be making extensive use of local expertise, with so much work to do in a tight time frame,” Mr Chan said. Queensland Dairyfarmers Organisation president Brian Tessmann said the project would be a welcome boost, opening access to the Chinese market and bringing new buying competition into the State. “We’ve lost a lot of our manufacturing capacity over the last decade and a half, simply because there has not been the milk supply,” he said. Queensland producers had been forced to compete with seasonal milking patterns in southern states, but the new facility would be looking for year round production and manufacturing to supply markets. “This will be a very good option for us if we can get a reasonably competitive price for our milk,” said Mr Tessmann who farms at Kingaroy, close to the new venture.

DAIRY NEWS AUSTRALIA DECEMBER 2014

NEWS  // 5

Water buybacks will hurt RICK BAYNE

DAIRY FARMERS in the Murray-

Darling region fear a new round of water buybacks will put more pressure on water supplies and prices and potentially threaten their viability. The Federal Government has announced new buybacks for water in the lower Darling, Murrumbidgee and NSW Murray catchments. The decision has sent shockwaves through the local farming communities which rely on irrigation for survival and where farmers are already paying $130 a megalitre to buy water. The announcement has been met with surprise and disappointment amid fears that it could make some farms unprofitable. Murray Irrigation chairman Bruce Simpson said the buyback would exacerbate concerns in the region about access to irrigation and the cost of water. “We’re paying around $130 a megalitre in today’s markets which certainly shrinks the profitability,” Mr Simpson said. “Water is like any other input; when it’s at a price that’s starting to put the entire irrigated enterprise out of profitability, we’ve got to start to say that we’re very concerned,” he said. “The buybacks only exacerbate it. Every entitlement that leaves our region adds further pressure to that equation. It continues to shrink the consumptive pool of water that’s available to irrigators and is therefore pushing the price of water up to a level that is concerning in terms of using that water profitability.” Mr Simpson said the government’s announcement was a regular topic of conversation and was concerning irrigators of all enterprises, including dairy farmers. “It’s concerning them to the point of saying what does our future look like,” he said. Parliamentary Secretary for the Environment, Senator Simon Birmingham told ABC Rural the government

WE NEVER SAW IT COMING KATUNGA DAIRY farmer Daryl Hoey says he never saw the Federal Government’s decision to buy back irrigation water coming. “It came as a shock. We assumed it was off the table and for it to happen without any consultation is disappointing and quite surprising,” he said. Mr Hoey said buybacks would “compound the problem” of already high water prices. “I would have hoped the buyback would be a measure of last resort and all other measures would have been exhausted first, such as efficiency gains and onfarm infrastructure works, before going back into the market place,” he said. “If there’s a shortfall then a buyback could be an option as last resort. New South Wales only has half as much water as last year; that just puts more pressure on the water.” Mr Hoey said it was hoped

the cap would be enforced and legislated. “The buyback is already having a significant impact on the amount of water able to be

traded every year,” he said. “We’ve already seen the effects on the water price. This new round added on top is only going to compound the problem.”

had not promised there would be no would happen. He said irrigators could was forcing farmers to spend less. “You buybacks and that they would be more expect to see the government in the become more conservative because you market every year until at least 2019 but can’t access the water at prices you can modest than previous years. make money at. They’re Senator Birmingham said spending less money and the buybacks were part of an that’s translating into the overall plan that placed more “Buybacks should only be used towns and businesses that priority on infrastructure as a last resort and I believe the rely on that irrigated activinvestment to recover water ity. against the basin plan targets. Government is jumping the gun “This adds further presHe confirmed the govern- again.” – Malcolm Holm, Blighty, NSW sure to irrigated commument had imposed a 1500-giganities. It undermines their litre cap on buybacks and the buyback “won’t come within of cooee the buybacks would be “as sympathetic confidence and elevates their concerns.” of that”. He said the government was as they can be”. Mr Simpson said it was recognised However, Mr Simpson said irrigaspending $700 on infrastructure projects and $15 million on buybacks, tors were surprised by the notice that that water has a property right and the though the final figure and water came shortly after the announcement of individual has the right to sell, keep or infrastructure funding, and he wanted buy it. amounts will depend on offers. “We can’t stop people making those “Our ambition is to make it as low the government to get the 1500 gigalitre cap legislated. “We appreciate they’re decisions but we’re trying to make the as possible.” Senator Birmingham told ABC Rural not quite at the cap yet but they’re very message loud and clear to federal and state politicians that we can’t afford the government hadn’t legislated the close to it.” Mr Simpson said the uncertainty to lose any more water and that this is 1500-gigalitre cap but he hoped that

having a dramatic effect on our irrigation regions.” He added that communities weren’t being given enough time to adjust. Blighty dairy farmer in southern New South Wales, Malcolm Holm, said farmers were disappointed. “The government should be concentrating on farm efficiencies and community irrigation retirement, not the Swiss cheese approach of buybacks which is detrimental to those who want to remain in irrigation farming,” Mr Holm said. “People are just disappointed and annoyed but we’ll get on with the business of farming and irrigating.” Mr Holm said the reintroduction of buybacks proved the need for efficiencies “so we don’t have to have these open tenders”. “It’s important for the New South Wales and Commonwealth governments to work together to find those efficiencies so we don’t continue to have these buybacks,” he said. “Buybacks are just a crude way of getting water back.” Mr Holm said it was difficult to put a definitive answer on the potential impact. “However, we can see the impact previous buybacks have had on the marketplace. Irrigators still want to irrigate but there’s a lot less water available for the productive sector so we see that being played out in the market place with water sitting at around $130 a megalitre. “That’s the environment we’ve got to operate in. Taking more water out of the system will only exacerbate that.” Mr Holm said most irrigation dairy farmers would rather see buybacks not occur and for governments to look at other smarter ways of saving water. “Buybacks do respect the value of the property right so it’s better for governments to be buying water than taking water, but we can be a lot smarter in the way we accumulate water. “Buybacks should only be used as a last resort and I believe they’re jumping the gun again.”

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Dairy News AUSTRALIA december 2014

6 //  news

Indonesian dairy demand grows rick bayne

While China has been widely touted as the golden cow for Australian dairy exports, another massive market on Australia’s doorstep has been largely overlooked. Now Indonesia is emerging from the shadows as the potential next big thing for dairy exporters. There has been solid growth in the market over the past decade but industry experts believe that is only the tip of the iceberg. Australia exported more than 44,000 tonnes of dairy products to Indonesia during the 2013/14 financial year, worth US$202 million. A new Indonesia market brief produced by Dairy Australia industry analyst Amy Bellhouse says the country is Australia’s fourth largest market in volume and value terms. “Indonesia is a rapidly urbanising economy with an increasing demand for Western-style and convenience foods,” she said. Commercial Research and Analysis Manager for Dairy Australia, Norman Repacholi, ranks Indonesia as one of the best markets available to Australia,

not only in South East Asia but in the have a reformist government and part profile and Australia has a good reputaof their platform is improving access tion in its safety record and the type of broader Asian region. “Indonesia is a massive market and around regulation and some of their milk that’s being produced,” he said. “We already do some business there. there is plenty of potential there and standards.” Mr Repacholi said there was a range In any South East Asian nations it’s good that will grow over the next 10 to 15 of products in demand in Indonesia and to have a local distribution partner and years,” he said. to investigate the opportuIn fact, Australian dairy nities and work out if they farmers aren’t producing suit your business.” enough to meet the possi- “Indonesia is a rapidly urbanising Mr Repacholi said there ble market demands. economy with an increasing was potential for more live “I think its potential can demand for Western-style and heifer exports in several probably grow more than South East Asian markets Australian milk production convenience foods.” – Amy Bellhouse – Dairy Australia with aspirations for more can grow in the short term,” self-sufficiency. Mr Repacholi said. “They’re looking for breeding stock He agrees that Indonesia has been Australia’s “clean, green reputation” put and for expertise as well. It’s very diflargely overlooked as the booming it in a good place to capitalise. “The fresh dairy products Austra- ficult to keep up with the broad-based Chinese market takes centre stage, but it could find more prominence with lia has been exporting to other markets level of demand as it grows throughout the recent slight cooling of demand in are also quite desirable in Indonesia, the region.” The Indonesia market brief says including liquid milk, UHT, extended China. “China understandably gets all the shelf life milks, plus milk powders like dairy exports from Australia to Indoneattention because it is such a large and whey nutritional powders, bulk ingre- sia have increased by 8% over the past rapidly growing market, but there are dients used for the industrial market, five years in volume terms but a massive plenty of other opportunities available and formula powders for manufactur- 70% in value terms. The biggest growth in export volume ing operations,” he said. in Asia. Mr Repacholi said there were some was skim milk powder (56%) and “There are also opportunities in Vietnam and other South East Asian import requirements and Halal certifi- whey powder (21%). Exports of whole cation required for business in Indone- milk powder, cheese and butter have countries,” he said. “We’ve got pretty reasonable access sia, but these were not insurmountable. declined. Global dairy imports to Indonesia “Products that we make are acceptto the market at the moment and I think that will likely improve because they able in terms of their quality and flavour have increased by 16% in the past five

years. Annual per capita consumption of fluid milk has increased from 1.32kg to 1.45kg between 2000 and 2012 and continued growth is expected. “Demand for dairy products in Indonesia is expected to continue growing faster than production, creating growth opportunities for Australia due to our relatively short shipping times and low freight rates,” the report states. “However demographics make Indonesia a target market for all major exporters.” The ASEAN - Australia – New Zealand Free Trade Agreement will eliminate tariffs on 96% of Australia’s current exports to ASEAN nations by 2020. Dairy Australia is holding seminars with key South East Asian markets, hosting several inbound mission programs and has launched a new scholarship program in conjunction with the Victorian Department of Environment and Primary Industries that will bring up to 15 dairy leaders a year from the South-East Asian region to study dairy production and manufacturing in Australia. Sri Lanka is also emerging as a potential growth market for breeding stock fuelled by a domestic push to boost their local industry.

Excess breeders set sail for China preg testing the heifers and putting later calves from the seven-week period up for sale. At the end of November they sent 14 young stock to China for the first time. “Normally I like to hold seed stock because they’re the latest genetics and should be the best. I don’t like to sell but we’ve got plenty and the money on them is good ($1650),” he said. “We’ll look at doing it again in the future if the circumstances suit.” They may also export to Sri Lanka if a mooted deal becomes a reality. “If we have numbers, those nine to 12 weekers can be sold to people who want to calve at that time of the year,” Mr Jamieson added.

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DAIRY NEWS AUSTRALIA DECEMBER 2014

NEWS // 7

Milk prices tipped to stabilise within six months to grow 2% as farmers respond to lower prices. In 2015, trade should Dairy Federation (IDF) be expected to regain predicts milk prices will its normal, long-term stabilise in the second average growth pattern, quarter of 2015. The global dairy sector provided that key trade organisation says farmers relations have more or less normalised by then, will respond to lower it says. milk prices by cutting This means trade production; this will have volume may grow by its full effect on prices another 4% to exceed the next year. 70 million tonne milk The IDF made the equivalent mark for the comments in its World Dairy Situation report for first time. “International 2014, released last month. projections expect a Prices on Fonterra’s population of 9 billion Global Dairy Trade inhabitants in 2050, and auction have fallen 50% thus an increased need since February; milk for food in the coming companies are dropping decades,” the IDF said. forecast payout. Last According to the season most companies OECD/FAO Agricultural paid out record milk Outlook prices to In 2015, trade 2014-2023, farmer the global suppliers. should per The IDF be expected average capita dairy says the consumption turning point to regain its in the market normal, long- should was reached term average increase by 13.7% at the growth between beginning pattern, 2011-13 and of the year. 2023. Prices are at provided “Driven the level of key trade by rising the previous relations population, turning point have more income in 2011-12, or less levels and however urbanisation, production normalised consumption remains by then. should strong. increase all the more in “While milk producer developing countries.” prices and feed prices It says 2013 was an are favourable in exceptional year, driven combination with good mainly by weather weather conditions, conditions in the there is no chance of beginning of the year. lower production and “As a consequence price recovery. It is only lagging milk production this summer (Australian generated a lower winter) that producer availability of milk prices started to come for exports and, given down.” the continuous strong Strong milk growth global demand, led has been recorded in to exceptionally high key markets during the average prices. first six months; EU “Throughout the production was up 5.1% year dairy market prices over the same period last remained at elevated year, US was up 1.7%. levels. As a result The IDF expects total milk production this year producer prices for raw to be up 3% over last year- milk were exceptionally high. In Europe as well an above average growth. as in New Zealand, However, next year’s dairy farmers had never production is forecast THE INTERNATIONAL

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received such a high milk price as they did throughout the course of this year. Similarly,

INDIA TIPPED TO OVERTAKE EU INDIA IS tipped to become the biggest milk producer within 10 years, surpassing the EU, according to the International Dairy Federation. Almost total milk production in India is consumed fresh; only small quantities are processed. The IDF doesn’t expect the end of the quota regime in 2015 to have a significant effect on total EU production. It may lead to further concentration of milk production in

some countries of the bloc, it adds. The IDF expects growth in New Zealand dairy exports to decrease compared to the last 10 years; stronger currency, increasing production costs and environmental restraints will be responsible. “Nevertheless, growth of production remains stronger compared to the other big exporters; extra production in New Zealand is almost totally destined for export.”

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DAIRY NEWS AUSTRALIA DECEMBER 2014

8 // NEWS – FTA

Now for processors to take advantage IT WAS in August, 2012,

that Murray Goulburn managing director, Gary Helou, told the then Federal Government to “get off their bums” and secure free trade agreements in Asia. Processors could invest in key countries in Asia, but they wanted a level playing field against its competitors, including New Zealand. The Australian dairy industry received the Free Trade Agreement with China it dreamed off, securing a “New Zealand plus” deal. Stronger export returns are expected to benefit Australian farmers if processors can capitalise on a deal that will remove tariffs on exports to China over the next 4-11 years.

