Watchdog targets processor price cuts PAGE 8 HOMEGROWN FEED
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MARCH, 2017 ISSUE 78 // www.dairynewsaustralia.com.au
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NEWS // 3
Since April last year, dairy farmers who supply Lion in SA and Queensland have had the opportunity to access brewers’ grain for stockfeed at competitive rates. Qld farmers Ray and Catherine De Vere, pictured with Lion’s Cameron Whitson, say the competitive price has reduced cost of production by 3c/litre. Now, Lion has extended the program to their suppliers in NSW, Victoria and WA, utilising spent grain from breweries in those states. NSW farmers will also be eligible to apply for citrus pulp, sourced from Lion’s juice operations in Leeton. Interested farmers should contact their Lion farm services officer or DFMC representative.
Research into mastitis vaccine. PG.09
Australian suppliers could get a stake in Fonterra
Hitting the ryegrass jackpot. PG.21
SUDESH KISSUN
FONTERRA CHAIRMAN John
Wilson says overseas milk suppliers could be allowed to own shares in the co-op. Speaking at the NZ Co-op business leaders forum in Auckland recently, Wilson did not rule out a co-op linkage with farmer suppliers in other countries. “The opportunity to form some sort of cooperative linkage we certainly believe is possible,” he says. “It won’t be easy – surprise, surprise – but is certainly possible. My view is that those opportunities
Plenty of grunt in Ford 7700. PG.24
NEWS .......................................................3-11 OPINION ...............................................12-13 MARKETS ........................................... 14-15 MANAGEMENT ................................16-18 ANIMAL HEALTH ...........................19-20 PASTURE SEEDS ...........................21-23 MACHINERY & PRODUCTS ...................................... 24-26
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are ways but this is an evolving issue.” Shadbolt says Fonterra needs more milk to grow the business. “As demand for dairy grows, we need to have stickability with dairy farmers in other parts of the world. We don’t want not to have the milk.” Federated Farmers dairy vicechairman Chris Lewis says it’s a decision for Fonterra shareholders. “If the directors and management of Fonterra can come up with an exciting proposal then farmer shareholders can debate and decide.” Australian farmers some years ago expressed keenness to join as Fonterra shareholders.
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Fonterra director Nicola Shadbolt told the business leaders forum that in her travels around the world she is often asked by farmer suppliers about the possibility of owning Fonterra shares. “The ‘belonging’ is the bit they are missing,” she says. But this also means coughing up $880,000, so there’s “a slight cost” involved, says Shadbolt. “But if there are other ways of structuring that, the belonging can still happen at no capital cost.... some co-ops in the Nertherlands have class A and class B members. Class B members don’t have all the rights of class A members, so there TH1848M 25-8-15
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are becoming more real today than in the past.” Wilson told the forum that of the 23 billion litres of milk processed by Fonterra last year, NZ farmers supplied 17.5b l. The rest is collected and processed in Australia, South America, China, Sri Lanka and Europe. The average farmer shareholder in NZ has $880,000 invested in the co-op. Wilson points out that Fonterra has “very strong control and ownership mechanisms”. The forum heard there is an appetite among overseas suppliers to own Fonterra shares but capital could be an issue.
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DAIRY NEWS AUSTRALIA MARCH 2017
Rising energy prices loom large WATER PRICES are
already a big issue for many in the dairy industry, but cost hikes in gas and electricity prices are set to cause more input cost headache for processors and farmers alike. Processors are already experiencing rises in gas prices of around 5-10% each year, but the industry’s peak lobby group says a looming gas crisis will drive cost rises of 50-100% or more over the next two years. Unlike electricity, which can be produced by alternatives such as solar and wind, processors have no choice but to use gas to pasteurise and dry milk in manufacturing. Interim Australian
“Australians should be enjoying cheap gas prices but a high percentage of our gas is being exported.” Dairy Farmers (ADF) CEO, John McQueen said increasing gas costs will hurt everyone across the supply chain. “The gas price rises will have a flow on effect and will be felt by dairy farmers through their processors,” he said. The steep rise in gas prices is due to supplies being diverted to meet international liquefied natural gas (LNG) supply contracts, low levels of exploration and forecast production, restrictions on onshore exploration and development in some
states and territories, and infrastructure constraints. “As the laws of supply and demand would suggest, Australians, sitting on bountiful gas reserves, should be enjoying cheap gas prices,” Mr McQueen said. “But that’s not the case as a high percentage of our gas is being exported overseas.” Mr McQueen said while it was understandable why many communities and farmers are concerned unconventional gas exploration, also known as with hydraulic fracturing
Dairy News Australia, February, 2017.
Calf sells for $251,0 00. PG.19
Strong silage yields.
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PG.22
wagon. PG.26
NEWS ........................
...............................311 OPINION ............ ...................................1 2-13 MARKETS ............ ............................... 14-15 MANAGEMENT ................................16 -19 ANIMAL HEAL TH ........................ ... 20-21 PASTURE IMPR OVEMENTS...22-2 3 MACHINERY & PRODUCTS ............ .......................... 24-26
(fracking), conventional gas exploration in Victoria, which currently has a moratorium until 2020, does not have the same concerns as unconventional gas. “Although the COAG Energy Council will be implementing a package of reforms, there is still so much uncertainty as to whether there will be sufficient gas available to meet future domestic demand.”
the WCB argument RICK BAYNE ”doesn’t stack produc tion,” it states. up”. Victoria’s agriculture “Recent government Warrnambool Cheese sector. PROCESSORS policy in and Butter regard ARE claiming “Our farmers produc to these resources said it expected the e some of Victoria’s dairy farmer has signif- the world’s gas price to rise s could be left becaus icantly increased the cleanest and freshes e of “government out of pocket becaus cost of power food. t policy and added e of increased restrict We won’t put that a level of volatility ing gas exploration”. at risk with gas prices in 2018. to the fracking,” water market which Ms Pulford Saputo said. Company Secretary, In a submission intensified the to the ACCC, Molone Paul cost-price “There are no proved squeeze on farm or y, said Warrnambool Saputo’s Warrnambool probable busi- reserves of Cheese nesses. Cheese and and commercial onshor Butter had no further Butter has warned e gas comment and so this argume that the cost on “Clear, balanced and nt simply doesn’t the submission, which of gas for its Allansf consistent stack also raises policy ord plant will concer up.” is required in this area ns about the cost increase by 50 per for the of power industr cent from 2018. She said there had y to prosper and and water and the been numer“This will in turn impact of governto foster ous explora negatively ment an environment tion permits issued policy. impact the milk price that will permit in Victoria, particularly paid to supgrowth .” “A over the last sustain pliers,” the submis able, affordable and sion states. 10 years. Minister for Ministe consistent supply However, the Victori r for Agriculof both water and an Govern- power The Labor Govern ture Jaala Pulford ment says it is required for the ment has rejected said the Andrew s is also reforming industry Labor the claim, saying Government was to maintain the the gas market to current level of protect- improv e competition and ing the ‘clean, green’ reduce reputation of prices.
The ADF has so far stopped Fairbrae Milk Co Pty short of Ltd Wa nt control of the advocating for manufacturer pr ofits for your ow n farm? a reservation policy, which decommissioned over reliable and have storage the next few years, the would legislate that a capacity as well, is a while complexity of Australia’s specified portion of gas away.” energy network and be set aside for domestic The issue is made more the challenges of manufacturing use, but complex by the variety incorporating renewable said it will add its voice of energy policies and technology meant there to the growing list of systems across states were no quick solutions. industry groups who are as territories, and the Politics has also calling for “urgent action” absence of a national, hindered progress. to address the shortage long-term policy at the “At the moment I’m of gas on the domestic federal government level. not sure many people market. ADF flagged an energy understand what the real Rising electricity prices and energy security issues are because it’s just forum with processors and getting clouded in political farmers in the near future shocks, such as the power to discuss concerns and point scoring,” Mr Hoey outages experienced in options. said. South Australia recently, “This is not just about “Renewables are are also causing concern. the dairy farmers this definitely where we ADF natural resources about the whole industry have to get to, but the policy group chair being able to manage gap between where we Daryl Hoey said with events such as extreme need to get to and when a number of coal fired heat waves,” Mr Hoey said. renewables will be more power stations set to be PERHAPS A GROU P DEVELOPMENT WOULD HELP MEET SETUP COSTS? Many farms have the potential to developing their own niche market s and there has probab ly never been a better opportunity for on-farm processing. While not everyo ne’s choice, setting up your own on-farm milk processing can help you:● Keep the value added component of your hard earned milk production. ● Provide alterna tive employ family and local commu ment for nity. ● Provide a better return on capital investment.
John McQueen
Gas prices could farmer returns lower
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How do I cut my energy bills? IN THE wake of rising energy prices, retail-
ers are advising small businesses, including dairy farms, and household consumers to look at improving their energy efficiency, as well as shop around for the best deal – particularly in Victoria which has more competition and historically lower prices than any other state or territory. The wholesale cost of electricity in Victoria has risen from around $40 a megawatt hour in January 2016, to more than $100MWhr in March 2017, and consumers are feeling the pinch. “After decades of stable energy prices these recent rises in tariffs are catching people off guard,” an Energy Australia spokesperson told Dairy News Australia.
2017
This image taken by produced by Mead Shane Charleston features in the 2017 Dairy dairy farmer Di Love ‘Cowlander the country for the calendar and Bowles (inset). Farmers suppl ’, ied photos from site with almos word spread quickl t 3000 calendars across y through the Dairy started Dairy Love distributed. If you’re Love facebook very quick, you told us. The faceb last year. “The only good thing can still get one. to come out of ook site now has last year was that,” Di more than 10,00 she 0 members.
4 // NEWS - POWER SHOCK
MADELEINE BRENNAN
ALIA FEBRUARY
NEWS // 3
“That’s why it’s more important now than ever for families and businesses to take control of their energy consumption. There are more than 20 retailers in Victoria; we urge people to shop around to make sure you’re getting the best deal from a retailer that understands your business and is prepared to work with you.” AGL said the weighted average tariff change across all small to medium enterprise (SME) electricity tariffs in Victoria this year is 13.4%. “An average business using 10 MWh per annum saw an average increase of $8.87 per week (including GST) but this can vary depending on a customer’s tariff type, their usage, the area they live in and their existing energy plan.” It said recommended purchasing more effi-
cient appliances when updating; ensuring refrigerator doors are closed and seals work; check taps to ensure there’s no dripping hot water; ensure air conditioner drains are not blocked; and, that there is adequate ventilation around air compressors. Citing ACIL Allen data, AGL said energy use is only one component of the bill, with network charges (poles and wires distribution) accounting for around 25%; federal green schemes 12%; and retailer business costs (such as marketing and wages etc.) accounting for 13%. Changes to distribution network charges are effective from July 1 in NSW, SA, Queensland and ACT. Changes in Victoria come into effect on 1 January each year.
