Dairy focus november 18, 2014

Phone: 027 255 8501 Scott

Dairy FocusNOVEMBER, 2014

PHOTO EDEN KIRK-WILLIAMSStaveley dairy farmer Carl Shannon with the faithful Meg

The balancing act Pages 3-5

2 Farming www.guardianonline.co.nz2 Dairy Focus www.guardianonline.co.nz

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PostAshburton Guardian, PO Box 77, Ashburton.

Matt Jones Staff Matters – looks at the legalities of dismissing a worker on ACC.

P26

Matt Jones

STAFF MATTERS

COMMENT FROM EDITOR

Fred Hoekstra

VEEHOF DAIRY SERVICES

Fred Hoekstra Veehof Dairy Services – counts the cost of lameness to your business.

P29

Chanelle O’Sullivan Face to Face – talks about the importance of paternity leave when a new baby joins the family.

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Chanelle O’Sullivan

FACE TO FACE

Murray Hollings Cooling Off – our new columnist discusses new milk cooling regulations.

P33

Murray Hollings

COOLING OFF

Madeleine Henderson Legally Speaking – discusses the implications of Residential Tenancies Act when it comes to terminating tenancy.

P18

Madeleine Henderson

LEGALLY SPEAKING

It’s been a fantastic spring in Mid Canterbury and there are some great looking calves out there.

With calving done and dusted, farmers are already turning their attention to getting silage and hay off the paddocks.

There has been a lot of conjecture about whether we are heading into a drought in Canterbury and it is certainly dry, despite some useful rain.

Many of the farmers I have been speaking to recently are sagely predicting a drought, saying the last big dry sucked the moisture out of the countryside in 1998-99. Albeit, there have been dry spells in the interim period, but nothing severe.

With this in mind Federated Farmers grain and seed spokesperson discusses the implications for the cereal grain harvest, now that the slug of carryover grain which has sat in silos for the past two years has gone.

Also in this edition we meet Carl and Dorothy Shannon – Staveley

dairy farmers who left their homes in Northern Ireland to make their home in New Zealand more than 40 years ago, and have a rollicking good tale to tell.

We profile DairyNZ’s Craig McBeth, in our continuing series on industry leaders and get behind the scenes on a South Canterbury dairy farm, where an environmental project is helping to save the giant kopopu – an interesting neighbour many of us won’t even know we have.

We are always keen to hear any story ideas our readers might have, just use the contact details below to get in touch.

Michelle Nelson

RURAL EDITOR

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Farm built up from DIY determination

When Carl Shannon set sail from his native Ulster

destined for Mid Canterbury in 1967, it was a different place to the district he lives in today.

His fare was paid by the New Zealand Government of the day, under the assisted immigration scheme.

Between 1947 and 1975, about 77,000 women, children and men arrived from Great Britain this way, in an initiative to populate the colony.

His decision to leave the 56-acre family farm in Northern Ireland was in part influenced by a desire to visit the country his mother was born in. “My mother was a Kiwi,” he said.

She had left Ashburton prior to World War Two and later fled London for Belfast to escape the troubles of the war-ravaged city.

According to Carl, his father looked over the fence one day and saw a pretty girl visiting his cousin – and the rest,

as they say, is history. The couple married and raised four children.

“All my mum’s family had

left New Zealand by the time I arrived,” he said.

“My grandfather worked for Beaths in Ashburton – he was

a travelling salesman, selling haberdashery, from a horse and cart.”

continued over page

Michelle Nelson

RURAL EDITOR

Carl and Dorothy Shannon of Halfpenny Gate Farm.

PHOTOS EDEN KIRK-WILLIAMS


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from page 3Ironically, Carl stayed on Belt

Road, where his mother grew up, when he first arrived in New Zealand with a family who had sponsored him.

However, it was a short-lived experience; although he had no work lined up he soon found himself gainfully employed.

“I came to Ashburton, I arrived on a Thursday, and by Monday I was working on a sheep farm in Te Pirita.”

Two years later his wife-to-be Dorothy arrived, she had remained in Northern Ireland to complete her teacher training.

During this time Carl also worked in the high country, with stints as a musterer on Double Hill in the Rakaia Gorge and Lake Coleridge Station, saving as much of his wages as possible.

When Dorothy arrived Methven arable farmers Natalie and Tom Currie, who were friends of Carl’s mother, offered her a place to stay and a job for Carl.

“They took me under their wing,” Dorothy said.

Less than three months later the couple wed, celebrating the occasion in a “small marquee” on the Curries’ lawn.

The newlyweds headed back to Te Pirita for five years, all

the while they scrimped and saved with the intention of purchasing their own property.

They returned to Methven to work on Jack Mangin’s cropping farm.

“That’s where we got our break for farming, we were trying to save money as best we could but inflation at that time was beating us.”

In the 1970s and early 80s interest rates climbed above 20 per cent.

“We had friends who had 90 acres and 60 cows for sale and the boss I was working for (Mr Mangin) lent us quite a lot of money,” he said.

“The banks weren’t interested in us,” Dorothy said.

“Anyone we worked for helped us out – we can’t speak highly enough of them, they were just so good to us.”

The Shannons have continued to pay that kindness forward.

“We’ve tried to help anybody who showed a bit of initiative,” Carl said.

When the young couple embarked on their dairying career at Halfpenny Farm in Staveley they both worked off the farm. Carl worked for neighbours and they both picked spuds.

“People just got on with what they had, it was just what you did, worked day and night,”

Dorothy said.“We made do with the coal

range for years.”Carl and Dorothy continued

to save every spare cent to purchase more land and their lifestyle reflected it.

“People don’t live off the smell of an oily rag today – nobody does that anymore – there were even holes in our oily rag when we started off,” Carl said.

“There were holes in the floor of our washhouse anyway,” Dorothy added.

Little by little their business grew. In their second year they built a new herringbone

Carl Shannon checking in on the afternoon milking.


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cowshed to replace the old walk-through shed. It was relatively new technology in the 1970s.

“We did it ourselves with the help of friends, who helped pour the concrete,” Carl said.

“Bits of ground started coming up for sale – we bought the next-door neighbour’s farm, where my mum used to stay as a girl, but we never knew that until she came to visit.

“The whole thing just kept growing, we had pigs as well, and beef cattle.”

With the same do-it-yourself determination applied to building the new shed, in

1987 the couple turned their attention to building a new house.

“We had a builder friend who was out of work in a time of downturn, and he helped us. It took us six months, and we had to pull the old house down,” Dorothy said.

“We went on to once a day milking in February while we were doing it.”

Initially the Shannons supplied the Ashburton-based Midland Dairy Company, which had just two tankers on the road. For a while they sent milk to Alpine Dairy, before Fonterra took over the Clandeboye plant.

Today they milk 700 purebred English friesians through a 50-bale rotary. Some years ago the couple purchased a 200ha run-off block “close to the pub” in nearby Mt Somers for £700 an acre.

“We bought Mt Somers instead of a life insurance policy,” Carl said.

“We rear all the calves – the bulls go to the North Island at about 100kg.

“Anything that is born alive is raised, we do that to utilise the place at Mt Somers.

“We also fatten all the cull cows, before they go to the works – it’s sad really, they’ve looked after you so well and they go off to the works.”

It takes just two-and-a-half hours to walk the cows to the run-off block and it’s a route they know well. Once, when a gate was left open on the milking platform, they made a stealthy getaway in the darkness. A shocked farmworker discovered the herd missing in the morning – but it was soon discovered the older cows had led the way back to Mt Somers.

In years gone by Carl drove the herd to the run-off on his own, assisted by his dog. New regulations mean signs, high- vis vests and people in front and behind the herd.

These days Carl is not as hands on with the stock.

He and Dorothy are in the process of handing over to the next generation, daughter Heather and son-in-law Allan Broomhall, who are lower order sharemilking.