This partnership will Government signed with increase its capacity to On the signing of the China, which was enacted deliver high quality infant FTA, Mr Helou said it was produce nutritional prodformula and other nutriin 2008. ucts destined for Asian a vital step for the future However, Fonterra Aus- tional milk powders to of Murray Goulburn’s sup- consumers. tralia Director, Operations Beingmate for Chinese “Chinese customers pliers. customers. “Murray Goul“It is the best outcome we could have Mr Donnison burn welcomes the said expanding announcement of the hoped for, as it will certainly go a long market access is Australia-China FTA, way in ensuring growth and a positive critically imporhowever any benefuture for NSW dairy.” – Mike Logan tant to the future fits from the FTA will profitability only come after it is of the entire Australian and Ingredients, Bruce and consumers trust the signed and enacted,” Mr dairy supply chain and the Donnison, said the FTA quality and safety of AusHelou said. China FTA presents all tralian dairy products, and could be advantageous to “MG has plans to sorts of opportunities. partnerships like that it is increasingly seek it as a grow in China and is NSW farmers group, finalising with Beingmate premium choice in both already investing in its Dairy Connect, says the – one of China’s biggest the ingredients and gromanufacturing and in four-year phase in of a infant food manufacturcery dairy foods. market distribution zero tariff agricultural ers. “Therefore it is vital footprint to provide world export agreement fits perOnce this partnership that Australia has excelclass dairy foods to China is complete, Fonterra and lent and competitive and south-east Asian Beingmate will establish a access to the growing and consumers. “ joint venture to purchase strategic China market.” Part of this investFonterra’s Darnum plant New Zealand co-op ment has been a $19 milin Gippsland, through Fonterra has already benlion upgrade of its facility wholly owned subsidiaries. efitted from the FTA its in Koroit, Victoria, to

l a i c e sp t r o rep NExT ISSUE: february pasture improvement The huge productivity gains available through pasture renewal have been proven by research and by farmer experience over recent years. Renovating pastures with new high yielding grass varieties means more milk in the vat and more money in the bank. The March issue of Dairy News will feature a special report on the latest technology, equipment and techniques to use to get the most out of Pasture Improvement. BOOKING DEADLINE: February 10 MATERIAL DEADLINE: January 28 PUBLISHED: February 3 CONTACT: CHRIS DINGLE T: 0417 735 001 E: chris@dairynewsaustralia.com.au

fectly with its long-term market-based strategy. Dairy Connect partnered with NSW dairy co-op Norco to send the first commercial shipment of fresh milk to China earlier this month. Dairy Connect CEO, Mike Logan, said the FTA will not only result in millions of dollars in tariffs being saved, but will ultimately increase the farmgate value for dairy farmers. “It is the best outcome we could have hoped for, as it will certainly go a long way in ensuring growth and a positive future for

NSW dairy,” Mr Logan said. “For the first time since deregulation, dairy farmers will be empowered and be in a position to choose, which markets they sell their milk into. “NSW has a significant capacity to increase its raw milk supply. “The FTA has signed away our handicap, and NSW is free to forge ahead with the international supply chains that have been built upon our industry’s direct relationships with the booming high networth consumer market in China.”

Chinese Minister for Commerce Gao Hucheng and Trade Minister Andrew Robb sign the Free Trade Agreement understanding under the guise of Chinese President Xi and Primer Minister Abbott.

Australia gets ‘NZ plus’ deal THE OLD saying “what you lose on

the swings you gain on the roundabouts” could be applied to the free trade agreements NZ and Australia have struck with China. Australian dairy leaders and even Trade Minister Andrew Robb said they wanted a “New Zealand plus” deal as negotiations for Australia’s FTA with China were underway. The final details of the Australia/ China FTA haven’t been revealed and won’t be for several months, but major elements have been announced, and it seems Australia might have the edge. Under the FTA, the 15% tariff on infant milk formula will be phased out within four years, while the 10% tariff on milk powder exports will be cut within 11 years. The FTA will also eliminate tariffs on cheese, butter and yoghurt within nine years, and ice cream, lactose, casein and milk albumins within four years. Liquid milk will be tariff-free within nine years. But it’s the lack of safeguards that has some industry figures touting the deal as more significant than New Zea-

land’s own lucrative FTA with China. Under the New Zealand deal, tariffs on liquid milk, cheese, butter and all milk powders can be reinstated if volumes breach a certain limit. Those rules won’t apply for Australian products, with the exception of tariffs on whole milk powder. So although the final tariffs on New Zealand product will be phased out by 2019 – significantly sooner than Australia – they have limits on the percentage of goods admitted tariff free every year. The final details of the FTA between Australia and China won’t be for several months as the two countries essentially signed ‘a statement of intent to conclude an FTA’ at the announcement late last month. An actual agreement won’t come into existence until after the text is ‘legally scrubbed’ and translated into Chinese. Lawyers from both countries study the agreement in detail to make sure the agreement in Chinese matches the English text Both countries can then exchange diplomatic notes to put the agreement into effect. This probably won’t occur until the second half of next year.

DAIRY NEWS AUSTRALIA DECEMBER 2014

NEWS – FTA // 9

NZ reacts to Aus-China FTA ANYTHING GOOD for

Australia is in the long run good for New Zealand. That’s the reaction of Trade Minister Tim Groser to the news that Australia has signed a free trade agreement with China, and to speculation that Australia’s FTA with China is better. Mr Groser said there is a degree of similarity between the New Zealand FTA with China and the Australian one, but it appears the Australians may have made some gains

in the phasing out of tariffs – a point he will take up with the Chinese. However, Mr Groser said suggestions made within NZ that Australia would displace NZ in the Chinese market was ridiculous. “The Chinese market is expanding so rapidly that Fonterra reached the conclusion five years ago that there was no possibility of a New Zealand based production system keeping up with demand,” he said. “That is why Fonterra

is investing $1 billion in producing milk in China.” Mr Groser said a strong Australian economy is good for NZ and if the Australian FTA strengthens its economy it will have a positive flow-on effect for New Zealand. “Specifically anything good for the Australian dairy industry is good for New Zealanders because

is a good one and differences between the FTAs both countries have struck with China will even out over time. “With infant formula, for example, we have achieved zero tariffs now and there is no volume restriction. “The Australians are going to take another four years to get to their own

the 10,000 Fonterra shareholders own 20% of the Australian dairy industry. “It’s an interesting paradox, it’s not a win-lose thing at all. New Zealand has a slice in the success of the Australia deal.” Dairy Companies Association of New Zealand (DCANZ) executive director Kimberly Crewther said the Australian deal

tariff rate cut. “For butter we are under a safeguard provision and the Australians will have small tariff advantage once we hit the volumes.” Ms Crewther said it’s probably too early to predict how the two FTAs will compare but there are positive messages for farmers.

“In the global context it is another step towards liberalisation for dairy products. So it shows openness by China to liberalising its market. “That [puts] the New Zealand government in a good position to engage on other restrictions that apply to us still. We’ll be encouraging the government to do that.”

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long life milk (UHT) in China in new bilingual metallic packaging and pack sizes, reinforcing the co-op’s intentions to maximise opportunities gained in the FTA. The new design, was based on Chinese consumer research and feedback, will feature on 200ml and one litre UHT containers, as well as associated family gift packs. MG said the new metallic UHT packs gives a premium look and feel and feature a distinctive gold Devondale logo, reinforcing the brand’s premium positioning in the market. The packaging is labelled with ‘100% pure Australian milk’, the packaging features clear consumer messaging about the milk’s country of origin, which appeals strongly to Chinese consumers. “We have our sights set firmly on high value growth markets, like China, where the demand for dairy foods is very strong well into the foreseeable future,” MG managing director, Gary Helou, said. “Our innovative new packaging enhances the product’s shelf appeal and is tailored to the local Chinese market based on extensive local customer insights. “The Devondale range is known internationally for its exceptional quality and safety, which we are clearly communicating on the pack, along with our proud Australian dairy-farmer origins, which is a key selling feature in international markets like China,” Mr Helou said. “The recent FTA will improve the competitive positioning of Australian dairy foods into China but dairy farmers must have ownership of the supply chain and brands in order to capture maximum benefit – otherwise value will be lost to others in the chain.”

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10 // NEWS

Murray Goulburn to buy back shares MURRAY GOULBURN suppliers have approved the board’s request to buyback all B and C Class Preference Shares at its annual general meeting held late last month. The voluntary buyback values the B and C class shares at $1.25/share. MG chairman Philip Tracy told the meeting the move to buy back the shares was working towards further simplifying the MG share register ahead of its potential capital raising next year. Mr Tracy said simplifying the share register would reduce the costs and also allow B and C class shareholders to realise the value of their shares. Former chairman Ian MacAulay questioned why shares were valued at $1.25 each. Mr Tracy said shares were valued independently and the board has agreed to pay at the top end of the valuation. He said it was impossible for the board to make a recommendation above the independent value. The buybacks opened on December 1 and close on January 12, 2015, with participating B and C Class Preference Shares

to be bought back and then cancelled on or about January 28, 2015. Payment will be made to accepting shareholders around the same date. In determining the buy-back price of $1.25 per share, the board referenced the rights attached to B and C Class Preference Shares, particularly with regard to dividends historically paid, and also took into account the amount received by A Class Preference Shareholders as part of the selective capital reduction which took place earlier this year. While MG is expecting a strong response to the buyback offers from B and C Class Preference Shareholders, it acknowledged it was unlikely that all eligible shareholders will elect to have their preference shares bought back. If all eligible shareholders accept the buy-back offers, the maximum cost of the buybacks to MG would be about $60.9 million. MG intends to fund the buyback from existing cash reserves and/or financing facilities. Suppliers should have their detailed buyback documents now.

Dwyer joins DA board WESTERN VICTORIAN dairy farmer, Lisa

Dwyer, has been appointed to the Dairy Australia board at the levy body’s AGM late last month. Mrs Dwyer, who farms with her husband, Eddie, at Macarthur, and held the role of chair of WestVic Dairy until her DA election, ran against Nullawarre dairy farmer Michael Spitse for a position on the board. DA chairman Geoff Akers was re-elected, while former chairman and president of the Institute for Chartered Accountants Jan West was elected to the position reserved for a director with finance and audit skills. The constitution dictated that Mrs Dwyer and Mr Spitse, who collected more than 100 A class signatures, had to contest as they had a similar skill set. Before the ballots were cast at the AGM, Mrs Dwyer secured about 61.9% of the proxy votes lodged and Mr Spitse 25.7%. Mrs Dwyer said she had called farmers from across the country in the lead-up to the election and said Dairy Australia had to tailor its programs to the different regions. “Every one of the eight dairy farming regions across Australia is different, and within every dairy

tion in spend in some protrade access.” region are different farmgrams so our expenditure DA managing director ing structures, challenges Ian Halliday told the audi- matches our income of and objectives,” she said. ence DA investment would approximately $57 to $60 “And all of those are both million, and we don’t be channelled into targetcommon and unique and ing farm profitability, pro- drop below our minimum so even though our milk reserves level of $14 miltecting and promoting might be homogenised, lion. the industry and its repuour farmers and their “We already have tation, and building the farming systems are most a good track record of capacity, skills and capacertainly not. reducing costs, “And so it “Even though our milk saving almost $2.5 is therefore million over the incumbent might be homogenised, past three years, on Dairy our farmers and their and have a conAustralia and farming systems are most tinued focus on the regional challenging all development certainly not.” programs – Lisa Dwyer expenses across the organisation.” to ensure Mr Halliday said DA bility of our people. that we don’t apply a “To support these three now has 10 extension homogenised approach to the development of the priority areas we increased coordinators employed across all dairy regions to Australian dairy industry.” our expenditure by 6% in work with our Regional the last financial year, up Mrs Dwyer said she is Development Programs to $61.8 million, across committed to ensuring to better coordinate and 63 projects in 15 key profarmer levies were focus extension activities grams. invested prudently and “Over the coming years and to help compensate would hope to encourage for the reduction in we will need to reduce a culture that “focuses publicly funded extension our expenditure through on what we can do rather efforts. cost savings and a reducthan what we can’t do”. In his first chairman’s address, DA chairman, Geoff Akers, said DA has been working to tackle non-tariff technical barriers to trade New faces for ADF which have a cumulative SADA president David Basham, UDV presiopportunity cost to the dent Tyran Jones and Dairy NSW deputy chair dairy industry to the tune Simone Jolliffe were all elected to the Australian of $1.57 billion annually. Dairy Farmers board at its AGM late last month. Mr Basham and Mr Jones replace outgoing “The report we long-serving board members Chris Griffin and commissioned on Peter Evans. Ms Jolliffe was re-elected having this issue makes for fulfilled a casual vacancy earlier this year. compelling reading, so The ADF Board comprises four farmer direcwhilst it’s important for tors – the newly elected directors plus chairman Noel Campbell - and one independent director, our industry to reduce Dr Anne Astin. tariff rates, it’s also crucial to tackle other areas of

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DAIRY NEWS AUSTRALIA DECEMBER 2014

NEWS // 11

Report claims Fonterra paid best 2013/14 price report commissioned by the Bonlac Supply Company (BSC) says BSC suppliers - who all supply Fonterra Australia received the highest milk price in Victoria and Tasmania for most supply patterns in the 2013/14 season compared to other dairy farmers. The report was prepared by Ian Gibb of Farmanco. BSC and Fonterra have a supply agreement in place where Fonterra must pay a milk price at least equal to Murray Goulburn. BSC commissions an independent audit on milk price paid by Murray Goulburn every year. However, this year BSC audited all major processors in Victoria and Tasmania. The report reviewed milk prices across four regions in Australia – north, east and west Victoria and Tasmania. Milk prices were compared with Murray Goulburn, Warrnambool Cheese & Butter, Tasmanian Dairy Products, Burra Foods,

Longwarry Food Park and Tatura Milk Industries (TMI). The study reviewed milk supply patterns for both a seasonal calving herd and a typical flat supply pattern produced by a herd with multiple calvings. Each of these production patterns was then scaled to 80,000kg milk solids, 160,000 kg of milk solids and 320,000 kg of milk solids to represent a small farm (around 150 cows), a medium sized farm (around 300 cows) and a large farm (around 600 cows). Based on comparisons, BSC and Fonterra Milk Australia was found to be the price leader in most regions for most supply patterns, with the exception of seasonal farms in the north, east and west where TMI, Burra and WCB respectively came out ahead and the flat supply farms in the west, where WCB was the price leader. Mr Gibb said in terms of competitiveness, BSC can claim to have been price leaders in most regions, for most supply patterns. “Farmers are aware that milk price is a driver of profit, but from a farm business management perspective the focus should be on profit, not price alone,” Mr Gibb said. BSC chairman Tony Marwood said BSC has a responsibility to its supply base to

ensure this leading milk price is achieved and that BSC Fonterra suppliers have a clear view on the price paid for the 2013/14 season.

“The outcome of this report is good news and validates what we said all season,” Mr Marwood said. “It shows that all our

suppliers to Fonterra received at least a competitive price and in some cases even better for the 2013/14 season. “The 2013/14 season

produced record high prices, whereas this season we’re experiencing lower prices because of a challenging market and volatile conditions.

“It’s important that our suppliers focus on what they can control – farm inputs and managing margins - to manage through the cycle.”

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DAIRY NEWS AUSTRALIA DECEMBER 2014

12 // NEWS – IDW 2015

IDW Field Days continue to grow THE IDW Dairy Farm and Machin-

ery Field Days will run for three days at Tatura next month, including a twilight event on the opening day of Tuesday, January 20, to cater for growing farmer interest. The opening day of the Field Days, proudly supported by Dairy News Australia, will be open to the public from midday to 9pm on Tuesday, January 20. The Field Days are also open on Wednesday, January 21 and Thursday, January 22. International Dairy Week runs from Sunday, January 18, to Thursday, January 22. IDW Director, Brian Leslie, said the perception of IDW – now in its 26th year – as a “show” event aimed at breeders was changing, with attendance and exhibitor numbers at the Field Days growing each year. “Four years ago, a decision was made to widen this scope and try to attract all dairy farmers to IDW,” Mr Leslie said. “There are still many dairy farmers within a 100 km radius of IDW who do not attend and we need to change this. “IDW is a week of dairy events for the whole industry. It will take time but we are confident the twilight field day will help change this perception. “We are thrilled with the growth of the field days and look forward to 2015

being bigger and better.” The IDW seminar program has also expanded and will be held from Tuesday through to Thursday inside the Tatura Tennis Clubrooms. (See pages 30 and 31 for the full list of speakers.) IDW event manager, Robyn Barber, said more than 70 companies had already signed on as exhibitors. “We have businesses coming from South Australia, Queensland, NSW and Victoria to participate, providing an excellent chance for any person involved in the industry to see the latest farm equipment and machinery in a relaxed environment,” Mrs Barber said. A virtual farm tour has been scheduled on the Tuesday evening, with two of the international IDW 2015 judges “throwing open the gates” of their properties in the UK and the USA. In a first for IDW, both men will conduct a virtual farm tour of their respective properties – Ken Proctor, Grange Farm, Norfolk, England, and Hank Van Exel of Van Exel Dairy and Exels Holsteins, California, will lead presentations in Wilson Hall at Tatura Park, on Tuesday, January 20. The Virtual Farm tours presentation will run from 8-9pm, with light refreshments beforehand. The Ayrshire breed will be the fea-

The IDW Dairy Farm and machinery Field Days will have a record number of exhibitors in its fourth year in January.

ture cattle highlight of this year’s IDW with the World Wide Sires Evolution sale to be held on the Wednesday evening. There will also be sales of Ayrshire and Jersey cattle held. An entry fee of $10 a day for $30 for multiple days (children are free) has

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been introduced this year with a portion of all money to be donated to Camp Quality. “We have had to introduce an entry fee in 2015 due to a number of improvements being made to the event,” Ms Barber said.