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SMARTER ENERGY USE ON AUSTRALIAN DAIRY FARMS DAIRY AUSTRALIA has produced a number of fact sheets and guides based on energy audits conducted on 1400 dairy farms nationally. These can help you assess options for improving energy efficiency and energy security on farm. Milk cooling, milk harvesting and hot water hold the highest potential for cost savings. Visit http://www. dairyingfortomorrow.com.au/ tackling-specific-issues/energy-2/
DAIRY NEWS AUSTRALIA MARCH 2017
NEWS - POWER SHOCK // 5
SA the canary in the coal mine in the dairy. “It’s dead money that you may never use but if you have to use it because you WITH BLACKOUTS across South may miss more than one milking, then Australia’s electricity system both this the losses on farm are more significant.” He said some farms did experience year and last, it could be said the state is the canary in the coal mine when it a blackout for longer than one milking comes to the challenges of Australia’s – up to three days – and that’s when the health of the herd is compromised. energy system. “It’s more significant when you are Fleurieu Peninsular dairy farmer David Basham says in 40 years the an irrigator as well. You might lose several days of irrigation family has only missed across your business.” three milkings –they all “Our He said the South Ausoccurred in the last six electricity bill tralian Dairy Association months of 2016 due to is about $3500 had come to an agreeblackouts. ment with the SA power It didn’t affect his a month just network to ensure dairherd more than one for the dairy. were given priority to milking at a time, but Six years ago ies get power re-established, he’s considering purwhich was helpful. chasing a backup gener- it was about But even if farmers ator in case the problem $3500 a decide to make investbecomes more frequent. quarter.” “We’ve never contem– David Basham ment in back up generation, issues remained plated having a generafurther up the chain. tor in the past, because “When the blackout happened the of our location we’re relatively close to the substation but these three outages factories weren’t able to receive milk were between 18 hours and 26 hours, or because they rely on electricity to pump the tankers out, so everything ground thereabouts,” Mr Basham said. A recent quote from an electrician to a halt. Milk had to be dumped. It all showed he would need to spend around snowballs to a much bigger problem.” He said the increasing cost of power $20,000 just to cover the electricity MADELEINE BRENNAN
David Basham
is also a concern. “Our electricity bill is about $3500 a month just for the dairy. Six years ago it was about $3500 a quarter.” Mr Basham said he was yet to make a decision on whether to make the investment into a backup generator, but many
farmers were already making the call. “The concern is are they buying the right generator. A lot are buying the tractor powered generators, which are a lot cheaper but are also less reliable and we’re now talking about moving to a stage were these aren’t just an emer-
gency source of power – they are effectively a backup generator.” He said there was scope for the industry to investigate and advise on the best options for farmers, including whether farms within local areas could share resources to reduce costs.
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DAIRY NEWS AUSTRALIA MARCH 2017
6 // NEWS
Infant formula fuels Chinese demand CHINA HAS become Australia’s most valuable export market for dairy products due to demand for infant formula. Dairy Australia’s Situation & Outlook report, released last month, reveals the value of exports has jumped from $US380 million to $US660 million in the 12 months to October, 2016. Over the same period, Australian exports of infant formula to Greater China grew from almost 6000 tonnes valued at $US74 million to 19,000 tonnes worth more than $US275 million. Australian exports of infant formula to other markets have
been more-or-less stable over the same period. Dairy Australia said these figures do not capture the large ‘grey market’, where private buyers often known as Daigou, buy formula from Australian retail outlets and ship or post it to China. Given the nature of the market, Dairy Australia said there are no reliable numbers around the extent of this market. However, DA said data from Australian supermarkets suggest that sales volumes cannot be explained by growth in domestic consumption, over a period in
which Australian birth-rates were more-or-less stable. ABS figures for the Australian infant population (0-3 years old) show between June 2010 and June 2016 the population grew from 1.17 million to 1.25 million, roughly 1.1% a year. Over the same period supermarket infant formula sales volumes grew from 7180 tonnes to 18,250 tonnes, for an average growth rate of almost 17% per year, according to DA. DA believes more Australian companies will seek to directly enter this market themselves, obviating the need for Daigou
intermediaries. An example of this might be Woolworths listing products directly on the Chinese e-commerce platform T-Mall to sell directly to Chinese customers, DA said. Several companies have invested in new or upgraded facilities to increase the supply of base powders and infant formula for export. Australian exports of infant formula to China have increased substantially since 2015, and even more Australian companies are set to apply for licencing to export into China.
16% rise in cull cows as beef prices soar THE NUMBER of dairy cull cows sold to slaughter in 2016 was 16% higher than the previous year, with 106,279 cows getting the chop. A smaller US beef herd and strong foreign demand for Australian beef saw prices rise 13% higher over the same period, with the weighted average carcass price sitting at 451c/kg, according to Dairy Australia’s Situation & Outlook. Despite easing somewhat from their highs in August 2016, cull cow prices remain elevated, with January carcass prices averaging 464 cents/kg. At the same time, the number of dairy cull cows in saleyards has fallen the last four consecutive months to January 2017, with the sales volumes down 16% in January compared to January 2016. While Meat & Livestock Australia has flagged the possibility of Australian cattle prices easing by between 20%- 40% in its Industry Projections 2017 Report, MLA considers this to be more probable to occur from 2018 onwards. Dairy Australia said that even after substantive easing, MLA predicts Australian cattle prices will remain significantly above the long-term average. In the short term, cattle prices are likely to be supported by restockers rebuilding beef herds in the southern regions, with producers looking to retain cows, according to Dairy Australia.
IN BRIEF Live export demand drops REDUCED DEMAND from China has seen live dairy cow exports fall. Live dairy cow exports for the 2016 calendar year totalled a little over 67,000 head, down 9% on the 2015 volumes, and 15% below the five-year average, according to Dairy Australia. The fall in live dairy cow exports is due to lower demand from China, the main destination for Australian dairy cows, reflecting challenging business conditions for the Chinese dairy industry, DA said in its Situation & Outlook report. Lower global milk prices and higher feed costs have resulted in over half of China’s dairies operating at a loss in 2016, with many large scale corporate dairies in China extensively culling herds. Going into 2017 there is some uncertainty over Australian live dairy cow exports to China, with new pedigree requirements coming into effect, but no clear pathway to satisfy them.
CHECK OUT THE LATEST NEWS AND INFORMATION AT www.dairynewsaustralia.com.au
DAIRY NEWS AUSTRALIA MARCH 2017
NEWS // 7
MG milk supply falls 20% in 6 months MURRAY GOULBURN
milk supply fell 20.6% (to 1.6 billion litres) from July 1 to December 31 2016, compared to the same time in 2015. The dramatic drop in milk supply was announced in the co-op’s half year results, released today. The co-op also announced revenue of $1.2 billion in that period, down 14.8% compared to the same period in 2015. As a result of changed milk supply flows, the current “weighted average” southern region milk price has risen from $4.86/ kilogram of milk solids to $4.92/kgMS. The co-op said the remaining “potential” step-up is 3c/kg MS as it forecast a final price of $4.95/kgMS. In a statement, the co-op said net debt as at 31 December 2016 closed at $677 million, up from
$480 million at 30 June 2016. Gearing as at 31 December 2016 was 37.8%. “The debt position reflects MG’s seasonal inventory build, which peaks each year around December,” the co-op said in its statement. “Debt has increased due to Milk Supply Support Package (MSSP) and growth capital projects. “During the period, MG invested $44.6 million in its new Consumer Cheese plant, SAP system and other projects. “MG continues to be focused on reducing working capital and prudent capital expenditure and expects closing FY17 net debt to be broadly inline with closing FY16 net debt.” The co-op is considering appointing a non-supplier Chair of the Board
Exports to return $3.2b LOOKING INTO its crystal ball, the Australian
Bureau of Agricultural Resource and Economics predicts farmgate price rises until the 2019-20 financial year. ABARES announced its predictions at its annual Outlook conference in Canberra earlier this month. It said the Australian farmgate price of milk is forecast to rise by 2% in 2016-17 to average 43.8 cents a litre. ABARES still uses cents a litre. It also continues to make multi-year forecasts despite the volatility in world markets. The price is forecast to rise by a further 7% to 47c/l in 2017–18 and is projected to hit 50.1c/l (in 2016-17 dollars) in 2019–20, according to senior ABARES economist, Peter Collins, who said the forecast improvement follows a turnaround on world dairy markets. “World dairy prices are expected to grow each year to 2019–20, as consumption grows faster than supply,” Mr Collins said. Mr Collins said that improving global prices are also forecast to contribute to a 5% rise in the total value of Australian dairy exports in 2016–17, predicted to reach $3.2 billion. “The expected rise in export returns this year is also driven by an increase in export volumes of high-value dairy products such as infant milk formula,” Mr Collins said. “In 2017–18 the value of exports is expected to increase by a further 11% due to rising world prices and some recovery in export volumes of other major Australian dairy commodities, such as cheese and skim milk powder. “The value of Australian dairy exports is projected to grow consistently to around $3.5 billion (in 2016-17 dollars) by 2019–20. “Over that period, Australia is expected to remain a significant exporter of dairy products to South-East Asia and North Asia.”
following Phil Tracy’s decision to stand down. The co-op said a review of Board structure and composition is continuing. “MG’s work to review the best approach to farmgate milk pricing trans-
parency is ongoing,” the co-op said in the statement. “This review will require input from suppliers and consultation on this topic will commence in the coming weeks.”
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DAIRY NEWS AUSTRALIA MARCH 2017
8 // NEWS
Watchdog to focus on risk allocation
Ben Bennett, Pomborneit They were very engaging and on our level but at the end of the day they’re not going to be able to do their report till the end of the year; I’ve got to milk the cows today and tomorrow and every day in between. They set a ceiling on our expectations from the start and I respect that. We’ve got to have confidence in our industry to keep the next generation going. The pricing mechanisms are not reflective of the market and until that happens we’re a prisoner of it. There are two aspects of it; price and price structure. It needs to be easier but it’s a cash flow issue as much as anything. If you made it simpler, people will be able to see it for what it is. The south-west produces 25% of Australia’s milk; it’s a serious issue.
“The whole risk allocation – the ability to drop the price two months out – will be a big focus of what we look at.”
RICK BAYNE
DAIRY FARMERS have pushed
for changes to risk allocation, pricing structures and timing at Australian Competition and Consumer Commission forums around the country. The forums are part of the ACCC’s public consultation for its Dairy Inquiry, which is examining competition between milk processors, contracts between processors and farmers, global supply markets, and the profitability of dairy farms. ACCC chairman Rod Sims said he was pleased with the contribution at the forums that were called to hear directly from dairy farmers about competition and fair trading issues that affect them. “I’m getting a good insight into risk allocation and some of the pricing issues and relative market position,” he said. “It’s terrific to know something but then to hear it mentioned in four or five different ways from people’s real experience.” A forum in Warrnambool on February 27 attracted about 50 farmers, less than half the audience in Toowoomba. “The passion in the room was the same here as in Toowoomba,” Mr Sims said. “There are a lot of people very concerned about their futures, about the future of the industry and there’s a certain degree of anger.” Mr Sims said the question of risk allocation was prominent. “What happened last May stands out as being very unusual,” he said. “It effectively means one part of the value chain - the farmers – are taking all the risk.”
Your say...
Rod Sims
“The whole risk allocation – the ability to drop the price two months out – will be a big focus of what we look at.” “That (the clawback) was an extreme example and put the issue in neon lights but the issue has been there for years.” Mr Sims said issues around incentives, the transparency of prices and how farmers can compare prices between different processors were also prominent. Farmers at the Warrnambool forum appreciated the opportunity to present their views, but some doubted the inquiry would lead to significant change. Pomborneit farmer Ben Bennett said it was pleasing that farmers were given the opportunity to comment but disappointing more didn’t attend. He said farmers were prisoners of the pricing mechanisms. “If you made it simpler, people will be able to see it for what it is; that’s what we need,” he said. Boorcan’s John Hateley said farmers needed time to properly compare prices, but he doubted the inquiry
would make significant improvements. Karrinjeet Singh-Mahil proposed a standard base price lodged on a particular date with an independent body and then released. Processors could then compete with incentives offered over and above that base price. “Let’s take all of the confusion out of it,” she said. “We hope there will be a distinct change to what’s required to make things fairer for farmers. To be able to manage our businesses properly we need the right information at the right time. I know there will be recommendations out of it, but I don‘t know if we’ll get the change we need.” Simpson’s Alex Robertson said he didn‘t believe the inquiry would lead to much change. “If you look at say loyalty payments. I have been harping on about how processors are re-regulating movements inside the industry. It’s quite complicated and I don’t know that they’re taking it seriously,” he said. “We need a concerted effort to do something, not just lip service and people wanting to know stuff.” The forums continue until March 22.