“Hopefully they will move up the ladder next year,” Carl said.

Another daughter Rebecca owns the iconic Staveley Store, just up the road, having given up a journalistic career in Wellington.

“We were quite surprised – Heather was in Australia, and this night there was a knock on the door and the two of them said they were home to the farm.”

Halfpenny Farm and the run-off block enable the Shannons to be relatively self-sufficient, wintering all their own stock on fodderbeet and kale. The operation also produces 2000-3000 bales of silage annually, and a rape crop follows the barley harvest.

“It helps if you get a wee tight spot, in a year like this one – when milk prices are down and grain prices are high, we don’t feed palm kernel.

There has been huge growth in the industry in recent years, which has altered the landscape and the economy.

Stand-out points for the

Shannons include the number of tankers on the road and the regulatory requirements.

“We used to know our drivers, now we don’t – they come at night now,” Carl said.

“ECan – everything has to go through ECan – when I first started nothing like that existed,” Carl said.

“Everything has changed – even the quality of the pasture, we work with agronomists, which we had never heard of when we started – grass was grass.

“You have to use experts because everything is on a bigger scale and because of the new regulations, and the need to manage nitrogen leaching.”

Five years ago the Shannons put in an effluent sorter system with three days’ storage in line with the regulatory requirements, however the bar has lifted and they have had to replace it with a system capable of at least 30 days’ storage.

Originally the property was irrigated with a gun, which has long been replaced by centre pivots, fed from a private scheme linked to a storage pond, water from the Rangitata Diversion Race scheme and the Barrhill Chertsey scheme, supplemented by some water from Lake Coleridge.

continued over page

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from page 5The seven-hectare storage

pond went in about five years ago, and creates a picturesque scene, dominated by Mt Somers, so much so the Shannons have a professional photo hanging on the dining room wall. It has also become a spot for recreation.

“The kids use it to boat and waterski on in the summer time,” Carl said.

Improvements in herd genetics and the emergence of the internet are also on the list of developments the Shannons have seen in the industry.

While last year’s milk price was unprecedented in Carl and Dorothy’s experience, they are not fazed by this season’s dip.

“All my life I’ve seen farming prices come and go. It just means Dorothy won’t have as much money to spend,” Carl said with a wink.

“We will just tighten up the reins, but it will hurt some people, the people who started in the past couple of years.

“A lot will depend on whether the price moves up or goes down, it’s sitting on the

border at the moment.”“The trouble starts when

the prices are good and people keep building more sheds, and buying more cows, that means more debt.”

After 37 years Dorothy and Carl are looking forward to spending less time on the farm.

“We would like to wind back but still seem to be pretty busy,” Carl said.

“We’ve just bought a house in Akaroa – and we’re hoping to spend some time there.”

“But, I just paid for the insurance, and I might have to work harder so I can rest longer.”

The Shannons have made regular trips back to Ireland over the years, but have never had an inclination to return to their native home permanently.

“We are used to the space out here now,” Dorothy said.

“Initially is was hard, for the first few months, and the first few times we went back it was hard leaving, but we wouldn’t go back permanently.

“It’s just so much easier to live out here.”

Above – Farm hand Kolbie Groom cupping on.

Right – Afternoon milking time on the Shannon farm.

Inset left – Environmental and Civil Solutions owner/operator Steve Adam working on site.

Inset right – Calves enjoying their last days indoors.


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Justin Geddes

Farmers need to plan for price dropDairy farmers need

to take action now to avoid going

backwards once the current forecast pay-out begins to take effect next year, Crowe Horwath agribusiness principal Justin Geddes says. 2014 was a record pay-out season and dairy farmers have just banked the last of the retrospective payments, but this season’s advance is more than $2 per kgMS below last year’s.

“While accounts might

look positive now, the recent record past payments are hiding the effect of this season’s lower advance,” he said. “This drop will see a lot of pressure on farm cash flows from May to October next year.”

Mr Geddes said that, like any business facing a significant drop in income, dairy farmers should be carefully examining their budgets. He recommended:

Looking at all variable costs to see what can be cut or improved.

Being aware that provisional tax for this

year is based on last year, so a re-

estimation of the 2015 tax is essential.

Looking at capital expenditure and working around or putting off ‘replacements’ wherever possible.

Re-visiting bank funding to see if a change of loan term or type of debt would help navigate any shortfall.

The budget review should be looking a minimum of two years out, said Mr Geddes, who added that the full effect of the drop in pay-out will not be felt until the 2016 season.

“The impact of this will see some operations struggle to reduce debt, but reward farmers who make an effort to manage the situation now,” he said.

“If the pay-out drops further, break-even will become difficult for some.”

Mr Geddes recommended dairy farmers schedule

regular meetings with their advisory team to review actual to budget

performance,

with every item scrutinised. Having a good team of advisors is important in the current tough environment, he said.

It was also important for farmers to keep in close communication with their bankers, and highly leveraged

operations might have to consider a period of interest-only repayment on loans.

“The key message is that, just because the bank account might look healthy at the moment, they should start planning now for the impact of the forecast low pay-out.”


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Special time needs some family timeForty-one weeks and three days –

10 days overdue! Induction starting first thing

in the morning and hopefully this boy will finally show himself ! The time of year to be having a baby isn’t ideal for deer farming as we are in the thick of velveting right now and will be for the rest of the year.

Thankfully our bosses are fantastic and right from the beginning have said for hubby to take a week off, which will be great, though I can guarantee that he will be “just going to check the velvet freezer” or “just going to go check on a mob down the back” which, so long as he takes the toddler, will be fine and perhaps he will show his face an hour or two later.

When discussing paternal time off on the Farming Mums NZ Facebook page recently, I was a bit saddened by the rules in some dairy contracts strictly stating “No time off during calving”.

I can understand that under normal circumstances, but would have thought more effort would go into ensuring that

some family time straight after birth would be possible?

Being that it is unpaid leave and the employer could have up to six months’ notice to arrange cover for two to five days at the time of birth and that here in New Zealand you are entitled to take up to two weeks’ unpaid paternity leave, I feel like it’s a crucial time in a family’s life and having that option unavailable seems quite harsh.

I do understand that the owners/managers are trying to run a business, but is this one event not a legitimate exception?

I did come across a few families who

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Left – Hopefully, by the time you are reading this, we will have a new addition to the family.


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Special time needs some family timewere unconcerned about the lack of time off, or family-run farms finding it near impossible which then comes down to each person’s discretion and choice.

The unpredictable nature of childbirth also makes it difficult, but I hope that if a family would really cherish those

first few days, that arrangements could be made well in advance – I can’t even imagine what the deal would be post-caesarean, with other children and/or lack of extended family assistance.

On a lighter note, I have recently tried a few things to help evacuate this little dude, with help of the farm.

I’ve tried being a rousey for a day at 36 weeks, chopped kindling, moved house

– twice! Skinned and gutted a sheep at 39 weeks, plenty of bumpy MUV bike rides around the farm, off-roading at a deer industry Advance Party just last week when over 40 weeks and spent the whole pregnancy walking and attacking gardens, including hoeing and planting

out two more rows just today! Which gives me a new theory that if you stay active the entire pregnancy – nothing short of jumping out of a plane is going to budge that kid if it doesn’t want to come!

By the time this is printed, hopefully there shall be four of us and until then I will be tightly crossing my fingers that it takes two hours and he comes naturally!

Left – Hopefully, by the time you are reading this, we will have a new addition to the family.

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I do understand that the owners/managers are trying to run a business, but is this one event not a legitimate exception? “


Preparing for seasonal pasture

changes

As we near the stage of the season where pasture changes from

its vegetative to reproductive state (seed head stage), it is important to consider the implications this has on cow performance. This is especially important in years such as this one (with a low pay-out being forecasted), as it is essential that we capture as much of this income as possible, through increased milk solid production, to maximise farm profitability.

