Dairy News Australia Sept 2013

Strong fodder season will ease squeeze pages 6-7 NEXT GENERATION

Investigating all options PAGES 10-11

CROSSBREDS TICK BOXES High fertility, production PAGE 18

september 2013 Issue40 // www.dairynewsaustralia.com.au

Taming the Lion Dairy Farmers secures new milk deal PAGE 4

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Dairy NewS AUSTRALIA september 2013

news  // 3

Further calls for dairy free trade Damian Murphy has investigated how banks can help young farmers enter the industry. PG.10

Michele Ryan and Frank Mickan give tips on producing the best quality feed possible this spring. PG.20

Australian dairy leaders have called for free trade agreements to capitalise on the ever-increasing demand for dairy in Asia. Australian Dairy Industry Council chairman Noel Campbell, Murray Goulburn managing director Gary Helou and Bega Cheese chairman Barry Irvin have all called for action. Mr Campbell said trade barriers had to be removed if Australia was to expand further into international markets. China overtook Japan as the greatest destination for Australian dairy exports last financial year and this is projected to grow further as the Chinese domestic supply decreases. ADIC chairman Noel Campbell said Australia was an efficient producer and had adopted an openmarket approach. However, he said without free

trade agreements such as the one New Zealand has in place with China, Australian dairy would find it hard to expand further into international markets. “Dairy exports to our top 10 markets are worth over $2 billion to the Australian economy, but in recent years our slice of the pie has been shrinking,” Mr Campbell said. “We rank fourth in terms of world dairy trade with a 7% share, behind New Zealand, the USA and the EU. “Most of our exports are to Asia partially due to our geographic position, but also we are excluded from other major markets by direct restrictions or export subsidy programs.” Mr Campbell said a new report commissioned by the ADIC and prepared by Dairy Australia showed there was a positive perception of

Australian dairy as being high quality and safe, but the lack of free trade agreements was hindering the sector’s chances of competing fairly in international markets. “Demand for dairy is growing in China, South-East Asia and the Middle East as their local milk supply cannot keep pace with consumer needs,” he said. “These burgeoning markets are being targeted by dairy producers from across the world with the USA and the EU and rapidly moving into traditional Australian markets. “Without free trade agreements like our competitors have, Australian dairy is operating with one hand tied behind its back and our farmers are unable to fully realise the many export opportunities that are now available. “This report further supports our calls that if Australia is to be able to

Chris Lancey says his new Claas Arion 640 tractor and loader is perfect for dairy farms. PG.32

News ������������������������������������������������������3-13 Opinion ���������������������������������������������� 14-15 Agribusiness ������������������������������ 16-17 Management �������������������������������� 18-21 Animal Health ��������������������������� 22-27 ABVs ����������������������������������������������������� 28-31 Machinery & Products �������������������������������������� 32-34

Northern Victorian farmer Tim Kennedy is looking forward to the new season. See more on page 18.

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fairly compete on the world stage, then we must sign-up to free trade agreements with our key trading partners as a matter of urgency.” Mr Helou has called for FTAs with China, Taiwan, Korea and Japan. “What we need is equal access to those markets. “You can’t be competing in a place like China with a 15% disadvantage compared to massive competitors like Fonterra,” he said. Bega Cheese executive chairman Barry Irvin told the Australian Financial Review that FTAs were towards the top of his wish list. “There’s no doubt that Australian dairy can continue to grow, but the observation I would make is New Zealand has an entire government focused strongly on investing in farms and FTAs. We’re a long way behind,” Mr Irvin said.

Dairy News AUSTRALIA september 2013

4 //  news

Dairy Farmers reaches deal with Lion rick bayne

Lion and the Dairy Farmers Milk

Co-operative have agreed to terms for the current season after initial discussions led to mediation. The Dairy Farmers Milk Co-operative, representing 700 dairy farmers, described the initial Lion price offer as a “have and have not” model which would mean lower overall milk prices for most suppliers. The Lion offer was a two-tiered system, with about 40% of suppliers offered five-year contracts with a three cents per litre contract consideration rate, with all milk at tier one value for the first year only, with no future guaranteed pricing. This offer targeted farmers supplying more than 1.5m litres in NSW and 800,000 litres in south-east Queensland. All others were offered a one-year contract with a view that these suppliers would no longer be supplying by the end of June 2014; this included tier two milk for those farmers for the spring months. Currently contracted farmers were offered more severe terms if they did not change to new contracts. However, new DFMC chairman, John MacArthur-Stanham, said Lion has reviewed its position following mediation. “We have reached a satisfactory position to go forward,” he said. “With Murray Goulburn in the market they could take a significant quantity of milk so Lion has to respond and adjust.”

Former Dairy Farmers chairman Ian Zandstra.

Zandstra returns to green pastures Mr MacArthur-Stanham said DFMC understood that Lion’s position was not unreasonable in theory. “They are less inclined to pay for milk more remote from the city market and on a smaller scale because of the costs, but as a cooperative we try to treat all our members fairly and equitably.” The cooperative has 1800 suppliers across the country and pricing is varied to reflect this. Mr MacArthurStanham would not enter into specifics due to the mediation process. DFMC has 320 dairy farmer members in NSW who produce more than 360 million litres of milk annually. It has welcomed new competition for milk in NSW and hopes it will result in better prices for farmers. Murray Goulburn is inviting dairy farmers in the NSW-Sydney market region to express interest in sup-

plying milk to the cooperative from October 1. The DFMC has a contract which restricts it members to supplying milk to Lion. Mr MacArthur-Stanham said having Murray Goulburn as a new supplier would be healthy for NSW dairy, even if it means the cooperative loses members. “I am sure we will lose a few members if they can secure a higher price, but having another competitor for milk is a good thing for farmers,” Mr MacArthur-Stanham said. “If there is upward pressure on price, that’s a good result for all farmers.” The DFMC would continue to negotiate good returns for its members but understood if farmers went for a higher price with Murray Goulburn, he said.

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rick bayne

After a decade at the helm of the Dairy

Farmers Milk Co-operative, Ian Zandstra is more convinced than ever about the value of cooperative representation. Mr Zandstra has resigned as chairman of the DFMC and won’t seek to be re-elected as a director at the AGM in November. But that doesn’t mean he has lost any of his passion for the dairy industry or the need to represent farmers in commercial negotiations. Mr Zandstra will now concentrate on his family’s two 404ha dairy farms at Nowra in NSW and Shepparton in Victoria. “Dairy farming is my great love, that is where my heart is, I have a great empathy for farmers, and that’s where we want to be,” he said. “I never regret a minute of my time with the cooperative, I have been on co-op boards for 17 years, but I’m a dairy farmer first and foremost. We started with a small start and dairying has been good to us.” Mr Zandstra was involved with Dairy Farmers Co-op before its restructure into DFMC in 2004 and has been the cooperative’s chairman since its inception. “Representation and governance is challenging, especially in the change era of our cooperative processor Dairy Farmers restructuring, corporatising and selling to Lion. It is vital that farmers have someone in there as their voice,” he said. “Farmers are too dispersed and don’t have all the information to negotiate as individuals. They really need a cooperative on the ground so their point of view can be heard in commercial dealings from sellers to buyers.” The DFMC has often battled at the negotiation table with Lion over its models of payment for farmers. “We realise we can’t be uncommercial but you have to make a deal that is

fair for farmer suppliers; farmers have an economic position as well but corporates don’t like farmers in their decision-making kitchen,” he said. “I kept going because there was always something more to do, the industry never settled down; there probably still is but we got through the Lion gold silver and black pricing episode so I thought the main things on the plate had now been addressed. “I know more issues will come up but there had to come a day when I say enough is enough and go back to enjoying being a farmer.” The DFMC has an agreement for members to supply Lion for the next six years. “After that I anticipate we will have to strike a new agreement and that’s where you need a cooperative to make sure the farmers’ voice is heard.” Mr Zandstra admits the industry has been “through a lot of tough times” over the past decade. “Seasons, prices and cost increases lead to volatile margins,” he said. “From our own farming perspective we believed we had to build critical mass and so we invested in building up our farms. My wife Cheryl and I have got confidence that we can make it. We like the business side of dairy and we choose to invest there, but there are always risks in farming and anything can happen.” Deputy DFMC chairman John Macarthur-Stanham will serve as interim chairman until the AGM. Mr MacArthur-Stanham said Mr Zandstra’s decision to stand down was a sad day for DFMC. “Ian’s leadership has been through an extremely challenging period for DFMC and the broader dairy industry. His wisdom and experience has been valuable for the board and management,” he said. “He has had a great career and put in the hard yards for farmers.” Mr MacArthur-Stanham also plans to retire at the November election.

Dairy NewS AUSTRALIA september 2013

news  // 5

Fonterra bacteria scare a false alarm PAM TIPA

FONTERRA WAS hit by a ‘perfect storm’ of unrelated events and mistakes which lead to the recall of whey product potentially contaminated with a lethal bacteria. This turned out to be a false alarm. The mistakes included a missing piece of plastic which initially lead to the reprocessing of WPC80, the use of nonstandard equipment for that reprocessing, and a one off delay in information sharing which lead to a delay in testing. Computer systems in Australia had just been upgraded when the recall was launched and staff lack of experience with the system lead to delays in tracing the product. “Global recalls are never related to one event,” says Mr Spierings. “This is the result of a number of separate and unrelated events occurring in

an in unforeseen sequence. When you compare it to other crisis this is always the case – there is always four or five events related to the crisis.” However, as pinpointed in the operational review by group director of strategy, Maury Leyland, the issue was not escalated to the chief executive early enough. Mr Spierings was told at 11pm on August 1, 24 hours after the AgResearch results indicating a potentially lethal clostridium botulinum and a month after that testing was commissioned. Mr Spierings said he should have at least been told when the sample went to AgResearch to test for botulinum in June, and possibly earlier than that when elevated readings indicated there could have been a problem. “I am not saying that I have the wisdom but what you normally do is sideline the product which is in the pipeline, you call your customers and

say park it for now. You do further testing and because it was such a rare example of botulinum in this part of the world you would have got the results from AgResearch and you would have got a second opinion. “Because it is so rare it’s so unique in this part of the world, you would have asked the question ‘should we have a second opinion’. That’s the end of June, not the end of July.” Fonterra has now created a new role of group director of food safety and quality reporting directly to the chief executive, strengthened the remit and scope of its Food Integrity Council, and launched an internal Food Safety and Quality Hotline for staff and contractors to escalate any concerns about potential food safety risks. It has also completed quality audits at its sensitive nutritional plants, including Hautapu.

MG cuts staff, lifts prices Murray Goulburn has sacked a further 72 lian economy.” The latest retrenchments were revealed a week employees across its processing facilities. The move follows the major review in May last after MG announced a step-up in the farmgate price year when 12% of its workforce – or 301 positions for the 2013/14 season of 9 cents/kilogram butter– was removed. An additional 64 jobs were made fat and 19 cents/kg protein, taking its “weightedredundant at its Rochester plant in March last year. average” price to $5.86/kilogram milk solids (MS). It has also All job cuts have increased its end been made in the of season forename of efficiency, cast to a range of according to the $5.95-$6.20/kgMS. company. External factors The latest reducincluding fluction in roles is made tuating internaup of 38 positions at tional commodity Cobram; 15 at Leon- Murray Goulburn has cut further staff prices and curgatha; 8 at Kiewa; 4 from its Rochester plant. rency movements at Edith Creek; 4 at Rochester; and 3 at Koroit. These changes will take may result in a final price that is higher or lower than this forecast, the company said. effect within the next four weeks. Managing director, Gary Helou, said since Keith Mentiplay, general manager operations, said all affected staff would receive their full enti- increasing the opening price in late June, the tlements and will receive additional support where international dairy market for key ingredients has remained strong while the outlook for the Austraneeded. “While these decisions are challenging, they are lian dollar has remained relatively weak compared necessary to ensure MG remains competitive,” he to last year. “These factors combined with our ongoing said. “It is in the best interests of our supplier/share- focus on delivering value through improved busiholders, employees, communities, customers and ness efficiencies and innovation, has meant that we consumers that MG remains a strong business, are able to pass additional benefits to our farmer able to compete globally and deliver higher farm- supplier/shareholders,” he said. The step-up follows the announcement in June gate prices. “We continue to employ more than 2000 people to lift the opening base price by 13c/kgMS. “We remain optimistic about market returns for at MG, mainly in rural and regional Australia and contribute an estimated $6 billion to the Austra- the remainder of the year,” Mr Helou said.

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Dairy News AUSTRALIA september 2013

6 //  news: FODDER SEASON

Frosted crops are hay bound rick bayne

Grain growers in northern NSW and southern Queensland may be forced to turn frosted crops into hay. Ian Wickham, from Feed Central, said he was surprised more grain growers hadn’t turned to the hay option after freezing overnight conditions in late August left crops extensively frost damaged. “Most are sitting on their hands waiting to see if gets really bad. Grain farmers tend to stick to what they know but they should look at hay as a back-up plan,” Mr Wickham said. “The value will decrease the longer they leave it.” Frost damage has been uncovered in wheat, barley, canola and chick pea crops. Mr Wickham said there was a reasonable market for hay. “Because it has been so dry it sucked up the existing hay for drought feeding so there is a market for it. We had one of the lowest volumes ever last year.” He said that while growers could

make more money from hay than grain with the crop condition, they needed to make sure they did it properly and stored the hay for long-term sales. “Some might want to sell hay as soon as it’s made, but you have to fit with what the dairy industry needs and store it properly.” Mr Wickham said grain prices remained reasonably good but prices were expected to drop significantly at the new season harvest. “It’s too late then to make hay,” he added. Dairy farmers in the region have been through a typically dry few months but could expect to have more growth after September storms. Mr Wickham predicted increased volumes of vetch hay and pasture hay this season. “There are pretty good growing conditions for hay so dairy farmers should have some good volumes coming up, if not high quality.” He recommended dairy farmers “think further ahead” and lock in some interim supply. “Most hay sheds are fairly empty on the east coast.”

A farmwalk at Barry Philp’s Garvoc property in western Victoria late last month.

Growth rates excel in south west Vic Ruminant

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Tim Huggins, from Five Star Stockfeeds, says confidence in south-west Victorian farmers is growing about the spring season. “With the sunny weather in the past week the grass has jumped out of the ground,” he said. “A bit more rain will keep that ticking along.” Mr Huggins said growth rates of 30-40 kg DM on south-west Victorian farms in August were amazing for that time of year. Farms in the region have also been

able to access more hay supplies to fill the breach before harvest. “There is a lot of high quality vetch hay at reasonable prices from the Wimmera and Mallee,” Mr Huggins said. “Overall the season is looking really promising at this stage.” Dixie dairy farmer in south-west Victoria, Barbara Collins, said the grass was starting to grow but many farmers were still trying to catch up. “It will make the light at the end of the tunnel a bit bigger, but the light is

just a pin prick at the moment,” she said. “We probably won’t see a profit till February and then we’ll need two or three years of good prices to make things look really good again.” The Collins farm just spent $8000 on a load of hay and expects to buy another similar sized load before having enough home-grown feed. “We’re still rationing out feed and had to buy hay for the springers,” Mrs Collins said. “Our grass is coming but it’s not there yet.”