John Hateley, Boorcan You cannot compare price going forward because of the variation in factors; seasonal and all that sort of thing. When you’ve got actuals on the ground for the past 12 months you can compare between factory and factory. They can have a step up or change their pricing or the season might cut out; it changes everything.
Paul Madden, Ellerslie Hopefully they’re listening to the comments about the price structure and the volume charges. We don’t pay a volume charge with ODFC (Organic Dairy Farmers) and that’s a big saving. I’m happy that the inquiry is happening. Hopefully it gets a few teeth and they can do something with it.
Karrinjeet Singh-Mahil, Crossley We can’t compare prices because we don’t know how they get to that weighted average. You haven’t got time to change to get a better option. You can’t make the decisions to best manage your business because you don’t have enough lead time of what the prices will be. We need to come to an industry agreed standard for a base price; lodge that on a particular date with an independent body and then all prices are released at the one time by that body. That means the company will be competing on the basis of what incentives they can offer over and above that base price. That’s going to change people’s focus. Instead of thinking that’s the price; they’re going to start thinking this is the base and here are the incentives; which ones of those am I best placed to try and get.
Alex Robertson, Simpson I thought they were doing a broader inquiry than what was indicated today. I don’t think they wanted to go anywhere except contracts between farmers and processors. They don’t want to go anywhere near what the supermarkets are doing, and that’s where half of the problem is. We’ve got retailers trying to squeeze everything into plain label. It stops processors from being able to value-add their product and earn more of a margin and develop more products. They didn’t seem to want to know about that. I don’t think the government wants to change from top to bottom. We need a concerted effort to do something. We’re just getting lip service and people wanting to know stuff. There’s a long list of problems including Dairy Australia, areas between retailers and processors but they don’t see that as part of their area. No-one wants to put penalties on mandatory codes of conduct. They’re useless without them.
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NEWS // 9
Report on MG, Fonterra soon RICK BAYNE
THE RESULTS of an investigation into the
actions of Murray Goulburn and Fonterra in last year’s price cuts will be known this month. The Australian Competition and Consumer Commission (ACCC) launched the investigation after the so-called “clawbacks” and had expected to release its findings by the end of the year.
Speaking after a February 27 hearing in Warrnambool into the ACCC’s separate broader inquiry into the dairy industry, ACCC chairman Rod Sims said the investigation was drawing to a close. “We are looking at Murray Goulburn and Fonterra under two headings – did they engage in misleading conduct in the way they dealt with farmers and secondly did they engage in unconscionable conduct,” he said. “There are two options,” he said. “The
investigation will have us say whether or not we believe that there has been a breach of the Act. “If we do we’ll be instituting proceedings, if we don’t we’ll be explaining why.” “I can’t foreshadow anything.” Mr Sim said the investigation should be completed this month. He added that the investigation was a completely separate process to the dairy industry inquiry.
Research towards a vaccine for mastitis GROUND BREAKING research towards the development of a vaccine for bovine mastitis is about to get underway in a Brisbane laboratory. A project team of scientists at the Queensland University of Technology is led by Dr Allison Carey who was announced as a Department of Agriculture Science and Innovation Award winner at the ABARES Outlook Conference in Canberra this month. Her award is sponsored by Dairy Australia which has provided a 12 months funding grant for the mastitis research. Mastitis has a huge impact on the dairy industry causing productivity losses and necessitating the use of antibiotics. Research under the Countdown Down Under program identified a gain of $47 per cow from lowering herd cell counts from 250,000 to 150,000. Dr Carey has been working on science of vaccines development for the past 10 years for both humans and animals, including koalas. A graduate from the University of Newcastle, she completed her PhD at QUT where she is now a post-doctoral researcher and lecturer. “There are five main types of bacteria that cause bovine mastitis and the key to getting an effective vaccine will be to cover multiple strains,” Dr Carey said. The new project will build on knowledge gained from many years of scientific research. It will focus on two variants of streptococcus bacteria, significant contributors to mastitis. “Our work has big implications for the dairy industry both in Australia and potentially world-wide,” Dr Carey said. The project will seek to identify antigens in bovine bone marrow which are reponsible for triggering the cows’ natural immuniity to mastitis-causing bacteria. “It’s a technique that has been used in the successful development of other vaccines,” she said. “The aim is to produce a faster response when the animal is challenged by bacteria to prevent mastitis developing. “It’s an important step on the journey towards a very worthwhile goal,” Dr Carey said.
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10 // AROUND THE REGIONS
Queensland
Northern Vic
South Australia
QDO pushes for Bega sells Tatura Big data focus of Fair Milk Price logo spray dryer Innovation Day THE QUEENSLAND Dairyfarmers’ Organisation has continued its push for a mandatory “Fair Milk Price” logo, making a submission to the Queensland Parliament’s Agriculture and Environment Committee’s hearing into the Sustainable Queensland Dairy Production (Fair Milk Price logo) Bill 2016. The Bill was introduced into State Parliament by Katter’s Australia Party in October last year. It was then referred to the Parliamentary Committee for consideration ahead of debate in Parliament. The Agriculture and Environment Committee also heard from councils, the Australian Competition Consumer Commission (ACCC) and the Department of Agriculture and Fisheries (DAF). QDO President, Brian Tessmann, said the logo would help consumers distinguish Queensland milk produced at an “ethical and fair price”. “People are continually asking what milk they should buy to support our local dairy farmers,” Brian said. “While QDO encourages them to ‘buy branded milk’, many want a clearer indicator right there on the bottle.” “At today’s hearing, the ACCC clarified its principled support for efforts that increase consumer’s access to information that provides transparency when making purchasing decisions. The Fair Milk Price Logo does exactly that.” “I’m calling on consumers, farmers and supporters of Queensland’s dairy industry to contact your local Member of Parliament and let them know how important this issue is to you and the state.”
BEGA CHEESE will sell one of its Tatura spray dryers to
help fund its recent $460 million purchase of Mondelez’ Australian grocery business, including Vegemite. It sold the spray dryer and its infant formula finishing plant at Derrimut, near Melbourne, to Mead Johnson Nutrition for $200 million. Bega has secured a 10-year service and access agreement with Mead Johnson for the spray dryer and finishing plant. Mead Johnson produces more than 70 products under its Enfa brand, including Enfamil infant milk formula. “The sale of the dryer and finishing plant together with the ongoing relationship with Mead Johnson is strategically and financially important for Bega Cheese,” Executive Chairman Barry Irvin said. “It secures revenue streams from these assets and releases capital which will be used to fund our recent purchase of Mondelez’ Australian grocery business including Vegemite.” The company announced it would buy Mondelez’ Australian grocery business for $460m in January, with Irvin saying it would be “company making”, and enable Bega to become a consumer goods business.
UTILISING THE wealth of available data to benefit your business will be the focus of the DairySA Innovation Day, to be held on Thursday, June 8 at The Barn, Mt Gambier. Under the theme of ‘Re-Imagining
Dairy: Big Data revolution’, the Innovation Day will feature international speakers. For further information, contact Kylie Boston on kylie@dairysa.com.au or 0407 231 547
Tasmania
Rolley appointed new VDL Farms’ CEO MOON LAKE Investments (MLI)
has appointed Evan Rolley CEO of VDL Farms. MLI Deputy Chair David Crean said Evan has worked with the past four CEOs of VDL on strategic infrastructure, farm development and key stakeholder management issues. Dr Crean said Moon Lake was
committed to its plan to export fresh milk directly from Hobart to Ningbo in China under the partnership announced with Qantas last November. Conversion of four VDL farms into organic farms has started, while the company has made a priority of having the lowest somatic cell counts in the country from three of its farms.
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Dairy NewS AUSTRALIA march 2017
around the regions // 11
WA
Gippsland
WAFarmers want dairy task force
Grant Williams new chair of GippsDairy
WAFarmers has made the sustainability and viability of the WA dairy industry an election issue, calling for the establishment of a dairy task force to identify a long-term solution. President Tony York said Western Australia had a shortage of manufacturing capacity, with over 90% of the state’s milk sold as fresh milk rather than made into butter or cheese. “The objective of the dairy task force must include proactive measures for investment into the establishment of a secondary value added industry that can utilise high end milk production especially during peak seasonal output windows to balance seasonal milk supply,” he said. “Western Australia must develop its capacity to manufacture products such as cheese, cream, butter, evaporated milks, and so on. “WAFarmers will continue to advocate for investment in this space to foster growth, incentives and further export opportunities to balance seasonal milk supply.”
Hallora dairy farmer Grant Williams and Yannathan dairy farmer Lauren Finger have been elected Chair and Deputy Chair respectively of GippsDairy. The elections followed the resignation of Graeme Nicoll, who was seconded onto the Dairy Australia board. Grant has been a GippsDairy director for four years and Deputy Chair for the
Western Vic
Saputo takes full ownership of WCB WCB has been officially swallowed whole by Canadian dairy company, Saputo, which acquired the remaining shares of the Allansford-based company earlier this month. Saputo has owned 88.02% of WCB since 2014, when it entered a bidding war with Murray Goulburn. However, Lion Dairy has retained its 10% share in WCB until this month, when it accepted Saputo’s offer of $9.05 a share. Saputo was then able to compulsorily acquire the remaining shares. Lion said it made a small profit as a result of the sale, but its stake was a strategic one intended to protect the business’ broader interests, including longstanding contract arrangements with WCB.
GippsDairy general manager Allan Cameron, Chair Grant Williams and Deputy Chair Lauren Finger.
past year. He is keen to spread the message of the dairy industry being an integral and responsible part of the wider Gippsland community. Grant said Graeme, in his role as Chair for the past 16 months, had provided decisive and intelligent leadership during a time when many farmers were dealing with the effects of low rainfall and milk price.
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Dairy News AUSTRALIA march 2017
12 // OPINION Ruminating
EDITORIAL
Government must lead on energy crisis
milking it... Supermarket surprise
TRIPS to the supermarket can be fraught at the best of times, but Dairy News Australia was surprised last week when visiting and was invited to try almond milk in the dairy section at Woolies. The InsideOut company, which specialises in ‘cold pressed’ plain and flavoured almond milk, as well as coconut water and iced teas, was audacious in its attempt to lure milk loving folk across to their non-dairy alternative. We told them they would be better off spruiking their wares in the fruit and veg section.
Donkey plonk
YOU’VE got to hand it to enterprising Chilean farmer German Errazuriz who has reportedly ventured into another fresh milk market – that of donkeys. The milk, sold under the brand Asinalot, is apparently similar to breast milk and has been historically used as its substitute in the days before infant formula. With the average female donkey producing about 0.5 litres to – 1.3 Litres per day, it certainly is a boutique product, with large herds required for commercial scale production. Legend has it took the milk of 700 donkeys to provide the quantity of milk for Cleopatra’s daily milk bath. We think it’s asking a lot for consumers to embrace this trend.
Going viral
IT’S not a good time to be a rabbit in Australia with a new strain of the calicivirus being released across 640 sites nationally this month. In what has been a six year process to get to this point, it’s hoped the RHDV1 K5 strain will knock out about 40% of wild rabbits, especially in southern Australia’s wetter and cooler zones. Anyone spotting dead rabbits on the their property is urged to notify the Invasive Animals CRC through feralscan.org.au or the Feral scan phone app. The K5 virus is also expected to be commercially available for farmers later this year. Check with relevant state authorities for application requirements. And any pet rabbits should be vaccinated or face a similar fate to their wilder cousins.