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“We are also keen to be able to support a charity so a portion of the entry collected will be donated to the chosen charity for IDW 2015 which is Camp Quality, whose purpose is to create a better life for every child living with cancer in Australia. “

Thomson recently found himself fighting an invisible and expensive enemy – a soaring Somatic Cell Count (SCC). It pushed the Fish Creek dairy farmer’s herd deep into penalty milk grades, leaving him struggling to isolate the cause and subsequently the most effective treatment. Mr Thomson milks 320-head in partnership with his brother, Bill, and Mr Thomson’s partner, Carolyn Little. He said it was challenging enough trying to make money in the dairy industry without weathering milk payment penalties. Discussions with his veterinarian, subsequent plant testing, new inflations and teat dip brand discussions and protocol checks cost more money and didn’t resolve anything. Enter the RT10 Dairy Quality device. Operating off an iPhone 5 or iPod, the revolutionary software gives SCC and pathogen recognition within 40 seconds of testing on-farm. It is also the only device in the market that gives a visual image. It was launched in Australia recently. It carries pathogen recognition for Staphylococcus aureus (Staph Aureus - which is chronic and often sub-clinical mastitis), Streptococcus Agalactiae (Strep

Ag), yeast and acute mastitis. Environmental pathogen recognition and pregnancy testing (via milk samples by 18 to 20 days pregnant) will also be available by the first half of 2015. “Our SCC was alarmingly high and no matter what we did, we couldn’t put our finger on it,” Mr Thomson said. “We were also having problems with cows at drying off with rising SCC. We bought the device in August and tested all our carryover cows at that time. “There was about 33 of them, and even though they were not expressing signs of clinical mastitis, half of them returned very high readings. We culled them. “It made an immediate difference to our herd SCC. We have since split the herd and we are doing more thorough testing of the second herd – identifying exactly what the pathogen is and treating accordingly. “It is certainly helping identify which bugs are involved. We are also working with our treatment regime so we can get the best results.” Mr Thomson said the RT10’s results had been quick, consistent and clear. The herd SCC was now travelling at 180,000, back from its high point of more than 400,000. • See the RT10 Dairy Quality device on the Dairy Quality Assurance stand at IDW.

DAIRY NEWS AUSTRALIA DECEMBER 2014

NEWS // 13

Protectionist policies hamper attempts to reduce hunger PAM TIPA

THE USE by developing countries of highly protectionist policies for their agriculture industries is counter-productive to reducing hunger, claims Professor Peter Warr, director of the Poverty Research Centre in Australia. Developing its own agriculture was important for a country to reduce hunger, the agricultural economist told the Rabobank F20 summit in Sydney. But those that also used heavily protectionist policies were reducing hunger at a lower rate than those that didn’t. Food security is back on the world agenda after a spike in world food prices in 2007-08, says Warr. The price of rice tripled, the price of wheat and corn doubled. The “real” price of commodities had come down dramatically over the last century, but volatility is a worry to food importing countries. Asia has two thirds of the world’s hungry people but it is also making the most progress on hunger. Over the last 20 years worldwide the number of hungry people in the world has declined by 150 million, but 850 million are still hungry. Sub-Saharan Africa is the worst performer. Increasing agricultural infrastructure and increasing domestic output by protecting local indus-

try against imports are two policies operating throughout Asia in varying degrees. Progress on reducing hunger varied greatly in Asia. China has a higher proportion of undernourished than India but the

Lower food prices reduce the rate of undernourishment. Some poorer farmers in protectionist countries may get higher prices and some benefit but more poor consumers are affected negatively. In Indonesia, for

instance, urban people, farm labourers and even 51% of producers of rice are net buyers – only when they produce enough for themselves first do they have something to sell. “When the price of rice goes up that hurts all those

net buyers; it benefits only net sellers,” he says. “There are two ways of stimulating agricultural output. Improve agricultural productivity: that improves food security unambiguously as it increases the availabil-

ity of food without raising the prices. And there is protecting the agricultural sector: that is Indonesia’s policy – they have banned the import of rice forcing up the domestic price by 40%, reducing the food security of all those

net buyers. “There is nothing wrong with the goal of food self-sufficiency but the effect depends on how you try to achieve it.” If your methods result in rising domestic prices you worsen food security.

Professor Peter Warr says protectionist policies do not help reduce hunger.

rate of decline was similar in both countries. Thailand and Vietnam had dramatically reduced undernourishment. Thailand has gone from 44% in 1990 to about 8%. Vietnam was similar; for Indonesia and the Philippines the progress has been much slower. “Indonesia and the Philippines are the two countries who have used protectionism as a way of stimulating their agriculture; it has not worked,” Warr says. His statistical analysis of the causes of undernourishment show it is not the rate of growth of GDP in a country but the rate of growth in the agricultural component of GDP that is the important factor.

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DAIRY NEWS AUSTRALIA DECEMBER 2014

14 // WORLD NEWS

Irish farmers, processors ready for quota removal PAT O’KEEFFE

IT’S AN exciting time for Irish and European dairy farmers. Having been constrained by European milk quotas since 1984, the shackles will finally be removed on April 1, 2015. However, the mood is tempered by two major issues: the prospect of a very weak dairy market in the first half of 2015 and the high risk of a massive superlevy bill for exceeding production in the 2014/2015 milk quota year, which ends on March 31, 2015, two months after most cows calve next spring. Ireland has a national milk quota of 5.4 billion litres. If we exceed that level of production in a milk quota year, which runs from April 1 to March 31, farmers incur a fine of 28.6 cents per litre of milk for each litre about their individual quota. At present the country is running about 7% above quota, so the prospect of a record fine of up to €100m looms. In recent years, the European Union (EU) allowed production to increase by 1% per year and the more ambitious Irish farmers have been gearing up for growth. More dairy sires have been used instead of beef bulls. Even within a quota environment, the national dairy herd grew by 3.4% this year. About 18,000 farmers milk 1.1 million dairy cows in Ireland, with surveys suggesting that two-thirds will expand their dairy output after milk quotas are removed. There will also be some new entrants – mostly young beef farmers making the switch from suckler cows (of which we have a herd of one million).

iDAIRY®

In 2010, the industry, in partnership with the Government, agreed a strategy for the agri food sector. A headline target was 50% growth in milk production by 2020. It sounds ambitious, but there is a lot of evidence to suggest that it will be achieved – assuming milk price bounces back and farmers are profitable, of course. Dairy processors such as Glanbia, Kerry and Dairygold have invested close to €500m to expand their milk processing capacity and move up the value chain. The reason for the optimism is Ireland’s inherent natural advantages for grass-based dairy production. In the 20 years prior to milk quotas, milk produc-

tion in Ireland grew by over 3% per year 15% of infant formula is sourced here. – a pace far higher than most countries Multinational players Danone, Abbott and Nestlé all operate large-scale proin the world. duction facilities that Grass-based utilise Irish dairy spring-calving systems While Ireland ingredients. Butter, dominate, although only produces cheese and powabout 15% of dairy ders are the other farmers milk cows around 1% of the main outputs, with through the winter to world’s milk, it the German butter produce fresh milk for produces about market particularly the retail shelves and 15% of the world’s important for Kerrycream for products gold, a brand owned such as Baileys Irish infant formula. by the Irish Dairy Cream liqueur. Infant nutrition is also a key sector in Board (IDB). The IDB is a marketing Ireland. While we only produce around co-op that exports on behalf of Ireland’s 1% of the world’s milk, an estimated 15 dairy co-operative processors.

A generation of farmers have been locked out of dairy farming for 30 years, with milk quotas presenting a huge barrier to entry. Many existing farmers left the business due to frustration as they could not expand. When milk quotas were introduced, 63,000 farms milked cows, so the scale of exodus has been large. Now, numbers are steady at 18,000, although the volatile reality of global markets is likely to claim some casualties in the coming years. New entrants are already bringing a vibrancy and energy to the business. • Pat O’Keeffe is the Deputy Editor of the Irish Farmers Journal, based in Dublin.

A young man Keane for dairying PAT O’KEEFFE

“YOU COULD not have asked

for a better year to go into cows. I have lost count of the amount of times people have said this to me over the past few months.” These are the words of Padraig Keane, a 24-year-old Irishman who is just completing his first season as a dairy farmer. He milked 47 cows this year, with a further 20 high-index animals in place for next year. The herd is being established while he invests in infrastructure such as roadways, water and a new milking facility on the Co Offaly farm. He is typical of many new

entrants: well educated, with a degree in agricultural science from University College Dublin; well-travelled, with a season in New Zealand under his belt; and well supported, with his parents (retired teachers) heavily involved in his new dairy enterprise. Keane turned down more than one job after he graduated from college in order to follow his passion. He is fortunate he has access to land – to buy it on the open market would cost €20,000 per hectare. The family sold their beef suckler herd and invested the proceeds in dairy stock. Banks will fund the conversion cost on the back of a sound business plan.

Irish dairy farmer Padraig Keane.

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WORLD NEWS // 15

Fonterra German buys UK processor expands as industry consolidates global milk pools THE UK dairy industry

FONTERRA HOPES to be collecting 30 billion litres

of milk worldwide by 2025, says chief executive Theo Spierings. Addressing the co-op’s annual meeting in Palmerston North last week, Spierings referred to six global milk pools – three in the southern hemisphere (New Zealand, Australia, South America) and three in the north (Europe, North America, China). Spierings defends the concept of expanding global milk pools. “Milk pools gives us access to safe, quality milk and we need extra milk to stay relevant.” He stressed that all milk pools will deliver quality milk. “The same standards apply in all milk pools as in New Zealand.” When Fonterra was formed 12 Theo Spierings years ago it processed 13 billion litres of milk in New Zealand; today, it picks up 21b L in New Zealand, Australia, Chile and China. Spierings says Fonterra’s ambition is to pick up 30b L by 2025; more milk will come from pools in Europe and China. Most of the extra milk will be turned into products for China; the Australian milk pool will process cheese, whey and infant formula and Europe will turn its milk into whey for China. Spierings says the milk collected from Fonterra farms in China will be turned into UHT products and food service ingredients for the domestic market. New Zealand milk products will go mostly to China, Middle East and Africa. – Sudesh Kissun

looks set for more consolidation as farmers and processors struggle to make ends meet. This month Germany’s Theo Muller Group bought Dairy Crest’s dairy division for $154 million, its second big British buyout in two years; in 2012 it bought Robert Wiseman Group for $540m. Dairy Crest’s dairy business processes and delivers 1.3b L of milk a year to big UK supermarkets; it also owns FRijj flavoured milk and sells bulk butter and milk powder. The deal, which will merge Dairy Crest with a Theo Muller operation to give a 30% share of the UK fresh milk market, is still subject to approval by antitrust authorities. However, Ronald Kers, chief executive of Müller UK & Ireland Group, warned about a threat to the UK market without further consolidation. “We are concerned that the dynamics of the

UK fresh milk market are unsustainable for dairy processors in the mid to long term. This acquisition will allow us to reduce our costs, increase our efficiencies and invest in the future.” His comments are seen as leaving the door open for more acquisitions. Other UK dairy tie-ups include the 2012 merger of Milk Link into Arla, the Nordic-based dairy. Dairy Crest says that by combining its dairies business with those of Müller Wiseman Dairies (the fresh milk, cream and butter business owned by Müller) it will further improve efficiency. “It will help to create a more sustainable UK dairy sector by delivering economies of scale and

cost efficiencies that will underpin investment in the industry. “This in turn should help the UK to compete more successfully in global markets, which is essential for British dairy farmers. “Dairy Crest believes the transaction to be in the best interests of consumers, customers, dairy farmers, employees and Dairy Crest’s shareholders. It will create a stronger business that protects long term employment and has the potential to help reduce costs and increase efficiency.” Dairy Crest brands include Cathedral City, Davidstow, Country Life and Clover. In the year ended March 31, 2014 Dairy Crest’s Dairies operations had sales of $1.8b.

Dairy Crest delivers 1.3 billion litres of milk annually to UK supermarkets.

l a i c e sp t r o p re NExT ISSUE: february irrigation Updating your irrigation system will not only save water, it will save you money, time and boost pasture growth. In the next issue of Dairy News Australia, we will feature a special report on the latest in irrigation technology and showcase the farmers that have benefitted from upgrading. BOOKING DEADLINE: February 10 MATERIAL DEADLINE: January 28 PUBLISHED: February 3 CONTACT: CHRIS DINGLE T: 0417 735 001 E: chris@dairynewsaustralia.com.au

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DAIRY NEWS AUSTRALIA DECEMBER 2014

16 //  OPINION RUMINATING

EDITORIAL

Here we go again

MILKING IT... Hijacked

New Dairy Australia board member Lisa Dwyer stole the show when she told the audience at the Dairy Australia AGM that she was “hijacked into dairy 10 years ago by a marriage proposal”. Lisa and husband Eddie Dwyer farm at Hawkesdale in south west Victoria. She may have been hijacked, but it seems Lisa has a natural disposition to dairy and farming (added with a proclivity for hard work). We heard following the AGM that she is one of the best silage wrappers in the district, proving it at a gathering of farmers and contractors from her district to see who could do the best job.

Fair crack

Full credit to Nullawarre dairy farmer Michael Spitse who had a crack at joining the Dairy Australia board at the AGM, gathering 100 signatures as the constitution requires then spending time to gather support. His bid fell short but he won plenty of admirers at the AGM with his vision of what he wanted to achieve on the board should he be elected. Michael told the audience R&D was crucial but are all activities undertaken by DA relevant to increasing the bottom line of farmers? He also asked whether DA should fund projects the commercial sector could perform. No doubt he’ll keep asking these questions to the board but well done on making the effort to try and ask the questions in the boardroom itself.

Legendairy

SA dairy farmer James Stacey was quick to his feet to ask a question at the Dairy Australia AGM following a video of all the activities comprising the Legendairy campaign. “Legendairy makes us feel good, but so does $7 a kilo,” James told the board. “With prices falling and a tough 12 months ahead, DA needs to focus on the profitability of farmers.” DA gave industry promotion, including Legendairy, funding of $8.4m in 2013/14, up from $5.4m in 2012/13 and $4m in 2011/12. The annual report also attributed the campaign to a “substantial increase in the proportion of farmers who spoke positively about the industry”. That was from research taken in March, 2014 – right in the midst of some good farmgate prices. It will be interesting to read what farmer sentiment about the industry is in next year’s report and, if it has declined, whether that’s attributed to a fall in prices and tough season. If so, what will be used to measure how the Legendairy campaign performed?