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Dairy NewS AUSTRALIA september 2013

news: fodder season  // 7

Grain surplus, strong spring will ease financial squeeze rick bayne

World record grain crops and predictions of better than average hay yields and a solid fodder growing season will help the financial squeeze that crippled dairy farmers last year. Record grain crops globally should lead to lower prices locally for new season crops while hay prices have eased in parts of Australia. The potential for a better-thanaverage spring will help farmers replenish feed stocks with home grown fodder. The demand for fodder across Victoria during winter has started to abate, although some farmers are still being forced to continue buying dwindling stocks of hay to see them through to harvest. Farmers are being urged to be proactive during spring and take advantage of the likely good conditions to increase their home-grown feed. Dairy Australia says there is a general feeling that although some pad-

docks have patches of waterlogging, at this stage there is potential for better than average hay yields in the coming spring, with predictions of a solid fodder growing season. Hay prices have been steady across most of Australia but have eased in south west Victoria. Grain prices have generally fallen slightly over the past month. Australian Crop Forecasters general manager Ron Storey said overall conditions and weather forecasts looked good though “the weather in the next month to six weeks will make or break us”. Mr Storey said south-west Queensland and north-west NSW were in poor shape but the rest of the east coast was generally good and slightly ahead of this time last year. “The Bureau of Meteorology is predicting average or slightly better chances of average rain; if their predictions come true we should have a reasonable season,” he said. Mr Storey said world record crops had pushed down prices interna-

tionally but the fall of the Australian dollar had offset that advantage for Aussie importers. “Prices remained flat in August but the pressure is downward.” Mr Storey said supply and demand was tight along the east coast and was likely to remain that way until harvest. “If you don’t have supplies lined up till around Melbourne Cup day, you need to start looking around.” Old crop prices are expected to remain strong. Queensland agricultural specialist Graeme Busby said high grain prices were providing no joy to farmers in a tight, dry market where milk prices also remain depressed. “There is plenty of water in dams but the grass is fairly dry,” Mr Busby said. “A lot of the yields have been pretty ordinary.” Victorian DEPI pasture and fodder conservation specialist Frank Mickan said Gippsland was sitting nicely for a positive spring. “West Gippsland has had more

rain and a bit of pugging but at this stage the whole region is looking reasonably okay for spring. “South-west Victoria is pretty much the same,” he added. Mr Mickan said farmers should do whatever they can within financial and practical means to grow and utilise as much home-grown feed as possible to try to minimise costs of production. “Grass grown and converted straight to milk will optimise annual profit,” he said. He said grazing management and nitrogen fertiliser should be used to boost the spring flush over as much area as possible. Mr Mickan said farmers should aim for quality above quantity and make sure they get their timing and decision-making right to encourage more home-grown feed. “Improving silage from 9.5 megajoules of energy per kilogram of dry matter (MJ ME/kg DM) to 10.5 in a 350 tonne DM stack can be worth an extra $10,000.”

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Dairy News AUSTRALIA september 2013

8 //  news: board level

Board has final say on operations PETER BURKE

New Zealand dairy farmers Trevor

and Harriet Hamilton have implemented a governance structure seen all too rarely in the dairy industry. The Hamiltons own or have interests in eight dairy farms across NZ and have set up a board which consists of themselves, plus two independent directors, Massey academic Dr James Lockhart and accountant Greg Eden. The Hamiltons’ farms produce 2.4 million kg milk solids (MS) a year. Each farm runs about 860 cows. They have an operations manager in the South Island who looks after the four farms there and Mr Hamilton has taken on the role of North Island operations manager as well as his owner responsibilities. None of the Hamiltons’ five adult children is on the board but they may be appointed in the future. The only other person present is the operations manager, Peter Aitken, but he does not have a vote.

“We have him in the boardroom the same as you would a chief executive. The aim is to give him a full understanding of what the board’s all about, where it’s going to, how we need to deliver on things and the general discussion of policies and strategies. “We’ll ask him to leave if and when we feel there is something we need to discuss in private.” The board meets bi-monthly and it has set some clear strategies and policies which drive the business. From these are set the key performance indicators (KPIs). Communication is a top priority for the Hamilton operation. The operations manager meets with the farm managers on a regular basis and they in turn meet with staff. Reports are fed back to the board. “I’d go to the South Island possibly once every six weeks and just deal with my operations manager, Peter Aitken and talk to him about any issues he may have. “We ask managers to report every

10 days on pasture walks and provide monthly farm reports which come back to the board through the operations manager. So we don’t want to take our eye off the ball on any of the KPIs.” This structured approach is critical to the success of their business, Hamilton said. Problems occur when junior staff don’t understand the farm policies and structures. “We implement that very strongly and there isn’t a lot of room for deviation.” Occasionally outside experts are called in to talk to all staff. What surprises many people is that the Hamilton’s children are not on the board and in fact have to report the board. “When we started going down this path of formal governance we called all the five siblings and said ‘This is what we’ve achieved in the last 30 years and the last 10 years and this is where we can take the company in the next 10 years. We asked them if they wanted to be part of it and we had 100% buy-in.”

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Four of the Hamilton siblings work in the business and for them it’s a case of ‘earned opportunity’ but not an inheritance. “We don’t believe in inheritance because it doesn’t bring about any learning. For example, my son and one of my sons-in-law have started at the bottom and worked up to where they manage some of the units, then we’ve opened up opportunity accordingly. “The family members are now under no illusion that Harriet and I don’t make decisions, other than personal decisions, without the board. “We have had instances of family differences and the independents on the board dealt with these on a business basis. “That puts the line between what is business and what is family and that is the line we want to keep.”

Trevor Hamilton

The key to it all is governance and having people on the board who think differently from him: they add value. “The exciting thing is where we can take it in the next ten years. People make the mistake of thinking it’s all about the money, but for me it’s all about the challenge. “I think we can probably take it from a NZ$100 million business to a NZ$250 million-300 million business in the next 10 years. “This is based on the fact that 12 years ago we had two farms doing a total of 300,000kgMS and are now doing 2.4 million kgMS. “How many people can I grow? How many family members can I grow? It’s hugely exciting.”

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Dairy NewS AUSTRALIA september 2013

news: board level  // 9

Boards aid farm strategy rick bayne

More dairy farmers are turning to a board structure to govern their business. The more formal approach to farm management is seen by many as a way to bring greater professionalism and scrutiny to the business operation. Warrnambool-based consultant Mike Weise of Client Victoria said many farms were realising the benefits of taking a more professional approach. “There definitely seems to be an increase in the number of farming companies, both family and corporate, establishing boards and then inviting an independent director to help them professionalise their multi-million dollar businesses,” Mr Weise said. “The management decisions are still kept within the family but the board uses the independent director to advise on how improve the way the farm business governs, set strategy, achieve agreed decisions, plan for succession and follow legal and compliance regulations.” Mr Weise recently attended an Australian Pacific Extension Network (APEN) conference in New Zealand on ‘Change: Chosen or Unchosen’ where the increase in the number of larger family farms creating boards was a hot topic of discussion (see story page 8.). Mr Weise, who is a professional director with a diploma from the Australian Institute of Company Directors, and is vice-president of APEN as well as chairman of South West TAFE, said many farming families had not previously taken time to work strategically on their business. “A lot of families don’t sit down and have a management team meeting and they don’t have a governance structure to assess how well the management team is delivering the business plan. “With a formal series of meetings, some farms

do decision making on the run and don’t set aside enough time to plan as a team and then review how the plan is tracking.” Mr Weise said structures being adopted by dairy farms were either a board or a board/ management hybrid. Farms looking to use an independent director often want someone who is experienced in governance, excellent at strategic thinking, has good business process and facilitation skills to help the board come to consensus, has some corporate legal risk management and compliance knowledge and is impartial, Mr Weise said. “Their reward is solely the fee they receive for their contribution at the board table.” Mr Weise said farm businesses also expect an independent director to have a diploma in company directorship. “It adds a discipline to the meeting schedule if there is a paid director present meetings won’t get cancelled because of some operational calamity on the farm.” Mr Weise said he believed the move to board structures was prompted by a growing understanding that all farms, dairy included, need to be more strategic in planning and take the time to review how the plan is being executed. Woolsthorpe dairy farmers Roma and Glenn Britnell established a board structure two years ago as a part of confronting the succession challenge. The board has an independent director, the two principles of the business, Mr and Mrs Britnell, and their three sons. “We spent time developing the capacity of the board members who had not been exposed to such a concept by investing in education, including a personal development course with our sons,” Mrs Britnell said. The Britnells use an independent director who is a local business man. “Business discussions need to be business focused and family and

that involves forward planning. “Using a board format is one way of doing that. I like formal arrangements because you have something to fall back on if problems arise as they often do,” he said. Mr Thorne said he had not noticed many clients moving to a board

business need to be separated,” she said. “Professionalising the relationship by developing board meetings with agendas etc assists with this.” Rural financial counsellor Vince Thorne said all farms need a business model

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structure “but maybe that is why they are my clients and need help”. “A number of farms operate well as a trust and a few use companies but this is often a more expensive way of administration with little benefits in the scale of operation,” he added.

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Dairy News AUSTRALIA september 2013

10 //  news: next generation

Loan scheme eases cash flow for young farmers It’s an ever-present

issue – how to deal with the ageing farming population and make it possible for young enthusiastic farmers to enter the sector. Dairy farmer Damian Murphy, from Dumbalk North in Victoria, believes thanks to a Nuffield scholarship, he may have found the solution. “I’ve seen people come into the industry and they’ve just found it so hard to get finance for things that would allow them to grow their asset and progress in the industry - it is becoming a real hurdle, and almost exclusive. “It was almost a case of you could only get a start and continue in agriculture if you had the family farm or the family connection to keep on going through and I’d like to see that change.” Mr Murphy set off on his scholarship in 2012 to investigate what young farmer finance schemes exist around the world, particularly in places where land is more tightly held than in Australia “That’s one of the key things we had to look at – if we don’t have that manoeuvrability, how do young people keep on coming through?

“They might start on a share and progress through onto a lease and maybe a marginal farm or something like that in places like Ireland and France they don’t have that option, whereas in Australia we’re lucky we still have that option.” Perhaps surprisingly Mr Murphy found in France that, unlike Australia, a significant percentage of farmers previously did not have a connection to the farm - in other words they were start-up farmers. “They do have a very different system to us, and yeah a lot of money flows in from the EU. “When I sat down with the French young farmer group and asked them, the answer was 30% do not have that connection to the land and I think that’s a terrific stat. “However it costs a lot of money and I think we can do it better than that.” It was in North America however where Mr Murphy’s big find came, when he discovered a loan program from Farm Credit Canada called Transition Loans. “How it works is when a young farmer buys a property, Farm Credit Canada will go as guaran-

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tor for the money that’s outstanding to the existing owner of the farm. “So over five years, Farm Credit Canada will guarantee that owner will get his money for that asset – so if it’s a $500,000 farm, they will get paid $100,000 each year from Farm Credit Canada. “Now the advantage to me as a start-up farmer is I only pay principal and interest on the amount outstanding to the owner. So in the first year the owner gets $100,000 of his $500,000 and as the young farmer I’m only paying principle and interest on that $100,000. “That helps a huge amount with cash flow and that’s what is really key to a young farmer, just protecting that cash flow situation,” he explained.

Damien Murphy Mr Murphy believes a bank should take on this transition program in Australia, but also sees merit in setting up a co-financing program where money from agriculture is invested back into agriculture to assist young farmers with equity requirements. “I mean get into agriculture and progress through, so I’m talking stock, lease agreements, machinery – anything that’s fairly manoeuvrable right through to land purchases. Wherever the young farmer wants to go I’d like to see them supported and encouraged with finance if that’s how they see they want to go,” he said. population. He said “I’ve seen people come into “We have to after travelfind some way ling around the the industry and they’ve of manoeuvring world on his just found it so hard to get that through Nuffield scholarship, he holds finance for things that would encouraging young and grave concerns allow them to grow their beginning farmfor the future of asset and progress in the ers into the Australian agriindustry.” industry to culture without progress through - because the next 10-15 years if it’s a viable entry system for these older farmers have not hampering them now. young people. “We’re in the same situ- a huge amount of assets “I think what you’re in agriculture and they’re ation, something is going going to find, and what going to have to get passed to have to happen with I found through my on in some way, someyoung farmers coming research in the EU, is how, at some stage and if through in the next 10-15 they’ve got such an old ag years or we’re going to end the young farmers aren’t population that it’s really coming through and in a up with a very old farmer going to hinder them in

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position to buy that asset or progress through or manage that farm, the value of that asset will reduce and that’s not good for anyone,” he said. The Geoffrey Gardiner Dairy Foundation supported Damian’s scholarship. Nuffield Australia is an organisation which provides opportunities to Australian farmers between the ages of 28 and 40 to travel the globe investigating a research topic important to them and Australian agriculture.

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news: next generation  // 11

Seeking best fit in northern NSW A northern NSW dairy farmer has used a scholarship to investigate different farming models in a bid to open opportunities for his family and other dairy farmers who want to progress within the industry. Paul Judge has worked on, and now partly manages, Sam and Fleur Tonge’s farm at Casino, NSW, for almost nine years but is keen to move into a sharefarming, leasing or management role. Mr Judge said the northern NSW district does not have a strong history of leasing or share farming. “Traditionally, it has been handed down or sold off,” he said. “I want to have a long future dairy farming. I see it as my career but the pathway isn’t clear or automatic. I’m going to have to create some of the opportunities for myself.” He was awarded a Winston Sweeny Scholarship to investigate how to facilitate these options. He focused largely on Tasmania where arrangements for share-farming, leasing and managing corporate farms are more common than in his home region. “There are amazing opportunities in the Tasmanian dairy industry at the moment,” he said. “Factories are looking for more milk; the government is opening up more irrigation water to drive agriculture so there’s a trend to opening up new land for dairying. “Landholders are recognising the returns from dairying and when they are ready to move out of daily involvement in dairying, they are considering options such as hiring managers, leasing and share farming. Yet there’s a shortage of young dairy farmers willing to take up those opportunities.” Mr Judge is unlikely to move to Tasmania, saying the farming systems are vastly different to farming in the subtropics, but he

did gain valuable insight into what makes a successful share farming, leasing or management arrangement. “The message I got loud and clear was there’s no standard agreement,” he said. “The most important thing is to find the right match of people, owner and farmer, and to build the agreement to meet both parties’ needs.” For now, Mr Judge plans to look for opportunities closer to home and has taken the step of selling the idea to landholders, preparing a prospectus for potential candidates to read. “I think there are a lot of dairy farmers in our area who are ready to reduce their daily involvement in the farm operations but see very limited options, such as converting to beef,” he said. “They might not think of leasing, share farming or putting on a manager.” Mr Judge said any agreement had to work for both parties. “Getting an agreement that works for landowner and farmer involves a lot of discussion, and some of the issues can be uncomfortable to face,” he said. “A consultant can guide you through that, help you understand the other’s perspective and draw on their experience to help you avoid common traps. “For example, a problem with leasing is people have scaled back so the farm is not running at its optimal capacity. Some may consider it a 2 million litre farm when it’s really a 1 million litre farm. Paying for potential and redeveloping a business is OK but often who pays for this is a sticking point. “In other cases, people want to exit the industry but they still have debt. The owner needs close to 100% equity to make a share farming or leasing agreement work. “An agreement with a share farmer means the owner may have to push it harder and invest more, so there’s a risk there, and both parties need to realise that.” Mr Judge and his wife,

Jo, will continue to invest in their herd until the right partnership can be established. There are about 420 farms in the sub-tropical district, from Kempsey

to northern Queensland. Mr Judge will continue to work until he finds one that works for both parties. He hopes other young farmers will follow in his footsteps.