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Dairy News Australia is published by RNG Publishing Limited. All editorial copy and photographs are subject to copyright and may not be reproduced without prior written
Death subsidy popular DUTCH DAIRY farmers are queuing for a ‘death subsidy’ for cows as part of a plan to reduce the size of the national herd. Media reports say 60,000 cows, or 3% of the total number, have to be slaughtered this year to comply with European phosphate norms or the Dutch dairy industry will be hit with a hefty fine. This means dairy farmers will either have to give up their business or return to the number of cows they had prior to July 2, 2015. The Dutch Government has earmarked €12m in compensation for the first 10,000 cows but the subsidy was oversubscribed by 30,000 within a day. Farmers who fail to get the subsidy, which will now be allocated by drawing lots, will have to wait until the next round of subsidies which are expected to be lower.
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While Canberra fiddles, those outside the national capital burn. The dairy industry has joined a long list of organisations calling for politics to be put aside and the introduction of a national energy plan. Others calling for clear direction on the future of electricity and gas supply include the National Farmers Federation, the Business Council of Australia, CSIRO, and energy suppliers and retailers. As gas and electricity prices rise, and infrastructure planning is put on hold until clear signals are received, the Federal Government and the opposition continue their schoolyard antics in trying to wedge each other in a bid to win the next election. Pathetic. Australian Dairy Farmers natural resources policy group chair, and northern Victorian dairy farmer, Daryl Hoey, summed up the frustration of many who have suffered from this inaction. “At the moment, I’m not sure many people understand what the real issues are because it’s just getting clouded in political point scoring,” he said. With a number of coal fired power stations set to be decommissioned over the next few years, the complexity of Australia’s energy network and the challenges of incorporating renewable technology, there are no quick solutions. A bipartisan approach is required. Unfortunately, this looks unlikely. ADF has flagged an energy forum with processors and farmers in the near future to discuss concerns and options. This must be a precursor to a concerted campaign to lobby state and Federal governments to set a clear direction on Australia’s energy future, to provide certainty to all businesses. The ADF has so far stopped short of advocating for a reservation policy, which would legislate that a specified portion of gas be set aside for domestic manufacturing use. This option is used successfully in other countries and should be adopted in Australia. Rising costs will invariably find their way back to the dairy farmer in the form of lower farmgate milk prices, as Saputo has stated in its recent submission to the ACCC. The Government must act now to provide the market with the certainty it desperately needs. Power blackouts and rising costs will continue if it doesn’t.
Editor Stephen Cooke
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editor@dairynewsaustralia.com.au Publisher Brian Hight Production Dave Ferguson Becky Williams Senior Journalist Madeleine Brennan Web Cameron Wilson Published by RNG Publishing Ltd Printed by Newsprinters Pty Ltd
permission of the publisher. Opinions or comments expressed within this publication are not necessarily those of the staff, management or directors of RNG Publishing Limited.
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DAIRY NEWS AUSTRALIA MARCH 2017
OPINION // 13
From gumboots to lab coats WILL FUTURE dairy farmers wear gum boots or lab coats? Is food production set to be more about engineering and chemistry and less about agronomy and animal husbandry? Kaila Colbin, keynote speaker at the recent Gardiner Foundation Dairy Leaders Luncheon says it’s certainly worth thinking about - now. The US-born, New Zealand-based technology expert says a wave of “exponential change” across a number of industries will cause chaos for those who don’t see it coming. Evolution in artificial intelligence, robotics, nanotechnology, biotechnology, energy and genetics are set to converge and explode in another wave of ‘disruption’ that will change the world. “This stuff is happening whether we are doing anything to prepare for it or not,” Ms Colbin warned. “Are we really taking seriously the nature of this kind of disruptive threat?” Across dairying, we are already seeing the first wave of change through automation; growing numbers of farmers are using robotics, drones, selfdriving tractors – and the technology will become increasingly affordable and accessible, boosting productivity and changing the way farmers work. Ms Colbin says the next wave of change will come from 3D printing – which will have the potential to create products on the spot, without the need for transport– and biotechnology, such as bioengineered milk and eggs. A company called Perfect A has already combined genetically modified cow protein and “brewed” milk in the lab. Genetically and chemically it’s identical to milk – it just hasn’t been through a cow. Who knows if it passes a blind taste test? The technology might be there but if Australian consumers are anything
NSW, won the Specialty White Dairy Drink for its Less Cream Milk, while Queensland local - the Milani House of Gelato – took out the Grand
Champion prize for its Dark Chocolate Gelato. With this year’s awards attracting a record 470 entries, it’s clear Australian dairy is not yet under
threat from anything produced solely in a lab. But perhaps we can expect there will be a genetically-modified category one day.
Kaila Colbin
OFF THE SHELF MADELEINE BRENNAN
to go by it’s unlikely lab milk will be palatable to them any time soon; the preference for ‘whole’ and ‘natural’ food is experiencing its own period of growth. Dairy Australia’s latest Situation and Outlook report shows a decline in volumes of fresh, white modified (low fat) milk for the fourth consecutive year (dropping 6% in the 12 months to January compared to full cream white milk which was up 9% in volume terms for the same period). Consumers are also choosing plain, unsweetened varieties of yoghurt over their modified counterparts (up 12.4% in volume for the 12 months to October 2016 compared to a 5% decline for unsweetened). The list of 2017 Grand Dairy Awards winners also suggest there’s something about ‘slow’ food that brings out the best taste, with smaller artisan producers holding their own against some of the larger mainstays. Tasmania’s Heidi Farm took out the 2017 Grand Champion Cheese with its robust Raclette. It’s a cheese that requires a fair bit of nurturing and is produced in smaller volumes than other cheeses produced by owners Lion Dairy & Drinks. Queensland’s familyowned Maleny Dairies won the fresh milk category for its Farmers Choice Full Cream Milk, while WA’s Bannister Downs, owned by Mat and Suzanne Daubney with support from Gina Reinhart, took out the cream category. The Chesworth family’s The Little Big Dairy Co,
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DAIRY NEWS AUSTRALIA APRIL 2016
14 // MARKETS
OPINION // 19
Keep one eye on the Export demand remains stronghorizon Dairy NewS aUSTraLia june, 2012
LETTER TO THE EDITOR
agribusiness // 17
ndependent review of Time for an indep lia’s value to farmers Dairy Australia’s The US will almost certainly produce more
THOSE WITH an ear to global dairy
With season 2011/12 only a few
incremental change in milk production (year-on-year)
milk again this year, and more of that is likely cents/litre in March (AUD 41c/L) to 28 to trickle (rather than flood) onto international Euro cents/litre (AUD 36c/L) in April. Profit margins are under pressure in the markets over the coming months. US, and in NZ Fonterra has announced the final payout for the 2011/12 season has been cut from NZ$6.75-$6.85/kg MS to NZ$6.45-$6.55/kg MS (AUD$4.96$5.04). Effectively, global dairy markets are rebalancing. Lower prices will both slow production growth and stimulate demand, and as this occurs we will ultimately see a price recovery. Key factors to watch on the global scene will be the rate at which milk production overseas slows in response to lower prices, the impact of the current financial worries on consumer confidence, the path of China’s economic growth, and the value of the Australian dollar. Demand for exported dairy products remains a positive and will continue to grow with the middle class in large emerging markets such as China, with changes in diet and with increasing urbanisation - and also in conjunction product had enjoyed. levels be hard toLocally, sustain. with globalwill population growth. the domestic is supported by a Even butter prices in the northern SMP market is under particular pressure, growing population and stable perwithconsumption. ample supplies and mixed demand. hemisphere weakened during February, capita Whilst the dairy market currently a challenging place The isEuropean Commission has not and with supplies in those markets to be a seller, all signs indicate that balyetwill budged on sales of its stockpile, unlikely to slow for several months, ance ultimately return.
markets have noticed an ending, unwelcome weeks from attention is now 2012/13 milkas prices as farmchange in the lastfocused fewonweeks, the ers consider strategies for the coming bullish sentiment that propelled year. In some domestically-focused renegotiated higher contracts incorcommodity pricesregions, significantly gLobaL impacT porating lower prices and reduced ‘tier JohN DropperT in late 2016 beginsone’ to access fray. are undermining farmer confidence and supply stability. For GLOBAL IMPACT If you’re panicking by now: don’t. private label DROPPERT contracts and promany farmers in export-oriented Shifts inJOHN a lower pricedemand outlook relative to cessor rationalisation have seen milk International dairyregions, supply and companies adjust their intake requirethe current season not only adds to the are still much better balanced they challenges of doingthan business, but seems ments and pricing to meet the changing demands of a highlythe pressured retail to contradict the positive term farmers to a single in which financial interest in upcoming GlobalDairyTrade (GDT) have beenmilk for most of the pastmedium few The current trend ON BEHALF of ngle in which levels while the Productivity outlook of Asia-driven dairy demand marketplace. Lower contract prices and events – alternative to the tune of an extra 15,000 years, but therehas aregrowth. some developments meeting! product the outcome. a lackof of supply opportuniFarmer Power, which production fallen profit margins Commission for a for farmers to exit 2012 milk production in the US those in south-east Asia and the Middle ties present challenges inand a market with flows. Dairyan Australia’s indicative outlook tonnes of WMP 10,000 tonnes that are worth keeping eye on. Since its formation, from 11 The last levy poll, represents dairy mation, from 11 billion litres manufacturers trulyDespite objective review is up around 4% on 2011 forthe the year to East maintain for southern farmthe gate milk prices – limited manufacturing capacity. industry (byconsistently higher ecomore over the next 12 months. The first concerns Zealand, April (leap year adjusted), whilst early nomic growth rates that support theseSMP challenges, the underlying domespublishedNew in the recent Dairy 2012: SitDairy Australia has to just o which reportedly farmer members has to just over 8 billion increase. of Dairy Australia and selling their increasedfarms dairy consumption. Howuation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production The futures market has responded where the milk production outlook received around litres (w finished the Marchto 2012 quota year up ever, the surge in supply has outpaced ita dairy consumptionthe and a value growing it cost Dairy Australia opening price range ofThis $4.05-$4.40/kg d in the south-west litres (while New has led delivers toZealand otherdemand producers growth in the market. accordingly, anda degree further 2.3% on the previous year. New population providing of cer-downward is increasingly diverging from