As pasture becomes more fibrous, lignin levels in the plant start to increase. NDF percentage of the pasture subsequently increases and the cow is generally not able to eat the same amount of pasture (kg DM) as the more lush spring pasture (see Graph 1 – Grass component).

With intake reduced and quality levels decreasing, milk production will decline at an

increased rate compared to the overall lactation - rumen fill and dry matter intake are your biggest limitations in holding milk production. Without adequate protein levels in the pasture, the cow will also not have the balanced diet necessary to maintain production. Transitioning your cows onto a diet to counter this period is important, as optimising the diet to compensate for the change in pasture quality will hold milk production for longer during this period of reproductive pasture (see Graph 2 – Milk solids).

If we check the numbers, preventing a 2 litre (or 0.16 MS) milk drop until mid-

January could be worth as much as 23MS/cow. An investment of 90 cents per cow per day for a period of 60 days is worth an additional margin over feed cost of $118 per cow per year. These results have been backed up through research trials, focusing on improving productivity and profitability through concentrate supplementation, being carried out at Lincoln University as part of the Dairy Business Centre (NZ) Limited’s dairymasters™ Tertiary Scholarship Programme.

As the effects from the continuous fluctuation of pasture composition throughout the season remain

poorly understood, Dairy Business Centre (NZ) Ltd has invested in a state of the art NIRS (Near-infrared spectroscopy) analysis unit to test feed material characteristics and allow farmers to effectively balance livestock diets based on the quality of feed available, in combination with the use of the appropriate complementary feed supplements. With this in mind, Dairy Business Centre can formulate farm specific feed supplements designed to balance the ration and maintain production through this important stage of lactation.

The use of new technology

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If you have any questions or would like more information on ration balancing or the benefits of NIRS testing, either talk to your nutrition consultant or contact us.

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Wetland conservation priority on South Canterbury dairy developmentSouth Canterbury farmers

Kevin and Karen O’Kane are protecting a native

fish in Canterbury while converting a dryland sheep and beef farm to dairying.

While giant kokopu are prevalent elsewhere in New Zealand, especially on the West Coast, they are becoming increasingly rare in Canterbury, pushed out by land use change as farming families like the O’Kanes switch to dairying.

The O’Kanes’ farm backs on to Horseshoe Lagoon, a coastal wetland north of Timaru with the only known population of giant kokopu in Canterbury.

Together with two neighbouring farmers the O’Kanes have built fences, dealt with willows and planted native trees to protect the lagoon, helped by $16,280 of Immediate Steps funding from the Canterbury Water Management Strategy Orari-Opihi-Pareora Zone Committee, Timaru District Council, Mackenzie District Council, runanga and the community. The Department of Conservation manages weed

control and allocated $3300 towards ring-barking cracked willows to their sapwood then treating with glyphosate.

The couple started milking 340 cows in August, two and a half years after buying the 100-hectare farm then installing irrigation pivots, building a cowshed and meeting resource consent effluent management requirements. They have also completed willow control agreed to by the previous owner, fenced off a spring and stream running into

Horseshoe Lagoon and planted a surrounding 5-metre riparian strip in swamp-loving native plants including flax, ribbonwoods, small-leafed Coprosma propinqua and sedge, Carex secta.

Family, friends and their children were invited to a planting day last spring. For the next few weeks, pukeko did their best to rip out seedlings but were thwarted by tree guards. Old man macrocarpa were left along the stream to provide giant kokopu with shade and cover until native

plantings are tall enough to take their place.

“It’s no problem,” Mr O’Kane said of his conservation work. “Cattle could have got stuck in the swamp areas and it’s satisfying seeing these places improve.”

Inspiration also came from sharemilkers Andy Palmer and Sharon Collett, who farm nearby. The couple fenced a stream in the Orari catchment, built crossings for cows before this was required by either Fonterra or the proposed Land & Water Regional Plan,

and then planted natives with support from Environment Canterbury and Central South Island Fish & Game.

“I’ve seen them rewarded with abundant bird and fish life,” Mr O’Kane said.

Orari-Opihi-Pareora Zone Committee Chairman Dermott O’Sullivan said dairy conversions were often a good opportunity to protect and create natural habitats.

“These are usually small areas with little impact on the business of farming but can be important from the

Left – South Canterbury farmer Kevin O’Kane and Environment Canterbury biodiversity officer Emma Coleman check progress of native seedlings planted a year ago.

Right – Macrocarpa provide shade and cover to giant kokopu until native plantings grow tall enough to take their place.

Far right – Giant kokopu are rarely seen in Canterbury.

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perspective of water quality and ecosystem protection,” he said.

Fencing out stock and riparian plantings helps prevent soil, nitrates, phosphorus and agricultural chemicals washing into waterways. These nutrients promote blue-green algae which deplete oxygen in water and can be toxic.

Department of Conservation biodiversity ranger Steve Harraway applauds the three farming families’ commitment to conservation at Horseshoe

Lagoon. Thanks to their efforts, the wetland is fenced off for long-term protection with invasive willows under control and 2000m2 is planted in natives.

“When DOC monitored and tagged the kokopu in 2003-05 they all showed an interest and were keen to do something to protect this habitat,” he said.

The once gravelly bottom of Horseshoe Lagoon started filling with silt and soil in the 1970s when the government encouraged land development with cheap loans. One big flood

event did most of the damage as foothill development and intensification on the plains left soil exposed.

The lagoon also supports eels and waterfowl including bittern and scaup, all important resources for tangata whenua.

“Today’s efforts are helping bring it back to as natural a habitat as possible,” Mr Harraway said.

Environment Canterbury biodiversity team leader Jo Abbott said Horseshoe Lagoon landowners are helping fulfil

the “Ki uta ki tai” - from the mountains to the sea - vision of the Canterbury Water Management Strategy, with help from Immediate Steps.

The Environment Canterbury Biodiversity Fund also helps pay for conservation, prioritising projects in areas where values are already high such as native bush and braided rivers. The Honda TreeFund supports community native planting projects.

“Together, these funds have so far awarded over $5 million to around 450 projects

protecting Canterbury’s biodiversity and ecosystems,” Dr Abbott said.

Ecosystems at Wainono Lagoon near Timaru and Te Waihora/Lake Ellesmere, near Christchurch, are also being restored through a range of biodiversity programmes in partnership with Ngai Tahu and the Ministry for the Environment.

For more information go to ecan.govt.nz/biodiversity or contact the Environment Canterbury biodiversity team via 0800 324-636.

■ Is a $10-million Canterbury Water Management Strategy programme in its fifth and final year with a second phase possible

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agencies and community conservation groups ■ Provides $500,000 in each of 10 Environment Canterbury water management zones plus $1.2 million

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Craig’s job is to get the science to the farmers for practical useCraig McBeth used to be

a banker. Not the kind that sits in an office

– but rather the type that dons gumboots and goes out talking to farmers about their overdrafts.

He was like the banking guy on those popular adverts on TV trying to educate the loud American Ira Goldstein about cows.

He did that job for more than 20 years, ending up as general manager of rural banking at ASB. “I really loved those ads and they did a pretty good job for ASB too,” he says.

Craig is still a numbers man – but these days his daily job is about the number of farmers who are engaging with industry body DairyNZ and ensuring they see value from their levy investments in the organisation.

Craig, who has a Bachelor of Agricultural Science from Massey University, leads DairyNZ’s field team of consulting officers and events management nationwide. He has teams operating from Northland to Southland and of course, including Canterbury.

Craig McBeth


Craig’s job is to get the science to the farmers for practical use

“There are nine people in our Canterbury team and they are a very busy group led by our regional leader Virginia Serra.