Casino farmer Paul Judge has investigated different farming arrangements in his quest to progress.

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Dairy News AUSTRALIA september 2013

12 //  world news

Fonterra to ship 4500 cows to China ABOUT 4500 cows are being readied to ship to China as Fonterra prepares to commission two more dairy farms near Beijing. Fonterra’s Peter Moore said shipments of cows to China will continue as they seek to develop more farms with the ultimate goal of producing a billion litres of milk there. Three farms are now producing, collectively milking about

10,000 cows. “We’ve got farms four and five under construction and due to be commissioned towards the end of this year…. That will require another 6500 cows, taking us up to milking 15,000-16,000 cows depending on the time of the year. Obviously we’ve got our supporting stock as well.” Sexed semen is used by Fonterra to grow heifers

numbers in China and Mr Moore says generally this has been successful. They are producing more heifers than they need at present but these animals will be used on future farms. North American genetics are used to increase the volume of milk from the cows in China as that market is largely a ‘liquid milk’ market. Such cows can produce 8-10% more milk than the ordinary

New Zealand cow, but Mr Moore points out that the base genetics is still Holstein Friesian . With the exception of the first pilot farm, the farms are in a hub in Herbei province which makes for easy management. The big difference is the design: lessons from the pilot farm have been incorporated into the design of subsequent farms

Fonterra is setting up two more farms near Beijing.

“Farms four and five are similar to farm three. We learned a lot from farm one and so farm two was quite different. Farm three has some minor differences from farm two and we have sort-of landed on what we consider the ‘roll

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hope to develop those next year and we are still in the process of finalising where those will be and the agreements to lease land, which we haven’t done yet but we are well advanced in those discussions.” Mr Moore says the success of the farms is in no small part due to the New Zealand genetics which have “suited us pretty well in China”. But with the farms’ rapid expansion it’s possible they may ship some cows from Australia to supplement their needs.

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out’ design for the future,” says Mr Moore. Each of the two new farms – four and five – will have about 3000 cows plus replacement heifers. Feed is being sourced from local farmers, helping build relationships with the local community. The farms are also good for local employment: at least 300 local people work them and only five ‘expats’. As the two new farms near completion Mr Moore and his team are thinking about the next ones. “We

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months ended July 2013 the median sales price per hectare for dairy farms was A$30,200 (47 properties sold), compared to A$25,650, for the three months ended June (66 properties sold), and A$19,700 (29 properties sold) for the three months ended July 2012. The median dairy farm size for the three months ended July 2013 was 147ha with a range from 64ha in Waikato to 525ha in Hawke’s Bay. Median production per hectare across all dairy farms sold in July 2013 was 861kgMS, down from January 2013 which was 1047kgMS – the highest ever recorded by REINZ in a month. On an annual basis, 2012 sales activity levels rose in 11 of the 14 regions measured by REINZ. Sales numbers were greatest in Canterbury which has led the trend to dairy conversions and where 239 sales were reported, up by nearly 30% on 2011. While well up on the 126 sales recorded at the trough of the market in 2009, sales volumes are still significantly below the average of just over 340 per annum which prevailed in Canterbury between 2000 and 2008. The Waikato region experienced the second highest volume of sales in 2012, at 174, up from fourth place in 2011. The Waikato region’s climb in the rankings was due to a sharp increase in the sale of dairy farms, with transactions doubling from 28 in 2011 to 57 in 2012. This growth in the dairy sector is being reflected by farmers and investors actively looking to buy existing dairy units, dairy support units and farms with potential for conversion. Southland, big in dairy conversions, was the third most-active market with 151 sales in 2012, followed by the Manawatu/Wanganui region with 137. Cow numbers reached 4,634,226, over the 201211 period, an increase of nearly 21% since the 2005-06 season when the total stood at 3,832,145. Most growth in cow numbers has been in the South Island where conversions have resulted in herd numbers rising sharply. The spike in conversion activity has reversed the trend of falling herd numbers brought about by farm amalgamation which had been a near constant theme for nearly 40 years.

Dairy NewS AUSTRALIA september 2013

world news  // 13

US change tack and sets sights on export markets The United States

dairy industry is turning its attention outside its own borders and could emerge as a significant competitor to Australia in international export markets, a visiting global dairy expert has cautioned. Rabobank’s New York-based global dairy strategist Tim Hunt – recently in Australia presenting to local industry – says the United States, long focussed on its own domestic market, is reorienting towards the global market place, attracted by the allure of better returns across some product categories. Until recent times, the entire US dairy industry had been dedicated to servicing its own lucrative and growing domestic market, with countries like Australia trying to gain access through bilateral trade agreements. “Historically, the US dairy industry lived in a fortress,” Mr Hunt said. “It had a very large, affluent domestic market, which grew strongly and had very high prices. It was protected from the international market by high tariff barriers and had government support. “But US dairy market growth has slowed in recent years, while the commodity price boom has seen international prices rise above domestic US market prices, making export returns more alluring for US dairy players.” This, in effect, was turning the US from ‘the hunted to the hunter’ as its dairy industry

sought to compete in the more attractive global marketplace, Mr Hunt said. “The US dairy industry is becoming increasingly cost competitive in export markets due to a combination of its large-

for global market exports. In addition, US regulation makes exporting hard for the industry.” And there are also market access and customer relationship issues, Mr Hunt said. “The US dairy industry

doesn’t have good access to several important markets and they also have relatively weak relationships with offshore customers,” he said. However, progress is being made towards the

US becoming a better exporter. “Plants are being tweaked to make export products and new plants are being built to service export markets,” Mr Hunt said. “Market access is improving and

relationships with offshore customers are being strengthened.” And with Australia largely having lost its cost of production advantage in world dairy markets, it will be increasingly likely to compete head-to-head

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scale farm operations, easing feed costs and a lower US dollar, while it is also beginning to align products to suit the global market,” he said. Mr Hunt said US dairy exports had already begun to steadily grow as a result, with, for example, milk powder exports increasing from about 300,000 tonnes in 2007 to 500,000 tonnes in 2012, and cheese exports going from about 100,000 tonnes to more than 250,000 tonnes in the same period. But Mr Hunt said it was not all smooth sailing for the US as they reoriented towards world markets, with a number of obstacles to overcome. “With the entire US dairy industry having developed to service the domestic market, they are not aligned to the requirements of exporting dairy,” he said. “Essentially, they have the wrong plants and they make the wrong products

with the United States in coming years, Mr Hunt warned. “Maintaining Australia’s edge in postfarmgate processing and marketing will be crucial to sustaining returns on farm,” he said.

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Dairy News AUSTRALIA september 2013

14 //  OPINION Ruminating

EDITORIAL

Banks must act as good corporate citizens

milking it... Dairy debate

We believe the term is ‘touche’. When anti-dairy group, Dairy Debate, issued a challenge to industry representatives to participate in, you guessed it - a dairy debate, Corangamite mayor Chris O’Connor agreed. If they would hold it in dairy country that is, more specifically, Terang. You could imagine them spitting out their soy drink in shock and indignation at such a response. “I want to invite them out to milk the cows at Demo Dairy, because my view is they wouldn’t know which end of a cow to go to,” the former dairy farmer said. Dairy Debate declined, saying it would be easier for people to attend in Melbourne. We’re not sure how many will be attending – at last glance they hadn’t lined up any pro-dairy volunteers and only one for the negative side.

Say it ain’t so

You have to feel sorry for Hughesy. No, not the wellknown comedian, but his brother. Dave Hughes - comedian, breakfast radio presenter and host of The Project – was challenged to give up drinking milk for a week on his radio show, prompting an online petition to quit it entirely. Residents of Hughes’s hometown of Warrnambool were outraged. Surely one of their favourite sons wouldn’t turn his back on the town’s most important industry. Rest assured, Hughes said he was only giving up milk for a week, part of a radio regime of foregoing certain foods to provide radio fodder. He told the Warrnambool Standard that not only did he have shares in Warrnambool Cheese and Butter Factory (WCBF), but that his brother, Michael, worked there. We can imagine the ribbing Michael has copped since his more famous brother opened his mouth. Christmas is coming, Dave, you better buy him something nice.

Footy team of century

The late Colin Watson may have won a Brownlow medal in 1925 with St Kilda but he would receive greater accolades following his passing in 1970. Watson, born in Allansford and starting his footy career with South Warrnambool, has since been inducted into the Australian Football and St Kilda Football Club halls of fame. Now, he has also been named captain-coach of the Blokes Who Grew Up On Dairy Farms Team of the Century, announced at the Milk It 4 More Expo at Glenormiston last month. Melbourne-based writer and broadcaster John Harms said the team is still up for debate. “We are getting closer but this is still not the definitive team. Every place it is discussed there are more names added to the mix and new consideration to be made,” he said. “It’s turned into quite a saga and very competitive.” The team can be seen at www.footyalmanac. com.au

Advertising Chris Dingle chris@dairynewsaustralia.com.au

Where have you been?

Loved this from SA farmer Matt Seeliger, Glencoe West, on Twitter last week: “The dairy industry must have picked up! Consultants and salespeople are calling again. First time for over 12 months.” And while on Twitter, some jokes from Picton farmer John Fairley: From what animal do you get dragon milk? A cow with short legs. What has one horn and gives milk? A milk van. What did the lovesick bull say to the cow? ‘When I fall in love it will be for heifer’! Goodnight, you’ve been great, thanks very much.

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Banks make a lot of money for their shareholders. Not many in Australia would call them good corporate citizens. A strong bank sector is good for the economy, they say, normally after revealing multi-billion dollar profits. This is true, but it must work both ways. They need to help small business grow. Murray Goulburn’s Robert Poole had most on his side when he said recently banks had to stop funding agriculture the same way they did 50 years ago. A lot of the banks are still funding agriculture like they did in the 1950s and 60s, with 50% equity and mums and dads borrowing money, he told media at a recent agribusiness conference. Mr Poole was taking the opportunity to promote Murray Goulburn’s sale and lease-back scheme, MG Partnerships, where the co-op attracts equity funds to purchase farm land which is then leased back to suppliers. But his point is still valid. Banks that reject young farmers with good business plans because of a lack of “necessary savings” or the amount required, does not bode well for the future of agriculture in this country. There is a responsibility for banks to look more closely at the proposition. We’re not talking about giving money away, more so rating emerging businesses as a profitable long-term investment. MG has now sold a dozen dairy farms to a European superannuation fund under MG Partnerships. This will help the next generation of farmers the industry needs. Farmers can bring projects to MG, such as buying the farm next door through equity rather than debt, and receive that initial boost. The super funds do well too, receiving returns of 5% per annum plus capital growth. It’s a win-win situation – it just takes some thinking outside the box. Young Victorian farmer Damian Murphy travelled to Canada to investigate farm finance and discovered a loan program from Farm Credit Canada called Transition Loans. When a young farmer buys a property, Farm Credit Canada will act as guarantor for the money that’s outstanding to the existing owner of the farm. This scheme not only gives a young farmer a leg-up into the industry but gives him a fighting chance to succeed by helping cash flow for the first five years. It’s thinking outside the box and Mr Murphy believes a bank should take on this transition program in Australia. There are thousands of young farmers that will use nous and energy to lead the next generation of farming. They just need support from a bloated banking sector.

Publisher Brian Hight Production D ave Ferguson Becky Williams Published by RNG Publishing Ltd Printed by PMP Print

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Dairy NewS AUSTRALIA september 2013

opinion  // 15

Farm groups must take lead in mental health State farming organisations need to step up and address the mental health and wellbeing of their members.

Field days should be used to promote mental health services to farmers.

accessing mental health telephone of our farmers is one of the greatest helplines, tele-health or online services. Further compounding the probchallenges facing the future of Australia’s primary industries and rural com- lem, our mental health service providers largely operate out of major regional munities. Because farmers prefer to partic- centres and do not have direct access to ipate in group activities arranged by farmers. It’s a Catch-22 situation: farmers organisations who they trust will underwon’t go to the services stand their needs, it is and our service providcritical for state farmers cannot get access ing organisations and to the farmers. So what industry associations do we do? How do we to work with health ser‘get to’ farmers to help vices and rural commuimprove their mental nities. health and wellbeing? This can best be Who does have access achieved through a to farmers on a regular community health opinion alison fairleigh basis? development approach, The answer lies with resulting in better outour state farming organisations (SFOs) comes for our farmers. High levels of mental health disor- and industry associations who have a ders and suicide have been featured as critical role to play in the provision of significant health issues for male farm- extensive, informal mental health support. ers across Australia. The 2013 Rural Industries Research Yet, few targeted interventions Development Corporation or preventative programs have been and designed. Implicated in the high rates (RIRDC) Report: Staying Healthy of suicide, male farmers show more Behaviours and services used by farmstigmatised attitudes towards mental ers and fishers, found that “farmers will health care which strongly predict reti- engage with health-related information, cence to seek care. [Source: Australian programs and services that come from, Journal of Rural Health, February 2013] or are endorsed by, trusted and credible As such, even where formal mental individuals and organisations. Industry health services do exist, farmers are associations are well placed to provide not using these services. Nor are they or facilitate the provision of services

literacy). Provide links on industry websites to web-based health materials from credible health organisation sites, and encourage members to use the linked sites for health information. ■■ Together with community groups, provide places and spaces for physical exercise and, more importantly, social interaction. (They should be supported to fill a wide role in relation to health and wellbeing in small rural communities that have limited interactional infrastructure and services.) ■■ Be alert to the effect of ‘difficult times’ such as drought, flood, economic pressures and industry regulation on farmers and fishers and have a ‘toolbox’ of community appropriate solutions ready to implement. Let’s not waste any more time on getting this right … far too many lives are being lost. • Alison Fairleigh is manager, rural and remote services, with Mental Illness Fellowship of Northern Queensland. She was named the 2013 RIRDC Queensland Rural Woman of the Year. Follow her on twitter at @AlisonFairleigh ■■

THE MENTAL health and wellbeing

that farmers prefer to use.” This can be achieved in collaboration with government, health services and local communities through a ‘community health development approach’. Such an approach uses ‘soft entry points’ – ie industry field days, community events and farmer education programs – to promote the effective use of available services. It also identifies within communities, credible individuals who can act as ‘boundary crossers’, who have the trust of farmers, industry and health services alike, to assist local health services design appropriate health information and activities and recruit farmers to these activities. The primary responsibility of SFOs is to provide a collective voice for their members on issues related to agribusiness and agri-politics. Yet, to secure the productivity, profitability and sustainability of the agribusiness sector, then it stands to reason that a healthy rural workforce is required to deliver this. Apart from the NSW Farmers Asso-

ciation (who have been leaders in the field), there appear to be no other organisations taking a front seat to address the mental health and wellbeing of their members. Key recommendations to come out of the 2013 RIRDC Staying Healthy Report for industry groups include: ■■ Develop a plan for promoting health and wellbeing to farmers, including brokering health programs run by external agencies. ■■ Build the capacity of farmers to identify the services, facilities, information sources and social infrastructure they need and would choose to use to maintain health and wellbeing, at both an individual and rural community level (health