Advertising Chris Dingle chris@dairynewsaustralia.com.au

Mixed messages

We’re told that consumers won’t want milk from genetically-modified pastures because “GM is bad”. That simplistic argument is all that’s apparently needed to stop farmers potentially improving their profitability. However, the world’s first artificial cow’s milk – Muufri – which its creators say will be available next year, is apparently better for the environment. As far as simplistic arguments go, this is hard to top. It’s not from cows, so it’s good. Yet, it’s made from a special variety of yeast that has been, wait for it, genetically engineered to produce milk proteins. How can one genetically modified product harm the environment but another genetically modified product help it? Oh that’s right, we’re trying to base our argument on fact. Pesky facts, always getting in the way.

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THE FEDERAL Government has announced new buybacks for water in the lower Darling, Murrumbidgee and NSW Murray catchments. The former Labor Federal Government used buybacks to return water to the environment at the height of the Murray Darling Basin reforms The Opposition, led by Tony Abbott, were among many who decried this ploy. Now, the Coalition Federal Government has decided to enter the water market itself. Parliamentary Secretary for the Environment, Senator Simon Birmingham, told ABC Rural Irrigators could expect to see the government in the market every year until at least 2019. Senator Birmingham said the government had not promised there would be no buybacks – which apparently makes this water grab OK. It’s not OK. It’s a quick fix with no long-term vision and the easy option for governments to do. Buybacks are only cheaper than investment in water savings infrastructure if you don’t count the long-term cost of people leaving regions. There is already talk of farmers spending less money. This translates into less revenue in towns and businesses that rely on that irrigated activity. There’s also the added cost of infrastructure maintenance falling to the dwindling numbers of irrigators who remain. Better water infrastructure will be needed to ensure adequate food supply in a changing climate, where more extreme weather events, including droughts, will be prevalent. Blighty dairy farmer, Malcolm Holm, called on the government to concentrate on farm efficiencies and community irrigation retirement, not the Swiss cheese approach of buybacks which is detrimental to those who want to remain in irrigation farming. Mr Holm described buybacks as a crude way of getting water back. He’s dead right. Senator Birmingham says the Federal Government will spend $2.3 billion on infrastructure projects to boost efficiency in the Murray-Darling Basin. We’re going to keep an eye on this claim - it’s one thing to list it in the budget, quite another for a Government to ensure the money is delivered. Many farmers have matched government grants with their own money to invest in water-saving infrastructure on-farm. It makes economic sense that they can access water at a market price to produce food. After all, wasn’t agriculture one of this government’s “five pillars”?

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DAIRY NEWS AUSTRALIA DECEMBER 2014

OPINION  // 17

FTA benefits won’t flow overnight for farmers DARRYL CARDONA

THERE HAS been significant fanfare about the recent signing of the free trade agreement between Australia and China, with the expectation that China will become the backbone of Australian dairy exports in the next 10 years. Reading the fine print of the FTA, our dairy producers will get tariff free access on the all-important infant formula market in four years’ time, and all other dairy products within 11 years’ time. What does this all mean to the average dairy farmer in the next three years? Nothing. When we review previous FTAs with other countries where they have been put in place, there has actually been a drop of exports to those countries, not an increase. Where today’s growth will come will be with export heifers, and good quality heifers at that. As a dairy farmer, you should consider China as your number one destination for dairy heifers, as the returns can be up to 50% higher than what an Australian dairy farmer will pay. China can become self-sufficient with dairy within five years, and actually become a competitor on the global marketplace within 10 years. They have

the technology, the land, the climate and the feed to become a dominant player in the global market. For every dairy cow in Australia, there are nine dairy cows in China, and each and every year, imports of dairy cattle into China increase. Australia exports large numbers of cows, at better returns than farmers would receive in Australia. If it wasn’t Australia exporting cows, it would be other countries, including New Zealand, the US, Canada and from the northern hemisphere. China’s demand for dairy is increasing but it is along generational lines. Changing one’s diet overnight to dairy consumption in a country that is used to having rice-based meals will not occur. A comparison would be if everyone in Australia were to change to rice-based meals overnight, it will not happen. It will be a generational change, and this change is commencing in China with infant formula, where tariffs are not reduced until four years. As the next generation in China grows, they will commence to procure more dairy product, it will not occur overnight. It will take years. China’s marketplace is completely different than that of the Austra-

Prime Minister Tony Abbott and Trade Minister Andrew Robb with Chinese President Xi and his Minister for Commerce Gao Hucheng at the signing of the Free Trade Agreement with China.

lian tastes, which means it will be difficult to achieve same product manufacture. We have to design foods for Chinese tastes, not Australian tastes. Over 95% of all liquid milk in China is purchased as UHT milk, which is the opposite to Australia where fresh milk makes up 95% of our sales. The distribution channels in China, which are cumbersome and difficult, will also make introducing fresh milk difficult. A lot of product is delivered on bikes and road congestion is massive. It is critical for companies forging into China in the next four years to

form close alliances with Chinese dairy companies. Most prefer a 50/50 joint venture, and by joining with a Chinese company, you achieve the key elements of local market access, local customers, distribution and recognition of our branding. Over the next four years, Australian dairy companies simply need to grasp joint ventures with open arms in many a different province and stick with successful standard Australian dairy brands. Joint ventures will help grow these brands in China and as China continues to become a com-

petitor on the global marketplace, our brands can be used in China under license where companies can grow their income, be it from locally made product in Australia, or product made in China using our names. Joint ventures also eliminate the problem of dealing with too many traders, who take a cut on the way through, to the detriment of returns to farmers. Manufacturers will need to also ensure tight control of their trademarked names. Probably every person in Australia has a fake Chinese product that we have all bought

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knowing full well it was fake. Australia is a small fish in a big pond in the global dairy market. Instead of trading in commodities that are turned into other products in other countries, we should target more growth of finished products with a longer shelf life, including UHT milk, infant formula, ice cream and yoghurt. When I was in Hong Kong recently I had great pleasure in seeing Pauls Custard and a good range of Bulla Dairy products, including sour cream, yoghurts and cream cheese. The FTA has been

concluded but work now starts on implementation, and ensuring we gain the best returns to our farmer suppliers. Farmers can benefit by exporting dairy heifers, while dairy companies put into place successful and proven JVs with large and successful Chinese operators, and not the fly by nighters. We have a great industry, with fantastic opportunities, we need to capture them, and implement them correctly to ensure success and, most importantly, dollars in your pockets. • Darryl Cardona is United Dairy Power’s chief operating officer.

DAIRY NEWS AUSTRALIA DECEMBER 2014

18 // MARKETS

Demand will grow next year Export demand remains strong Dairy NewS aUSTraLia june, 2012

agribusiness // 17

FOUR MONTHS ago, this column

cents/litre in March (AUD 41c/L) to 28

With season 2011/12 only a few

incremental change in milk production (year-on-year) considered several ofattention down-is now Euro cents/litre (AUD 36c/L) in April. weeksmonths from ending, Profit margins are under pressure in the focused on 2012/13 milk prices as farmward movements in dairy commodity US, and in NZ Fonterra has announced ers consider strategies for the coming prices on international the final payout for the 2011/12 season year. In markets. some domestically-focused has been cut from NZ$6.75-$6.85/kg MS regions, At that stage, therenegotiated averagecontracts Glo-incorgLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96porating lower prices and reduced ‘tier JohN DropperT balDairyTrade (GDT) was atfarmer $5.04). one’ accessprice are undermining Effectively, global dairy markets are and supply stability. For GLOBAL IMPACT US$3309/tonne –confidence an average fall of 34% rebalancing. Lower prices will both private label DROPPERT contracts and promany farmers in export-oriented Shifts inJOHN slow production growth and stimulate regions, a lower priceFebruary outlook relative to cessor rationalisation have seen milk across all products from the demand, and as this occurs we will ultithe current season not only adds to the companies adjust their intake requirepeak. mately see a price recovery. Key factors challenges of doing business, but seems ments and pricing to meet the changto watch on the global scene will be the demands of a highly pressured retail to contradict positive medium Since then, the GDT theaverage hastermtryingprogram. rate at which milk production overseas outlook of Asia-driven dairy demand marketplace. Lower contract prices and soon to assess how dropped a further slows in response to lower prices, the a It lackremains of alternativetoo supply opportunigrowth. 23%, reaching flows. 2012 milk production in the US those in south-east Asia and the Middle impact of the current financial worries ties present challenges in a market with were, Dairy Australia’s such fears with US$2561/t at the November 18 indicative event. outlookwell-founded for southern farm gate milk prices – limited manufacturing capacity. Despite is up around 4% on 2011 for the year to East maintain consistently higher eco- on consumer confidence, the path of latest round of price negotiations Much has happened April (leap year adjusted), whilst early nomic growth rates that support China’s economic growth, and the value these challenges, the underlying domespublished inin thethe recentmarket Dairy 2012: Sit-the uation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Australian dollar. in Japan still underway at the time of since the start of August, the most Demand for exported dairy prodopening price range of $4.05-$4.40/kg ita dairy consumption and a growing finished the March 2012 quota year up ever, the surge in supply has outpaced ucts remains a positive and will conpopulation providing a degree of cer- 2.3% on the previous year. New Zealand demand growth in the market. dramatic and unexpected therangewriting. MS and a full yearbeing average price This situation has seen the scales tinue to grow with the middle class in $4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish So far however, the worst fears have announcement bybetween the Russian governIn the seasons following the 2008 this season up 10% on last year - a huge tip in favour of buyers in dairy mar- large emerging markets such as China, report considers the wider market pickets, with commodity prices retreat- with changes in diet and with increasing market influence given 95% of NZ milk financial crisis and subsequent comture and summarises the many factors ment of an embargo on food imports not been realised, and although cheese at play; the key theme of the current sit- modity price recovery, farmers in is exported. Argentina is also enjoy- ing steadily over recent months. Butter urbanisation - and also in conjunction have regions adjusted insolid lineingwith the growth, but a sig- prices are down some 30% from their with global population growth. Locally, from the EU, US, Canada, Australia andin theprices solid production export-oriented have seen uation being that of re-balancing supply global supply growth (see chart) - with nificant dairyto supply chain. banned broader market, the outlook seems to gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market is supported by a Norway (in addition Ukraine, In regions of Australia focused on higher-cost competitors in the North- much of this additional milk from leav- lost more than 20%. Farm gate prices growing population and stable perless downside potential than a in July). have subsequently been reduced in capita consumption. Whilst the dairy ing South America. ern Hemisphere amongst those expandproducing drinking milk, many farmersreflect Despite wider economic uncer- most exporting regions. The average market is currently a challenging place ing output as their margins increased. faceimpacts a re-balancing in the formmonth ago, with some expecting values The ban’s direct onmarket Austraof renegotiation of supply contracts This season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France to be a seller, all signs indicate that balremain supported currentcountries like China and for example, dropped 12% from 32 Euro ance will ultimately return. lia are largely confined toaccess denying sevditions have further enhanced around milk as importing and reduced to ‘tier one’ supply.could prices also depressed, New Zealand’s ucts, for which skim milk is a by-proderal processors with Russian-approved levels in the near term. The commodity most impacted by processors are also increasing SMP uct. plants a premium-paying butter market. Butter, anhydrous milk fat (AMF) Indirectly, many feared that some of the Russian ban has been skim milk output, while recent corrections in the the 260,000 tonnes of cheese exported powder (SMP), which on GDT has lost US domestic market are bringing Amer- and cream cheese continue to perform 52% since February, including a 35% ican suppliers closer to export compet- reasonably well on export markets, to Russia by the European Union ASEAN-Australia-New austraLian DairY, each Zealand FTA (AANZFTA). rice and wine and even better in the domestic maritiveness. drop since August. year would be dumped onexporters worldto mar“Protectionist sentiMalaysia are the biggest Demand is reportedly healthy and kets of many major exporters (AustraMuch of the European milk that kets, including Japan and East ment over agricultural winners in a freeSouth trade goods is rife and growagreement (FTA) signed would have been destined for Russia in sizeable volumes of product are chang- lia included). Asia. ing across the globe, so to provide portion pack between the two counaustraLian FooD total returns of some the form of cheese has been directed to ing hands, but in the wordscompany Profitability in markets has in this context it is pleasconfigura- from channeltriesthese last month. Freedom FoodsThe(200-330ml) ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a ling milk to SMP/milk fat production traders, there is ‘just too much prodSMP in recent months, boosting supply already been eroded in recent years to forge an agreement seven years of negotianew milk processing plant ucts. with Malaysia has market. Other factors are at will tions, allows to cash in on growing streams The areNSWatlocation present greater than uct around’. in athat falling by price competition froma liberalised US exports, dealt with some sensiprovide access to the most licensing arrangement demand in Asia. those producing WMP. The reason so much SMP is play too, often subsidisedforunder the Cooperative agricultural issues however. sustainable and economic Australian liquid milk Thebeing plant, to be built in from not effectivelyWith covered by has exporters and allows indusAustralia, will Furthermore, be source of milk. Pactum unlike cheese, in fat prodwhole milk powder (WMP) produced is to do with milk southeast tives Working Together (CWT) AANZFTA,” says Fraser. strong links to the Austraaccess for higher value the first Australian greenEurope SMP and butter Sealing the deal: Malaysian trade minister Mustapha Mohamed “While under the dairy industry and will are eligible for retail products. fields expansion in UHT in lian with Australian counterpart Craig Emerson after signing the deal. AANZFTA agreement expandstorage its arrangements It guarantees Aus10 years. With whole milk powder subsidised under the EU’s Primost of Australian agriwith dairy farmers for tralian wine exporters Freedom’s wholly (WMP) prices also depressed, vate Storage scheme. but also through technical Despite the compleers through streamlining culture’s key interests supply of Aid milk. The new the best tariff treatment ownedare subsidiary Pactum New Zealand’s processors or so called ‘behind themilk powder tion of this agreement, of rules-of-origin dechad tariffs bound at zero, plant will increase scope Malaysia gives any counAustralia will run the increasing skim Speculation that SMP pricing border’ restrictions.” much remains to be done (SMP) dairy and rice are two sec- laration processes and try. It also allows open plant. Some of its products for Australian milk supply output. The FTA was signed on for Australia’s farmers to improved marketing – value-added, sustainable may reach public intervention levels access arrangements from tors where incremental will be sold in Australia. May 22 in Kuala Lumpur tap into the full potential arrangements for certain market access improveand export focused. 2023 for Australian rice The company says increases its attractiveness to manuby Australia’s Trade and of the Asian region and commodities. ments have been negotiInitially the plant will with all tariffs eliminated given Asian consumCompetiveness MinisThe Malaysian market beyond. ated under the Malaysian produce 250ml andof 1L the effective price by 2026. ers’ rising incomes and facturers, because ter Craig Emerson and his He says the NFF will is worth about A$1 bilUHT packs from a process The National Farmers’ FTA. improving diets, demand floor that intervention buying by the Malaysian counterpart now throw its attention lion in Australia agricul“This trade deal was line capable of 100 milFederation says the trade there will grow for qualtowards ensuring agricul- Mustapa Mohamed. tural exports – including also particularly imporlion L.Commission The processing and provides. deal will improve interity dairy products from European Emerson says Australia ture remains front and being its fourth-largest tant for sectors such national market access low-cost production bases packaging plant will emit itscarbon, part,use WMP presents a mixed centre in completed FTAs will be as well-positioned sugar export market and less water, for Australian agricultural as dairy that have been such as Australia, whoseForless in the Malaysian market fifth-largest wheat export with South Korea, Japan, facing a competitive disandlarge be morevolume energy-effi-transactions are goods. milk is well regarded. picture; as Malaysia’s closest tradChina and Indonesia as market. advantage in Malaysia cient than equivalent “After seven years of The new plant will providing priceinsupport, but ongoing ing partners in ASEAN, With an annual economic immediate priorities. compared with New ZeaUHT facilities Austranegotiation, the NFF is allow Pactum to meet “These are all markets and in some cases better. growth at about 5%, land which already has lia and SE Asia. Pactum under no illusion of how growing demand for strength in New Zealand’s milk producThe FTA will guarantee Malaysia forms an impor- with enormous growth expects site preparation to challenging it has been to a completed FTA with UHT dairy milk, and add tariff-free entry for 97.6% opportunities and where tant part of the ‘Asian Malaysia in place.” begin in October 2012 and supply. complete this FTA with to capacity for valuetion continues to bolster of current goods exports significant barriers to Century’ story and the The FTA also sigstart-up by mid-2013. Malaysia,” NFF vice presiadded beverages at ThosePactum processors from Australia once it opportunity this presents trade in agriculture still nals some administrative makes UHT who can are prodent Duncan Fraser says. its Sydney factory. Pactum enters into force. This will for Australian agricultural exist, not only through benefits for Austrafor private label and fat instead, The FTA will fill a is expanding its capabiliducingproducts cheese or SMP rise to 99% by 2017. tariffs that restrict trade producers, says Fraser. and proprietary customers. number of gaps within the lian agricultural exportties at the Sydney plant but those with dedicated WMP facilities are keeping the market well supplied. Demand across Asia, the 016-017.indd 17 6/06/12 1:41 PM Middle East