MS and a full year average the price range $500 million from Zealand around $750,000, om Zealand’s production to significant of Victoria, we farmers asproduction wellfew as theexpected This situation has seen the scales is widely finish between $4.50 and $4.90/kg MS. The tainty beyond the current ortoconverting to is likely adjustments. at the next pessimistic forecasts of recent pressure In the seasons following the 2008 this season up 10% on last year - a huge tip in favour of buyers in dairy marreport considers the wider market picresulted in only applaud the stand government. kets, with commodity of NZ milkprofitable financial crisis and subsequent com- market influence given 95%more ture and summarises the many factors auctions. months. beefprices retreatButter is exported. Argentina is also enjoy- ing steadily over recent months.taken in farmers at play; the key theme of the current sit- modity price recovery, farmers an estimated 600 by Senator What this of30% milk The other market are market, Moisture conditions are highly in the export-oriented prices aredeluge down some fromcan their growth, but a sig-seasonal regions havedevelopments seen solid ing solid production uation being that of re-balancing production) should “What farmers witness mers witness are their funds dairy farmers David Leyonhjelm in 2011 peaks, whilst powder prices have nificant supply gap in Brazil prevents global supply growth (see chart) with dairy supply chain. witness are their varied across the various dairying more seasonal. This is the time of year upset the apple cart, prompting buyers lost more than 20%. prices from leavIn regions of Australia focused on higher-cost competitors in the North- much of this additional milkring alarm bells forFarm gateopposing the changes attending workshops being spent on lavish e funds (typically nt on lavish and offices, Southern where (in theamongst absence major regions events at present, butdrinking milk intakes subsequentlyhemisphere been reduced in ingmarket South America.to hold out. have ern Hemisphere those of expandproducing milk, many farmers the government, most exporting regions. The average Despite wider economic uncering output as their margins increased. face a re-balancing market in the form prices generally been closing inpredicting on prior-year shocks), commodity $5,000-$7,000 per sellers can also tend to cut pricestoifthe five year poll of nationwide. annual forecasts consi recasts have consistently of renegotiation of supply contracts This season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France Dairy theylikebut need to formove product to 32the pay loseditions some ground. levels, pulling and thereduced season-to-date Australian Dairy example, dropped 12% from Euro dairy levy.* as importing countries China instead and have further farm) enhanced milk access to ‘tier one’ supply. being spent improved milk produc milk production with no rejecting allFarmers, tenders. who there will be a flow on effect to market or meetspreads end of financial With the northern hemisphere volume up with them. Australia the yearWerepeatedly are concerned on lavish events creditors, strategies for achievin for achieving and ahas been spring getting underway, milk supplies stock message returns for Oceania suppliers. sends the right contacted signal – that the targets. that all is Fonterrathis, in particular all licensed that thisThis is just the and offices, annual failure to advise the go advise the about Outside of this seasonal flux, forcedgovernment to bump its full season forecast are rarely constrained. In fact, more dairy farmers calling So what does all this mean? latest illustration of forecasts consistently well. Fundamentally, the international often than not in recent years, stories there is some extra supply pressure. up, revising a 7% drop to one of 5%. the true state of the ind ate of the industry.” for farmers to how Dairy Australia As the number predicting improved market remains markedly better of processing capacity falling short are The US will almost certainly produce The acknowledgement of extra “Fundamentally, the ASEAN-Australia-New austraLian DairY,milk support these change, fails to represent production more of farmers declines Zealandusually FTA (AANZFTA). rice and wine to led than this time last year, when milk again this year, and more doing the milk rounds. volumes in the pipeline hasexporters in turn international market “Protectionist sentiMalaysia are the biggest did so with a limitedlacklustre compulsory levies on has dou withfinely no strategies vies on has doubled over the disillusionment demand and runaway of thatfurther, is likely toDairy trickle (rather thanthe interests of dairy In a relatively balanced for to a boost in forecast offer volumes for ment over agricultural winners in a free trade remains markedly better budget of around goods is rife and growagreement (FTA) signed farmers and is an farmers in addition achieving this, and a supply growth repeatedly same pe ition same period) and amongst the flood)Australia onto international markets will ing across the globe, so to provide portion pack between the two counaustraLian FooD $3,000-$5,000, which than this time last year.” attempt to eliminate to around $300m failure to advise theover the torpedoed any potential recovery the num coming months. in this context it is pleas(200-330ml) configuratries last month. remaining Freedom Foods 0m the number of dairy dairy presumably need to company ing Australia has managed tion for beverage prod- elicited a response The deal, signed after Group Ltd is to build a democratic in prices. will probably produce in government farmers government about Europe farmers has shrunk farmers about how to forge an agreement seven years of negotiaprocessing plant ucts. continually ramp upnew milkfarmer’s with Malaysia that has allows a liberalised to cash in on growingto haveThe The local supply in from 23, more milk, but faces the structural rights a NSW say.location willfrom only a small funding (withsqueeze no the true state of the no from 23,000 totions, 6,500. their industry is run, the levy even more demand in Asia. Commission dealt with some sensiprovide access to the most licensing arrangement Australia isdirect adding financial its own dimension, will risk undermining adjustment associated with theThemass minority of farmers. panel The b tive agricultural issues and not economic plant,The to be built in sustainable industry. l The board offor Australian liquidasmilkis well illustrated inoforder to secure itssoutheast Australia, not effectively covered by source of milk. Pactum has exporters and allows will bemarket even if, as some have noted, imports the in its disposal of the culling cows in the Netherlands to We believe they do that developed contribution from Dairy Au Australia’s dairy om Dairy Australiaaccess for higher value by theAANZFTA,” fast declining says Fraser. strong links to the Austrathe first Australian greenown survival. will ultimately play a part in filling the stockpile – but the longer the standoff meet phosphate regulations. fields expansion Sealing the deal: Malaysian trade minister Mustapha Mohamed “While under the lian dairy industry and will retail products. in UHT in not reflect the views the proposals dairy manufacturers appears exports used turers appears to be heavily membership of the with Australian counterpart Craigto Emerson after signing the deal. AANZFTA agreement expand itscontinues, arrangements It guarantees Ausyears. with buyers the more it gaps. This extra pressure doesn’t 10 compare Chris Gleeson, for wholly changing the most of Australian with dairy farmers for of the majority, and despite their presence influenc tralian wine exporters Freedom’s account for about resence influenced by dairy Australian DairyagriAnd unlike last year, the outlook starts to underscore massive influences of recent but also through technical Despite thewith comple-the ers through streamlining culture’s key interests supply of milk. The new fragility in the the best tariff treatment owned subsidiary Pactum Crossley VIC was on the board). manufac 50% ofdec-milk tion produced manufacturingMalaysia gives anyFarmers as well or so called ‘behind the of this agreement, of rules-of-origin had tariffs bound atas zero, plant will increase scope the results are tainted counAustralialevy will runprocess the for farmgate prices can certainly be market. years (for example, quota removal), border’ restrictions.” much remains to be done dairy and rice are two sec- laration processes and try. It also allows open plant. Some of its products for Australian milk supply On behalf of by a failed process. Far from advancing interest dominated –by but this has fallen vancing interests, and has state The FTA wascommodity signed on for Australia’s but farmers improved marketing tors where incremental value-added, sustainable access arrangements from bodies. words, emphasising that characterised as ‘better than now’. will be sold in Australia.In other ittois leaning on prices. Farmer Power May 22 in Kuala Lumpur tap into the full potential arrangements for certain 25%, accessour improveexport focused. 2023 for Australian riceWe market The company says whoand the positive interests of start watched Farmer Power, people are not to around and f watched the farmgate repeat But as these headlines there is insufficient demand to soak up which Northern hemisphere indicators by Australia’s Trade and of the Asian region and commodities. ments have been negotiInitially the plant will with all tariffs eliminated given Asian consumdairy farmers, *EdCompetiveness note: The changes has no funding independent of Dairy Minisbeyond. Malaysian marketcould ated under the Malaysian produce 250ml and 1L price for milk by 2026. ers’ rising incomes and previous calls made TheAustralia wellhave fallen heavily in recent weeks, and this product. An easing back of Chinese to deliver more back to the farmgate, price for 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 Dairy Australia hassome been able Australia and who mil- base, since been it never hurts to keep an eyehas on the being ke purchasing removed has whilehave product with an passed Oceania being kept at well totradethe Minister a net importer Malaysian counterpart now throwof its attention lion inbe Australia agricul“This trade dealfor was line capable of 100has Federation says the thereorigin will grow forWMP qualMustapa Mohamed. towards ensuring agricultural exports – including also particularly imporlion L. The processing and deal will improve interity dairy products from overseen an industry below su to attract over 600 therefore a that pricing horizon. of thehave support for that has maintained dustry below sustainable Agriculture and milk in 10 years’ time. into law. a premium, current
ng ur
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M.AU
Malaysia FTA benefits dairy Freedom
Foods plant targets Asia
national market access for Australian agricultural goods. “After seven years of negotiation, the NFF is under no illusion of how challenging it has been to complete this FTA with Malaysia,” NFF vice president Duncan Fraser says. The FTA will fill a number of gaps within the
tant for sectors such as dairy that have been facing a competitive disadvantage in Malaysia compared with New Zealand which already has a completed FTA with Malaysia in place.” The FTA also signals some administrative benefits for Australian agricultural export-
being its fourth-largest sugar export market and fifth-largest wheat export market. With an annual economic growth at about 5%, Malaysia forms an important part of the ‘Asian Century’ story and the opportunity this presents for Australian agricultural producers, says Fraser.
ture remains front and centre in completed FTAs with South Korea, Japan, China and Indonesia as immediate priorities. “These are all markets with enormous growth opportunities and where significant barriers to trade in agriculture still exist, not only through tariffs that restrict trade
Emerson says Australia will be as well-positioned in the Malaysian market as Malaysia’s closest trading partners in ASEAN, and in some cases better. The FTA will guarantee tariff-free entry for 97.6% of current goods exports from Australia once it enters into force. This will rise to 99% by 2017.
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GOT SOMETHING ON YOUR MIND?