If you have been affected by anything you’ve read in this article, please call one of the following helplines: • Lifeline: 13 11 14 • Suicide Call Back Service: 1300 659 467 • Kids Helpline: 1800 55 1800 • MensLine Australia: 1300 78 99 78

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Dairy News AUSTRALIA september 2013

16 //  agribusiness

Bega reaches $1b in revenue Bega Cheese has

increased its revenues in the last financial year by 8.3% to $1 billion and profit after tax by 24.6% to $25.4 million. The company’s share price rose to an all-time high of $3.09 following the announcement. Earnings per share grew 30.8% to 16.76 cents

per share while dividends grew 15% to 7.5 cents per share. Management strengthened the balance sheet, reducing net debt by around $20 million to $87 million. Management also held capital expenditure relatively flat while boosting production volumes from 203,765 tonnes to

210,052 tonnes. The results were announced a month after Bega Cheese approved a capital investment plan to build a nutritional powder blending and packing facility to support the growth of its infant formula business. Bega Cheese’s wholly owned subsidiary Tatura

Milk Industries manufactures infant formula and child milk powders, particularly to the customers in the Asian market. The new blending and packaging facility will allow Tatura Milk to meet the projected growth of its existing customers and respond to the ongoing demand for retail ready

L A I C SPE T R O REP NEXT ISSUE: OCTOBER 2013 TRACTORS AND MACHINERY Next month’s special report reviews the latest developments and news from the farm machinery sector; the hardware that makes the modern farm tick. We’ll focus on equipment that’s relevant to dairy farming – no big broadacre gear reviews, just gear that helps the dairy industry farm smarter. Watch out for it in the October issue of Dairy News Australia. BOOKING DEADLINE: October 2 MATERIAL DEADLINE: October 8 PUBLISHED: October 15 CONTACT: CHRIS DINGLE T: 0417 735 001 E: chris@dairynewsaustralia.com.au

infant formula products sourced from Australia. The facility will be commissioned in early 2014 and have an annual capacity to blend and package up to 15,000 tonnes of canned nutritional powders. The footprint of the new facility will allow for future upgrades of addi-

Bega chairman Barry Irvin.

tional packaging lines to increase capacity and format flexibility. Bega Cheese has entered into a supply and services agreement with Melbourne-based nutrition company Omniblend Nourish who will access up to 25% of the initial capacity. Omniblend Nourish co-operated with Bega Cheese in the design and selection of the equipment for the facility. Bega Cheese chief executive Aidan Coleman said nutritional dairy products were a key to

Bega’s growth. “The growth in demand for high quality infant formula products particularly from the Asian region is well documented with China alone consistently delivering double digit market growth,” Mr Coleman said. “We are very confident that we will quickly build volume in our new facility and the company was pleased to work closely with Omniblend Nourish in both the design of the facility and long term supply agreement.”

WCBF profit falls by half Warrnambool Cheese and Butter maintained

sales in the last financial year but its profit fell by 50%. Total revenue was $496.5 million, essentially unchanged from last year’s numbers, but after-tax net operating profit fell 50.7% to $7.5 million. Chairman Frank Davis said the 2012-13 financial year had been “difficult and disappointing”. Mr Davis attributed the lost profit to a persistently high Australian dollar and high raw milk cost relative to market conditions. “However WCB has undertaken a number of strategic steps to maintain its long term revenue base and mitigate against ongoing deterioration in international commodity revenues,” Mr Davis said. “A late surge in international powder prices and the depreciation of the Australian dollar was insufficient to wholly compensate for the depressed trading conditions and outcomes that prevailed for the majority of FY2013.” WCB’s balance sheet remains strong and gearing at 31.8% is well within policy range, according to Mr Davis. Working capital debt increased temporarily as WCB took advantage of the improved powder prices and lower exchange rates late in the year. In the latter part of the year, Warrnambool’s situation improved slightly with an uptick in international powder prices and a depreciating Australian dollar (which helps exports). Looking ahead, the company expects prices to prove more profitable for 2014. A weakening Aussie dollar has expanded margins, while Warrnambool continues to churn ahead with various business improvement projects. The directors have declared a fully franked final dividend of 11 cents per ordinary share with a record date of September 9, 2013, and a payment date of September 27, 2013. The Dividend Reinvestment Plan is applicable to the payment with elections to participate to be lodged by September 9, 2013.

Dairy NewS AUSTRALIA september 2013

agribusiness  // 17

Chinese appetite for Australian grows Export demanddairy remains strong Dairy NewS aUSTraLia june, 2012

agribusiness // 17

perhaps unsurprisingly, largely reflect- cents/litre in March (AUD 41c/L) to 28 As widely reported, the combination With season 2011/12 only a few incremental change in milk production (year-on-year) weeks from ending, attention ing the growth in exports to China. And Euro cents/litre (AUD 36c/L) in April. of lower milk prices, higher input pricesis now Profit margins are under pressure in the focused on 2012/13 milk prices as farmthis is where the 2012/13 figures provide US, and in NZ Fonterra has announced and adverse seasonal conditions meant ers consider strategies for the coming year. In some volume domestically-focused evidence of a notable year-on-year shift. the final payout for the 2011/12 season that the total production for has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incorgLobaL impacT That is, in 2012/13, although Japan to NZ$6.45-$6.55/kg MS (AUD$4.962012/13 finished down 2.9% on the prior porating lower prices and reduced ‘tier JohN DropperT one’ access are undermining farmer remained the top export destination $5.04). season. Lower total production meant Effectively, global dairy markets are confidence and supply stability. For global impact Shifts in private label contracts and proin to export-oriented by value, Greater China (China, Hong rebalancing. Lower prices will both that there was lessmany milk farmers available manGlen fisher slow production growth and stimulate regions, a lower price outlook relative to cessor rationalisation have seen milk Kong and Macau) overtook its neigh- demand, and as this occurs we will ultiufacturers, but with healthy (albeit rel-to the companies adjust their intake requirethe current season not only adds ments pricing to meet the changchallenges of doing business, but seemsthat theand dairy industry’s returns have for bour to become the top export desti- mately see a price recovery. Key factors atively low) growth in domestic dairy to watch on the global scene will be the to contradict the positive medium term ing demands of a highly pressured retail some time been linked to Asia. In recent nation by volume for Australian dairy rate at which milk production overseas product consumption and producoutlook of Asia-driven dairy demand marketplace. Lower contract prices and a lackthis of alternative supply opportunihas become more clearly pro- exports. And this unprecedented devel- slows in response to lower prices, the tion volume wellgrowth. outstripping domes- years Dairy Australia’s indicative outlook ties present challenges in a market with flows. 2012 milk production in the US those in south-east Asia and the Middle impact of the current financial worries was to the year-onnounced: after all, close to 75% of the tic requirements,for the broader industry Eastlargely maintain consistently higher eco- on consumer confidence, the path of is up around 4% on opment 2011 for the year to due southern farm gate milk prices – limited manufacturing capacity. Despite published in the recent Dairy 2012: Sit- these challenges, the underlying domes- April (leap year adjusted), whilst early nomic growth rates that support China’s economic growth, and the value year growth specifically in China-bound total value has gone to Asia over the last still relies on growth in export markets uation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Australian dollar. ofupfluid and whole milk years; and this closer to the 65% Demand for exported dairy prodto drive farmgate returns. We collate our three ever,milk the surge in supply has outpaced finished March exports 2012 quota year ita dairy consumption and awas growing opening price range of $4.05-$4.40/kg ucts remains a positive and will conMS and a full year average price range population providing a degree of cer- 2.3% on the previous year. New Zealand demand growth in the market. powder (WMP). in the first half of the 2000s decade. Of figures on the prior season, as the data This situation has seen the scales tinue to grow with the middle class in between $4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish tip in favour of buyers in dairy mar- large emerging markets such as China, this season up 10% on last year - a huge continuing In thethe seasons following the 2008 report considers the wider market China’s urbanisation share going to Europe and comes available, including estimates of pic-course, ture and summarises the many factors financial crisis and subsequent com- market influence given 95% of NZ milk kets, with commodity prices retreat- with changes in diet and with increasing and increasing household incomes are urbanisation - and also in conjunction the Americas has declined over the same how milk was utilised. at play; the key theme of the current sit- modity price recovery, farmers in is exported. Argentina is also enjoy- ing steadily over recent months. Butter prices are downincreased some 30% from their with global population growth. Locally, growth, but ato sig-keep export-oriented regions have seen solid ing solid productionexpected being that of re-balancing driving dairy A first glance uation at the export figuresin theperiod. global supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market is supported by a dairy supply chain. product consumption, which the OECDA second glance reminds us that the might suggest that Inthere was no truly regions of Australia focused on higher-cost competitors in the North- much of this additional milk from leav- lost more than 20%. Farm gate prices growing population and stable perconsumption. dairy milk to China, subsequently been2022. reduced ing SouthEast America. FAO forecastshave ern Hemisphere expandproducing drinking many farmers est in gettingWhilst freshthefluid to grow 38% by Onin capita of totalamongst valuethose going to South significant year-on-year shift.milk, This is share Despite wider economic uncer- most exporting regions. The average market is currently a challenging place face a re-balancing market in the form ing output as their margins increased. exported fluid milk volumes mainly comtop of the positive longer term outlook Asia and Japan has remained very stable not unexpected in the context of genof renegotiation of supply contracts This season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France to be a seller, all signs indicate that baland reduced access to ‘tier one’ supply. ditions have further enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately return. erally stable, established product mixes over the last decade at around 30% and for dairy demand, China is also facing prise ultra heat-treated (UHT), extended serious challenges in growing dairy shelf-life (ESL) and similar products and relationships in export markets. So, 20% respectively. But a closer look confirms a more supply domestically. China’s domes- that are making their way to the counthe 2012/13 figures reveal that export volumes were up, around 5% to 800,000 recent trend, namely, the growth in tic production for the first half of 2013 try’s consumers. China-based researchtonnes and export value was just margin- the share going to Other Asia (which reflects this—with production report- ers BSNABC estimate that UHT milk ASEAN-Australia-New DairY, includes over 10 Asian countries out- edly already 5-10% down. Hence, the accounts for 60% of the Chinese liquid ally down (0.1%) toaustraLian $2.756 billion. Higher rice and wine exporters to Zealand FTA (AANZFTA). side Southeast Asia and Japan): this was fundamentals favour China continuing milk market and with annual consumpcheese volumes and the higher Austra“Protectionist sentiMalaysia are the biggest ment over agricultural winners in a free trade between 15-18% for much of the 2000s, to rely on imports; so developments in tion of the product growing at around lian dollar were primary drivers behind goods is rife and growagreement (FTA) signed 10%, more Australian relevant FooD has so been 25-27% over the last three China may become even moreaustraLian those movementsbetween in volume and value. ing acrossbut the globe, to provide portion pack product should the two counin this context it is pleas(200-330ml) configuratries last month. company Freedom Foods invariably find itself on the supermarto the broader farmgate returns story in years. Digging down further into the figOverall the pattern depicting the ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a to forge an agreement ucts. in China to meet that surgseven years of negotianew milk processing plant ket shelves ures confirms that this growth in the Australia. value of Australian exports by destinawith Malaysia that has The NSW location will tions, allows a liberalised to cash in on growing ing demand. Of course, despite widespread intervalue of exports going to Other Asia is, tion region in 2012/13 confirms dealt with some sensiprovide access to the most licensing arrangementthe fact demand in Asia.

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

So, the 2012/13 figures provide some encouraging signs. Yet a bigger challenge still for Australian dairy exporters may be growing the value of China-bound exports - free trade agreement notwithstanding. Higher value-added products such as cheese, infant, WMP and other powders have also seen good year-onyear growth—and at least the data suggests that there are plenty of prospects for growth and improved returns there too. • Glen Fisher is industry analyst with Dairy Australia.

tive agricultural issues for Australian liquid milk The plant, to be built in sustainable and economic not effectively covered by exporters and allows southeast Australia, will be source of milk. Pactum has AANZFTA,” says Fraser. strong links to the Austraaccess for higher value the first Australian greenSealing the deal: Malaysian trade minister Mustapha Mohamed “While under the retail products. fields expansion in UHT in lian dairy industry and will with Australian counterpart Craig Emerson after signing the deal. AANZFTA agreement expand its arrangements It guarantees Aus10 years. most of Australian agriwith dairy farmers for tralian wine exporters Freedom’s wholly but also through technical Despite the compleers through streamlining culture’s key interests supply of milk. The new the best tariff treatment owned subsidiary Pactum or so called ‘behind the tion of this agreement, of rules-of-origin dechad tariffs bound at zero, plant will increase scope Malaysia gives any counAustralia will run the much remains to be done border’ restrictions.” dairy and rice are two sec- laration processes and try. It also allows open plant. Some of its products for Australian milk supply The FTA was signed on for Australia’s farmers to improved marketing value-added, sustainable access arrangements from tors where incremental will be sold in Australia. alongside its founder, the they are also –and very different challenges and where we GEA Farm GEA FARM The challenge of May 22 in Kuala Lumpur tap into the full potential arrangements for certain market access improveexport focused. 2023 for Australian rice The company says by Australia’s Trade and wasgiven Asian of the Asian region and managing commodities. ments have is been negotithe plant late Philip Locke. –consumI don’t expectInitially to take a will can add value.” Technologies owned Australia Technologies haswith all tariffs eliminated Competiveness MinisThe Malaysian market beyond. ated under the Malaysian produce 250ml and 1L by 2026. ers’ rising incomes and Ownership by GEA Mr Mikkelson was NZ approach in Australia by the GEA Group, in not dissimilar to the appointed New Zealand 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 Malaysian counterpart now agricul“This trade deal was line capable of 100 mil- Group allows for products trade earning quala shareholder andthrow theits attention challenges andforlikewise what works A$8.2 billionlion in Australia of managingthere will grow managing directorFederation says the2012 towards ensuring agricul- Mustapa Mohamed. tural exports – including also particularly imporlion L. The processing and deal will improve interity dairy products from of front and the differences in Tasmania will notplant will emit made in New Zealand, globally. betweenlow-cost production Jamie Mikkelson to viceEmerson says Australia ture remains being itsmanaging fourth-largest director tant for sectors such national market access bases packaging centre in completed FTAs will be as well-positioned sugar export market and dairy that have been less carbon, use less water, such as FIL and Milfos, to for Australian agricultural such as Australia, whose Milfos when Mr Locke necessarily work in New Mr asMikkelson has farming in, for example, president area Australasia. in the Malaysian market fifth-largest wheat export with South Korea, Japan, facing a competitive disand be more energy-effigoods. milk is well regarded. be marketed elsewhere in died last year. South Wales. worked at Milfos, the North and South He will head sales and as Malaysia’s closest tradChina and Indonesia as market. advantage in Malaysia cient than equivalent “After seven years of The new plant will ing partners in ASEAN, With an annual economic immediate priorities. compared with New ZeaUHT facilities in Austrathe NFF is allow Pactum to meet the world. When GEA Farm “It’s about Hamilton, for 20 years, Islands. operations in Newnegotiation, Zealand “These are all markets and in some cases better. growth at about 5%, land which already has lia and SE Asia. Pactum under no illusion of how growing demand for The FTA willNew guarantee with enormous growth forms an impor- bought completed FTAgrow with theMalaysia expects site preparation to to ahe milk, and add In New Zealand GEA Technologies in real where helped “While ZealandUHT dairyunderstanding and Australia, andchallenging remainit has been tariff-free entry for 97.6% opportunities and where tant part of the ‘Asian Malaysia in place.” begin in October 2012 and complete this FTA with to capacity for valueFarm Technologies Milfos in late 2012, Mr detail the drivers, business from a start-up, and Australia are similar, MD in New Zealand. of current goods exports significant barriers to Century’ story and the The FTA also sigstart-up by mid-2013. Malaysia,” NFF vice presiadded beverages at from Australia once it trade in agriculture still opportunity this presentsbecame nals some administrative Pactum makes UHT dent Duncan Fraser says. its Sydney factory. Pactum Mikkelson enters into force. This will for Australian agricultural exist, not only through benefits for Austraproducts for private label The FTA will fill a is expanding its capabilimanaging of restrict its trade rise to 99% by 2017. tariffs that producers, says Fraser. director and proprietary customers. number of gaps within the lian agricultural exportties at the Sydney plant

Kiwi oversees GEA Farm Technologies in Australia

016-017.indd 17

Jamie Mikkelson

NZ operations. He is now one of eight global VPs, responsible for sales and performance of 190 employees and 50 service partners. Mr Mikkelson said the acquisition of Milfos by GEA completed the companies offering of a ‘total solutions provider’ for pastoral dairy farmers. New Zealand is being positioned by GEA as a ‘world hub’ for pastoral farming. He said business is about people first and products second. “My role is aligning people and the business to a common strategy and helping them deliver on that strategy.”

an Australi er m r a f dairy and d e n desig tured c manufa

owns and markets milking machine and farm management equipment from Milfos and WestfaliaSurge, dairy hygiene and animal health supplies from FIL, effluent handling equipment from Houle and barn equipment supplies from Norbco.