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

and Africa is reportedly good, though buyers are not short of options. Quarter 1 2015 requirements are well on the way to being covered and Q2 business is also being done. The current problem for sellers in global dairy markets is that the supply cycle has outpaced demand growth; quite the opposite of the situation a year ago. With little change to the fundamentals, it looks likely that prices will finish 2014 around current levels. The good news is that inevitably, the cycle will turn. Though a substantial degree of downside risk remains (particularly for SMP), many products are likely to find increasing levels of support into 2015. By then, pricing signals will likely be reaching the farmgate (and consumers) worldwide, and supply may become further restricted as southern hemisphere farmers contend with a potentially difficult summer. When buyers again have reason to be concerned about securing product, the market dynamic will change markedly, and those in a position to take advantage will reap the rewards. • John Droppert is industry analyst with Dairy Australia.

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DAIRY NEWS AUSTRALIA DECEMBER 2014

MARKETS // 19

Australia must grow or be left behind I’M ALWAYS amazed

that there still appears to be a debate about whether this industry should grow. It has taken some years for us to use the g-word but now it is driving corporate and industry agendas. There are two growth questions: Firstly whether it is better for an industry to be larger in future and secondly whether individuals should grow their businesses. In the context of the world market, it is no brainer that we should grow. Over the past decade we have been a dwindling part of a growing market. The Chinese FTA and fast growth in other export markets give the Australian dairy industry an opportunity but not the free kick some expected. We must demonstrate our credentials, as a reliable and cost-competitive supplier to their growing

dairy needs. Is that market big enough for all big dairy players to grow? We’ve actually added up the expected supply and demand numbers and weighed the risks with both. More than likely, supply will struggle to keep up with demand. If we don’t grow supply of those products, we’ll quickly be left out of the frame for customers selling into many rapidly expanding markets. If we’re not an integral part of these supply chains, we will not have the diversified options we could have. The rewriting of Chinese import regulations should be an important signal – the rapidly rising numbers of affluent Asian consumers will want far greater assurance of the safety and integrity of the sources of milk behind brands, and Australia has won strong

trust in this regard. Trust goes well beyond product integrity however, as it’s also about continuing to turn up as they grow. The case for growth goes way beyond addressing needs of customers and consumers. Growing industries attract capital, skilled people, workers and if done right - the commitment of supportive communities. This in turn brings governments to invest and provide policy settings – affecting infrastructure, trade deals and business regulation. Who doesn’t want to be part of that story? Now it is well accepted that we have to be a bigger industry, and it’s not just CEOs of Murray Goulburn and Dairy Australia talking about it. Fonterra, Warrnambool Cheese (WCB), Bega, Burra Foods and others

FRESH AGENDA STEVE SPENCER have publicly stated that volume growth is a primary driver of their strategies. Why would Saputo pay such a full price for WCB if it didn’t want it to grow in size and value in the future? Why did Bega decide to invest a portion of its profits on the sale of WCB shares in future growth of its farmers? It doesn’t matter whether the total milk production target is 12 billion or 15 billion over the next decade or so, as long as the target is a credible stretch.

It is stretch and vision that matters – to compel us to think differently about how we operate farms and processors, how we employ technology, how we connect with customers, and how we make best use of the available capital – all aimed at growing wealth. A stretch target like that will focus new capital and new players on this industry – owners, managers and workers. A large part of that growth will come from newcomers and new business models. Having a target and a game plan tells others what we want and where we want to go, and it’s a powerful thing to be doing. Consider the alternative, is it better to have no vision and no direction? If the industry decides – on a misguided belief that a domestic market will always return more - to focus only on the

domestic market, output will certainly stall and shrink, and this will develop into a scrap for a slow-growing retail market. If anyone doubts this, visit the UK industry with your eyes and ears open. The second growth question is for the individual business, which is down to the personal choices of owners and operators. It won’t be for everyone, but even if you don’t plan growth on your farm, being part of a growing industry can add to the value of your asset and your options. No one expects growth to happen for growth’s sake. If an industry collectively strives for growth, it will only come about if there is greater wealth created – additional milk will be the outcome. On farm, that comes down to how to manage farm business cash flow

and capital over the medium to long-term in a more volatile world. The trend line in milk value over time rises, but probably at a rate slower than the cost of inputs, labour and overheads, so producing “more from less” is critical. That’s where industry programs should and are now being aimed. We’re in a tough part of a market cycle, when many don’t want to think about growth. But if you keep your focus short and don’t get your business fit in tune with the world we’re in, you will never really come to terms with it, and you may miss the opportunity to be part of a really good story. • Steve Spencer is a director of Freshagenda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.

Export Index stabilises in November FRESHAGENDA’S AUSTRALIAN export index fin-

ished November at 145 points, unchanged from October. Cheddar – the major product influencing the index was relatively stable, with the index price down just 1%, after suffering a drop of 15% in October. Powder prices continued to lose value, with SMP down 5% and WMP down 3% during November. New Zealand production moved past its seasonal peak in October, up 5% on the prior year with the expectation of further slowing in production growth with sharply lower farmgate prices. While there were hopeful signs of stability for powder

prices during November, the last GDT event of the month saw the price index fall 3.1%, with SMP and WMP, down 5.7% and 5.1% to US$2299/t and US$2400/t respectively. Butter was the one bright spot, up 2% for the month, with demand strong particularly in US and Australian markets, and the market appearing to be fairly well balanced. As the year draws to a close, it’s difficult to believe how much things have shifted from this time last year – in fact the index has lost 33% of its value since November 2013. Powder prices have lost around half their value in that

time. Thankfully the Australian dollar has also lost some value, and may continue to support returns to exporters in the New Year, as the market rebalances and commodity prices start to recover. The index is a lead indicator of average export returns based on spot prices, currency movements and export mix. The index measures current market sentiment, but in reality it takes 3 to 6 months for prices to translate into actual returns, depending on the timing of contract negotiations. It was set to 100 in January 2000. For weekly updates visit http://www.freshagenda.com. au/

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DAIRY NEWS AUSTRALIA DECEMBER 2014

20 // BREEDING MANAGEMENT

Reducing the calving period pays off RICK BAYNE

EIGHT YEARS ago Mike and Kim

Jamieson arrived in Australia from New Zealand and took over a farm near Timboon in south-west Victoria where the calving was spread across nine months. Today they’ve cut the calving time by two-thirds and have an in-calf rate the envy of many. But they’re not resting on the laurels of their 14-week calving starting each April; next year they want to condense it to 13 weeks with the ultimate aim of a 12-week maximum. At the same time they have drastically reduced their numbers of empties to 5%. The Jamiesons talk about “doing the one percenters right” and that applies to breeding as it does to every other aspect of their farming. “When I got here we calved for nine months…there were cows everywhere” Mr Jamieson said. They bought the farm as a going concern with 150 cows and bought more cows to bring the total closer to 240. “The cows I bought calved in a reasonable pattern but I’m not sure what the pattern was for the cows that were on

the farm,” Mr Jamieson said. They decided to join the purchased cows and some ready to be mated on the farm. “Our next calving was still pretty long because it’s pretty hard to get cows that have only just calved back in calf. We had limited success at getting good mating. We did induce a few cows for a few years.” But gradually they admitted. “A lot of turned the corner and the cows were calvstarted to synchronise the ing when we were calving. breeding so there’s “We’d join for X WHO: no chance of getting amount of time and then Mike and Kim Jamieson them in calf.” take the bulls out and that WHERE: Last year they got would be it. In the early Timboon down to 5% empyears we’d preg-test about WHAT: ties over 15 weeks. “I January. If we had 60 cows Reducing calving time consider that not too empty, 20 were immedibad,” he said. ately chopped, 20 were But he still wants more. “You’ve got identified to chop later and 20 were to to push the bar higher. We’re aiming for be kept and mated next year,” he said. “We were hedging our bets. We can’t less than 5% over 12 weeks.” Mike said fertility had been “taking cut all the empties because it’s not their fault because the calving pattern didn’t care of itself” as the farm improved and synchronised the calving pattern. suit in the first place.” “When we open the mating we get At one stage they had 60 empties the vet out each time to check on the from a herd of 220. “That’s pretty huge,” Mr Jamieson non-cycling cows,” he said.

“We’ve been chopping the non-producers and generally getting a better and better herd. There’s no real secret to it.” The Jamiesons use Livestock Improvement Corporation for their breeding program. “I look at traits other than production. It’s an all-over thing; breeding, fertility, somatic cell count. Livestock Improvement have gone for such a robust animal that will milk for a number of years and continue to get in calf while still doing really good milk solids. I don’t talk about litres, milk solids is the important factor. These animals are focused on producing the maximum milk solids production at the lowest cost and I felt the Livestock Improvement’s bulls were going to help

us get there.” The Jamieson farm did more than 500 kgMs per cow last year. “The really good guys are close to 700 but they feed up to eight kilograms of grain per day and we’re feeding four. They might be doing two matings, we’re doing one.” They breed a crossbred herd. “It’s neither a Friesian nor a jersey,” Mr Jamieson said. “If we have a lighter cow we join it to a heavier cross-bred, if we have a heavier cow we go to a lighter one.” They aim for black cows and when it comes to the mating program they look at the size of the animal and the component levels for fat and protein. They use five jersey bulls each year so they don’t have trouble with tail end calving.

Dry season affects production MIKE AND Kim Jamieson moved to Australia from New Zealand in 2006 to avoid the prohibitive prices of land in their native country. They purchased 150ha

near Timboon and later leased 27ha in an adjoining block. Some of the land is native bush and scrub, leaving them with about 130 effective hectares. They aim for about 260

crossbred cows, though numbers have gone beyond 300 on the back of the successful breeding program. Now in his 30th year of farming, Mr Jamieson has

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bought a lot of experience across the Tasman but had to make some adjustments along the way. “It became apparent early on what the farm can sustain and what it can do production wise that’s economically viable,” he said. “We learnt a few lessons along the way.” The Murray Goulburn suppliers have about twothirds perennial pastures and a third of persistent annuals. Until about three weeks ago they were on track for record production. “We’re still ahead but we’re slipping down considerably now,” Mr Jamieson said. “We haven’t had a lot of rain in late spring and the soil profile is dry. Last year we did 140,000 kg/ MS which was a record, but the previous two years were 119,000 and 121,000. We’ve got all the levels right and pastures are

Mike and Kim Jamieson in the dairy.

in line. Even with a dry spring we’ll go close to 130,000 this year.” They buy in some hay and traditionally about a tonne of grain but last year they used about 1.3 tonne of grain and expect to do the same this year. “I like to shandy into the silage wagon some good quality wheat and hay. “That gives me a little roughage and `bung factor’ that keeps them a bit tighter and enables us

to maintain a round length of 30 to 35 days during the winter.” He says good feeding and close monitoring are the keys to maintaining animal health. “You’ve got to keep the feed up to them and have a good eye for when a cow’s not right. “I’ve always watch every cow walk in the shed. If you watch them you’ll pick up if they’re lame or any other problem.”

The Jamiesons have a new full-time employee, Dylan Biscoe, who impresses his employers with his eye for the cows and his care for his work. Farming is a big picture profession for the Jamiesons. “We try to the basics right – all the one percenters that add up to 100%. There’s no way you can prioritise any one thing above the other. It has to be a full farm focus.”

DAIRY NEWS AUSTRALIA DECEMBER 2014

BREEDING MANAGEMENT  // 21

New breeding indices provide more choice WHEN IT comes to

selecting bulls to use over their herds, dairy farmers will have more choice when three new breeding indices become available with the April ABV release. The new indices were announced at the Australian Dairy Industry Council annual breakfast, held in Melbourne last month. Australian Dairy Herd Improvement Scheme (ADHIS) general manager, Daniel Abernethy, said three indices were aligned with farmers’ differing breeding priorities. They were then developed following an extensive review process which involved direct farmer input on trait preferences and breeding philosophies. “It was clear from farmer feedback that while farm profit was a national breeding objective certain farmers placed more emphasis on different traits when making bull selection decisions,” Mr Abernethy said. “This finding supported the introduction of multiple indices.” The three indices are: the Balanced Performance Index, Type Weighted Index and Health Weighted Index. “While all three indices include traits that influence profitability, the focus on profitability and achieving desired gains for particular traits differs,” Mr Abernethy said. “The Balanced Performance Index, achieves the National Breeding Objective of increasing farm profit and will align to the breeding priorities of most Australian dairy farmers. “In addition two extra breeding indices have been developed to meet the needs of those farmers whose breeding philosophies put increased

emphasis on type or health.” ADHIS chairman and mid-north coast NSW dairy farmer, Adrian Drury, said Australian breeding indices must continuously evolve to meet the needs of dairy farmers which change in response to our farming environment and consumer demands. “The three new indices will help us make better decisions about which bulls will produce cows that are better suited to our individual farming situation,” Mr Drury said. Jersey Australia president and Mt Compass, SA, farmer, Peter Ness, said the new indices will be equally useful to those farmers who pick their own bulls and those who tend to rely on breeding and mating programs or an advisor. “The review process has included all sectors of the industry to hear what farmers and advisors had to say about indexes,” Mr Ness said. “The result is three indices that farmers can confidently use to meet their breeding preferences.” Aussie Reds president and Mt Gambier, SA, farmer, Graeme Hamilton said one size does not fit all when it comes to selecting dairy bulls. “The three new breeding indices give farmers more choice to customise their bull selections to their individual breeding needs,” he said. Holstein Australia president and Terang, Victoria, farmer, David Johnston, said all three of the new indices would be of interest to Holstein Australia members. “While many of our members will be keenly interested in the Type

CORRECTION In a caption on page 21 of the November issue of Dairy News Australia, we said: Grame Hopf selected this white cow from Alex McArthur’s herd as an ideal milking cow - not particularly tall, angular shoulders, wide rib cage, lots of room for the rumen, high pin bones in the pelvis and udder good sized and sitting well under the pelvis. This was incorrect. Mr Hopf says the ideal cow has low set pins, not high pin bones as written in the article.