“Their job is to work with the local dairy farmers in a region, running discussion groups and events to help them farm competitively and responsibly. They are also there to really boost support during adverse events like droughts and storms.

“DairyNZ knows how important it is to have people on the ground in regions supporting farmers, and understanding the local issues and challenges of farming in Canterbury,” he says.

Craig has a job title that sometimes requires a bit of explanation to his non-farming friends. “I’m general manager of extension for DairyNZ. I often get asked ‘so what are you extending?’ ” he says.

“The answer is farmers’ knowledge and understanding, particularly of the research and development that goes on at DairyNZ. Our job is to help take DairyNZ’s work out to farmers in the regions in a way that is helpful and relevant to farmers. That way farmers keep up with the latest developments and advice. It’s about extending the reach of our science and research and help farmers improve their practices.

“It’s a two-way dialogue. We also need to feed back to DairyNZ’s head office in the Waikato what is important to farmers in the regions and ensure DairyNZ understands what farmers need,” he says.

“We focus on giving farmers advice that is free from commercial interests too because as an industry body we are independent and unbiased, but dedicated to dairying.

“A prime example is the co-ordination role we are taking in getting to the bottom of the issue with swedes as a forage crop for cows in Southland at present. Some cows have died and a number have become ill after feeding on the crops this winter so we are researching and supporting farmers with advice.”

Craig says DairyNZ knows that farmers are the ones who need the science. “Scientists do the work – and then development and extension specialists turn that science into tools, resources and information that farmers can use in a practical way on their farms.”

Farmer-to-farmer support and advice is vital and his team spends a lot of time facilitating those kinds of exchanges through workshops, events and regular discussions groups.

“A lot of innovation and applied research also takes place on farms through our focus farms and demonstration and research farms. New Zealand farmers have a long history of using, adopting and applying scientific research to their farming systems.

“We’ve got a lot of early adopters in our industry that just lap up information that they can use to improve their bottom line and their environmental performance. We just have to be proactive about more farmers doing that.”

Craig joined the senior management team at DairyNZ this year when he moved up the ladder from a manager to a general manager. “I now sit on the senior leadership team at DairyNZ and that’s great. It’s also a sign of how important DairyNZ sees the role of

supporting farmers with knowledge and expertise.

We aren’t doing science for science sake – we’re doing it for our farmers. They pay for this work to take place – and so they want to see the results – and see value in it and use that knowledge.”

Craig says that farmers see value in the work that DairyNZ does. “That’s clear from the support we received in May this year when farmers voted on whether to continue the levy on their milksolids production that funds DairyNZ’s work.

“We got over 80 per cent support from farmers for keeping the levy. I felt that was a real endorsement of how much effort we put in to listen to farmers as well as support them to be the world’s most competitive and responsible farmers.”

The dairy industry is a big part of Ashburton’s economy but do you know who is leading its thinking and research? This month, we profile Craig McBeth, as part of our continuing series on key industry leaders from DairyNZ, the industry’s research and science body.


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Employees’ accommodation – know your obligationsMany dairy and other

farming operations, as employers, provide

accommodation to employees as part of an overall remuneration package during the employment relationship.

Such an arrangement is known as a service tenancy. Service tenancies are covered by the provisions of the Residential Tenancies Act 1986 (the Act) and differ to “normal” residential tenancies in respect of notice to terminate the tenancy, and rental paid in advance.

A service tenancy is defined as a “tenancy granted under a term of … a contract of service or a contract for services between the landlord as employer and the tenant as employee or contractor…” A contract of service is an employment contract, whilst a contract for services refers to independent contractors.

In a standard residential tenancy, a landlord cannot require the payment of any

rent more than two weeks in advance (or before the expiry of a period for which rent has been paid already). In contrast, a service tenancy means that a landlord may deduct from a tenant’s pay the amount of rent payable by the tenant for a period longer than the standard rental period.

This is only permitted as long as the deduction is proportionate to the amount of the tenant’s pay that is regularly deducted. Such a deduction must also only be made where there is a special reason, such as an upcoming holiday period, that the landlord pays the tenant

for period longer than the standard pay period.

The other distinguishing feature of a service tenancy is the required notice period for termination. A fixed term residential tenancy cannot be ended by notice during the term of the tenancy.

A periodic residential tenancy can only be terminated by providing 90 days’ (ie three months) written notice to terminate.

Less notice may be given if the property is subject to an unconditional sale and purchase agreement or the owner requires the property for them or any member of their family, in which case 42 days’ (ie six weeks) notice is required.

With a service tenancy, however, either party must give at least 14 days’ written notice to terminate a service tenancy if the employment relationship has been terminated or if either party has given notice to terminate

that agreement. Therefore, a service tenancy ends when an employment relationship ends.

If the tenant is permitted to remain for the 14-day notice period, there are circumstances where less than 14 days’ notice may be given if a landlord believes “on reasonable grounds” that a tenant will cause substantial damage to the premises.

Less than 14 days’ notice may also be given if it is necessary for the conduct of the landlord’s business that a replacement employee is appointed within less than the 14-day notice period and no suitable alternative accommodation is available for the replacement employee

during those 14 days.In these circumstances,

however, a landlord cannot give less than five days’ notice.

Difficulties can arise when the employment relationship remains on foot, however the employee is unable to work - for example, the employee has suffered a serious injury or illness.

As a service tenancy does

not usually end until the employment relationship has terminated, any notice to terminate a service tenancy prior to the termination or notice to terminate an employment relationship has no effect, ie a landlord is not able to use the 14 days’ notice to terminate a service tenancy

Madeleine Henderson

LEGALLY SPEAKING

Although service tenancies are common practice in New Zealand and governed by the Residential Tenancies Act, they arise only within an employment relationship and should not be considered in isolation“


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Employees’ accommodation – know your obligationsif it results in the service tenancy terminating before the employment relationship, even where an employee is unable to carry out their duties due to injury or illness.

In such circumstances, any notice of termination of employment by reason of long- term injury or illness (which, as with all terminations, must be carried

out in a procedurally fair manner and be substantively justified) must come before the notice to terminate the service tenancy.

As both employment agreements and service tenancies, which often form part of the employment agreement and are not

necessarily in a separate document, are based on the law of contract, there is no reason why the parties to a service tenancy cannot vary or terminate the tenancy by agreement.

It is recommended that any variations or cancellations of a service tenancy by agreement are recorded in writing and signed by both parties, to

avoid any dispute down the track.

As with ordinary residential tenancies, the Tenancy Tribunal has jurisdiction to determine whether any person is entitled to possession of any premises and to make orders accordingly. To obtain a possession order from the

Tenancy Tribunal, you must lodge an application with the Tenancy Tribunal. Such applications may be based on the grounds of abandonment, outstanding rental arrears, or other reasonable grounds.

If an employee appears to have abandoned the premises, an applicant must provide evidence of abandonment, which may include correspondence to an employee’s last known address, records of reasonable attempts to contact the employee (for example, recording notes of phone conversations and voice messages, email correspondence, phone calls and correspondence to next of kin or emergency contacts and the like).

If you cannot contact or locate an employee then you should consider instructing a private investigator to locate the employee to bring correspondence to an employee’s attention.

Other difficulties can

arise where you have one employee occupying on-farm accommodation, whose partner is also an employee.

It may not be appropriate to grant a separate right of occupation to the partner under their employment agreement, in the event of their separation.

For example, you may have one partner employed as a manager and the other partner is employed to rear calves and relief milk.

It may be that only the manager is entitled to a service tenancy, so that there is no tension, ill feeling or dispute about the right to occupy the premises in the event that the couple separate.

In the example given, the manager may have the right to remain however the calf rearer/relief milker may have to find alternative accommodation.

If both have the right to accommodation, practical difficulties may arise and such

situations will likely strain relationships with other employees.