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Dairy News AUSTRALIA september 2013

18 //  management

Crossbreds tick every box stephen cooke

Standing among

his herd of crossbred cows, it seems funny to hear Tim Kennedy say: “I wouldn’t touch the crossbred semen when I heard about it 10 years ago.” Curiosity saw him “dabble in it” and he soon came to the conclusion they were the best cows he was breeding. “I thought, we better get some more.” Tim and his wife Leah now milk 750 crossbred cows on the northern Victorian prop-

erty at Torrumbarry they sharefarm with New Zealand farmers James and Donna Wilkins. They came to the 1300 hectare farm 10 years ago, managing it for five years. They then purchased the herd and machinery and moved to a sharefarming arrangement, trading as Avonleigh Heights. They employ all staff as part of the arrangement. When they first came to the property 10 years ago, they were milking up to 1700 cows but the northern Victorian drought saw this drastically reduced to 300 by 2007/08. They have slowly built numbers since. The Wilkins converted the former dryland sheep and cropping property to dairying 20 years ago. Having trouble sourcing crossbred cows, they

Tim Kennedy

Who:

Tim and Leah Kennedy Where:

Torrumbarry What:

Crossbred herd

purchased mainly Friesians, some crossbred and some Jerseys. They then used a mix of Friesian, Jersey and some crossbred semen to create a crossbred herd. “The herd was tending too much towards the Jersey side and getting too small and we wanted more of a crossbred, so we moved to LIC crossbred semen,” Mr Kennedy said. The LIC crossbred bulls are all Jersey-Friesian cross but contain varying amount of either. “Apart from the hybrid vigour, we find they require less maintenance, have less lameness, are easier to get back in calf and have less mastitis issues,” Mr Kennedy said. They also produce more milk solids than a pure-

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Better Milk Price More Profit – or is it?

Be sure to visit our major sponsor, Devondale/Murray Goulburn and the team from MG Trading stores at their hospitality area.

It’s More Than a Handful 1pm Thursday 26th September 2013

Come along and see our Feed Companies and Milk Companies go ‘head to head’ in a hand milking competition. Sponsored by Burra Foods.

Are we just chasing a pot of gold at the end of the rainbow? Panel Members: Trent Crawford (Binginwarri), Toby Leppin (Bena), Paul and Louise Sherar (Loch), Hans van Wees (Tinamba) and Russell Mann (Rabobank). Topic: With a shocker of a year behind us, and better prospects ahead for 2013/14, the panel members representing small, medium, large and sharefarm dairy businesses tell us how they fared in 12/13 and what their strategies are for this season. Are they chasing a pot of gold at the end of the rainbow, or are they chasing genuine profits with a proven track record? Sponsored by the South Gippsland Shire Council and Rabobank.

bred. He simply chooses from the highest ranked bulls from the catalogue each year to add to the herd. “We are constantly seeing improvement in the cattle,” he said. LIC also appeals to Mr Kennedy as he operates a grass-based system, like most of New Zealand, where LIC has its breeding program. “We only feed half a ton of grain per cow during winter and we find the LIC cows do better, particularly in tough times. We’ve bought cattle in that aren’t NZ genetics and they stand out like a sore thumb.” The grass-based production system is underpinned by an extensive irrigation system. The farm contains 15km of channels and there are two automated pumps in the Murray River to maintain them at a constant level. 650ha of the farm is irrigated, with each linear irrigator covering 80ha. They have 220ha of annual pasture and 120ha of cereal crops, enough for their own needs, and share crop a further 350ha of canola and wheat. “Since the drought, we realised we needed to be self-sufficient. We can produce cereal for $80-$90/t, which is a third of the current price.” Every paddock is the same size and shape (6.6 hectares) and the 60-head rotary dairy is located exactly in the middle of the farm, which makes for easy management, according to Mr Kennedy. The extensive system

Service Provider Session 4pm Wednesday 25th September 2013

This networking session will be extra special this year with some wine and cheese to taste! Dairy farmers are welcome to attend. Sponsored by Dairy Australia & GippsDairy.

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Lateral irrigators irrigate 350ha of the farm.

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Northern Victorian farmer Tim Kennedy in his crossbred herd.

of laneways and channels makes it easy to grow the exact amount of pasture required and to move the herd quickly when the desired amount has been eaten. “We put 70 to 80kg of urea on the day before every grazing. We also divide paddocks with strip fences if necessary. “We alter rotation length to growth rate. Pasture is measured every 10 days with a rising plate meter and we allocate pasture as needed and adjust the rotation length to maximise our growth.” They have switched to a 100% annual pasture base now they are entirely autumn calving and graze each paddock down to 1400-1500kg dry matter before moving the herd on. They can fine tune this because of their irrigation system, utilising lateral irrigators to maintain the correct level of moisture, and optimising pasture growth with a constant trickle of nitrogen. The cows are run at the stocking rate of 3.2cows/ ha, producing 1300kg milk solids/ha. It is all autumn

calving from March 10 for 10 weeks. They stop feeding grain in mid-August and resume when cows are due to calve again. Mrs Kennedy is responsible for calf raising. They raise and keep as many as they can to continue building numbers. They see 20-30 calves a day during this 10-week period as easy compared to the 60-70 they had to deal with when running 1700 cows. Mr Kennedy attributes LIC genetics to his empty cow rate of 10-12% after the 10-week joining period. Those that don’t get back in calf are sold. Their calving system also enables them to capitalise on the premium milk price in the winter months (it was more than 60c a litre in July) when cow supply is peaking. Mr Kennedy aims to fine-tune the operation further by investing in moisture monitoring equipment. “We do weekly pasture measurements and annual soil tests but if we could nail the exact amount of moisture in the soil, rather than guess work, we could grow more

pasture. “That’s the next step in the progression. We have been looking at moisture monitoring systems over the last 12 months and they have come a long way from where they were 10 years ago. “They are at a stage now when it would be beneficial and cost effective to do it. “There are permanent moisture probes now that can talk to your phone all the time and that takes the guess work out of it.” Despite the size of the operation, Mr Kennedy said their mantra is a simple and sustainable system. Their 10-week calving enables them to take February off, when cows are run on dryland. There is no irrigation from late December through to the end of February. “We are very systems based and train our staff to follow systems,” Mr Kennedy said. “We run 200 cows per man because of the system, where the Australian average is 90 cows/ man.”

Dairy NewS AUSTRALIA september 2013

management  // 19

Tracking genetic changes over time With a herd of about

1200 dairy cows Elaine Haddon has a lot of data. She recently discovered the Genetic Progress Report is a useful tool to guide sire selection decisions and for tracking changes in the herd’s genetic merit over the years. Elaine, and her husband Neville, dairy at Sabina River near Busselton in Western Australia with their son Garry and his fiance Tiffany Jones. They received a report on their herd when attending a recent workshop run by ADHIS with support from DAFWA and Western Dairy. Mrs Haddon looks after the farm records and says a challenge with a large herd is finding a way to use data to make better decisions. “Between milk recording and our on farm PC system we have a lot of herd data but it’s not always easy to make sense of it. It can be hard to see the woods for the trees,” Mrs Haddon said. When it comes to genetics, Mrs Haddon has found the Genetic Progress Report presents the herd’s data in a way that she can track changes over time and compare the herd to industry standards. Mrs Haddon said selection decisions in the past had placed high priority on profit and type. “Our first report confirmed that we have made very good progress with type, and it highlighted some strengths in the herd that we hadn’t noticed, such as longevity and fertility. But we were disappointed in our genetic progress for Australian Profit Ranking,” she said. While the herd has made steady gains in APR over the past 10 years, it is tracking just below the national average. Some of that may be due to missing data: the Haddons purchased a significant number of cows

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in recent years and some of these are missing their sire and dam information. Animals with missing sire information won’t get an ABV and therefore won’t be recorded in the report. Also, the Haddon’s have previously waited until heifers calved before entering them into the milk recording system. “I’m keen to start entering that data when they are calves because it will make our Genetic Progress Report more useful to see trends among the youngest animals in our herd.” Once the data is more complete and up to date, Mrs Haddon will closely examine the herd’s genetic progress for profit, mastitis and protein. These are the traits she has identified on the current report that could be improved. “We are a commercial operation but I’ve always placed a high priority on type because it affects profitability. Sometimes our cows walk up to 3km a day so we look at feet and legs and also udders when selecting sires to use over the herd. And of course we also look at their APR,” she said. “Our report confirms that our selection decisions have achieved significant gains in type. But it also highlighted the traits that we will concentrate on more in the future – protein percent and mastitis. “That’s the beauty about the report – because it’s based on our own herd so it’s a good tool for guiding decision making.” Mrs Haddon has already started getting more data into the milk recording system so that it will be incorporated into future the Genetic Progress Reports. “I’ll be reviewing future reports with great interest. As well as guiding our selecting decisions we’ll be able to see – over time - the effect of those decisions on the herd’s genetic merit.”

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Garry Haddon and fiance Tiffany Jones.

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Dairy News AUSTRALIA september 2013

20 //  management

Quality silage focus will be rewarded in the vat Farmers across

south west Victoria need to get their timing and decision-making right to encourage the growth of more home-grown feed

this year to take advantage of predicted favourable spring conditions. DEPI fodder conservation specialist Frank Mickan and Warrnam-

bool’s DEPI Dairy Services team member Michele Ryan stressed the importance of being proactive and developing a feed plan for the season to ensure

cows are productive. Mr Mickan said while farmers should “go like hell now” they should consider going for quality over quantity as many

things can occur over harvest with the result that medium to lower quality quantity of fodder is produced without targeting this.

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“You should grow and utilise as much homegrown feed as possible to try to minimise costs of production,” he said. Mr Mickan added improvements in silage quality would pay off for farmers in the additional value of milk produced. Improving silage from 9.5 megajoules of energy per kilogram of dry matter (MJ ME/kg DM) to 10.5 in a 350 tonne DM stack can be worth an extra $10,000. “Yield will be lower and cost per unit of DM will be increased but so are the costs of harvest such as twine/netwrap, plastic, chopping/baling, cartage in/out of the storage site. Also much more silage of lower quality is needed to be consumed per unit of production,” he said. “Grass grown and converted straight to milk is the most efficient way to optimise annual profit. “You can cut a lot of bulk but lose out on quality and putting conserved crops into storage increases costs substantially.” Mr Mickan said that it was important to feed the milkers as well as possible and have enough high quality pasture and/or fodder for heifers. He advised farmers to use grazing management and nitrogen fertiliser to boost spring growth. “You should keep grazing tight for fodder conservation and longer feed supply into summer,” Mickan said. “You’ve got to make every hectare count and should walk all paddocks to prioritise your paddocks. “Your home block is most important but also try to make your out-block work for you.

“Improving the pasture species and/or improving soil fertility for longer term lease blocks, could be a big bang for the scarce buck. If there are vigorous ryegrass and clover plants surrounding the poop and piddle patches, then pastures should respond to fertiliser. “If not, then pasture species need to be sown.” Ms Ryan said farmers shouldn’t create a false surplus. “Don’t take the feed away from the cows and don’t lock up too much of your land for silage,” she said. Grazing should happen just prior or at canopy closure. Ms Ryan recommended farmers use a mix of crops across their farm. “If you are using nitrogen for extra growth, you should hit paddocks you know you can get on. You want to make sure every kick is a goal. You should take the time to do soil tests on representative areas of the farm which will tell you what nutrients to focus on and work out your best winners.” More than 150 farmers and service providers attended a series of ‘Filling the Shed’ field days hosted by WestVic Dairy’s Profitable Farming Systems project and the Department of Environment and Primary Industries at Macarthur, Garvoc, Toolong and Colac from August 29 to September 3. Profitable Farming Systems project manager Tim Huggins said the field days were designed to trigger farmers to think about their planning for spring. The field days were funded by Dairy Australia and the Department of Environment and Primary Industries.

Dairy NewS AUSTRALIA september 2013

management  // 21

More trees help pasture RUSSELL and Maxine Napper believe trees make a better dairy farm. Reducing salinity, keeping cows warm and cool, encouraging pasture growth and making it a better place to live and work is a decent short-list of reasons. The Nappers run 200 cows on 70ha in the Macalister Irrigation District in Sale, Gippsland. “I like trees and I could see the reaction of the dairy cows,” Russell said. “On a stinking hot day in a paddock without trees they’ll all crowd around the trough – the dominant cows will get in, whereas the heifers won’t get anywhere near it. “Whereas when you have trees, the dominant cows might take all the shade but at least then the younger ones get access to water.” Both Russell and Maxine, who are very mindful of animal welfare on their farm, believe trees are the single most important factor in maintaining a happy herd. “On a very hot or very cold day I can say that the cows are clearly happier in a paddock with trees in it,” Mr Napper said. Having contented cows, however, hasn’t meant a drop in production but instead has seen cows better able to cope

Who:

Russell and Maxine Napper Where:

Sale What:

Strategic planting

with extremes of temperatures, while pastures thrive in the shelter afforded by planned plantings. “You see a cow on a hot day standing there panting and you wonder how much energy she is using trying to stay cool,” Mr Napper said. “But if she’s feeling comfortable she will go out and have a bit of a graze then come back.” In a tough industry, looking out for the bottom line is vital if farmers want to keep their heads above water. But Mr Napper maintains that giving land over to trees has seen pasture – and potential profitability – grow significantly.