Weighted Index, I also expect many to pay close attention to the Balanced Performance Index and the new Health Weighted Index,” he said. “Fertility and cell count have been particularly dif-

ficult to make decisions about in the past. “Personally, I will probably short list bulls based on the Type Weighted Index, then look at their Health Weighted Index to see what I’d be trading off

on that front. “The benefits of having three indices to choose from to match your breeding preferences will apply to all Australian dairy farmers, not just HA members.”

The new indices are aligned with farmers’ different breeding priorities.

DAIRY NEWS AUSTRALIA DECEMBER 2014

22 // MANAGEMENT

Pushing pastures to the max GORDON COLLIE

STRIVING TO improve

pasture use efficiency is a key focus for young NSW dairy farmers Daniel and Rebecca Cochrane. The amount of pasture their cows consume goes directly to bottom line profitability of the intensive grazing enterprise in the Wogamia district, just west of Nowra. The margin over feed costs is the critical performance indicator which reflects how successfully they are managing the property, Mr Cochrane said. “We like to keep the margin sitting over $8 per cow per day. There are times when we are pushing it over $9 which is good.” At the end of November, the indicator slipped

below $8, reflecting buy in feed costs, the need for increased irrigation and lower spring milk prices. Feed management is a continual challenge to maximise performance of their herd, currently milking about 325 cows on a dairying area of 115ha with dry cattle running on leased country. “I’ve got a fairly good idea of feed allocation to achieve a grazing equivalent of five cows a hectare in spring,” Mr Cochrane said. He returned to family dairying two and a half years ago after working in dairy genetics sales. His father Geoff has stepped back from day to day operation with Mr Cochrane and his brothers Tim and Tom each now farming independently. “Rebecca and I took over an existing dairy and

WHO:

Daniel and Rebecca Cochrane WHERE:

Nowra WHAT:

Pasture management

have been on a continuous business improvement program to lift production,” he said. “We are on track to supply about 2.65 million litres to Pauls this year which is getting close to our full potential.” Always open to new ideas, the couple are about six months into a two-year project hosting a local producer focus group sup-

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ported by both Dairy NSW and Dairy Australia. “We will be looking at all aspects of dairy business management aiming to learn and improve by sharing our experiences,” he said. During the second focus group meeting, discussion turned to the issue of making full use of pastures. There was an extra body of feed available after a rain break, but Mr Cochrane was keen to conserve as much fodder as possible to make silage. There was a suggestion that the grazing rotation could be sped up slightly to take advantage of the extra feed available. After the meeting, Mr Cochrane increased the pasture available to his milkers by about 15% and dropped the grain fed in the bale by 1 kilogram. Milk production increased by 1.2 litres a cow. Mr Cochrane said pasture would always be his cheapest milk production option, but it was important to take a strategic approach to buying in feed and producing a partial mixed ration based on his own corn and sorghum silage. “We have forward contracted a hay supply to lock in pricing certainty,” he said. Kikuyu pasture provides about half his feed base, oversown with annual ryegrass and oats. Milkers are fed a mixed ration on a feedpad for about six months of the year at variable rates according to seasonal conditions. The pad is gener-

ally operational between November and mid-February and mid-May to midAugust. “Kikuyu is pretty much the best weed we’ve got. We get some fantastic growth with a bit of nitrogen and irrigation, producing high volume feed of reasonable quality. “It handles grazing pressure and gives us consistently high production through to late summer, early autumn.”

Nowra dairy farmers Daniel and Rebecca Cochrane, and part of their herd.

Mr Cochrane said the kikuyu was stressed with a low rate dose of glyphosate, about 250ml a hectare, to allow the rye and oats to get established. “Last year we grazed it down and sprayed after seeding, but this year we are going to try and spray about 6 to 8 days before seeding in late Marchearly April. “We feed ryegrass from May through the winter months and the kikuyu is starting to come back towards the end of October,” he said. About half to a third of the pasture production

area is irrigated, depending on seasonal conditions. “We are in a 1000 mm rainfall area and we like to minimise the cost of irrigation and our labour input,” he said. They have been using the services of dairy consultant Neil Moss from the outset for farm management and nutrition advice, and are in regular contact to fine tune day to day operations. “He runs our feed rations through the CPM modelling program and the results are pretty spot on. “We take regular test

samples to build up an accurate picture of our feed regime, particularly the quality of our silage. Tests over the last couple of years give us a basis for comparison. “Our aim is to provide our cows with as much feed as possible, pushing our stocking rates up without cutting ourselves short. “It’s a matter of balancing quantity with quality. This season we’ve had to top some paddocks.” Mr Cochrane said their aim was to get daily milk solids per cow up from 1.7 to 1.8kg to 2kg and have production averaging body weight over a lactation. His milk price is secure for another 12 months and he said he was confident about the future industry prospects. The huge interest in Australia being shown by the Chinese was likely to put pressure on milk production and pull prices up.

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Dairy NewS AUSTRALIA december 2014

management  // 23

Slashing inputs proved a revelation John Fairley

gordon collie

WHEN A small dairy enterprise on the south western outskirts of Sydney slashed farm inputs for all the wrong reasons the result proved a revelation. The decision to process their own milk in the wake of dairy deregulation almost proved fatal for the Fairley family which has been farming in the Picton district for more than 150 years. “We had no choice but to stop spending because we had run out of money,” said John Fairley, who with his wife Sally launched Country Valley milk into the local market in 2004. Before the advent of social media and relying on word of mouth promotion, the business was slow to get off the ground, racking up losses for the first five years. “The result of cutting back inputs on the farm, the impact on our soil, was just unreal,” Mr Fairley said. “We did some soil tests and the results were unbelievable. In four years carbon levels went up 25%. We had healthy worm populations and the soil structure and water holding ability improved.” The only negative was that dams didn’t fill the way they used to because the rain was soaking into the soil rather than running off. The experience prompted the family to adopt a low impact farming regime with green manure crops for mulching and about five tonnes of composted chicken manure a hectare applied each year.

Where:

Picton What:

Input reduction

The use of chemical inputs has been reduced to one spray a year to prepare for a crop of ryegrass. Oats is also grown for grazing to supplement hillside native pastures. Grain feeding is limited to about 3 to 4 kilos a day. The dairy also uses waste brewers grain and Mr Fairley said he was keen to explore the possibilities of using other food waste as a resource. Effluent from the dairy and waste water from the milk processing plant is recycled on farm. “We haven’t used any urea in three years and the clover is growing like you wouldn’t believe,” Mr Fairley said. “There has also been a positive impact on herd health. Our cows are contented and healthy and their fertility levels are good. Because we don’t push milk production too hard our cows have a longer productive life.” The small herd of 100 to 110 Friesian-Jersey cross milkers on the 125ha property average about 20 litres of milk a day. The dairy operation is now supervised by son Tom, a seventh generation family member, with Mr Fairley increasingly focused on marketing Country Valley Dairy.

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DAIRY NEWS AUSTRALIA DECEMBER 2014

24 // ANIMAL HEALTH

Staff management influences herd health JEANETTE SEVERS

ALEX MCARTHUR

ventured into dairy farming eight years ago in a three-way partnership with his parents, Andrew and Louise, with a focus on considerable and quick growth. Lessons along the way have led him to acknowledge people management is the biggest challenge in farming, followed by herd health. And managing people influences herd health. With a background in sheep farming, Mr McArthur started with a 180 mainly Friesian-Holstein milking herd on 101ha at Maffra eight years ago, working with one other person. He has grown the herd to 700 milkers producing 470 kgMS/cow/year, grazing 220ha, using two dairies and employing seven people. The herd is now at a size where it is approaching selfreplacing status and is 80% Holstein. A lease block at Stratford and his parents’ farm at Meerlieu are used to grow out heifers, graze dry cows and cut silage and hay. “The calves are raised on milk at Maffra then spend six months on the lease country at Stratford, before they’re moved to

the home farm at Meerlieu,” Mr McArthur said. “They finish growing out at Meerlieu and are joined. “We try to keep everything we grow on the Maffra farm for milk production. “When we dry off cows, they all go to Meerlieu.” The dryland Meerlieu farm grows most of the silage and hay used at Maffra – this year harvest equated to one roll of silage and one roll of hay for each cow in 2015. One dairy runs all year round, milking a 400-cow split-calving herd; the second dairy milks 300 spring calving-cows. The second dairy is a 25 swing-over with stall gates and cup removers – designed as a one-person operation. The larger dairy is slated for replacement with the same infrastructure and one-person operation status. “We’re all looking at less labour intensive practices,” Mr McArthur said. “Since I started on August 8, 2006, I haven’t stopped. “There’s always ongoing development work, whether it’s the herd, pasture, buildings, irrigation system or upgrading the troughs. “As the herd has grown, we’ve had to keep develop-

WHO:

Alex McArthur WHERE:

Maffra WHAT:

Herd health

ing everything to support that herd to produce premium quality milk. “Everything that drives the system off Maffra is to produce milk.” Mr McArthur recognises his staff are an important aspect of how and at what pace the farm develops. Integral to that is herd health and management. He feels lucky his workers are well skilled and experienced in animal management, or are willing to learn. It is his own philosophy reflected back. “Managing such a large crew it is about the skills they have,” Mr McArthur said. “If you’re farming you need to manage people. If you want to grow you need to delegate. “We have different people for different positions – and people are given the opportunity to grow.

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Some of Alex McArthur’s herd of 700 milkers.

monia and considered different options. “In the end, the treatment program required visiting the farm twice daily, checking the herd and isolating sick heifers. “We think the outbreak was caused by a stressful event. We lost a dozen in all. “About four months later it flared up again but because we were monitoring them and were experienced, we only lost two heifers.”

Part of his ongoing strategy included selling some of the heifers to offset ongoing risk to production values. “At the end of the day our objective is to put milk in the vat. “We ended up selling them because I was worried about their production capacity,” Mr McArthur said. “In the back of my mind was the risk factor of holding onto them – and selling them gave me

money to buy replacement cows in the future if I need to.” His decision to sell a large number of the heifers was helped by his herd manager, Mike Gawne, buying cows. “Mike bought 50 cows and wanted to run them in our herd. “It means he can grow his business and negated our need to buy more replacements to fill a shortfall,” Mr McArthur said.

Intensive AI program means all hands on deck JEANETTE SEVERS

healTh sick cow alerTs

“If I can’t train somebody to take my place in the system, I can’t grow.” He has also been willing to seek advice, being mentored by Maffra veterinarian and dairy farmer, Dr Jakob Malmo and swapping experiences with Matthew Gault, a dairy farmer at Stratford. “When I first started dairying, Jakob offered advice and mentoring. He was very good at working through strategies with me to monitor herd health and meet their needs, and improve on my mistakes,” Mr McArthur said. “Matthew began dairy farming about the same time as me and we’ve been able to swap ideas and experiences.” Mr McArthur’s relationship with vets and his staff was very important last year when the heifer herd contracted pneumonia. “We’d put 180 of them through a drench program and all was well at Stratford,” he said. “Then six heifers died. We didn’t know if it was a random thing or something more serious. “We had two vets involved to treat the pneu-

runs a 700 milking herd, producing 470 kgMS/cow/ year, on 220ha at Maffra, supported by a leased block at Stratford and another farm at Meerlieu to grow out heifers and produce silage and hay. Mike Gawne manages 300 of the milkers and Lyndsey Heath, an AI technician, works with Mr McArthur on the breeding strategy for the overall herd. “Lyndsey is passionate about joining by AI. We work out the breeding

strategy and then they implement it for 300,” Mr McArthur said. “I manage the other 400 milkers. Last year we used a PG [synchronized] program and AI’d over seven days, with an 80% success rate. “This year we didn’t use PG and AI’d over 24 days, then mopped up with Friesian bulls. They’ll come out around Christmas/New Year. “The difference was manpower. “Last year we AI’ed 65 cows each day. This year we AI’ed 3-14 cows each day. “The yards we are

Alex McArthur, Mike Gawne and Lyndsey Heath.

using are not up to holding the total herd; and doing it in the short time frame and at such intensity required several people. “With larger mobs we need more people on the job and in the yards. “That means other

work gets delayed or doesn’t get done.” With the development plans including a new set of stockyards, Mr McArthur said the synchronized AI program can continue, if the manpower is available.

DAIRY NEWS AUSTRALIA DECEMBER 2014

ANIMAL HEALTH // 25

Teat end damage a leading cause of mastitis in herds ADRIAN JOE

ARE YOUR cell counts

increasing and above 100,000? Is your clinical mastitis above 10% of the herd for the whole year? If so, it will be costing 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 program. 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 overmilking 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 based in New Zealand.

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DAIRY NEWS AUSTRALIA DECEMBER 2014

26 // ANIMAL HEALTH

Tis the season for heat stress AS ANOTHER year

draws to a close, I would like to wish all our readers the complements of the season. No matter what your beliefs, it is important to reflect on all you have achieved this year, and to spend time with your loved ones. It is also important, especially for those with a young family, to try

and schedule some time away from the farm over the holiday season. That doesn’t mean the work stops and it is important to stay on top of essential management decisions over the summer period. Heat stress is a very significant issue all dairies must address. When cows are exposed to hot weather, they have a limited ability to basically

store up heat in their body and then allow it to dissipate over night. In times of extreme temperature, or high humidity, the ability of a cow to regulate her body temperature can be overwhelmed. The times when heat stress becomes really significant is when we receive a run of days and nights of high temperature and

ANIMAL HEALTH ROB BONANNO humidity causing the heat load of the cow to just continue to increase. The key measure is the

THI, the Temperature and Humidity Index. There are some really good tools that use tables of THI and weather forecasts to identify days or weeks of high risk of heat stress. Dairy Australia has some fantastic resources for predicting and managing heat stress, I would strongly encourage all dairy farmers to access these resources, to set up

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the alerts that warn you in advance of times of high risk. The cool cows website is a must for your favourites. When periods of high risk of heat stress are identified, a number of strategies can be employed. Some are simple management decisions like changing the time of milking to avoid the heat of the day, thoroughly wetting down the yards prior to bringing the cows in for milking or selecting paddocks close to the dairy with good shade. Active cooling can include using sprinklers during milking. Research suggests getting the correct droplet size can make a very significant difference to the effectiveness of sprinkler systems. Active cooling using fans can enhance the effectiveness of evaporation. Fans improve cooling significantly because as the air blows over the wet skin, it increases evaporation, which literally sucks heat out of the cow. This is known as the latent heat of vapourisation, and is an extremely useful ally in the fight against heat stress. Passive cooling by the construction of shade structures or strategic plantings of trees are also great methods of mitigating heat load. A nursery man once told me that the best time to plant a tree is 20 years ago and the next best time is today. I couldn’t agree more. A well-designed and maintained tree line is a real asset to any farm. Take care to ensure you get the correct orientation so that you don’t shade your laneways during the winter which can result in wet slippery laneways. Shade structures can be as modest as a bit of well-placed shade cloth right through to free stall barns costing hundreds of thousands of dollars. Every farm that sets about building a shade structure will need to do their own feasibility study to ensure it is appropriate to their needs and expectations.