Other matters to consider include whether, as an employer, you expect employees to share.

The accommodation clause of an employment agreement should contemplate whether the employee has to share or may be required to share their accommodation in the future.

For example, consider specifying whether the whole of the premises is provided for the employee and their family or that the employee’s accommodation is one room in a shared on-farm dwelling.

In conclusion, although service tenancies are common practice in New Zealand and governed by the Residential Tenancies Act, they arise only within an employment relationship and should not be considered in isolation.

Madeleine Henderson is with Tavendale and Partners

Although service tenancies are common practice in New Zealand and governed by the Residential Tenancies Act, they arise only within an employment relationship and should not be considered in isolation


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The core services we offer to our clients are:C O R E S E R V I C E S

Member of

“We consider the environment for all works we undertakeand are proud our peers have recognisedthis fact for thesecond year in a row.”

W I N N E R 2

013

WIN

NER 2013

- AWARD -- AWARD -

W I N N E R 2

012

WIN

NER 2012

- AWARD -- AWARD -

Environmental Award winners for the 2nd year in a row

“Grant Hood Contracting Ltd’s

philosophy is to provide our clients

with superior value and a solution to

their contracting needs.


P H I L O S O P H Y

WINN ER

2012

WIN

NER2012

Environmental- AWARD -Environmental- AWARD -

Member of

“Grant Hood Contracting Ltd’s

philosophy is to provide our clients

with superior value and a solution to

their contracting needs.


P H I L O S O P H Y

WINN ER

2013

WIN

NER2013

Environmental- AWARD -Environmental- AWARD -

Member of

“Grant Hood Contracting Ltd’s philosophy is to

provide our clients with superior value

and a solution to their contracting

needs.

To achieve this we will always provide

excellence in service, workmanship in

a professional manner from our

highly experienced dedicated team of operators and management”

PHILOSOPHY

Animal welfare and your bottom lineLameness in dairy cows is

seen as a major welfare concern and cause of

production loss. Alongside mastitis and

infertility, it has been identified as one of the main animal health issues causing losses on NZ dairy farms, according to Richard Nortje from Rangiora Vet Centre.

“Research into lameness on New Zealand farms provides the industry with useful insights, particularly around impacts on bottom lines,” Mr Nortje said.

Lameness refers to any condition(s) that prevents a dairy cow from using all four feet in a normal manner.

A study of 43 South Island dairy farms in the 2005-06 season found lameness to be higher than that reported in the North Island and Australia.

Using an average herd size of 718 cows, it found that on average 26 per cent of cows in the herd went lame at some point during lactation.

“If we used the scenario from the study and assume a $5 milk pay out, one lame cow could cost $450 in lost milk

production, reduced fertility performance, wastage and treatment costs,” said Mr Nortje.

“Additionally, the annual cost of lameness for the farm of 718 cows would be approximately $84,000 in this case.”

Risk factors have been identified for lameness in the South Island and include long walking distances of large herds, the quality of the

walking track, management factors, first calving heifers adjusting to sheds and the breed of cow.

The role of nutrition, particularly sub-clinical acidosis, is still unclear but is important to keep in mind, Mr Nortje said.

“We recognise that the health and welfare of each cow has a direct impact on milk quality, which is why our Lead With Pride™ certification

programme emphasises its role in dairy farming best practice,” said Mark Wren, Synlait Milk’s Lead With Pride manager said.

“Our suppliers who want certify at the gold/elite level of Lead With Pride must undergo an on-farm lameness assessment. It ensures all necessary steps to minimise and manage lameness are being taken,” Mr Wren said.

The assessment looks at several aspects, including

the farm policy in regards to prevention and treatment, how cow friendly the design and facilities are, staff knowledge on prevention and identification and on-going monitoring of cows.

Mr Nortje points out the Lead With Pride assessment is also an opportunity to learn and improve how cows are managed in a way that reduces lameness.

courtesy of Synlait Milk


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New role lands on-farm firstNew MilkHub Dairy

Automation sales manager, Vanessa

Hislop, is surprised but pleased to find out she’s the first female to step into the role area sales manager at Tru-Test across all its brands and categories.

It is not the first time she’s stood out in a crowd. During her 11 years at outdoor timber specialists Goldpine’s she visited local farmers and built up relationships to establish the customer base for a new Otorohanga store. She was appointed branch manager and grew it to a successful store employing four staff and becoming the first ever female branch manager for Goldpines. There’s no disadvantage of being a woman in the agricultural industry she says: “I am just as good as my male colleagues and have always been one of the boys – possibly just a little better organised!”

Most recently Vanessa worked with Zee Tags as South Island territory manager taking care of

retailer relationships for livestock identification tags throughout the South Island across dairy, sheep and beef, pig and deer farming. Now based back in her home town of Rakaia, Vanessa’s role with Tru-Test will cover

the upper South Island from Malborough to South Canterbury, giving her the chance to combine her love of the agriculture sector, outdoor sports and family.

“Agriculture has always been something I loved. I pretty

much went to school to do the agriculture and leadership roles. I am looking forward to really focusing on the dairy environment with Tru-Test and learning more about the science of farming. Right now I’m absolutely loving getting

out on farms, working with farmers to solve problems and looking how best to achieve farmers’ long-term goals.”

Outside of work Vanessa is a keen sportswoman. She has played netball all her life, playing for rep teams and Tasman.

“It’s just the thing I do, I love it. I have finished playing for Rakaia this season and got player of the year. When I am not playing I’ll be coaching.”

If Vanessa’s not on a farm or on court, you might see her riding road and mountain bikes or on her quadbike “hooning” around the Rakaia River. Looking ahead Vanessa is keen to take on the Coast to Coast endurance event.

Shane Nolan, South Island sales manager for Tru-Test says the company is very pleased to have Vanessa on board. “Vanessa is a very genuine and capable woman. She brings a strong passion for business development and a real enthusiasm to the MilkHub Dairy Automation team.”

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Rootzone Reality – measuring nutrient losses from cropping farmsA research

programme measuring

nutrient losses from cropping farms is up and running, with a network of

special measuring devices being installed underground in paddocks up and down New Zealand.

The Rootzone Reality project is funded by

the Ministry

for Primary Industries’ Sustainable Farming Fund and led by the Foundation for Arable Research (FAR). It aims to scientifically prove what is happening under our cropping systems and ensure accurate reporting of nutrient losses from them.

Project manager, Diana Mathers from FAR, says the project grew out of a need to ground truth nutrient loss models being developed by regional authorities looking for ways to improve freshwater

quality. “Many councils are looking at the development of Farm Environment Plans, complete with an Overseer nutrient budget and a commitment to address nutrient losses through a change in management practice. Cropping farmers are often suspicious of models and question whether the results truly represent losses from their farms. This is fair enough, because in reality, there has been little measurement of nitrogen

losses from the root zone of cropping rotations and we are short of data to calibrate the cropping components of the models.

“That is where this SFF project comes in, funding the installation of a permanent network of fluxmeters under cropping rotations in Canterbury, Manawatu, Hawke’s Bay, Waikato and Pukekohe.

“Fluxmeters are a simple but clever design for the collection of drainage water. They are


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Rootzone Reality – measuring nutrient losses from cropping farmsessentially a drainage pipe with a funnel, and have a wick which draws water into the collection pipe during drainage events. Drainage volume can be measured and samples of drainage water tested for nitrate concentration.”

The project will collect data from a diverse range of crops and cropping rotations across sites and seasons. These will include arable and vegetable rotations, with crops including grains and seeds, onions, maize, potatoes, beetroot and process and green vegetables. The impact of stock grazing will also be measured, along with drainage and nutrient loss data, weather, soil moisture, crop management details, crop biomass accumulation throughout the season, and crop yields.