Since the start of his planting program, he said there has been a threefold increase in dry-matter consumed per hectare. Put simply, better care of the land has resulted in a better outcome in milk production. “We produce 1.5 million litres of milk off 60ha - that’s about as productive as anywhere.” It was in the early 1990s when a routine inspection of a bore revealed the water table had risen to dangerously high levels. Mr Napper had seen it all before and knew that if nothing was done, some of the best farming land in Australia would soon become barren. “I can remember in 1961 the paddock over the road from my school turned black after we had a wet winter,” he said. “Back in the 1950s irrigation was extended to Nambrok for soldier settlement and within three years the water table rose 20 feet. “The bottom end of Nambrok just turned black.” It was indiscriminate land clearing combined with irrigation on farms that was causing salinity. Mr Napper believed that it was the re-introduction of trees that would allow the land to heal itself.

Russell Napper on his Sale dairy farm.

“There was a problem here and the question, was what we are going to do about it?” he said. “We knew that one of the things that would help was getting some native vegetation back.” Hearing about a salinity trial program called Joint Action Salt Action, the Nappers began the first of many tree plantings that have transformed their farm into a shining example of what can be achieved through planned farm management. After patchy early results, Russell helped form the Clydebank Landcare Group and started to get the right plants for his property. “We did some first direct seeding

trials in the area. And that was quite successful in ‘91/ ‘92,” he said. With the growing trees thirstily sucking up water, the water-table started to recede. The addition of a groundwater pump (one of several in the area) has seen vast areas of formerly unproductive land returned to verdant dairy pasture. The pumps were funded with government assistance and are maintained through a levy on irrigation water. Mr Napper has not only worked to improve his own land, but has been an active member of various committees and boards like the Wellington Salinity Community Group and is currently a Southern Rural Water committee member.

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Dairy News AUSTRALIA september 2013

22 //  animal health

Donovan’s dairy sees light chris dingle

The installation of a revolutionary milk purification system has been instrumental in overcoming calf health problems for a large dairy near Mt Gambier in South Australia. James and Robyn Mann run Donovan’s Dairy, at Wye, milking 2200 cows at peak time on a 116 unit rotary platform. “Some time ago we could not get on top of

salmonella issues,” said Mr Mann. “Every time we vaccinated, we got another strain. It was a massive drug cost, so we made the decision to go with the UV Pure purifier system. It was the logical next step – we weren’t getting anywhere with vaccines.” The WestfaliaSurge UV Pure ultraviolet calf milk purifier is a modular unit built around stainless steel UV turbulators. The UV lamp is inserted into a quartz tube allowing

Who:

James and Robyn Mann Where:

Wye, via Mt Gambier What:

Milk purification

the light to penetrate the milk as it passes over the tube and into a separate calf milk vat. A hot water circuit allows cold milk to be brought up to feeding temperature. The flexible system is scalable depending on the size of the particular dairy operation. Waste milk from mastitis cows is often discarded, but if treated properly to lower bacterial or pathogen levels, it can replace milk sources that calf-rear-

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ers would otherwise need to purchase. The ultraviolet light in the WestfaliaSurge UV Pure system penetrates bacterial cells in the milk, destroying their DNA bonds, killing the bacteria and eliminating their ability to reproduce and grow. It kills the bacteria without affecting the nutrient value of the milk, and the immune factors and proteins remain unchanged. Vitamins A, B6, B12 and C remain intact and there is even an increase in Vitamin D, which does not occur with traditional heat pasteurisation. The milk is never heated above feeding temperature, helping to preserve the milk’s beneficial immunoglobulins. Donovan’s Dairy installed the WestfaliaSurge UV Pure system a year ago and it has seen two calvings, totalling 1050 calves with just 15 losses in that time.

Calf manager Barb Habner and James Mann inspect this year’s calves.

Barb Habner has been doing the calf management job at the farm for 10 years and says since they have been using the new system, they have minimal sick calves. “Now, if any calf gets sick, it’s one course of antibiotics and they’re fixed.” All the mastitis milk goes into the 1000 litre tank and Mrs Habner tops it up with fresh milk for the required amount. “We just purify what we need for the calves that day, and tip out what’s left.” The WestfaliaSurge UV Pure is fully-automated

and easy to use with minimal training required for operators. It will start automatically at pre-set times and calculates the required process time for the amount of milk, reducing time and energy. It incorporates a fully automatic ‘clean-in-place’ wash process after every batch with the correct wash solutions to ensure proper cleaning. “You just select how many litres are in the tank, press go and it does the process and shuts off when it’s finished,” explained Mrs Habner. “When we have colos-

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Calf manager Barb Habner with the WestfaliaSurge ultraviolet calf milk purifier.

trum milk in, we show it as twice the actual volume.” The colostrum milk is purified and fed separately at the calving pad. They clear the pad three times a day during calving time, when they have 40 cows calving down per day at peak time. “From the purifier the milk goes into a cooling tank to maintain it at 14°C if we need to store it otherwise it comes out at 20°C – or whatever we set it at – and straight to the calves,” Mrs Habner said. “It is easy to use, giving us healthy calves where it was previously hard work. It has become almost a pleasure to rear calves. This is so much better than mixing up powder. Life is a lot easier and the UV Pure works in well with the daily routine.” All the calves get four litres per day and are weaned off at 110kg. While they are in the calf shed, they get ad lib grain and hay and access to water. Mr Mann said the UV Pure system is almost maintenance free.

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Dairy News AUSTRALIA september 2013

24 //  animal health

Leptospirosis incidents higher than first thought A pilot study conducted in New Zealand as part of a review on leptospirosis disease incidence revealed 30% of apparently vaccinated herds sampled tested positive to the disease. Concern over mixed messages behind vaccinations prompted the New Zealand Veterinary Association (NZVA) to initiate a

review by Massey University Epicentre on leptospirosis disease incidence. This work reported on the possibility of increased risk of leptospirosis infections in herds where calves had not been vaccinated until six months of age. A small pilot study by Massey showed 30% of apparently vaccinated herds sampled tested posi-

NZVA, said the ‘window of infection risk’ was there when vaccinations were not done until six months of age. “An animal may well be infected with leptospirosis prior to that, and even if it does get vaccinated, that will not eliminate the infection.” From the Massey review the Leptosure ‘best

tive for leptospirosis, and 13% of cows in these herds could have been shedding the bacteria. The risk of having a herd with one or more cows shedding leptospirosis bacteria appeared to be associated with the age at which calves were vaccinated for the first time. Dr Roger Marchant, a veterinary advisor to the

practice’ advice now is earlier vaccination than previously recommended, but not too early: for the average mob age of dairy calves the first vaccination needs to be about seven weeks of age on a farm with a high leptospirosis risk. For a typical dairy farm that equates to 10 weeks after the seasonal start

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but themselves and their staff. The disease in humans is a moderate to severe illness with ‘flu-like’ symptoms, which can later develop into more serious conditions including meningitis. The leptospirosis bacterium is spread through urine and bodily fluids, and can survive in stagnant water for several weeks. Infected cattle may present with fever, abortions or the birth of weak or stillborn calves. Vets say good hygiene and use of personal protective equipment is important when working around cattle, in stagnant water or in areas affected by flooding.

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of calving as the earliest time, with a second shot administered 4-6 weeks after the first. Even on low risk properties, farmers should aim to complete these two shots before six months of age. A high-risk farm is one that experiences high rainfall in spring and summer, flooding and water-logged paddocks, maybe has a history of leptospirosis infection, has a rodent population, and livestock that may have contact with un-vaccinated animals, especially when grazing off-farm, or with bought-in seasonal grazing stock. Farmers should vaccinate for leptospirosis to protect not only their herd

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Dairy News AUSTRALIA september 2013

26 //  animal health

Reduced fibre can lead to acidosis With rising prices of fibre sources,

such as hay, it may be tempting to reduce the fibre content of the diet. However, doing so may lead to losses in milk production through acidosis. If you have limited fibre available, it will be important to plan the rate of feeding to ensure you still have enough to feed a balanced diet in late winter/ early spring. Effective fibre is important in maintaining rumen health as it promotes the cud-chewing, saliva production and rumen contractions that assist with maintaining a healthy rumen environment. Cow’s saliva is important as it contains naturally occurring buffers, including bicarbonate, that neutralise acids produced during digestion to assist with the maintenance of a suitable rumen pH. Without sufficient fibre in the diet, saliva production is not sufficient to maintain a stable rumen pH and the rumen becomes more acidic. Some feeds require more chewing and result in more saliva production than others, which is related to the amount of fibre they contain. Fibre is the structural carbohydrate component of the plant that allows the plant to stand up. It is located within the cell wall and is made up of three main

Removing fibre sources, such as hay, from your herd’s diet could lead to losses in milk production through acidosis.

components: hemicellulose, cellulose and lignin. These components within a feed These animals will be noticeably sick to be NDF and of that, 75% to be effecare estimated, via chemical testing, as Neutral Detergent Fibre (NDF). Cows with reduced milk production, reduced tive fibre. Some feeds, for example palm require a diet containing 30-40% NDF appetite and scouring. This may result kernel extract (PKE), have a high NDF in downer cow syndrome and ulti- percentage but a low effective fibre conwithin their daily dry matter intake. tent resulting from a small particle size. Of this, 75% needs to have a fibre mately death. Alternative fibre sources may be There are some things you can do to length greater than 1.5 centimetres. The amount of acid production that check if you are feeding enough fibre. used to extend hay stores, but they cannot be used as the sole source of needs to be neutralised varies with diet. These include: fibre. If cows consume sufficient amounts of highly digest- Without sufficient fibre in the diet, What is the vat telling us? The fibre and energy ible feeds, such as grain and saliva production is not sufficient content of the diet contribactively growing pastures, to maintain a stable rumen pH ute to milk fat percentage. A rumen pH drops. reduced fat test may indicate This results in reduced and the rumen becomes more acidosis, especially if the fat populations of fibre-utilis- acidic. test falls below the protein ing bacteria and increased test. proliferation of acid-producing bacte- Is there any grain or concentrate What is happening in the paddock? ria. This leads to increased production left in the bails? Observe the behaviour of cows after If bails have over 10% of feed left of acid and therefore a reduced rumen behind the accuracy should be checked. they have eaten. This is likely to be two pH. The rumen’s natural buffering To do this, check the accuracy of 10-20 hours after milking. capacity cannot keep up with the pro- individual feeders. If they are dispens- Are the cows chewing their cud? At least half of sitting cows should be duction of acids and the pH continues ing the right amount consider reducing chewing their cud. If there are less than how much you feed. to decline. This may lead to acidosis. If one bail has over 50% left some 50% of the sitting herd chewing their Cows with rumen pH between 5.2 – 5.6 have sub-clinical acidosis. cows have substantially reduced appe- cud, this indicates insufficient fibre in These cows may not appear to be sick, tites. Check for cud chewing and the diet and it should be increased. Are there lame cows? although feed intake and milk produc- manure consistency. Laminitis can be a sign of acidosis. tion will be reduced. Animals with a Is there sufficient effective fibre in Your vet will be required to identify if rumen pH below 5.2 will be suffering the diet? The cows need 30-40% of their diet the lameness is a result of laminitis. from acidosis.

Is the manure consistency correct? If manure has a porridge-like consistency, forming a soft pile 40-50 millimetres high, and making a plopping sound when it hits a concrete floor, then the diet has enough fibre. Manure that is of a watery consistency and light in colour indicates insufficient fibre in the diet. A loose dark manure is more likely to be due to the amount of pasture in the diet and is still safe if other indicators are OK. In summary, insufficient fibre in the diet can lead to acidosis. Cows with acidosis have reduced feed intake, decreased milk production and scours. There are also other indicators that can be observed in the dairy and paddock that can signal acidosis. It is important to maintain adequate fibre levels in the diet and ensure that 75% of that fibre is effective in order to minimise the risk of acidosis. Plan your hay and silage feeding so that you don’t run out in late winter, as hay is expensive and difficult to source at present. • This article was prepared by the Department of Environment and Primary Industries and first published in the August Mountain Milkline.

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Dairy NewS AUSTRALIA september 2013

animal health  // 27

BJD vaccine could be derailed Last month, Dairy

News Australia ran a series of articles about my recent trip to Nepal as part of the EU-FMD training program. It was an incredible experience to travel to another country and get a glimpse into the challenges faced by farmers in a totally different system to what I had previously experienced. I left Nepal with a couple of really strong messages (and a nasty dose of gastro). The key reasons, in my opinion, why diseases like FMD are endemic (ie widespread) in Nepal are that there is poor infrastructure, industry development, access to ongoing education and a generally poor understanding of biosecurity practices to keep diseases out of the herd, and contain the spread within and between herds. Here in Australia, we have access to a sound industry development body (Dairy Australia), generally good governance, reasonable infrastructure, almost endless opportunities for education and self education and reasonable access to services like veterinarians and advisors. However, on virtually every dairy farm that I visit, there are opportunities to improve the management of diseases to prevent the introduction, the impact or the spread of bugs on or between farms. About the most common disease that people ask me for advice about how to keep it out of their herd, or how to prevent it from spreading, is Bovine Johnes Disease (BJD) Johnes Disease is an insidious disease that can spread throughout a herd causing losses due to chronic scouring and poor performance, loss of cull value, and a reduction on the value of the herd. There are areas of the Australian Dairy Industry where there is a very low or no incidence of BJD, and others where it causes significant economic losses. For this reason, it has been very hard to get an industry wide consensus of opinion on the best way to deal with JD. In some herds, it only represents a potential economic risk because of the possi-

bility of movement restrictions and loss of value, on others they have significant production and livestock losses from the disease. There is a lot of concern regarding testing for BJD as the blood test is not sensitive enough in the south of Australia, and not specific enough in the north. The fecal culture tests take weeks or months to get results and again are not especially sensitive at detecting the result. The BJD Market Assurance Program has been around for many years as a tool of managing risk by testing herds or representative samples of the herd to reduce the likelihood of the introduction of BJD when purchasing cattle, but even that is not 100% guaranteed. Here in Victoria, we have had a Test and Control program (TCP) which has been testing and culling positive animals in herds for a number of years. The TCP is currently under review, and its future is uncertain. In most of the Southern Dairy industry, BJD is now considered as a management disease, with no specific movement restrictions applied to infected herds, just the obligation to declare your infected status if selling replacement stock. One would think that as we move towards management of any disease that the development of an effective vaccine would be the number one priority to prevent the spread or the expression of clinical disease. For a number of years, a vaccine has been being tested at a number of sites in Victoria, and the results look pretty promising, yet at the moment, the vaccine is not proposed to be included or recognised in any of the official BJD management programs. The trials conducted in East Gippsland have shown a significant impact on clinical cases, and the shedding of the bacteria in cattle vaccinated up to two years old, but the best results occur when young calves of around 3-4 weeks are vaccinated. The real benefits of this vaccine will be a reduction in the long term contamination of pasture, and reduc-

animal health rob bonanno tion in economic losses on infected farms. However, the animal health council and the AVPMA (who register vaccines and veterinary

stakeholders in Dairy Australia and other industry representative groups that the BJD vaccine needs to be registered and distributed to farms that want to manage this important management disease, especially if the Test and Control program is shut down as a result of the review. • Rob Bonanno is a partner in the Shepparton Veterinary Clinic and a past president of the Australian Cattle Veterinarians Association.

it working well because duce immunity when vacproducts) feel that the the company that makes vaccinated animals should cinated very young by the it may decide not to try to cell mediated NOT the be excluded from export market a vaccine markets that that has label conrequire BJD We are likely to never get ditions that make it Blood testing like China access to the vaccine for hard to sell to farmers. This could be a despite there BJD, despite it working case where our regbeing evidence ulation and infrathat calves vac- well. structure could cinated under derail a valuable disease antibody pathway. 10 weeks of age do not management option. What might this mean actually test positive on As a group, dairy farmto the dairy industry in the blood test at a greater ers, their veterinarians Australia? We are likely to rate than unvaccinated and advisors need to get NEVER get access to the calves in the same group. the message across to key vaccine for BJD, despite This is because they pro-

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© 2013 Zoetis Inc. All rights reserved. Zoetis Australia Pty Ltd 38–42 Wharf Road, West Ryde, NSW, 2114. 04/13 AM971/A PAL0922/DN

PAL0922_DN_260x185_v02.indd 1

30/08/13 3:20 PM

Dairy News AUSTRALIA september 2013

28 //  ABVs

Dicksons claim number 1 title Rick Bayne

Terang dairy farmers and Hol-

stein breeders Bryan and Joanne Dickson are on top of the world with their herd being ranked as the best in Australia. It is the first time a south-west Victorian breeder has topped the Australian Profit Rankings for at least a decade. The feat is even more remarkable as the Dickson’s Emu Banks stud herd of 728 is more than double the average size. The Dicksons have also bred two heifers in the top 20 rankings. The number one ranking has been revealed in the August release of Australian Breeding Values (ABVs) by the Australian Dairy Herd Improvement Scheme (ADHIS).