Again, orientation is extremely important to maximise the effectiveness of the shade pattern and minimise the shading of areas of high traffic. Consulting with someone experienced in this field is critical. Once again, Dairy Australia have some great publications on this topic. If your prevention strategies fail, and you are faced with a cow (or cows) collapsed with heat stress/heat stroke, it is a serious emergency. Often the cow will go down with milk fever like symptoms, their respiration will become fast and they will be open mouth panting and often frothing at the mouth. Actively cooling these cows before any other treatment is important. Lots of cool water poured over the cow to soak her to the skin and then encouraging evaporation by fanning is useful. The aim is to get their body temperature below 39.2C. I have seen cows with temperatures over 42C survive once cooled and treated. Some cows will need calcium or 4 in 1, some anti-inflammatories and some oral or IV fluids depending on their symptoms. Great care must be taken administering treatment to cows who are suffering heat stroke, I have had them literally drop dead off the needle whilst being treated when I hadn’t ensured they were adequately cooled prior to treating. Far more common than seeing clinically affected cows is to see evidence of “sub clinical” heat stress. Milk drop, reproductive failure and other production losses are the most common, and most costly part of heat stress but are often largely invisible. Every dairy farmer should be making plans to ameliorate their risk of heat related losses this long hot summer as heat stress will be costing you a small fortune long before you see clinically affected animals. • Rob Bonanno is a former president of the Australian Cattle Veterinarians Association and a director of the Shepparton Vet Clinic.

DAIRY NEWS AUSTRALIA DECEMBER 2014

ANIMAL HEALTH // 27

Rollover crush wins award THE EZY Rollover Crush developed by the Mulcahy family - dairy farmers at Kyabram - won the Australian Machine of the Year award at the Elmore Field Days, held last month. Peter Mulcahy and his daughters, Victoria and Alexandra, started the business last year. “As dairy farmers, we know how hard it is to trim cows’ feet, how dangerous and unsafe it is tying cows’ legs up in the dairy with the risk of being kicked, and also how long it takes,” Victoria said. “So we decided to design a crush that would fix all our problems.

engineered in Echuca, were sold in January to a variety of farms, ranging in size from 150 to 1500 head. The cow is secured in the crush, which is then tilted on its side. Legs are restrained, which makes it safe and easy to trim

and correct any hoof problems. The crush can also be used to dry off cows, use teat seal and conduct minor mammary surgeries. The side of the crush also opens which means it can also be

used to conduct general surgeries. The crush simply needs to be bolted to the ground and plugged into a 240V socket. For more information visit www.ezyrollovercrush. com.au

Early Detection of Subclinical Mastitis is your key to higher profits This Mastitis Detector detects inflammation of the udder fast and reliably “After travelling and working on dairies in USA for most of 2013 we came

up with a design that can be used for hoof trimming but also double up as a

general farm crush for multi-purpose uses.” The first of the crushes,

Secured cows makes hoof care easier PROPER EQUIPMENT makes animal health care much more pleasant and, most importantly, much safer for both the cow and the farmer or vet. A Hoofcare handler has been specifically designed to cover not only hoof trimming, but most tasks, including tagging cows, drenching, calving, foot trimming and even a caesarean. When hoof trimming, the cow is put in the unit and locked in the head bail, while a belly hoist is placed just behind the shoulders (under the belly) to help the cow keep its position. A belly strap is never to be placed close to the udder as this can do irreparable damage to the milk veins. Once the Belly strap is in place, either of the front legs can be raised on the adjustable front hoof trim leg rest. There is a rear

leg hoist to lift either one of the rear legs. The handler is designed so one of the front legs can be lifted and strapped down on the support block while the diagonally opposite rear leg is restrained with the rear leg hoist. This provides added stability and security. The rear leg hoist functions best when a strap or vet rope is attached in a noose like manner just above the hock and leg joint, this will tighten the tendon when lifting the leg and reduce nerve sensitivity and blood flow. The Hoofcare unit has two full size side gates and an anti-sway bar which stops the cow sidestepping when all gates open. The Ellinbank research farm has used a Hoofcare handler for several years. • For more information, visit www.technipharm.com.au or call 1800 124 034.

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DAIRY NEWS AUSTRALIA DECEMBER 2014

28 // ANIMAL HEALTH

Locked in with individual feeding DAIRY CALVES

in Australia are predominantly reared in groups from birth until weaning. This results in the communal feeding of milk which may be once, twice or three times daily in non-automated systems. Feeding milk to groupreared calves can be stressful and inefficient for both calf and operator because calves drink at differing speeds and can compete with each other for teat space. As a result, feeding calves may become a time consuming job, requiring multiple staff, to ensure that all calves receive their daily allowance of milk, which still cannot be guaranteed.

In group feeding systems, it is difficult to identify slow or incomplete feeders, which can be an early sign of sickness. Such calves may not be picked up early enough which can increase their risk of morbidity (sickness) and mortality (death). The concept of locking head bails for the feeding of calves is not new. They were used decades ago with variable success as the designs differed greatly. They became less popular as more convenient methods of group-feeding calves were developed. However, there are consequences of convenience and now, with research suggesting that our dairy calves are not being fed to reach their full potential, the more recent methods of

The Vet Group Integrated animal health solutions

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GEMMA CHUCK

feeding calves in large groups are no longer suitable. Locking head bails are available in a range of designs, varying in strength, functionality and cost.

Some models are deemed to be overengineered with many moving parts, which contribute to overall weight and ultimately expense. When choosing a

BENEFITS OF LOCKING HEAD BAILS: ■

Each calf receives a known consistent volume of milk.

■

Slow drinkers, with no underlying disease, can be kept with their age group. This enables a true all-in all-out system with improved biosecurity.

■

Early identification of sick calves allows early treatment and increases the likelihood of a favourable outcome.

■

May help in the prevention of cross-suckling behaviour.

■

Supports accelerated growth programs where calves need to be fed a known volume of milk.

■

Calf feeding becomes a one person job, regardless of pen size or number of pens.

• Human resource management and recruitment

■

No competing for teats, bunting or stealing of milk ration.

• Mastitis and milk quality investigations and advice

■

Does not matter how fast or how slow each calf feeds.

• Consultancy, nutrition and business support

■

Minimal staff training required.

■

Safe, fast and effective delivery of milk.

■

Low physical demand on the calf rearer, leading to increased longevity in the job.

The Vet Group Farm Services • Clinical veterinary services

• Calf health and disease prevention • Lameness treatment and prevention

• Bovine reproduction services

Phone: 1300 838 700 www.thevetgroup.com.au

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The locking head bails have also allowed farmers to utilise accelerated growth programs which rely on individual milk feeding systems.

model for your calf shed, it is important to consider the number of calves per pen (determined by calving pattern and time period calves spend in the shed) and whether or not there is room for the equivalent number of head bails and an access gate to the pen. Access gates are essential to prevent injury to calves and staff. Regardless of the model, head bails are not intended to be climbed over. Other considerations include whether the head bails will be fixed or hinged, how the pens will be cleaned out, what type of feeders will be used and how milk will be delivered to the calf shed. A common theme is for milk to be transported from the dairy in a milk cart to the calf shed, where it is pumped to the individual feeders via a trigger hose. This has proven very popular due to the

ease and speed of milk delivery without the need to lift and carry buckets of milk. This consistent, stress-free feeding regimen has shown health benefits and increased growth in dairy calves and more efficient use of staff at feeding time. The locking head bails have also allowed farmers to utilise accelerated growth programs which rely on individual milk feeding systems. In hot weather, routine feeding of electrolytes has proved beneficial to help reduce heat stress and disease events. The locking head bails allow fast and effective feeding of electrolytes, enabling all calves to receive a known volume. • Dr Gemma Chuck is a dairy vet working at The Vet Group in south west Victoria. She has a special interest in calf rearing and is currently undertaking her PhD in this area at The University of Melbourne.

Dairy NewS AUSTRALIA december 2014

IDW preview  // 29

Managing downer cows effectively EUROPEAN AND North heifers will fully stand when euthanised.” Dr Steinfort strongly American dairy farmers have mostly submerged in water,” emphasised the importance been using cow floatation Dr Steinfort said. “From our observations of using the RiserTank within systems for several decades. Gippsland-based vet John and feedback, 95% of these hours of a cow being down. “We see so many cows doing Steinfort says the float process cows and heifers will make a is based on the principal that successful recovery and their further damage when struggling to get up when initially a kilogram of body mass down. displaced in water reduces “Many dairy the effective body weight “As a rule 80% of cows managers have by the equivalent amount. and heifers will fully designed new protocols “Hence, one feels stand when mostly around their downer lighter in water and so cow management do cows when placed in submerged in water.” based on the early floatation tanks.” identification of a Dr Steinfort said floatation tanks (or Riser recovery time is significantly downer cow, followed by diagnostic procedure and then Tanks) provide a two-fold reduced. “We expect most cases to into the RiserTank. function – they assist with the “Their testimonies of diagnosis of a cow’s condition spend between 1 to 4 days in the and provide a means for faster RiserTank with full recovery of 80% recovery rate prove this is repeatable as long as the the cow and lactation. recovery. “The cows/heifers who downer cow is prioritised and Steinfort Agvet have designed their RiserTank and don’t fully stand - their back protocols followed.” RiserTanks are available in their use methodology to end floats whilst standing on decrease the negative impact their front legs - generally Australia and manufactured by of both leaving cows and heifers have more serious problems Steinfort Agvet. sitting for 23 hours a day and and a successful recovery is • Dr Steinfort will be presenting a highly doubtful in the short to seminar on downer cow diagnosis the struggling to rise factor. “As a rule 80% of cows and medium term. They are often and management at IDW 2015.

Tips for proper cow restraint Fred Hoekstra

WHEN A cow is being restrained there are some principles that always apply. ■■ The cow needs to be comfortable ■■ The operator needs to be safe at all times ■■ The operator needs to be in control at all times If the cow is not comfortable she will be a lot more unsettled. Consider the surface the cow is standing on. The cow must be standing on a flat or sloping up surface as a cow does not like to face downhill if you are lifting her back feet. She will fight you all the way. Purpose built hoof trimming crushes, like the WOPA Hoof Treatment Crush, have a belly strap to support the cow when she loses her grip and falls over.

An added benefit of this belly strap is that it calms the cow down as cows relax when you put pressure on their belly. Some people like to have a leg tied up just above the claw against a bar. It makes the leg sit more rigid but if the cow should go down there is a very high risk of injuries such as broken legs or dislocated hips. Lifting from the hock is much more comfortable for the cow and because she can still lean on the raised leg there is very minimal risk of injury. The operator needs to be safe at all times. When trimming a back leg of a cow the leg should be lifted from the hock and the trimmer should always stand beside the cow. The cows’ leg should be lifted high enough so that you can comfortably lean onto

the cow with your back pretty much upright or slightly bent forward. You can achieve this by going through your knees. Leaning onto the cow and keeping your back straight is the key to comfortable and safe trimming. The physical touch also gives the cow a sense of security and helps her to relax. When you trim a front foot always have one of the back feet raised. She is not only more stable but it makes it harder for her to kick forward. The operator must be in control as cows sense when somebody is nervous and lacking

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confidence. When a cow is tied up in a crush you should always be able to lift or lower her using winches without handles flying around by themselves. A braked winch with reduction is the answer here. If you are interested in improving your cow and operator comfort, safety and control speak to us about the WOPA Hoof Treatment Crush. • Fred Hoekstra is a hoofcare expert and founder of VeeHof Dairy Services, distributors of the WOPA Hoof Treatment Crush. They will be exhibiting at IDW.

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DAIRY NEWS AUSTRALIA DECEMBER 2014

30 //  IDW SEMINAR PROGRAM

Three days of speakers TUESDAY 20 JANUARY 9AM

Dairy downer cow management Speaker: Dr John Steinfort – Steinfort Agvet

Vet Dr John Steinfort will talk on the diagnosis, treatment options and general outcome expectations on a range of downer cow conditions. John has developed a diagnostic procedure for

downer cows which assist dairy farmers in their decision making processes and management options for downers cow. John will also explain how the Riser Tank floatation system works

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Homemade Ricotta Speaker: Jason and Annie Chesworth – Hunter Belle Cheese Jason Chesworth manages the wholesale cheese department for Hunter Belle Cheese, the Chesworth family business in the Hunter Valley, NSW. He and wife Annie competed on My Kitchen Rules this year. They will show how to make ricotta cheese and several dishes, including the bruschetta and chocolate baked ricotta they cooked on Better Homes and Gardens. 11AM

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Managing mastitis with an app Speaker: Erica Oakes – Dairy Australia Dairy Australia’s mobile app, the Countdown Mastitis Toolkit, is helping some farmers save tens of thousands of dollars every year. and local Murray Dairy farmers will demonstrate the App, how to use it and what it can do. MIDDAY

Australia’s New Balanced Performance Index Speaker: Peter Williams – ADHIS

From April 2015, the Australian Profit Ranking will be replaced with a new Balanced Performance Index to identify the country’s leading bulls, cows and herds. The Balanced Performance Index identifies animals that generate greater profit through a combination of efficient production, longevity, health, type and workability traits. In addition, two further indexes will be released that focus on type (Type Weighted Index) and health (Health Weighted

Index) that support a range of breeding philosophies.

range of industry leading semen and embryo suppliers.

1PM

WEDNESDAY 21 JANUARY

How to Accelerate Calf Growth Speaker: Allan MacGillivray ProviCo The practise of milk fortification is a useful tool to ensure better growth results in well managed calf rearing operations. This seminar will explore the options available to get the best results in your rearing setup. 2PM

Thank Goodness I Got The Short Straw Speaker: Malcolm Ellis – LIC New Zealand

Did you know that by using Short Gestation Length semen at the end of the mating period you will be able to achieve a more compact calving pattern and more days in milk? Malcolm Ellis will talk on how, in a 350 cow herd with normal submission and conception rates, a farmer could stand to gain around $4500 in extra income through more days in milk with the use of SGL in weeks 7-10 of mating (based on average of 1.5kg/MS per animal and $5.30 pay out).

9AM

Australia’s New Balanced Performance Index Speaker: Peter Williams – ADHIS (See Tuesday’s program for details.) 10AM

Transition feeding: latest advances and benefits of pre and post-calving diets Speaker: Dr Ian Lean – ProviCo The importance of DCAD and the right mineral balance in the diet of cows in the last 21 days before calving has been highlighted in various publications over the past few years. The importance of DCAD immediately post-calving is an area of nutrition that has received far less press and yet it has great relevance to how well the lactation begins. This seminar will include a review of the importance of DCAD in the whole transition period from 3 weeks prior to 3 weeks post-calving.

How to Be Investment Ready Speaker: Neil Lane – Dairy Australia The Australian dairy industry has become increasingly attractive to investors from both international and domestic sources. Investment on farm is needed and Australian dairy farmers are being increasingly exposed to alternative models of attracting capital into their businesses from both on and off shore sources. Neil will discuss what the Australian dairy farmer can do to be ‘investment ready’ and what pathways are needed to create successful farm businesses. Neil’s goal is to help dairy farmers achieve better business outcomes and higher profits. 1PM

SemexWorks A Step Ahead Speaker: Jay Shannon – Semex

11AM

Achieving Superior Performance from Superior Genes Speaker: Andre Nel Ridley

3PM

The Gene Market – Marketing Genetics on an E-Commerce Platform Speaker: Shane Ashworth - Total Livestock Genetics Dr Shane Ashworth will discuss the evolution of the electronic world of marketing genetics. The Gene Market is a customdesigned selling platform giving everyone the ability to buy and sell genetics. The independent e-commerce website showcases genetic material from a diverse

MIDDAY

In this presentation Andre highlights the economic impact of not exploiting the full genetic potential of a dairy cow. Discuss what nutrients are required to allow a cow to perform to the genetic production, health and reproductive traits we have selected for. We will also investigate which feed additives can assist in optimising cow performance.