At each site, one paddock is selected and 12 fluxmeters are installed in groups of four. Variability between individual fluxmeters is reduced by targeting areas within the paddock with similar soils and

soil profiles. The top of the fluxmeters sit one metre below the soil surface, well below the cultivation management zone. Once they are in and the soil has re-settled, they have no influence on the crop above them. Tubes for collecting the drainage samples

come from the fluxmeter to the soil surface, and samples are collected throughout the season after drainage events.

Diana says installing the fluxmeters is hard work.

“Because we want the data to represent the cropping system, the fluxmeters must be installed with minimal disturbance of the soil in the rootzone. A hole is augered out and the soil horizons are preserved so they can be

repacked, in order, after the fluxmeter is dropped in.

There are some limitations to consider in site selection. Paddocks need to be flat with no artificial drainage, the rotation must be representative of the main arable and vegetable rotations and the

host farmer must be willing to share information about the cropping system.

Paddocks with shallow top soils and stony secondary layers are unsuitable because of the difficulty in repacking the stones and soil above the fluxmeter in a way that guarantees the integrity of the drainage data. Soils with high water tables are also problematic because of the risk of the fluxmeter being flooded

every time the water table rises.

During the life of the project we will be running Overseer budgets for the crop system that the fluxmeters are under. This will give us two sets of numbers, the actual N loss from the rotation and the

modelled N loss from Overseer. It is important to remember

that Overseer uses long-term average weather data to model nutrient losses over a 12-month period while the actual leaching losses relate to real-time rainfall.

When comparing the two sets of data, we would expect the real data values to be either higher or lower than the Overseer values, depending on whether it has been a wet

or a dry season. This data pattern will enable us to see whether the Overseer model is doing a good job. If we find that the real data is always either higher or lower than the Overseer values, we will suspect that model is either over-estimating or under-estimating the nitrogen losses for the rotation.

Whatever the outcome, the data collected in this project will be a valuable asset for the cropping sector, providing insights into the relationships between soils, crops and management practices.

Rootzone Reality is funded by the Ministry for Primary Industries’ Sustainable Farming Fund and led by the Foundation for Arable Research in partnership with Plant & Food Research, HortNZ and five regional councils (Environment Canterbury, Hawke’s Bay Regional Council, Horizons Regional Council, Waikato Regional Council and Auckland Regional Council).

Whatever the outcome, the data collected in this project will be a valuable asset for the cropping sector, providing insights into the relationships between soils, crops and management practices

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Maintaining a clean environment throughout the calf-

rearing period can make a real difference to disease levels in the shed and to the comfort of the calves.• Calf-sheds should be cleaned

as soon as possible after the last calf leaves.

• Disease pathogens persist longer in the environment if organic materials such as manure, saliva and bedding are present so all bedding and organic material should be removed.

• Pressure cleaning is recommended

• Steam or hot water will enhance disinfection

• Staff rearing calves should maintain good hygiene and wear clean clothing and boots.

• Develop a check point system to ensure disinfection procedures are carried out thoroughly.Clean and disinfect the calf rearing environmentAt the end of the calving season all rails, gates, partitions, walls and feeders should be cleaned of any

obvious manure or other organic material.

• Disinfection is most affective if the dirt and manure are removed — a water blaster works well for this purpose

• Hot, soapy water may be a necessary first step to breakdown fat and remove milk residues.

• Thirty minutes contact time is required for effective disinfection. Sterilising dirt is not effective.Products such as lime are

thought to sterilise dirt, but in fact have minimal impact on the number of disease-causing organisms present in the ground. There is little scientific justification to support the use of dirt sterilisers, as well as being ineffective, they can be an irritant to staff and calves exposed to them.

Calf-rearing environments should be clean and comfortable.

Providing a clean and comfortable calf rearing environment reduces the risk of disease and ensures calves grow well.1. Make sure you have suitable

calf-rearing facilities for your current and future needs.

2. Design calf-rearing sheds to provide adequate protection from wind, rain and heat. Consider making adjustments to sheds to ensure good air circulation and to minimise draughts before next calving season.

3. Make sure that dairy effluent does not enter the calf-rearing environment.

4. Maintain a clean environment by topping up bedding material regularly and disinfecting rails, partitions, walls and gates in calf pens.

5. Limit the risk of calf-rearing personnel spreading

disease–make sure clothes and boots are clean and disinfection techniques are appropriate.

6. Plan facilities and procedures that minimise the need to enter calf pens.

7. Choose an absorbent and comfortable bedding material that insulates the calf from the cold.

Keeping calf-rearing areas clean

Calf shed clearout


Can you let a worker go for medical incapacity?Can you let one of your

farm workers go if they’re on ACC, and if

it’s from a self-inflicted alcohol-fuelled injury no less?

Dismissing your farm employee for medical incapacity due to injury is fraught with difficulty so make sure you do your due diligence. You need to replace this staff member - but can you do it legally?

Despite the misconceptions, this can be done on most occasions providing you can justifiably terminate employment on the basis of medical incapacity. You need to take matters on a case-by-case basis and at all times follow a fair process.

What you need to know

Find out all details on the cause, nature and extent of the employee’s injury and overall condition. Let your farm worker have a chance to explain what has happened and be sure to obtain a medical certificate.

Your responsibilitiesFarmers need to note

that under the Accident Compensation Act 2001, employers have an obligation in relation to vocational rehabilitation which applies when ACC decides it is reasonably practicable to return the claimant to the same place of pre-injury employment.

What if the injury wasn’t work related? Firing an employee who

is on long-term accident compensation due to injury, even if the cause wasn’t work-related must be handled with care.

ACC will notify you in writing, and you must then take all practicable steps to help the claimant to achieve their rehabilitation goals. The onus on employers to help rehabilitate injured employees applies to both work-related

and non-work-related injuries.Worst scenario

case study Here’s a not too uncommon

predicament, no doubt inflicted on many an unsuspecting dairy farm owner or manager:

Recently a local dairy farm worker was injured in a car accident and ACC have had him referred to an Occupational Therapist (OT) who has said he can return to work on light duties. He has damage to an ankle and his elbow, both of which he states are too painful for him to work on a dairy farm.

The light duties are quite prescriptive in what he can and can’t do and have come from an OT who it has to be assumed, is a “townie”, and most likely has no idea what happens on a dairy farm. The OT has visited the farm but will still not relent on what he can and can’t do.

We’ve hit a bit of an impasse here with ACC saying that while this worker is on ACC he is a “bonus” for the farmer as he wouldn’t have had him for the roster anyway due to his injury.

The worker has been

Matt Jones

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Can you let a worker go for medical incapacity?provided accommodation and power as part of his employment agreement, so basically he is getting free board, and power and doing no work at all for it and in this case is spending his ACC money in town drinking with his mates!

To make matters worse the employer and the employee both agree that it is not working out for them (and had done prior to the accident). The problem now is that he cannot be fired, laid off or quit as he is on ACC due to let’s say, self-inflicted injuries while having too much fun.

Then to top it all off the farm worker went on the booze in town and walked home after his night out, a distance of 18 km, on an ankle that is apparently too sore to work in a dairy shed!

The farmer had issued him with a number of warnings and did everything that is required to dismiss this worker, but unfortunately it has been difficult. In the legislation though there is a point where dismissal is more likely and subsequent to all of this one

injury developed a complication which now allows the employer to dismiss the worker for long term medical incapacity. After all the farmer did require another staff member and the accommodation which added strength to his case.

For more info see the Department of Labour website and always consult legal advice if unsure. Here are some tips to help achieve the best outcome possible:

An employer who is considering the dismissal of an employee on long-term accident compensation should:

Act in line with any relevant provisions in the employment agreement or the employer’s policies;

Assist with any vocational rehabilitation programme for the employee through ACC;

Fully investigate an employee’s work capability and the actual needs of their job;

Base their decision-making on an up-to-date medical

prognosis or specialist’s opinion;

Warn the employee that their long-term absence may necessitate dismissal, and ask the employee to give feedback during the decision-making process; and

Consider giving the employee alternative, light work (often difficult on a dairy farm) if they are

temporarily unable to carry out their normal job.