Who:

Bryan and Joanne Dickson Where:

Terang What:

Top APR herd

The Australian Profit Ranking (APR) is the main breeding index available for Australian dairy sires and is based on a series of nine production and non-production traits. Mr Dickson said the selection of highly ranked APR bulls and strict cull-

Bryan Dickson’s breeding success was more remarkable considering the large herd size of 728.

Do You Want Cows That Are . . . TROUBLE FREE FERTILE LONG LASTING EASY CALVING LOW SCC & GOOD CONFORMATION DNA_ABS_0813.indd 1

Bryan Dickson with this year’s calves.

ing of lesser performing cows had led to the national success. “It’s all in the genetics. Breeding with good bulls is the top of my list,” he said. ABVs express a sire’s genetic potential for a single trait such as milk protein content or milking speed. A breeding index reflects a sire’s genetic potential for a combination of several traits, making it easier for dairy farmers to compare the suitability of different sires for their herd. The APR, the main breeding index available for Australian dairy sires, is a single index that reflects nine traits that influence net farm profitability, including production (milk, fat and protein yields) and non-production traits. Non-production traits include survival (longevity), fertility, mastitis resistance, liveweight, temperament and milking speed. The contribution of each trait towards the final APR value is ‘weighted’ according to its relative contribution to profitability. Michelle Axford from ADHIS said the Dicksons’ top ranking was an even bigger feat when the herd size was considered.

“Bryan and Jo’s result is special because they have such a large herd of more than 700. Most near the top are much closer to the average size of 250 cows,” she said. Ms Axford said that to achieve the number ranking proved the Dicksons are “very careful breeders”. “They use genomic technology well and are very careful in their bull choices, and how they mate and how they decide which cows should be bred and which ones culled.” The Dicksons have been moving up the rankings over the past few years and were listed as number two for the Holstein breed in April this year. The herd has an APR of 113 and an ASI of 92, the second best in Australia. It has a protein ABV 16kg above average, the best in Australia, 470 L milk, and 14kg fat. Mr Dickson said the use of genomics had helped in the herd development. “More than 30% are genomically tested, with more testing being undertaken each year,” he said. “A key part of our success is that we herd test and we don’t milk lower performing cows,” he said. “We cull the low

performers even if they look good. It’s hard but that’s how we got to this level.” Genomic bulls dominate the top bulls in the latest list of ABVs. Ms Axford said that more than half the Holstein bulls in the latest Good Bulls Guide were young genomic bulls. “Genomic – or DNA – testing is having a major impact on dairy artificial breeding in the two years since the technology was introduced in Australia,” she said. The Dickson farm is continuing to maintain good production with almost 9000 litres per cow and 630-640 kg/MS. Mr Dickson said he had aimed for a top 10 ranking but once he achieved that he set his sights on the top. “Once we got in the top few I started thinking about reaching number one. It’s nice to get there.” Emu Banks sells about 50-60 bulls each year to Genetics Australia and other A.I. companies, by exporting to China and to the local market. Ninety per cent of the bulls sold have been genomically tested. “Having the number one ranking is certainly a great boost for us,” Mr Dickson added.

LEVI

Freecall 1800-ABS-BULL www.absglobal.com/aus ABS-AU-info@genusplc.com

The Answer Is...

. . . ABS DURAbulls 2/09/2013 3:39:28 PM

Dairy NewS AUSTRALIA september 2013

ABVs  // 29

Better genetics rewarded across all feeding systems

ANIPRO MAKES THE DIFFERENCE More weight ~ More Milk ~ More Money ®

ranged from $14 to $90 and semen for bulls listed in using more intensive feed- to low bail, moderateGood genes mean more daughters of higher APR is an interaction between averaged $27.17,” she said. sires produce more milk. high bail and partial mixed the Good Bulls Guide. ing systems (hybrid and milk, regardless of the genetic merit and feeding Regardless of feedAnd, not only do they ration feeding systems. We The semen of the Holstein total mixed ration).” feeding system, according system. ing system, herd managproduce more milk, they didn’t have enough data to top 50 APR bulls does not The results for Jerseys to the results from Feed“The benefits of greater necessarily cost more than ers should select high APR also showed an interaction get valid results for Jersey ing the Genes, a study com- are just as likely – if not genetic merit do vary sires whose Australian that of other bulls. more likely – to last in the between genetic merit and herds using hybrid or missioned by the ADHIS between feeding systems. Breeding Values are aligned “Semen price is not a herd as daughters of lower TMR feeding systems,” Dr feeding system. with Dairy Australia fundWhile there is a benefit in Anipro product competent operators with the breeding objecbarrier to using high APR sires,” Drby Brightling Brightling said. “Jersey daughters of high ing. is a fully servicedAPR all feeding systems,with the troughs supplied and a unique bitterfrom components. tives for their herd. These said. two part - sweet & The study also looked at bulls. The catalogue price APR sires produce more Dr Pauline Brightresponse selecting bulls are listed in the Good for straws from the top findings support the relationship between milk volume, fat and proling, who led theThis study,enables“These high APR sires is greatest in consumption to be controlled. Bulls Guide. 50 APR bulls in April 2013 the use of high ranked APR herds with Holstein cows the APR and the price of tein. These results apply said results dispelled the sires listed in the Good myth that the benefits of Bulls Guide for all dairy cows with higher genetic herds, regardless of breed merit, or Australian Profit or feeding system,” she Rankings (APRs), were UNIQUE BENEFITS OF ANIPRO said. not realised in herds using Improved Weight Gain - More Money The study drew upon a low bail or total mixed Improved Feed Conversion - More Money data from 505 commerration (TMR) feeding Improved Fertility - More Money A specifically designed, cost effective, specialized, unique, waterproofed Mineral and Vitamin including a higher content cial Australian dairy herds, system. Improved Milk Yields - Moreusing Money of essential elements Selenium and Magnesium to supplement as a loose mix or through mineral dispensers to enhance a range of feedThe results also dispel performance of all classes of cattle. ing systems. Holstein and the common view that high PRODUCTS FOR BOTH CATTLE and SHEEP COMPARE THE ANALYSIS: Jersey cows were analysed genetic merit cows don’t separately. last in the herd. FERTILITY PLUS The results showed there “In all feeding systems the • Increases fertility in both dairy and beef Let Agri-Gene make the difference for you. • Increases milk yields – lower cell counts for a visit to your Farm. Call us on • Eliminates Grass Tetany and metabolic conditions • Self-limiting – Balancing mineral requirements • Unique waterproofing process AGRI-GENE PTY LTD • Improves your profits – more cows in calf 123-125 Tone Road, Wangaratta Vic 3677 • Cost effective 12-19 cents per cow per day P: 03 5722 2666 F: 03 5722 2777 • Improves weight gain and maturity in beef and dairy young stock Email: Info@agrigene.com.au - Website: www.agrigene.com.au • Can be fed through feed systems at 30 grams per cow per milking Genomic bulls dominate the top bulls in the Photo: Lothlorien Contender Renita-Red & Bralock Connection Merle, Bralock Jerseys, Berry NSW latest list of Australian Breeding Values (ABVs) released by the Australian Dairy Herd Improvement Scheme SUCCESS IS THE ANSWER (ADHIS). Michelle Axford from ADHIS said that more Don and Bruce Glasgow started using Fertility Plus to increase fertility in their dairy herd. Fertility has increased around 10%. Don then found by continuing Fertility Plus, his than half the Holstein bulls in the latest Good Bulls level of metabolic diseases dropped dramatically. Don now uses Fertility Plus as a Guide (which lists the top dairy bulls) were young management tool, increasing production and lowering Somotic Cell Count. genomic bulls.

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“Genomic – or DNA – testing is having a major INCREASE YOUR FERTILITY impact on dairy artificial breeding in the two years since the technology was introduced in Australia,” she said. THE PROOF IS IN THE RESULTS IN DAIRY “Three years ago, there were no genomic bulls. & BEEF HERDS THROUGHOUT AUSTRALIA Photo: Don, Bruce & Claire Glasgow, Bena Vic Two years ago, less than 25% of the Holstein bulls in the Guide were young genomic bulls. That represents BEEF DAIRY a rapid uptake of the technology.” John & Gemma Monk – Kyabram Athol Economou – Violet Town – FERTILITY Improved conception rate in last Spring joining, up by 10% in their 300 Athol runs 300 Euro-British cows and usually has around 10% empty cows. Mrs Axford said the rapid uptake was because cow herd. He has used Fertility Plus ad lib in the paddock over the past 12 months and genomic testing could be done when an animal was any Justin & Brooke Evans – Three Creeks Illawarra’s – Greta has lifted conception rates by 3%. Introduced Fertility Plus a month prior to joining and continued through age, so breeding values could be estimated for young John & Sally McVean – Corryong – GRASS TETANY a 9-week joining period. First round conception rate of 83%. An easy use They run 250 cross bred cows as a vealer operation and since using Fertility cows and bulls, long before performance data was availproduct with no loss due to weather or rain damage. Plus, have not lost any cows to Grass Tetany. John believes Fertility Plus has John & Linda De Win – Yarram able (or daughter performance data in the case of bulls). also helped with milk fever and mastitis. Has used Fertility Plus for the past Found when using Fertility Plus that cows that showed no sign of heat are “This means bulls can be used with confidence from two years, with only two cows empty this year. having strong heats and getting in calf. Robert & Tim Hayes – Tarcombe Herefords – Euroa Jim Peacock – Tongala a much younger age, and that will contribute to a faster Used Fertility Plus to successfully control Grass Tetany for the past two years. After commencing Fertility Plus, cows that were not producing well, looked rate of genetic gain in Australia’s dairy herds.” Duncan Newcomen – Ashwood Park Charolais – Yea better and started coming on to the rotary dairy better. Improved milk yields and better conception rates. Used Fertility Plus to eliminate Grass Tetany and has found that cattle that The Good Bulls Guide includes 22 proven bulls that Stephen Pendrick – Stratford were having silent heats are now cycling strongly. have returned to service having previously been availAfter commencing using Fertility Plus during joining not only conception rates Pam Shelley – Kaludah Herefords – Cooma improved, but production went able on the market as young genomic bulls. ® ® up and SCC down. Stopped Fertility Plus after Pam was getting very low conception rates in the AI programs with cows ANIPRO MAKES THE DIFFERENCE ANIPRO MAKES THE joining and found milk production went down and DIFFERENCE SCC up. having silent heats or not cycling. Since feeding Fertility Plus, the cows are “The farmers who used these bulls as young genomic Re-introduced Fertility as a~ management increased production More weight ~ More Milk ~ More Money More Plus weight More Milktool ~ –More Money cycling and getting in calf. Cows only take Fertility Plus when they need it. bulls will now be joining their heifers. That’s a full two more than pays for Fertility Plus. years earlier than before this technology was available,” she said. CAN YOU AFFORD NOT TO USE FERTILITY PLUS Genomic testing is also useful for older animals, INCREAS E IN YOUR DAIRY OR BEEF MANAGEMENT? YOUR PR even proven bulls with daughter performance data. 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Dairy News AUSTRALIA september 2013

30 //  ABVs

Australian Breeding Values August 2013 HOLSTEIN TOP 10 Profit – Australian proven Profit