GOT SOMETHING on your mind about the latest issues affecting our dairy industry? Put your pen to paper or your fingers to your keyboard, and let our readers know what you think. Don’t forget to put your name and address. Note: Letters may be edited. (Names can be witheld from publication on request.) 6/06/12 1:41 PM
LETTER TO THE EDITOR EDITOR@DAIRYNEWSAUSTRALIA.COM.AU
Ho
Dairy NewS AUSTRALIA march 2017
markets // 15
Competing in a post-truth world The 2016 US presidential election and Brexit vote brought a serious reality into our lounge rooms and onto our computer screens: the plague of fake news swaying society in a posttruth world. Post-truth is defined (according to a leading dictionary) as “circumstances in which objective facts are less influential in shaping public and consumer opinion than emotional appeals”. It simply took wellorchestrated political campaigns in the UK and then the US to effectively hit emotional buttons of target voters to “wall out” credibility and reason and deliver results that for many were not only unexpected, but seem downright crazy. Sad. Facts and evidence matter less in this era, while emotion and often distrust drive policy and change. An advocacy body or celebrity can spread any views it wants on subjects as vital as healthy eating, biotechnology and climate change, with little or no supporting evidence, and have people believe. Why? Because it’s what they want to believe. Lies build up and become wallpaper, their content and credibility no longer matters. It’s far too late
fresh agenda steve spencer when minds have been changed and decisions made. Ask Hillary about that! The actual truth is, there is nothing new in this trend. The food industry has been operating in a post-truth world for many years. There is much recent experience. A milk product that is cleverly pitched to a segment of consumers promotes the belief in a “difference they can feel” – has been so convincing that they are prepared to pay the healthy difference in price. Conventional products continue to complain that this product has no scientific basis, meanwhile the brand climbs to 10% of supermarket sales. How long have we seen “celebrity chefs” or selfmade food experts (the Food Babe of the US is a favourite example of mine) without credentials in diet, nutrition or any other aspect of health, claim that certain foods are bad for you and that
sectors need to watch cutting them from the carefully. diet is the way to healthy Expectations of living? consumers in society are They attract a far rapidly changing. People greater following than are bombarded with so a fact-based agrifood much noise from a diverse industry promotion site. array of “channels” they A weight of evidence are forced to become can be rolled out to highly selective in what scientifically prove that they absorb and respond there is no health benefit to. from consuming organic People choose beliefs food, but that doesn’t which suit their view deter a steadily larger The food industry has been operating in a post-truth world for many years. Self-made of the world, and are number of consumers food experts like the Food Babe in the US, with no credentials in diet, nutrition or any becoming more selfish willingly paying more for other aspect of health, attract a far greater following than a fact-based agrifood industry promotion site. organic foods in the belief about what they believe, feel or value. that “organic is natural is require stories that take a daunting challenge to evidence to cut through: They choose positions healthier” and the rest is a bit long to tell, and for gain acceptance for GMO time-poor people simply or “selective facts” to “big food” and bad. forages – the self-absorbed consumers or community glaze over at facts. match those beliefs. More recently, dairy members, “not enough consumer perceives all More often, concepts Increasingly, consumers sector protests have direct benefit for me”. the benefits going to the such as fact based take their own initiative grown over the word It’s far easier to get a producer in saving costs nutrition; a diet that to seek out businesses or “milk” being hijacked by or fending off drought, but bad news story to spread people they want to follow provides the building alternatives. like a bushfire than sees all of the “risks” for blocks of Once Getting the message home to sell a good one to a themselves in eating the long-term thinking it disinterested target. owned the to influence consumption of healthy living; end product. Getting the message So where do we go or an animal term, the US products and acceptance of with this? Dairy competes home to influence treatment dairy sector innovation is going to require that has an consumption of products for consumers, for career has watched environmental choices, for capital and for and acceptance of sales of plant- a big rethink to keep dairy innovation is going to government investment. benefit seem based milks competitive. require a big rethink to Eventually it comes all too far soar 76% over keep dairy competitive. down to how the away, too the past five Time is running out. abstract for people to grab community is influenced or engage with. years while conventional • Steve Spencer is a director by messages and imagery. a tangible and immediate They look to the milk sales have dropped of Melbourne-based firm The industry can’t rely on benefit. reviews of peers - other 18%. traditional arguments and Freshagenda, a specialist This era requires consumers or people they The traditional dairy food analysis, advisory and channels for prioritising, more skilled marketing identify with - for their industry argues these consulting business which or even accepting dairy. engagement that can truth rather than listen to alternatives aren’t provides a range of clients The core propositions readily “separate a fool the “story” the brand or technically milk (in its with insights on market that the dairy sector from their money”, by world view), but who cares product tells them. driving a compelling story relies on – solid platforms trends and developments, Reasoned argument – the consumer does and strategy development and like sound nutrition, that needs little or no and scientific fact no that’s what matters longer cut it with a person back up – because it “feels environmental and welfare implementation, supply These are small chain analysis and project credentials, rewarding right”. that has a firm world examples of a wider trend evaluation. career opportunities – No wonder it is such view. It is far harder to use that stakeholders in food
Farmgate price predicted to reach $6/kg MS There’s been lots
of discussion about the need for more transparent pricing signals for dairy farmers. As the events of the past 12 months have shown, the absence of a clear and credible view on forward prices can make planning challenging for farmers to say the least. Back in July last year we introduced our concept for “a clearer view” on future farmgate prices for Dairy News Australia readers. Our approach recognises there are two components of farmgate milk prices paid by manufacturers in southern Australia – a commodity value of milk, which reflects the returns
fresh agenda jo bills from the global market for dairy products, and an additional value captured on top of base commodity returns. The commodity milk value (CMV) outlook is based on Freshagenda’s forecast fundamental value of major commodity products (cheese, butter, whole and skim milk
powder), which is in turn based on our rolling analysis of global trade balance. This is converted into a local value of farmgate milk using the industry’s product product mix, deducting conversion costs and converted to Australian dollars per kilogram of milksolids. The chart on the right indicates the CMV steadily climbed in the latter part of 2016 as supply from EU and New Zealand tightened. The CMV peaked in January, and since the not totally unexpected news that Kiwi milk output wouldn’t be quite as low as Fonterra forecasts were indicating,
coupled with a quicker than expected recovery in EU production thanks to improving farm margins – commodity prices and the outlook have weakened. Improved commodity returns in late 2016 will translate to a CMV for 2016/17 in a range of $4.55 to $4.75/kgms – implying a final farmgate price between $5.20 to $5.40/ kg MS – including value capture. Looking ahead, large EU intervention stocks of skim milk powder will continue to overhang the market as the northern hemisphere spring flush approaches – and demand remains patchy. However export availability and
import demand are projected to balance out. At home, domestic value capture will remain under pressure – particularly
for cheese – with no signs that competitive tension will lesson. Our projected range for the average southern
Australia farmgate price in 2017/18 is $5.80 to $6.00/ kg MS with an underlying CMV of $5.30 to $5.50/ kg MS.
Dairy News AUSTRALIA march 2017
16 // management
Seasonal strategy is more t Gordon Collie
Proven resilience from a mix
of pad feeding and pastures has set a Brisbane Valley dairy farming family for the next generation. The partial mixed ration system has been a mainstay for the high production Holstein herd since the early 1990s, giving the Wheildon family the flexibility they need to cope with seasonal variations. Mark Wheildon and his wife Deborah operate Good Luck Farms at Lower Cressbrook just outside Toogoolawah. The enterprise started by his father Ken in 1965 has been consolidated from three small dairies to a single 320 hectare unit. Mark worked away from the farm gaining qualifications as a mechanic, a trade he has found useful since he began dairying full time in 1988. Their son Brendan has completed his mechanical apprenticeship while now also working part time on the farm as is their daughter Bianca who is in her final year of a law degree at the University of the Sunshine Coast.
Who:
Mark and Deborah Wheildon Where:
Lower Cressbrook, near Toogoolawah What:
Mixed ration system
The family have milked up to 400 cows, but now focus on 250 to 300 milkers with a lactation average around 8000 litres complimented with beef breeding and selling lucerne hay. “We’ve got good alluvial flats on the Brisbane River, but we cop a flogging when it floods. And we can get extended dry periods too.” “Paddock feed is always cheaper, but we need security of production. “When we first introduced a feed ration, we thought we could drop it in winter, but the cows looked for it and its
now part of our year-round feed intake to get the production levels we look for,” Mark said. “We grow our own silage, as much grain as we can and our own hay with a surplus for the local market.” They typically feed four to five tonnes of mixed ration a day on their shaded feed pad. The grain content averages about seven kilos which includes a kilo per milking fed in the bails as a contentment ration. About 60 hectares of corn is grown each season, half for grain and half for silage. The hammermilled corn is fed with an equal measure of wheat as a preference, sometimes barley. About 40 hectares of ryegrass provides winter feeding from May into November. Lucerne is a mainstay crop with about 60 hectares divided equally between grazing and hay production. “The lucerne is marvellous for us. We can make round bale silage or quality small hay bales for our own use or for sale. It provides quality morning grazing with forage sorghum fed off at night.” Mark said the heatwave conditions
Mark and daughter Bianca with contented cows on covered feed pad.
in early 2017 had proved extremely challenging. Milk production crashed five or six litres from the peak 28 litres a day, leading him to begin trials with a feed additive designed to help with heat stress. With good access to water, four travelling guns can irrigate about 120 hectares. Pumping costs are a major expense, costing about $200 a night for each irrigator to water 3.2 hectares. Total power bills for irrigation and the dairy exceed $10,000 a month, with
some offset from two small solar panel installations. Mark said he had done some cost comparisons on replacing the high pressure sprayers with centre pivot or lateral move sprinklers in the future. He is attracted to the energy cost savings of low pressure systems but the question mark is over the big capital outlay. A big spend would need to be amortised over a decade or so and would need a serious commitment to
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DAIRY NEWS AUSTRALIA MARCH 2017
MANAGEMENT // 17
e than Good Luck
Mark in a field of forage sorghum.
Ration feeding at Good Luck Farm.
staying in dairying to justify. The Wheildon family supply their milk to Lion Dairy and Drinks in Brisbane through the Dairy Farmers Milk Co-operative. Mark and DFMC share the view that hard work and high quality are worth a premium. Mark is also a DFMC Ward representative for the local Lockyer Valley region. “There are only five farms left in the
Toogoolawah area now. There used to be about 35 on this side of the river alone and we are the only ones left.” The farm milks pedigree cattle with a focus on breeding since his father first registered Good Luck Friesian Stud when he started dairying. Unjoined heifers are mated with sexed semen to help improve herd genetics. Quality Holstein semen is
used on the highest performing cows and beef semen on the animals which have lower production to breed beef weaners. In an effort to boost conception rates, the herd has this year been fitted with heat detection devices which automatically transmit data at milking. Daughter Bianca, 21, is keenly interested in genetics and last October
registered her own stud. Good Fortune Holsteins has a foundation of six Leader females from the Darling Downs which have been mated with sexed semen. “I hope to ramp up our efforts with genetics in general but also showing our cattle. I am committed to the dairying industry and excited to see where it takes my brother and I in the future as 3rd generation family farmers,” Bianca said.
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DAIRY NEWS AUSTRALIA MARCH 2017
18 // MANAGEMENT
Soil nutrients depleted New Forage after high yields Value Index SOUTHERN AUSTRALIAN dairy farmers are being urged to replenish their paddocks after a long growing season of high pasture yields. Andrew Speirs, of consulting firm Meridian Agriculture, has advised farmers who have produced high yields to perform soils tests and conduct a nutrient budget. “Farmers need to know what nutrients have been removed from those paddocks, particularly after several years of dry weather” Andrew said. “This will help them determine how best to revive their paddocks.” Andrew said some paddocks have cut up to eight tonnes of hay, removing about 25kg of phosphorous out of the system, the equivalent to nearly 300kg of single super plus 300-350kg of muriate of potash. “Farmers need to keep an eye on those high yielding paddocks and
Andrew Speirs
replenish what has been exported,” he said. “It’s not like other years where pasture growth has been reduced.
Quality of hay and silage is down a bit because it was late to harvest, but you’re still taking out all that phosphorous so farmers will need to look at increasing phosphorous fertiliser application rates, as well as potassium and sulphur if on light soils.” Andrew said rainfall across southwest Victoria, for example, had been in the top 10 percentile. Andrew will speak at a pasture update seminar in Stawell on March 27, providing tips on nutrient replacement after a wet year. The Grassland Society of Southern Australia is combining with the Perennial Pasture Systems group to present the Meat & Livestock Australia Pasture Update at Stawell Entertainment Centre on Monday, March 27. • For more information contact 1300 137 550.
L A I C SPE T R O P RE
NEXT ISSUE: APRIL DAIRY EQUIPMENT Dairy farmers have to make decisions now for improving their milking system for next season. Many will be considering replacing old equipment or altering their dairy sheds to improve milking efficiency. BOOKING DEADLINE: March 29 MATERIAL DEADLINE: April4 PUBLISHED: April 11 CONTACT: BRETT MATTHEWS T: 0417.440.009 E: brettm@dairynewsaustralia.com.au
“The Forage Value Index scores are now make more informed, profitable calculated by multiplying the seasonal decisions when choosing the best yields of each cultivar (as determined perennial ryegrass for their farming by experimental trial data) with the system and forage needs, following the economic value (as determined by launch of the Australian Forage Value case study farms in different dairying regions).” Index (FVI). The economic values for the The FVI is an independently-analysed, industry-endorsed economic index based increased dry matter yields in the trials ranged from $0.15 - $0.37 per kilogram on seasonal dry matter production. Using a simple banding system, the of extra dry matter. Economic values are the change in FVI ranks the performance of 20 of operating profit for every Australia’s most popular kilogram of dry matter perennial ryegrass varieties “The increase. The economic value relative to the typical varies with the season, for climactic conditions economic example, pasture grown on within each dairy region, values farm is worth more in winter providing farmers with for the than spring. another tool to help lift increased To be included in the farm profitability. FVI, each cultivar must have Dairy Australia’s Group dry matter Manager Farm Profit and yields in the seasonal yield data from at Capability, Chris Murphy, trials ranged least three, three-year trials using strict experimental said there was currently from $0.15 protocols. All trial data was no independent method analysed by an accredited available to assess the - $0.37 per statistician and reviewed agronomic performance kilogram by a Technical Advisory of the myriad of perennial of extra dry Committee to determine its ryegrass cultivars matter.” place within the FVI banding commercially available in scale. Australia, until now. The FVI was developed by Dairy “With little independent information on the traits and capabilities of these Australia, in partnership with Agriculture existing cultivars, farmers tend to stick Victoria, Meat and Livestock Australia with what they know and have used, and the Australian Seed Federation. The New Forage Value Index which can result in lost production opportunity and reduced incentive to for Australia can be accessed at invest in new pasture cultivars,” Mr the Dairy Australia website – www.dairyaustralia.com.au Murphy said.