Matt Jones is managing director of Agstaff

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JFM2401 VeehofDairy Focus Quarter Page October 2014

this proof has been

confirmed.

What worked well?

Next time around, we’ll...

Additional thoughts...

Activity Review

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Profit from SustainabilityFertigation is an efficient and effective way to fertilise crops, saving time and money while improving yields. Fertigation Systems works with existing irrigation and nutrient plans to improve pasture sward and grazing residuals; reduce soil compaction; increase soils carbon levels; provide more control over where and when nutrients are applied; and is an efficient way to apply nutrients.

Fertigation is an efficient method to fertilise crops, saving time and money while improving yields. Fertigation works with existing irrigation systems.

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Experience proves cost-effectiveA few weeks ago, I had

a discussion with a farmer about trimming

cow’s feet. He was managing this farm

and his contract stated that he was required to have a minimum number of staff members. Because of that he had plenty of labour power so one of the jobs that he got his staff to do was to trim the lame cows. That seems to make sense especially with the milk price the way it is - you want to save as much money as you can, right?

Let’s think about that for a bit. If money is a bit tight and you have toothache, would you get one of your staff to sort it out for you? Or likewise, do some of you, who know how to inseminate a cow, take on this responsibility yourself this year to save money?

For most farmers the answer will be “no” to both of these questions and I would assume that the reason for that, in most cases, will be because of the quality of the job done, and in the case of your toothache, it may have a pain factor as well.

Most people realise that the better your in-calf rate is, the better your bottom line profit will be, so it pays to get an experienced AI technician to inseminate your cows, and so the same is true for trimming lame cows.

It does pay to utilise the skills and experience of qualified hoof trimmers if you want to save time and money – “how does that work?” I hear you saying, “How can I save money by paying someone to do a job that one of my staff can probably do just as well?”

I guess the answer to that will be largely influenced by your understanding and acceptance of the skill involved in proper hoof trimming which will minimise the recovery time of your

cows ensuring that they return to full productivity quicker, but also with the very real difficulty in quantifying the cost of lameness.

Do you know how much

lameness costs you? Can you work it out? It’s not that easy is it? A lot of the cost of lameness comes from reduced productivity, and that varies per cow. There are many

factors at play like the time of the year when the cow is going lame, the severity of the lameness, etc.

DairyNZ worked out that the average cost of a lame cow is around $500 and that on average 35 per cent of your herd will be lame in a season. So a farm milking 1000 cows could have a $175,000 lameness bill in a season.

That is not so much a bill that is being paid out, but more so a cheque that is not coming in.

We worked out that if the cost of a lame cow is $500 (and I think that is conservative) then the industry is missing out on nearly a billion dollars a year.

In a season where you need to think particularly carefully of each financial decision you make, it is important to beware of false economy and ensure you are utilising your staff where they are going to be most productive in using their individual skill sets.

This is a subject that I will seek to address in my next column in a little more detail.

Fred Hoekstra

VEEHOF DAIRY SERVICES


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Peter Moore, newly appointed general manager PGG Wrightson Livestock.

Livestock business evolving, but fundamentals the sameThe Paeroa saleyard is a

far cry from the hustle and bustle of Beijing

where Peter Moore spent a significant amount of time in the seven years prior to joining PGG Wrightson (PGGW) to head its Livestock division in August this year.

But it’s a transition he is clearly revelling in, saying he could not resist the opportunity to return to an industry he understands.

“I grew up on a sheep and beef farm in the Waikato,” he said.

“While having farming in my blood I did take a diversion in becoming qualified in risk management but always returned to farming firstly with AgResearch, running their research farms and abattoir, and then with Fonterra in Asia and South America where I led the development and operation of their global farming business in China and Brazil.”

The opportunity to return to New Zealand to work with PGG Wrightson, one of the country’s heritage farming organisations, was hard to


Livestock business evolving, but fundamentals the sameresist. “PGG Wrightson is a really good business; it is grass roots and close to farmers by virtue of the personal nature of the business and the fact that it is represented in every region of the country.”

Three months into the role Mr Moore said the fundamentals of the livestock business haven’t changed to what they were 140 years ago.

“The livestock business is about relationships – about building trust on farm and following that through with superior service at every point of contact.

“But the way we work with farmers is changing, thanks to technology, and the old notion of ‘one size fits all’ no longer applies.”

Technology is enabling an evolutionary change in the way the livestock business transacts, Moore says.

“A significant number of our farmers are happy to continue with the status quo, selling or buying stock in the paddock with one of our agents or at the saleyards, but a growing number also want to be able to do business via the internet.

“We want to provide a level of service which keeps pace with the latest technologies and innovations but which is tailored to the individual needs of each farmer.

“This will see all PGG Wrightson stock agents provided with tablets so they can ultimately do-away with docket books and record every

step in the sale or purchase of stock as it happens.”

Mr Moore says the first roll-out of the tablets will occur before Christmas to around one-third of PGG Wrightson’s agents with the rest of the team in early 2015.

“As with any change, there will be agents who love it and others who will need to see the benefits before they fully commit, but I’m confident the ease of use

and improved transparency and consistency will win the entire team around and, just as importantly, our farmer clients will see the benefits.”

The tablets will, according to Mr Moore, complement PGG Wrightson’s online selling service, Agonline, and the on-line Livestock Quotes which are starting to prove popular

with a growing number of farmers.

“We work hard to understand and meet the requirements of all our farmers – whether that be transacting on the farm, at the saleyards or even helping them bypass the yards and sell direct to the works. It all comes down to understanding their needs and providing the best way to deliver a great outcome.”

The stock and station industry has appeal as a career option for young people, says Mr Moore, with PGG Wrightson regularly fielding enquiries from a range of people including university graduates and school leavers, and even some farmers wanting to enter the industry.

“We offer a training course which is accredited to the Primary ITO and also have a course for auctioneers but there is only so much training you can do in the classroom; in this business you need to understand farming and farmers and we’re fortunate to have agents who have been with us for 30+ years. Their experience and insight is invaluable in guiding the next generation who will represent PGG Wrightson.

“The strength of PGG Wrightson’s livestock business is the 260 people driving up farmers’ driveways every day nationwide. There are around 500 to 600 stock agents, excluding meat company buyers, in New Zealand and around half of them work for PGG Wrightson so we are out

there, on a lot of farms talking with farmers, every day of the week.”

At the end of the day Mr Moore says the livestock business is the food business.

“New Zealand is in the business of food and when you consider that total food/farm production in 2050 will only feed 44 million people out of the world’s estimated population of nine billion you realise what a fantastic opportunity exists for New Zealand agriculture. I’m committed to ensuring the PGG Wrightson’s Livestock division plays a leading role in delivering that objective.

“When I first went to China seven years ago there weren’t too many steak restaurants in Beijing – now there are a lot and they’re full of Chinese people, not westerners - this is just one example of how eating habits are changing and how and where the demand will come from.

“The potential is limitless for New Zealand farmers and the organisations which support them. It’s great to be part of that future.”

The potential is limitless for New Zealand farmers and the organisations which support them. It’s great to be part of that future

“


A Disclosure Statement is available on Request and Free of Charge

214 Burnett Street, AshburtonPhone 307 7127, www.hhg.co.nz email:[email protected]

FinD out how to eARn A higheR RetuRn thAn BAnK DePoSitSJohn Moore of Hamilton Hindin Greene is running a

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Heartland confirms successful strategy

Heartland, New Zealand’s only NZX-listed bank, had their

annual meeting at the end of October. Investors obviously liked what they saw, with the share price having risen to all-time highs of $1.07 in the weeks after the meeting. The AGM presentation did not contain any major surprises, but did serve to reiterate Heartland’s strategy of taking up niche positions in less competitive parts of the banking sector.