Production

Genomics included

Australian Proven or Intl

country road roumare canbee

g

A

355

72

304

78

Roumare

roumare

g

A

314

95

250

3

roufector

bundalong roufector

g

A

292

77

4

sholtz

st. clair sholtz-twin

A

285

5

29ho12470

indijks babylon

g

A

6

useage

kaarmona caleb

g

7

westgate

gallrae jocko 3438

8

29ho12772

9 10

APR $

APR Rel

Survival

44

21

105

59

107

105

70

104

103

104

69

98

396

87

107

89

106

106

96

103

102

102

94

98

95

CRV

247

83

70

31

107

64

111

108

77

106

104

104

78

94

63

ALT

73

193

80

49

27

105

58

105

103

72

101

104

104

65

102

57

ABS

283

81

202

87

75

35

103

68

100

100

75

101

102

102

77

103

72

ABS

A

280

84

199

90

100

45

108

71

102

109

78

102

100

104

80

100

77

GAC

g

A

274

82

182

88

93

46

110

67

110

108

78

104

103

103

84

97

70

GAC

ballycairn oman pello

g

A

271

80

172

85

51

24

106

69

97

95

80

100

102

103

77

107

65

ABS

deancox

manna farm deancox

g

A

268

82

204

87

87

41

105

67

108

104

77

101

102

103

82

100

69

GAC

realm

eclipse roumare realm

g

A

264

74

269

81

58

29

104

59

98

102

70

103

103

101

72

92

61

GAC

g

A

320

82

246

88

96

28

100

68

108

112

77

101

104

106

84

106

70

AGR

A

278

83

212

88

73

27

107

72

119

115

83

104

105

106

78

100

78

AGR

199

105

79

110

107

90

104

106

105

95

98

87

ABS

Bull Name

1

Canbee

2

ASI

No. Dtrs

Daughter Fertility

Workability

No. Herds

Rank Bull ID

ASI rel

Conformation Traits

Survival

Rel

Over Type

Mam Syst

Type Rel

Milk Spd

Temp

Like

Rel

Dtr Fert

Rel

Source

ALT

JERSEY TOP 10 Profit - Australian proven 1

sandblast

nowell sandblast

2

tbone

richies jace tbone a364

3

elton

cairnbrae jaces elton

g

A

272

93

219

98 1098

4

tengen

moroka tengen

g

A

261

69

221

77

35

15

103

54

101

103

64

102

102

104

69

5

larfalot

lightwood lucrative

g

A

242

94

189

98 1045

216

106

81

111

105

92

100

103

103

97

97

86

GAC

6

vanahlem

pannoo abe vanahlem

g

A

229

76

162

83

51

27

107

62

125

118

72

102

106

106

72

99

65

ALT

7

gainful

kaarmona galeao

g

A

201

82

167

88

84

46

105

67

114

112

72

100

103

102

84

93

72

GAC

8

tailboard

nowell tarsan

g

A

198

97

157

99

1263

241

102

92

106

103

89

100

102

101

97

99

95

GAC

9

vavoom

rockleigh park valerian vavoom

g

A

195

73

200

81

58

22

102

56

101

99

65

102

103

105

72

98

57

ABS

10

delian

loxleigh delian

g

A

187

75

180

82

68

38

104

57

115

109

66

102

100

102

78

97

59

GAC

GAC

RED BREEDS TOP 10 Profit - Australian proven 1

randersdavid

r david

A

235

81

99

88

67

16

VIK

2

vrsolero2851

vr solero

A

217

69

194

79

28

10

100

42

3

peterslund

peterslund 1213

A

195

96

101

98

751

107

108

91

94

94

85

102

99

101

94

104

95

VIK

4

arbbonjovi

bosgowan bon jovi

A

187

84

133

91

128

62

105

66

111

105

71

101

102

202

82

104

71

GAC

5

arbpotsie

grazin potsie

A

185

83

138

91

121

51

103

62

97

93

65

98

100

100

83

106

69

GAC

6

arbbobdown

loden bob

A

166

92

170

98

873

176

104

73

110

104

79

97

100

100

97

97

83

GAC

7

arblippman

bosgowan lippman

A

160

80

125

90

122

40

103

55

108

109

51

101

99

99

84

100

66

GAC

8

andersta 1967

andersta 1967

A

150

88

92

94

194

31

105

73

101

98

98

88

102

84

VIK

9

arbfrosty

meriben park jack frost

A

143

76

98

85

84

35

102

58

104

106

62

101

103

102

79

100

51

GAC

10

arblex

beaulands lorry

A

140

82

101

90

111

53

106

61

118

109

59

100

102

103

83

102

71

GAC

VIK

ABS: ABS Australia AGR: AGri-Gene CRV: CRV Australia ALTA: ALT Genetics GAC: Genetics Australia VIK: Viking Genetics LIC: Livestock Improvement For complete ABV information visit www.adhis.com.au

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Dairy NewS AUSTRALIA september 2013

ABVs  // 31

Data helps fine tune herd With 600-700 cows

in herd recording, John Lillico has plenty of data. He recently discovered the Genetic Progress Report makes that data work for him as a management tool. Drawing upon his herd recording data, the Genetic Progress Report shows the impact of Mr Lillico’s breeding decisions and tracks his herd’s genetic improvement over time. Mr Lillico, and his wife Vicki, dairy near Smithton in north-west Tasmania, with help from two to three employees. About three quarters of the herd calves in spring, with the rest calving in autumn. Production averages at 9000-9500 L/cow/year from a predominantly pasture-based feeding system. Cows receive about 2 1/2 tonnes of concentrates in the dairy each year. Although Mr Lillico has always taken a strong interest in breeding and genetics, it has been in the context of operating a commercial dairy business. The herd’s Genetic Progress Report shows it ranks in the top 10% for Australian Profit Ranking and well above the national average for type, longevity, fat and protein. The results confirmed that Mr Lillico’s breeding strategy over the years has worked. He selects bulls based on high APR and type. “We have always believed in the science

Who:

John and Vicki Lillico Where:

Smithton What:

Genetic Progress Report

behind the APR system. We’ve always selected from the top bulls for APR while paying close attention to their ABVs for type. And our report confirms our experience: that following the APR for selection delivers us the most profitable bulls,” he said. Mr Lillico uses a combination of bulls bred in Australia and overseas. “When we are looking at bulls from overseas, I’ll use their ABV(i) if they are available. We find them more reliable than the breeding values from their country of origin.” The Lillicos have traditionally used progeny test straws over a small portion of the herd but in the past 12 months have transitioned across to using genomically tested young bulls instead. “We are looking forward to seeing the full proofs from these bulls when their daughters come into production,” he said. Mr Lillico’s main interest in the report was

the traits it highlighted for improvement. “My initial reaction to the report was that it highlighted the traits we need to keep focussing on, particularly mastitis and daughter fertility. It also showed how mating decisions from year to year can quite dramatically affect the herd’s overall genetic trends and therefore profitability. It certainly puts a new perspective on the data from our herd,” he said. Mr Lillico said he was both surprised and disappointed by the herd’s graphs for mastitis resistance and fertility, although both sat at about national average. “Daughter fertility has become a big focus for us because we don’t want to cross breed. I think genomics will help us identify young bulls that rate well for both profitability and daughter fertility. I will certainly be taking a keen interest in our future reports to see if we are making progress with fertility.” Like many herds, Hindlee’s graph for genetic progress for mastitis resistance fluctuates from year to year. “The mastitis graph made us step back and look at what might have contributed to the curve going up and down. I think it may be due to using some promising young bulls that didn’t have a lot of daughter data and a couple of them fared

John and Vicki Lillico at their Smithton dairy property.

quite badly for mastitis resistance. That dates back to the pre-genomics years and I’m hoping genomics

will help us avoid those sort of mistakes in the future,” he said. John is keen to see the

herd’s Genetic Progress Report each year. “It’s a good tool to keep us focussed on profitability

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Dairy News AUSTRALIA september 2013

32 //  machinery & products

Arion ideal for dairy jobs “It has manual Lancey reckons is very remotes and we find it Gippsland a couple of weeks ago, we useful. an easy tractor to operThe engine is a 6.8 litre caught up with Chris and Leanne ate and excellent for Lancey at Nyora, not far from Poowong. six cylinder 24-valve turhired labour.” Together with Chris’ parents, bocharged intercooled The week before we Graeme and Trish, they milk 1000 Hol- diesel which meets Stage visited, they had also steins on a 12-year-old 70 unit rotary 3B emissions standards. taken delivery of a secwith automatic cluster removers, The radiator has been working clothes ond-hand Claas Arion boosted milk meters and retenchris dingle 540 with 135 hp, also by 35% tion bars on their main fitted with a Stoll front from pre400ha farm, and a furvious models to handle end loader. ther 300 on a separate “It’s only done 10 hours so far, but the greater demands of property with a 24-stall it’s doing everything that we expected. the system. swing-over herringbone The ‘Claas Infor- We’ll use it for feeding out and carting shed. mation System’ allows silage. Which tractor we use for that “Cups go on at 5am adjustment of key trac- depends on the load and how far it has and 3pm, throughput Who: tor functions such to move it.” on the rotary is between Chris and Leanne Mr Lancey is effusive about the supas transmission and 400 and 450 cows per Lancey port from the Claas Harvest Centre and engine settings. hour,” Mr Lancey told Where: Nyora, via Poowong Like most new trac- said one of the main reasons that they us. What: tors these days the have chosen Claas is because of the In February of this Claas Arion 640 tractor Arion 640 comes stan- level of service they receive. year they bought a new “Personal service is paramount and dard with a cab and airClaas Arion 640 tracAllan and Paula Slater give that because tor fitted with a Stoll front end loader conditioning. It has done 400 hours and Mc Lancey they have a personal interest in the through Claas Harvest Centre in Warragul (formerly Trac Mac) run by Allan said that although it is a pretty basic dealership. “Plus LandPower back up is phetractor it is the ideal unit for hay feedand Paula Slater. The 155 hp four wheel drive trac- ing, and outstanding for tillage and hay- nomenal. The back-up service is 24/7!” They make all their own pit silage tor has 50kmh transmission, which Mr making. and this season plan to cut 400ha of their own, plus 400ha for neighbours. Chris and Leanne also lease a 2000ha property near Henty in NSW for their own feed, growing triticale, wheat and lupins. That property provides grazing for 450 heifers. Other machinery on the Nyora property includes a Claas Jaguar 890 precision chopper which dumps the silage into a couple of silage wagons converted into trailers and three tip trailers. Two Claas 3900 contour mowers look after the hay and silage cutting – “we mow one day and chop the next.” Chris Lancey and A Lely rake, John Deere 467 round family milk 1000 Holsteins at Nyora. baler and Massey-Ferguson MF187

On a very wet morning in central

Chris Lancey with the Claas Arion 640 tractor purchased in February.

large square baler make up the haymaking equipment. “We take the Massey up to NSW to bale straw there and bring it back here, mainly for the calving shed,” Mr Lancey said. They have four Fendt tractors, including one that is used both at home and up north. At Nyora a three-point linkage Landaco fertiliser spreader is used for following cows. They employ nine full-time staff and the Lanceys say they all get on well

together. “Our staff perform above expectations and we have no worries about rostering. Without them the job would be impossible.” Mr Lancey admitted the dairy job has been “pretty ordinary recently” and generally supply of milk in the industry will be an issue. But he loves dairying. “Right at the moment we are comfortable with the feed around the place, as long as the rain doesn’t hang around for too long.”

Case IH balers lift capacity by 20% The Case IH LB4

Series large square balers are more efficient than previous models, boosting productivity on-farm. Geoff Rendell, Case IH product manager for Hay and Harvest, said the new design has increased capacity by as much as 20%. “We are very excited to bring a new level of baling technology and performance to Australian producers,” said Mr Rendell. “We know the importance of maximising short baling windows - the LB4 series gearbox runs at an astonishing 48 strokes per minute to put crop through the machine

quicker and more efficiently. “The high-speed baling means producers can get more done in a day without compromising the quality of the bale.” Inside, the LB4 Series baler features a new, high inertia flywheel that is 19% larger than previous model, resulting in improved performance. The new, high-capacity pickup features a roller windguard, feed-assist roller and faster RPMs to maximise crop flow into the baler. “The LB4 large square baler has been put to the test, baling more than 200,000 bales, and it has excelled across a variety

of crops and conditions,” said Mr Rendell. “The baler’s sleek new look and curved design also improves its functionality, allowing it to shed debris more easily.” The LB4 has also been redesigned for better wear and longer life, including the all-new, heavy duty frame on the pickup and reel. Two feet narrower than previous models, the new design provides better visibility around the baler and makes transport easier. LB4 large square balers also come equipped with steering sensors that interface with the intuitive AFS Pro 700 display to more

efficiently help producers build the perfect hay bale. A GPS logger is available for recording bale moisture, and together with a bale weighing system, offers complete bale documenting. With GPS data logging and computer mapping software, all data relating to the baling process can be viewed at any time and can be exported onto a USB drive. The LB4 is available in a choice of single axle or steerable tandem axle, in standard configuration or rotor chopper. “The new design elements create a product that is not only more efficient and reliable but also

easier to use and maintain,” said Mr Rendell. “We are very excited

about the performance of this baler - I’d encourage you to visit your local Case

IH dealer to ensure you get the most out of your next bale.”

Beauty. Brains. Brawn.

Right now, get 0% p.a.* financing on all new John Deere Balers and Mower-Conditioners in stock at your participating dealer. Choose from our hard-working lineup of hay equipment like the 9 Series Premium Balers. Designed with a MegaWide Plus™ pickup and heavy-duty 80H Diamond chains, these balers are built to bale quality hay and quality profits. Plus, they’re backed with an unmatched 2-year, 12,000-bale warranty†. Hurry, this deal ends 31 October 2013. Learn more at your John Deere dealer today or visit us online.

*Conditions apply. Finance available through John Deere Financial Limited to approved commercial applicants only. Offer is based on 30% deposit, GST back and 36 month term. Fees and charges apply. If not amended or withdrawn earlier, the promotion expires on 31/10/2013. Other terms and rates are available. Offer available on new balers and MoCos in stock at participating dealers. †Two-year or 12,000-bale warranty, whichever occurs first, covers wear parts on 469 and 569 Premium Round Balers. Warranty excludes drive chains. Contact your dealer for full information.

JohnDeere.com.au/zero

Dairy News AUSTRALIA september 2013

34 //  machinery & products

Silage in the mornings, hay after lunch TARANAKI, NZ

contractor Lloyd Gernhoefer’s new Kuhn VBP 2160 variable chamber BalePack is saving him time and labour with its simple

season. He has run Lloyd Gernhoefer Contracting from home at Eltham for 18 years. His services include hay and silage bales, pit silage, hedge cutting,

bale-and-wrap operation, the machine supplier reports. Gernhoefer bought the VBP 2160 last year, making 11,000 bales of silage and 3000 bales of hay last

effluent ponds, fertiliser spreading, trailer work, direct drilling and cultivation. Gernhoefer hadn’t had a Kuhn baler before buying the BalePack but he has

The BalePack combines two technologies in one machine.

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Epan 5, 14 Cubic meter capacity, 12 tonne spreader. Heavy duty robust spreader. Smaller models available to suit 100HP tractor Available on 3% finance^ with full one year manufacturer’s warranty.

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From incl GST Iris Super Spreaders Complete Range 400ltr (pictured), 700ltr, 900ltr Trailed. Full one year manufacturer’s warranty.

“It makes a nice bale and it has handled the conditions we have to deal with. Some of my country is pretty hard work, and we’ve got a lot of swamp land around here. I had a demonstration model here the summer before I bought it and we put it on some rough country and it handled it well. “I liked the ease of working on the computer with the BalePack. That was the big thing: the monitor is easy to work… a big advantage at the start.” He bought the BalePack and did most of his silage with it last season. “It’s really good. I haven’t been driving it myself but my guy who operates it finds it good.” The BalePack combines two technologies in one machine. This baler/wrapper combination combines the OptiCut integral rotor and unites it with an inno-

$6,400

From incl GST Reck Typhoon Pond Mixer

6.3m Reck Typhoon Jumbo 45mm slurry pond mixer, high efficiency galvanised prop. Full 1 year manufacturer’s warranty.

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vative wrapper system. The machine can make top-quality bales in all crop conditions and it operates effectively on steep slopes, the supplier says. Fast and reliable bale transfer combined with a high-speed, twin-satellite wrapping unit enable

“It makes a nice bale and it has handled the conditions we have to deal with. Some of my country is pretty hard work.”

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From incl GST installed* Jeantil EVR 21-15 Twin Horizontal Beaters

owned Kuhn power harrows and a plough. He looked at the BalePack after realising he wanted something a bit different to replace his standard baler. “I was looking for something different from everyone else. I wanted to see what else was available.

Kuhn VBP2160

output up to 55 bales per hour. Gernhoefer opted for Kuhn’s IntelliWrap 3D wrapping system, which distributes the total film quantity uniformly and efficiently across the entire surface of the bale. “The 3D system is really good, and you hardly get any rips in the wrap when you’re loading and unloading trucks,” says Gernhoefer. The design embodies fewer moving parts, unmatched crop flow, and outstanding performance and dependability, says the supplier. Gernhoefer says the VBP 2160 allows him to have one less guy out on the job, making his baling operation more efficient. The variable chamber also allows him to go from silage in the morning straight into hay in the afternoon.

We also supply complete feed mills designed for the small or large dairy farmer so why not start milling your own grain today and benefit from the savings Need a new pencil or centreless auger we stock a large range of grain augering equipment at great prices

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301

42

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103

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Overall Type

209

22

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53

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137

104

202

36

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1304

37

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76

106

107

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