AUSTRALIAN DAIRY farmers can
Routine calving induction limit cut to 12% THE AUSTRALIAN dairy industry has revised its routine calving induction limit from a maximum of 15% of cows in a herd, to 12%. Routine calving induction is all nontherapeutic inductions. Australian Dairy Farmers (ADF) interim CEO, John McQueen, described the reduced induction target as “great news for the industry”. The new target was set after reviewing 2016 induction data and following consultation with dairy farmers, vets and processors through the Calving Induction Steering Group, the ADF Animal Health and Welfare Policy Advisory Group, the ADF National Council, ADF Board and the Australian
Dairy Industry Council (ADIC) Board. A survey of veterinary practices performing inductions in 2016 confirmed that induction was used in fewer herds and the number of cows induced (0.75% nationally) was almost half the number induced in 2015. In April 2015, following a series of meetings and consultation with farmers, vets and processors, the dairy industry agreed to phase-out routine calving induction nationally. “The Australian dairy industry wants to be as proactive as possible on measures to support excellent animal welfare outcomes and to meet the expectations of customers and consumers,” John said.
CHECK OUT THE LATEST NEWS AND INFORMATION AT www.dairynewsaustralia.com.au
DAIRY NEWS AUSTRALIA MARCH 2017
ANIMAL HEALTH // 19
More trouble, but is it new or old? ROD DYSON
I SHOULD have been expecting the phone to drop out, but it still came as a surprise when it did! It drops out every time we approach Cape Clear, a small community midway between Ballarat and Lismore in the Western District. Unfortunately, I was mid-sentence on the phone to Paul when it happened. You may remember Paul from a couple of months ago – his was the large farm where Staph aureus (Staph) had been causing cell count and mastitis issues. Paul and the farm staff had diligently made the necessary changes to their plan, especially to the milking plant and the milking routine, and things had been going along quite well, but they were also well aware that things could change. Paul had seen how milk cultures are so important to understanding a problem, and was aware that we needed ongoing cultures to monitor what was happening on the farm, so when the Bulk Milk Cell Count (BMCC) started to sneak up, and he also started to have a run of clinical cases of mastitis, he had duly collected a range of milk samples for culturing. The results had just come back, and he had called to discuss the implications when the phone dropped out! While we travelled onward to where we would regain signal, I had time to read the email with the results that he had sent, and sure enough, it looked like things had changed, as there were a number of Strep uberis results in this batch. But the critical question was about which samples came from high cell count cows, and which were from clinical cases. After we regained contact, I asked Paul to send
me the list of cows with a note as to which were clinical cases and which were not. I was then able to sit in the car with my iPad on one knee and iPhone on the other knee, comparing the cow list with the culture results (and no, I was NOT driving at the same time!). It then quickly became clear that the high cell count cows were still predominantly Staph infections, and the clinical cases were now predominantly Strep uberis. This change necessitated a change of thinking – where could these environmental Strep uberis infections be coming from? As always, the highest risk period for new infections, especially environmental infections, is the first hour after milking, whilst teat orifices are still closing and sealing. This meant the feed pad was high on the list of potential offenders, because that is where the cows go immediately after leaving the milking shed. “How often is the feed pad cleaned?” was naturally the first question, and the discussion went from there. Like many farms, Paul’s feed pad is cleaned on an “as needs” basis – when it looks like it is “too dirty”, it goes onto the job list to be cleaned. This then opens the door of human variability – different people may have a different interpretation of what is “too dirty”, and also how “urgent” the task is, and possibly even “how it is done”. A delay of only a day or so, or a different idea of what is “too dirty”, can easily open a window of considerable risk for environmental infections. So the decision was made to change to a regular cleaning program – every Monday and Thursday, because that is when all staff members are on the farm, making it more “do-able” on those days. Extra cleaning would be done in anticipation of
a rain event, as it usually becomes very difficult to clean a pad after it turns to slop. The second question regarding the feed pad is whether or not feed is in the troughs prior to milking so that cows will walk out after being milked and start eating. If there is no feed in the troughs when they
arrive, the cows will always do the same thing – lie down and wait. And the last thing Paul needs is for the cows to lie down and expose their teats to contaminated material in that first hour after milking. In Paul’s case, this was not an issue, but we regularly see farms where a simple change to this
timing can make a significant difference to the risk of environmental infections. While Paul’s milk quality was quickly back on track after these changes, I contemplated how useful technology had been in providing a rapid response – and also how frustrated I had been by a momentary loss of that
technology near Cape Clear. But I also considered how valuable the communication had been for Paul that comes from maintaining a close relationship with an advisor. Paul was able to make a quick response using informed decisions, based on discussing accurate information coupled with
a clear, up-to-date understanding of the on-farm situation. Use whatever technology you have available to keep your advisers informed to make the best use of their services. • Rod Dyson is a veterinary surgeon and mastitis advisor at www.dairyfocus. com.au
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DAIRY NEWS AUSTRALIA MARCH 2017
20 // ANIMAL HEALTH
To tube or not to tube? RESEARCH HAS
shown that dairy calves should be actively fed good quality colostrum as soon as possible after birth in order to benefit in the short and long term. The method of active feeding has been shown to affect colostral antibody absorption, with teat feed-
ing or tube feeding being optimal. Calves left to suckle the dam are at a greater risk of low antibody absorption which is linked to increased morbidity and mortality. However, the merits of actively teat feeding colostrum versus actively tube
“The method by which you feed colostrum is important but secondary to actually feeding it in the first place.”
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both methods in preparation for the autumn calving season. Getting in the groove
Adult cows have four functional stomachs: the rumen, the reticulum, the omasum and the abomasum. In the pre-weaned calf, liquid milk and colostrum are digested in the fourth stomach, the abomasum. In order for this to happen efficiently calves are born with a muscular fold of tissue which, when closed, forms a channel between the bottom of the oesophagus and the abomasum. This is called the oesophageal groove. When the groove is closed, milk can bypass the first three stomachs, enabling liquid feed to be deposited directly into the abomasum. The closure of the groove relies on a reflex which is triggered by the sights, sounds and smells of milk feeding. Drinking water is unlikely to stimulate this reflex. The action of sucking is a strong stimulus for closure of the oesophageal groove. Teat vs Tube Teat feeding stimulates the natural reflex closure of the oesophageal groove, depositing colostrum and milk directly into the abomasum. This is the major benefit of teat feeding. Fluid delivered by a tube feeder does not stimulate this reflex closure and fluid is deposited into the first three stomachs. As a result, there is a potential time delay in absorption of colostral antibodies in calves fed colostrum with a tube feeder. Colostrum needs to pass from the first three stomachs to the abomasum and then to the small intestine for absorption. Studies have shown that the volume of colostrum fed by a tube feeder has an effect on the level of absorption of antibodies from colostrum. Only 42% calves fed a small volume of colostrum (1.5L) by tube feeder had acceptable passive transfer of immunity, com-
pared to 100% calves fed the same volume by a teat feeder. However, calves fed a larger volume (3L) of colostrum with either a tube feeder or a teat feeder had no difference in passive transfer of immunity. This shows that when calves are tube fed larger volumes of colostrum, there is overflow from the first three stomachs and rapid passage to the abomasum. The decision of whether to feed colostrum by tube or by teat should take into consideration the time between birth and first feed, the volume of colostrum to be fed, the skill of the operator and the other workload. Tube feeding requires specific training and can be fatal if not performed correctly. Ask your veterinarian for guidance on how to tube feed calves safely. The same procedure is used to administer electrolytes to sick calves and is a useful skill to learn. Tube feeding is quick and efficient with a known volume of colostrum being fed. This is particularly useful in seasonal calving herds where there can be a lot of newborn calves in a short period of time. Tube feeding is ideal in tight calving patterns and when used to feed larger volumes of colostrum in a single feed. As discussed, teat feeding is more natural, less invasive and allows optimal absorption. It can be time consuming and frustrating and is often not an option when many new calves require active feeding of colostrum over a short timeframe. Teat feeding is ideal when time permits and when smaller volumes of colostrum are fed, for example to lower birth weight calves. Remember: It is the active feeding of any colostrum which will have the biggest impact on calf health. The method by which you feed colostrum is important but secondary to actually feeding it in the first place. • Dr Gemma Chuck is a veterinary advisor at Apiam Animal Health.
DAIRY NEWS AUSTRALIA MARCH 2017
PASTURE SEEDS // 21
Wingham farmer hits the jackpot AS THE old saying goes, when it rains
it pours and when Stephen Germon had to replant his pastures for the fifth time in a year due to flooding, he knew he had to make some big changes. So he packed up and moved 50 kilometres to Wingham near Taree where he and his son Dean run their Holstein and Jersey-Friesian cross herd on 280 hectares of leased land. “I’m a fourth-generation dairy farmer, my father was a dairy farmer for 47 years and even when I was getting flooded out, we didn’t think about stopping, we just tried to work out a way to improve things which is why we moved.” “We’re chasing more milk so we’ll increase the numbers rather than pushing the cows too hard for extra milk.” Growing herd numbers means there’s a growing demand for grazing pastures and silage, but the rain stopped
falling at Wingham. This is where Pasture Genetic’s Jackpot Diploid Italian Ryegrass has been a lifesaver when the area has fallen well short of its usual 1400mm annual rainfall. Stephen planted 24ha of Jackpot instead of his usual Knight Italian Ryegrass after his seed supplier Pete Gosling saw good research results for it. Stephen direct drilled Jackpot at 30 kg/ha where it displayed an excellent tillering ability to produce a thick, well branched ryegrass on first grazing. It was still growing in November when his other ryegrasses had gone to seed. “We planted late February, but didn’t see a blade of grass and I thought we would have to replant because we just didn’t get any rain. “Then we got 130mm in deluges over two days and everything just popped
NSW farmer Stephen Germon said his Jackpot Diploid Italian Ryegrass was still growing in November when other varieties had gone to seed.
out of the ground beautifully. “It was thick ryegrass from the word go, it wasn’t finicky and the cows would go in and leave a bit of residue behind. “Even when the season dried off and I couldn’t water some of the paddocks,
the Jackpot was still there. Another inch of rain would have meant another cut of silage off it.” Stephen said the Jackpot was competitively priced and that he will use it again instead of Knight because of the extra quality and quantity and its abil-
ity to keep on growing during a tough season. “I’m really happy with the way it’s held up in the dry and our cows went up three litres every time we went into those paddocks, so I’ll definitely be sowing more next year.”