This seminar will help you find the best genetic solution for your herd. SemexWorks offers: It’s Easy – Based on a simple, touch step-by-step process that helps define your strategy; It’s Right for You – Economics are customized to precisely match your business; It’s Flexible – No matter what path you choose for your dairy, SemexWorks can accommodate it. 2PM

Adding value to Holsteins through genomics Speaker: Graeme Gillan - Holstein Australia Genomics has the potential to provide dairy farmers with the tools to identify the genetic merit of their animals to accelerate the genetic gain in their herds. What underlies the uptake of

Dairy NewS AUSTRALIA december 2014

IDW SEMINAR PROGRAM  // 31 these technologies and ultimately their value to producers is the way they are communicated.

Separating Fact from Fiction Speaker – Dr Dennis Scott – Ethical Agents International

3pm

The Cow Manager Speaker: Wayne Conrad - World Wide Sires USA

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Thursday 22 January

Metabolic diseases remain an important impediment to animal health. Oral milk fever remedies, in particular, vary greatly in safety and efficacy and there is a lot of misinformation about their use. The basic principles are simple and during this seminar will be succinctly explained, indicating what works and what does not work. Note: Breakfast will be supplied for listeners. RSVP for this seminar therefore required. Phone Agri-Gene on (03) 5722 2666.

8am

9am

Milk Fever –

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Resistant Genetics Speaker - Jay Shannon - Semex Semex’s exclusive, patented Immunity+ sires have been tested and confirmed to have high levels of immune response. Studies show that Immunity+ sires pass on their natural defence to their daughters and future generations - 27% less mastitis;17% less metritis; 32% less retained placenta. 10am

Managing Milk Composition

composition they are genetically capable of. In this presentation we will investigate how the diet can be manipulated to maximise milk solids production most cost effectively. 11am

Energy Cost Reduction Strategies for Dairy Farmers Speaker: Colin Scott - Thermal Recovery

Systems & Tony Smith - Dairy Solar Thermal recovery uses the waste heat from your milk vat to make hot water for free. It also improves the efficiency of your chiller plant, further lowering costs. Expect payback periods of four years or better. Colin and Tony will present case studies from dairy farms that have utilised thermal recovery

and/or solar power. Midday

How to Be Investment Ready Speaker: Neil Lane – Dairy Australia (See Wednesday’s program for details.) 1pm

Raspberry & White Chocolate Cheesecake With: Jason

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RISERTANKS An advanced system for the management and diagnosis of Downer Cows and Heifers

Speaker: Tim Harrington - Ridley To optimise the return per cow we need to ensure they are able to produce milk at the fat and protein

Chesworth – Hunter Belle Cheese In this session Jason will show you how to whip up a simple main and dessert. Both dishes are among Annie and Jason’s favourites, Steak with Blue Cheese Sauce and Raspberry and White Chocolate Cheesecake. Both dishes featured in their Instant Restaurant on Channel 7’s My Kitchen Rules.

New range of models available.. Economy, Standard and Stud Cow Risertanks, with a choice of wheels with tow hitch, double steel walled insulation, canopy covers, front gate and all with Rinnai Gas hot water heater, feeders and Pelvic Lift MK3 cow lifter and transport system. Steinfort Agvet Pty Ltd 3/15 June Court, Warragul, Vic 3820 Phone 0428 595 957 (John Steinfort) johns@steinfortagvet.com.au • www.steinfortagvet. comau

AUSTRALIA DESIGNED AND MANUFACTURE D TO LAST!

DAIRY NEWS AUSTRALIA DECEMBER 2014

32 // MACHINERY & PRODUCTS

Spreading liquidised urea with Tow and Fert CHARLIE COOTE was impressed when he first saw the Tow and Fert Multi 1000 fertiliser applicator at New Zealand’s Mystery Creek Fieldays some years ago. “It has always been our goal to find a more environmentally responsible and economic solution to farm fertiliser; liquidising nitrogen has helped us do this,” he said. Charlie and Marion milk 750 cows at Mooroopna in the Goulburn Valley, on the banks of the Goulburn River opposite Shepparton, with their son, Hayden and his wife Heidi. They have been on the property, which totals 546ha including a run-off block, for seven years and the place needed a lot of refurbishment when they started. “The irrigation, the laneways, the fencing, it’s been massive and it’s not yet finished by any means.” The machine is manufactured and marketed by New Zealand company Metalform Tow And Farm and about the time that Tow And Farm were expanding into Australia,

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they ran a demonstration at the farm next door to the Cootes. The result was that both neighbours each purchased a unit in August last year. The Multi 1000 has a 1000 litre tank and a 20m boom, using a patented recirculation system and vicious agitation to dissolve granular urea into a solution to use less nitrogen per hectare and get the same response. Tow And Farm designed and built their own 3” stainless steel trash pump and the whole unit is powered by a Kohler 7 horsepower four-stroke 208cc engine. Because it does not require a PTO it can be easily towed by a small tractor or a ute. The application nozzles are located at each end of

the boom and the direction of the spray can be adjusted to suit the wind conditions. The published application rate varies from 50 litres/ hectare at 25km/hr with TF15 nozzles to 650 litres/ hectare at 5km/hr with TF50 nozzles. Mr Coote said they are spraying mainly urea and a carbon source, usually lime flour. “What attracted us was that we could liquidise the urea, use half the normal rate and get our ‘bang for the buck’. And that has proved correct,” he explained when we visited in mid-November. “We couldn’t find anything on the market that was specifically designed to turn urea into liquid and then spray it out.” They liquidise 350kg of urea with 750 litres of water. The time taken for the mixture to dissolve is dependent on the temperature at the time, but takes about 10 to 20 minutes, and they add additives to it as needed. The 1000 litre tank covers 8ha per application. “It is a relatively expensive machine, so you have

Charlie and Hayden Coote on their Mooroopna dairy farm.

WHO:

Coote family WHERE:

Mooroopna WHAT:

Fertiliser applicator

to know that it’s going to do what you want. It’s wellmade and with good back-

up service. We haven’t had much call for that, anyway. Suffice to say that we are very pleased with the results.” Hayden is the main operator of the machine and said it is simple and easy to use. “It does more than one job; we incorporate it in our farm fire plan in summer by keeping it on standby full of water as it is well equipped for firefighting. “We can suck from the dam and it pumps out the water like a wash-down yard hose. It has already been used twice with good results.” They spray the paddocks “following the herd”. It works out as a rotation of 35-40 days in winter and 18 days in the spring. “It’s a job for every second day.” At the time that we visited in mid-November the machine was hooked up behind their Massey Ferguson 7614, but they also use the ute and a smaller tractor to tow it from time to time. The Cootes also have a 90hp Valtra, a 60hp Case IH tractor tractor and a 130

hp telehandler to support operations. Charlie said they are utilising water from the adjoining sewerage treatment facility. “We have a pipe and riser system covering 210ha fed from the effluent and the channel in a closed farm system. The primary pump runs virtually 24/7. “We have just planted 50ha of fescue watered by a pivot irrigator with a 989m radius, which we are told is the largest in Austra-

Hayden Coote with the Metalform Tow and Fert.

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lia. It can cover 120ha and is powered by two 55kW units. “By growing more grass and fodder the tow and Fert helps maximise effectiveness of these huge irrigation upgrades.” The Cootes employ three full-time workers and Charlie says it’s a good team and they all work hard. “Tow and Fert helps us all by saving us the most precious commodity time.”

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DAIRY NEWS AUSTRALIA DECEMBER 2014

MACHINERY & PRODUCTS // 33

40 years and still rolling out bales FORTY

YEARS of making its Roll-Belt balers, and sales of 235,000 machines, is prompting manufacturer New Holland to affix a ’40-year’ decal to a new variant of this globally popular machine, the company says. The latest generation Roll-Belt is said to “redefine” round baling, with technology that can improve capacity by 20% and density by 5%. New Holland introduced the Roll-Belt variable chamber baler series in 2013, with customised feeding systems like the SuperFeed and CropCutter rotor options. The new ActiveSweep crop processing solution also offers “tailored” baling. Now new Roll-Belt variablechamber round balers are replacing the BR7000 series, with 20% greater capacity. Many features will enhance productivity, the company says. “The Roll-Belt baler enables operations to specify the baler that suits their needs,” says Greg Moore, New Holland hay and harvest product specialist. “The standard rotor SuperFeed and professional CropCutter variants enable tailored baling. “The all new pick-up, dual density system and endless belt design will deliver significant productivity gains.” The pick-up is redesigned to boost capacity by up to 20% in

silage. Buyers can choose between 1.8m and 2m configurations. The standard heavy-duty, five solid tine bar pick-up with reinforced rubber tines – 10% stiffer laterally and lasting five times longer – maintain pick-up performance in difficult, uneven and stony terrain, says the maker. The new standard feed-assist roll transfers the crop from the pick-up to the rotor while simultaneously merging the flow of the crop to ensure it matches the exact width of the bale chamber. The folding castoring gauge wheels make changing from transport to field configuration sim-

pler. The wheels swing up and round, and are locked in the transport position without having to be removed. The SuperFeed standard 455mm rotor, with New Holland’s ‘W’ pattern fingers, maintains high throughput of all crops. The ter variant delivCropCuters the densest bales, with 15 integrated knives for

fine chopping. The maker’s DropFloor function is designed as a time-saver to be operated from the cab. When large wedges of crop block the rotor, the floor is lowered to provide more space in the feeding zone and baling can continue. The Roll-Belt baler has four 273mm wide belts which prevent losses and improve tracking performance. The increased belt stability ensures a large contact area with the crop to improve reliability and bale formation. Endless belt technology ensures the belts are strong as there are no joints. This eliminates stretching for uniform bale formation. And the belts’ texture makes cleaning easier.

New Holland super feed.

Massaging liner wins top prize DELAVAL’S CLOVER milk liner has won a top prize at Euro Tier in Germany. The liner won the DLV innovation of the year award 2015 in the category milking technology. The product exemplifies form following function, the company says. The design ensures the liner stays in the proper milking position and has a massage effect, ensuring the cow’s comfort without compromising milking performance. As a result teat health improves and mastitis cases are reduced. The DLV innovation of the year awards have ten categories including feeding technology, animal welfare, software and milking technology. “We are honoured to win this award,” said Jean-Jacques Dreier, portfolio director liners and tubes at DeLaval. “It is great to be accredited by DLV for… products that enhance animal welfare, reduce costs and increase productivity for our customers.”

The company’s Clover liner 20M suits cows with average teats, the liner 20M-EX suits cows with average teats but wide udders, and the liner 20S-ST is for cows with average-to-short teats. Combining the DeLaval Clover liner with its Harmony cluster is the perfect match to ensure milking performance and udder health, the company says. DeLaval also won a silver medal in the category for its InService Remote. Criteria for selection included optimising labour management, facilitating work safety and reducing energy costs. The system monitors milking solution equipment remotely, ensuring optimal performance and productivity 24/7/365, enabling farmers to manage their dairy operations from their smartphone. “It shows that we’re on the

DeLaval’s Clover milk liner has a massage effect.

right track with our innovations,” a spokesman said. “[The remote] supports our customers in increasing throughput and yield while keeping udder health under good control.” EuroTier is said to be the world’s largest innovations marketplace for machinery, instal-

lations and farm inputs for professional animal husbandry. There were 270 innovations submitted by 156 exhibitors from 19 countries to the EuroTier organizer. The four-day event attracted 2360 exhibitors from 49 countries.

DAIRY NEWS AUSTRALIA DECEMBER 2014

34 // MACHINERY & PRODUCTS

Finding a Feraboli under the Christmas tree Australia. Some of their newer underfoot, dirt laneways round balers make some solid (not slippery) undergood YouTube viewing and foot, and warm nights are with aggressive styling and all joining the calendar in names like ‘Extreme’ they indicating that summer is sure look the part. upon us. The 165 (a mid-90s Summer, of course, model) is a bit more means both two things: sedate, but seems to be hay season and Christmas. a good mid-range older My day job and dairy JOHN DROPPERT baler. interests preclude me from Research was pretty difwish list for this year, but wishing for the Christficult, since apart from a last year’s ‘gift’ is worth a mas present of a tight hay brochure with basic specs, mention. market to help fund my the only web forums where I didn’t really need a modest fodder producit rates a mention are in round baler until I saw a tion venture, ruling out Italian. ‘well loved’ Feraboli 165 the most obvious linkage From what I could Sprinter advertised locally, between the two. ascertain through However, this It picks up hay off Google Translate leaves me free to conthough, there are at least centrate on my ‘oper- the ground and a few satisfied owners ating costs/systems turns it into wellthere with older optimisation’ presents, shaped bales; which out machines soldiering otherwise known as on well; or fond mem‘new machines I’d like at least provides the satisfaction of a ories of the one they to buy’. The beauty of Christmas present shouldn’t have sold. So I took the plunge, buying presents for that gets used. buying the machine oneself is that they can ‘as-is’ (i.e. ‘barely made it by a seller who clearly not only be second-hand, through the last job before wanted it gone. but as clapped out, unrelithe owner decided he’d Feraboli is an Italian able and potentially catahad enough’). manufacturer, seemingly strophic to life and limb Fortunately, it came not represented as widely as need be (and budget in the world as the top-line well-supplied with spare allows). tynes, as I spent a lot of brands, but with a decent The latter is, of course, time getting to know the presence in Europe, and strongly discouraged. I pickup by replacing many an active importer here in haven’t yet settled on the GRASS CRACKLING

GRUNT

A ‘well loved’ Feraboli 165 Sprinter baler.

Strength / Quality / Performance

titan Series 7.8 - 25m3 The Titan Series Forage Wagons are built for the serious farmer. Heavy-duty 13mm floor and elevator chains and larger diameter sprockets are designed to handle larger and heavier volumes of material with ease. Larger floor and elevator shafts and bigger gearboxes give trouble-free operation and extended service life, with less time needed adjusting chains.

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of them after it crashed its way through a shear bolt on the first test run. Like many older balers, the control box links directly to the tractor’s battery, making loose cabling a leading cause of sudden power loss. On one early occasion when the box blacked out mid-tying cycle, I attempted to investigate the condition of its fuse, only to find extracting it produced several pieces of fuse. Approximating their relative positions and jamming all of these pieces back in together produced a surprisingly effective workaround. It’s not like I had a warranty to worry about voiding. The box itself is a prize irritant. It provides a curious mixture of English and Italian screen messages, and has one level of audio tone that can signify anything from the tailgate being open for ejecting a bale, to a catastrophic

malfunction – but seems best suited to screaming ‘bloody murder’. It has many buttons and is highly programmable; the user difficulty lies in assessing whether you’re doing something wrong, or whether a button simply no longer works. The twine cutter is another on-again, off-again affair, probably due to my self-taught adjustment knowledge. But it gets the job done, and overall, the old Feraboli is a pretty handy piece of gear. It picks up hay off the ground and turns it into well-shaped bales; which at least provides the satisfaction of a Christmas present that actually gets used. • John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.

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