Along with confirmation of their current successful strategy, investors would have been buoyed by the confirmation of Heartland’s full year net profit after tax (NPAT) forecast of $42-45 million. The company also noted an unaudited NPAT

of $11m for the first quarter of the financial year, which, given the earnings growth Heartland are currently showing, raises the possibility of Heartland beating those full-year forecasts.

Chairman, Bruce Irvine, noted that Heartland expects organic growth from its current business units, but investors could also expect growth from “bolt on and other acquisitions”. Recent acquisitions in line with this

strategy include a 10 per cent stake in peer to peer lender Harmoney, and the purchase of reverse mortgage company Sentinel.

Heartland’s niche markets are considered to be at the riskier end of the lending spectrum, although this also means there is less competition from the larger trading banks, and means that Heartland can maintain higher margins.

Heartland still has some non-core property assets to

dispose of, but the company has made great progress, reducing their exposure to these legacy assets by 62 per cent in the 2014 financial year. Property development is certainly not a niche that Heartland specialise in so investors will cheer further reductions in the non-core property asset portfolio.

An NPAT of $45m would place Heartland on a fairly attractive forward price to earnings ratio of 11 times.

The forecast gross dividend yield of 8.6 per cent will also be attractive to investors.

Written by Grant Davies, Authorised Financial Advisor at Hamilton Hindin Greene Limited. This article represents general information provided by Hamilton Hindin Greene, who may hold an interest in the security. It does not constitute investment advice. Disclosure documents are available by request and free of charge through www.hhg.co.nz.

Grant Davies

A BROKER’S VIEW


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Be careful of opportunistsAs most farmers are

now aware, new milk cooling regulations

are proposed to take effect for the 2016/17 season, the specifics of which we will cover in a future column.

As with any perceived large-scale opportunity, many new parties are producing and marketing “new technologies” to snap-chill milk, promoting energy efficiency and future compliance to aggressively sell product. Typically these companies come and go with the opportunity and as their money is only made in the sale of a new product, they usually disappear again later.

I suggest asking the following question:

Do I need to upgrade to an expensive hi-tech system to cool milk to storage temperature outside of the milk silo?

The answer is no, as the new cooling regulations are only allowing for a quicker cooling time and most farms with new equipment installed over the last few years will already comply with the new

regulations. Of course you may wish to

future-proof your operation for many years down the track or to snap-chill for milk quality reasons (it may also be necessary if you are housing cows, using warmer primary cooling water supplies or robotic milking), although simpler snap-chilling equipment is generally as efficient and less expensive.

The reality is most farms will be able to comply with the new regulations utilising relatively inexpensive conventional milk silo refrigeration and this is also reliable, efficient and easily repaired in the case of faults.

Don’t be talked into spending large sums of capital

on something you do not need, may cost you more to run and is less reliable.

It should also be noted; a large number of farms can become compliant simply by improving the effectiveness of their primary cooling and this area should always be assessed in conjunction with any milk-cooling audit.

Again any firm selling cooling products and not looking into possible primary cooling improvements does not have your best interests at heart.

If you do wish to snap- chill your milk look for a simple system with generic parts that can be easily serviced and provides reliable

operation.High levels of technology

involve specialised service personnel and parts (sometimes having to travel and be sent from far afield) and downtimes in the event of a fault can be significant.

Murray Hollings is an owner of DAIRYCOOL

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Good-quality pasture vital for good silageSilage is pickled pasture. When pasture is ensiled, its sugars are converted into lactic acid by bacteria. It is the lactic acid which pickles the pasture, allowing it to be preserved for a lot longer than it would have been if left in the open air.

By Dairy NZ

It is impossible to produce high quality silage from low

quality pasture, no matter how good the fermentation is.

Both the quality of the ensiled pasture and the quality

of the fermentation must be considered.

Note: Need to use crop specific inoculant i.e. grass

inoculant. The lower the DM the

quicker to ensile but there’s more risk of low quality silage

(compost). The higher the sugar

content the quicker to ensile.Advertising feature

Estimate of DM% grass silageSqueeze Test: Break up silage 2-3cm length and roll into ball size of tennis ball, squeeze in fist for 30 seconds

DM%

Hands dry, sample does not stay in tight ball when stop squeezing

Over 30

Sample stays in ball when stop squeezing, no juice, hands moist

26-30

A little juice runs out with difficulty 21-25

Juice runs out easily 18-20

Interpreting pasture silage analysisFactors measured

High quality fermentation

Low quality fermentation

Interpretation

pH 3.5-4.5 5.0-6.0 A low pH prevents unwanted butyric fermentation.

Ammonia N (% of total N)

5-10 20-30 Low values indicate minimal breakdown of protein in silage usually due to rapid fall in pH to a low level in silage.

Lactic Acid (% of DM)

8-12 0.1-1 High concentrations indicate well preserved silage.

Butyric Acid (% of DM)

0.1-1 3-5 High concentrations indicate poorly preserved silage.

Time to ensile grass silage (days to when can be fed out)% DM Days to ensile

with inoculant Days to ensile without inoculant

20 4-7 8-1430 4-10 14-2140 4-10 20+50 up to 14 up to 30+


Rural monthly publications

• Business profi le

• Solar energy

• Christmas messages

South ISland wIde

August 2013

Pages 2&3

The Wright stuff

Dairy FocusDairy FocusGuardianAshburton

Page 2

PUBLICATION

Tuesday, December 16

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Monday, December 1

Dairy Focus

Feed-out machines more user-friendly

Scannell range of Universal Stock Feeders both 12m³ and 20.5m³

machines have transformed from being not only the best feed-out machine on the market with its extra strong design, to now being even more user friendly, sales manager Richard Armstrong said.

We have had a new ergonomically designed multifunction joy stick added to give fingertip control; all the functions can be operated in one hand Mr Armstrong said.

The hydraulic system has

been upgraded for simplicity and functionality.

The new tilting elevator on the front side allows for flexibility in feeding product freely from the machine, making it easy to achieve the feed pattern required. The elevator on both models is fully adjustable from 15 to 90 degrees of tilt.

Along with the tilt elevator we have added a maintenance free hydraulically driven reduction box to the cross floor. Another superior feature is the maintenance free hydraulic cylinder that brings the product forward to

the front cross floor feed out section. This design cleans the floor of all product with a strong smooth positive operation.

The new USF range of Scannell bale feeders have proven to have low operating costs and minimal maintenance which is a major advantage for the ever busy farmer. Larger 12.5/ 15.3 wheels are now standard on the Scannell USF12m³ and 22.5/400on the extra heavy duty Scannell USF20.5m³ model. The offset axle pivot is another superior feature, this allows the front wheels

to carry less weight making turning easier and better for traveling over soft terrain.

Both Scannell models come with a sprung tail door to allow easy rear loading of bales and both feeder and loading compartments are on the same level making the transition easy as it slides forward and this prevents bales from tipping over, when the bales are brought forward into the feeder section.

The Scannell USF20.5m³ model has capacity for four to six round bales (1.2m long) or six to 12 medium square bales, while the Scannell USF12m³

model option could carry four round bales or six medium square bales.

Scarletts now build equipment such as multi purpose recycling equipment including balers and manual sort line conveyors, waste compactor systems, waste transport containers, Swingthru container handling systems as well as continuing with traditional earthmoving repairs and general engineering and a full range of Scannell Hay Equipment including bale feeders and multi purpose wrappers.

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Dairy focus november 18, 2014

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Transcript of Dairy focus november 18, 2014