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Dairy News AUSTRALIA march 2017
22 // pasture seeds
Choosing best ryegrass for your farm Aubrey Pellet puts a lot of thought into his pasture program – so he’s happy that the dairy industry is doing the same. A former Kiwi who now farms at Hill End in West Gippsland, Aubrey has looked towards his homeland for guidance on cultivars in the past, with the New Zealand dairy industry having successfully used a Forage Value Index for some years. Now with Dairy Australia developing a Forage Value Index for Australia, Aubrey can see huge benefits for farmers who use the tool to select their ryegrass species. “Ryegrass is the foundation of my farming business so I want to make sure when I put in a new ryegrass in the ground, I’m hoping it’s going to be there for more than five years, so I want to get the best ryegrass that I can,” he said. “The Forage Value Index will give me the confidence that this is the best ryegrass that I can sow for my conditions.” The Forage Value Index has been developed by Dairy Australia, in partnership with Agriculture Victoria, Meat and Livestock Australia and the Australian Seed Federation to provide independent analysis of agronomic per-
West Gippsland farmer Aubrey Pellet says one of the biggest barriers to choosing new cultivars is knowing whether you will get a benefit from the new cultivar over and above what you are using already.
formance of the 60-plus cultivars of perennial ryegrass commercially available in Australia. Australian dairy farmers invest more than $100 million renovating pastures each year and perennial ryegrass accounts for almost 80% of this. Until now, there has been no easy way of assessing the agronomic perfor-
mance or potential economic benefit of different cultivars for use in dairy production. The FVI is a rating system that helps Australian dairy farmers and their advisors make more informed decisions when selecting perennial ryegrass cultivars. It provides an accurate, reliable and independent assessment of
the potential economic value of perennial ryegrass cultivars in different dairy regions of south-east Australia. The selection of better performing cultivars will help to increase pasture productivity at key times of the year and ultimately, farm profitability. The investment in new ryegrass species is one of the biggest decisions that
farmers can make – and it can make and break a season. For Aubrey, having a higher level of certainty when it comes to choosing pasture species will help reduce risk in his farm business and capitalise on favourable seasonal conditions. “One of the biggest barriers to choosing new cultivars is knowing whether you will get a benefit from the new cultivar over and above what you are using already,” he said. “Because it is a substantial investment, you need the security of knowing you can get a better yield or more energy or greater persistence.” “I like the way I will be able to select my preferences. For instance, I will be able to say I want a diploid rather than tetraploid or choose the type of endophyte I prefer.” Dairy Australia’s Richard Romano said farmers like Aubrey will reap the benefits once the Forage Value Index is up and running. “The Forage Value Index gives you reliable, accurate and independent information to make independent decisions on which cultivators have the best potential for delivering economic value on your farm,” he said.
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DAIRY NEWS AUSTRALIA MARCH 2017
24 // MACHINERY & PRODUCTS
You have to admit, it’s built Ford tough I KNOW you’ve been
hanging out for an update on the Ford 7700, purchased before Christmas on something between a whim and a brain fade. Whilst you only caught up with the details a month ago, I’ve had considerably longer than that to poke and prod, and put the old girl through her
paces. Well, I’d like to say that’s the order it went in. ‘First, I’ll get her home, then I’ll give her a good service and a thorough look over, then I’ll see what she can do’. In the event, you may remember that trying to get hay off the paddock late last year was a bit of a nuisance.
Long periods of patience, interspersed with bursts of racing against the clock before the next 5mm of rain arrived. Long story short, the first weekend after the Ford arrived was dry, so with little more than a check of the fluids the small square baler was
The first weekend after the Ford 7700 arrived was dry, so with little more than a check of the fluids the small square baler was hooked up and off we went.
GRUNT
JOHN DROPPERT hooked up and off we went. The old Ford hasn’t looked back since. It’s been on the baler, haybob, hay forks, slasher, land plane and 8’ grader blade, only letting me down once when I discovered the hard way that the fuel gauge doesn’t work. In an unrelated and rare fit of Deutz-induced rage (and briefly forgetting that tractors are inanimate objects) I nearly hooked it up to the 3.2m hay mower, because ‘that’ll learn ‘em’. I reckon it would have done the job – possibly with the front wheels off the ground. After an experience or two tedding by moonlight, I took to the electrical system with a 12 volt tester, yielding more questions than answers about this machine’s past. It wasn’t that hard to get power to the driving lights (one of which promptly blew), and subsequently replace them
with an LED light bar. Getting a current to the back of the machine proved to be more of a challenge, and was only achieved when removal of the correct section of dash revealed that several wires had been disconnected from the master light switch. Probably for good reason, but there’s only one way to find out. Plugging them back in also restored the dash lighting, so now I can see the nonfunctioning fuel gauge at night too! A new mystery awaited when I picked up the cover of the fuse box from the cab floor to reattach it. Upon discovering that it no longer fitted,
a search amongst the floor detritus produced a second cover, perfectly matched to what I must now assume is not this tractor’s original fuse box. Interesting. After a few weeks of shaking the spiders loose, I finally removed no less than 10 litres of dirt, broken glass, spider webs, rotted trim and rusted nuts from the cabin, and had the back window replaced with a monstrous sheet of laminated glass more suited to a suburban passenger train. I can confirm that sitting on the window sill trying to support a 30kg sheet of glass on your knees whilst holding both ends of the recessed bolts to reattach it is not fun.
Glass in, the spiders have been bombed, so only the hardened ones remain. Another surprise awaited the first drive post-cabin sealing. After 10 years of very occasional use, and a 2 year stretch with nothing at all, the air conditioner is still blowing cold air! Probably dust, pollen, spiders and Legionnaires Disease as well – but cold air! Just in time for the end of summer… • John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many diffeent makes and models in a variety of roles for both profit and fun.
Manitou enhances telescopic handler MANITOU HAS released a new generation of its MLT-X 840 agricultural telescopic handler. New features include innovations in ergonomics, improved performance thanks to a more powerful engine and greater hydraulic flow. The commercial launch of the MLT-X 840 ‘Silent Force’ models will be held in Australia next month. The 8 metre model MLT-X 840 has a new speed-sensitive Active CRC boom suspension equipped with activation memory. An ‘Intelligent Hydraulics’ package will be offered on the new generation combining 3 new concepts: ■ ‘Quicklift’- allows the operator to extend or retract the telescope and lift the boom simultaneously. This is particularly useful for storage operations ■ ‘Bucket shaker’- a new function
■
that shakes the bucket with a single movement of the controls by the operator ‘Return to load’- The Machine memorizes the exact initial angle and position of the bucket, enabling the machine to automatically return to the start position in loading operations without any adjustment by the operator.
“The innovations on these very popular models will allow our customers to increase their productivity while reducing the time spent on numerous operations,” according to Manitou’s Wim Roose. The soundproofing of the cab has also been optimized with a reduction of 6 decibels, compared to the previous version of the MLT-X 840 machines.
DAIRY NEWS AUSTRALIA MARCH 2017
MACHINERY & PRODUCTS // 25
Roll Baler Combi revamped MARK DANIEL
THE NEW Holland Roll Baler 125 and Roll Baler 125 Combi have been completely restyled to offer excellent service access. It will now meet the requirements of the most demanding contractors, livestock and mixed farmers, the company says. Designed to operate in a wide range of conditions and crop types, and deliver consistently high bale quality, the new models also offer more durability, reliability and ease of operation and share many advanced features with the Roll Baler 135 Ultra.
New Holland’s Roll Baler 125 and Roll Baler 125 Combi have been completely restyled.
machine without any losses. In operation, the knives lower automatically when the drop floor is lowered and the choice of an optional rotor declutch system ensures fast unplugging even in extreme conditions. In the bale chamber, a new roller design with 10 notches reduces crop losses in dry conditions and ensures positive bale rotation in all conditions. The operator can select the option of using 10 knives or the full 20, switching from the two settings without having to stop for sharpening. As a bale nears completion, the knives can be retracted for
The film wrap on the Roll Baler 125 Combi works 20% faster than the previous model and uses the New Holland hydraulic feed to pre-stretch the film. The Roll Baler 125 models have a 2.3m wide pick-up, which was introduced on the BigBaler and Roll Belt balers, with five tine bars with double cam drive and the adjustable suspension system. An improved roller wind guard, also taken from the BigBaler range, promotes feeding in light or heavy windrows and is available with a choice of removable fixed or swivel wheels. An adjustable drawbar is designed to allow high and low hitch positions and is complemented by a double speed jack for fast hitching or removal. A new drop floor, operated from the tractor cab, offers 120mm clearance at the front and 60mm at the rear. This makes it easier and quicker to clear a blockage from the
the final layer, leaving a smoother surface for wrapping. When not in use, the knives are automatically raised as the bale chamber is opened, ensuring self-cleaning of the knife bank. The film wrap on the Roll Baler 125 Combi works 20% faster than the previous model and uses the New Holland hydraulic feed to prestretch the film. This ensures a tight, reliable wrap every time and is suitable to deliver plastic or net from rolls up to 1400mm wide; it has stowage for three spare rolls. The single Roll Baler, has the maker’s Duckbill net wrapping system, which is 20% faster, easy net loading from the side with one active and two stock rolls, and over-theedge net wrapping.
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DAIRY NEWS AUSTRALIA MARCH 2017
26 // MACHINERY & PRODUCTS
Keenan returns to Australia KEENAN RETURNS
to Australia following its acquisition by animal nutrition company, Alltech, last April, and will be present at Farm World Field Days, Warragul, from March 30 – April 2. Keenan Australia took delivery of its first machine last month and will have its MechFibre 320 and Orbital Spreader on display at Warragul, Keenan Australia General manager, Gary Griffith, will also be on hand to talk to farmers. Gary said Keenan is using the latest technology to help producers deliver greater farm efficiency. “InTouch is Keenan’s live data review and
support service featuring advice from skilled nutritionists. It helps farmers ensure their animals reach their full potential,” Gary said. The InTouch technology works by automating data sharing, enhancing nutritional analysis and improving analytics. InTouch records a log of feed ingredients and how it has been prepared. This information and feedback from the farm is exchanged through the Keenan InTouch Controller, which is powered by Intel and cloud-based technology. The InTouch system, combined with the InTouch Controller,
monitors all the action that takes place in the feeder and on the farm. “For example, the system alerts the InTouch Hub when there is a drop in animal performance or a change in the mixing system on the farm. It acts as another pair of eyes for the farmer. “The website application and telephone offers support from a team of top nutritionists, providing producers with optimal control over the nutrition and performance of their herd,” Gary said. “InTouch ensures a top quality and consistent mix from the MechFiber wagon. “No matter what feed
and forages a farmer uses, there are two things that are crucial: the quality and the consistency of the mix. “Independent research shows the mix needs to be the same, day in and day out, to deliver the best results. “That means evenly, thoroughly mixed feed that is never overmixed or under-mixed, with ingredients that are consistently added in the same order and ratios.” Gary said the mixer wagon and the InTouch system helps do this by breaking down the mix to produce fibres with clean- cut ends, which help provide an optimum rumen condition when digested by the animal.
InTouch system saves time IRISH FARMER, Michael Nolan,
L A I C SPE T R O P RE NEXT ISSUE: APRIL TECHNOLOGY AND ENERGY More dairy farmers are adopting technology that helps reduce costs and save time, including management software; automated irrigation systems; robotic milking; and heat detection devices. A special report in the April edition of Dairy News Australia showcases some of the latest technology helping farmers improve their efficiency and profitability. BOOKING DEADLINE: March 29 MATERIAL DEADLINE: April4 PUBLISHED: April 11 CONTACT: BRETT MATTHEWS T: 0417.440.009 E: brettm@dairynewsaustralia.com.au
milks about 100 cows in the south east of Ireland. He operates a buffer feeding system to supplement the grass on his farm. The grazing platform is on 28ha around the farm, with an out-farm used for silage. One of his main objectives is to produce good-quality silage as it constitutes as the main ingredient in his herd’s diet. Michael is using a high- input, highoutput model, which is based on goodquality grass. In early 2016, Mr Nolan upgraded to a new Keenan MechFiber350 and opted for the InTouch Controller and InTouch system. In this short period of time he is convinced of its merits and the
technology. Not only does it allow him to feed a consistent ration, but it also gives him more free time to carry out additional tasks on his farm. “The InTouch Controller has the capacity to monitor numerous diets,” he said. “It monitors the amount of silage, straw and grains needed in the feed. The machine does all the work and automatically shuts off the power takeoff (PTO) when the mix is complete. I no longer have to wait for the load to be mixed and other jobs can be carried out. “The technology also allows me to be more aware of performance on farm. The early identification of problems has allowed me tackle these issues before they become costly.”
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