Dairy News Australia April 2014

Fonterra secures Woolworths deal, Lion licks wounds PAGE 7

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APRIL 2014 ISSUE 46 // www.dairynewsaustralia.com.au

DAIRY SOLD OUT

“Our words fell on deaf ears” Robert Poole, ADIC

PAGES 4-5

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NEWS // 3

NEWS ��3-13

MARKETS �� 14-15

OPINION �� 16-17

BREEDING MANAGEMENT �� 18-21

MANAGEMENT ��22-23

ANIMAL HEALTH ��24-27

TECHNOLOGY ��28-29

MACHINERY & PRODUCTS ��30-34

Peter Notman (pictured with John Mulvany and Bruce Johnstone) told farmers to aim for a quick feed this season. PG.23

Gippsland farmer Ian Hooker can spread rations over a day anywhere on the farm with his Lely mobile feeding station. PG.31

In-line cell count sensors have improved performance on Paul Smith’s Western Victorian farm. PG.28

DAIRY PRICES are continuing to drop but the dairy boom is far from over, says BNZ economist Doug Steel.

At US$4033/t, the whole milk powder price is more than double the US$1800 paid to US farmers after the global financial crisis hit in 2008-09.

Prices are expected to ease fur-ther as more milk floods the market but Mr Steel said prices would remain relatively high compared to those of previous years.

Long term, dairy prices will remain strong on the back of good demand for milk products, he said.

At the first GlobalDairyTrade auction this month, the index dropped 8.9% to US$4124/t from US$4563 a tonne two weeks prior, the fourth straight decline and the lowest level since August 2012.

However, Mr Steel said the 2013-14 season has been “one out of the box” and no one should expect prices to remain around US$5000/t.

“We might just get prices sus-tained at US$5000/t one day but over the next 12 months prices will ease,” he said.

He put this down to increased milk supply from the EU, New Zea-land, US and Australia. The milk supply situation has changed much in the last 12 months.

Last year New Zealand was reeling from a severe drought and an extreme winter in Europe had affected production.

This year EU’s production is up 5% and US up 1%. Steel predicts New Zealand to produce 11% more milk than last season.

“Twelve months ago milk supply was squeezed and that kicked prices higher,” he said.

“For 12 months very high prices were maintained. Now milk pro-

duction is ramped up and prices are easing. This is the commodity cycle at play.”

However, demand for dairy remains strong in China and the Middle East and this should keep prices strong longer term.

Dairy analyst Jo Bills, of Fresh Agenda, says futures prices and recent GDT auction results indi-cate the softening of prices seen in recent weeks will continue through 2014.

However, she said there is no cause for panic.

“A supply response has been building for some time, and com-modity prices are still well up on where they were a year ago, in fact to the tune of 30% in Australian dollar terms,” Ms Bills said.

“On this basis 2014/15 farmgate prices look pretty solid.”

Rabobank expects an easing of global milk pricing from now until June.

Exportable supply rose strongly

in the last quarter of 2013 and is expected to continue into early 2014 as producers respond to improved margins through high milk prices and falling feed costs, according to Rabobank analyst Tim Hunt.

“A strong Northern Hemisphere production season, on the back of an exceptional season in the Southern Hemisphere, should generate more than enough exportable supply to exceed China’s extraordinary addi-tional needs from the world market, loosening the market somewhat,” Mr Hunt said.

“However, the rate of price reduction will be limited by struc-tural constraints on suppliers, the need to replenish depleted buyer inventories and ongoing demand growth in line with a slow economic recovery.

“The most crucial demand side question is whether China will sus-tain the frenetic buying we have seen on the international market throughout the last 12 months.”

Prices easing but will remain strongSUDESH KISSUN

Liza Fahey, one of four finalists in the 2014 Victorian RIRDC Rural Woman of the Year award, talked to Dairy News Australia on how to encourage more young farmers into the industry. Pg 10.Front page photo source: Licensed from the

Commonwealth of Australia under a Creative Commons Attribution 3�0 Australia Licence�


4 // NEWS

DAIRY LEADERS have expressed concern that the industry could receive little benefit in the pro-posed Free Trade Agree-ment with China.

Australian dairy has high hopes that tariffs and other trade restric-tions will be signifi-cantly reduced to enable increased exports into this rapidly growing market.

New Zealand signed an FTA with China in 2008 and now pays between 0-7% in tariffs, which will fall to 0% in the future. Australian exports cur-rently attract tariffs of between 10-15%.

However, the minimal concessions achieved by Australia in the recent FTA with Japan have caused concerns.

United Dairy Farmers Victoria president Tyran Jones said the Japanese

agreement had mainly ignored Australia’s $13bn dairy sector.

“This really doesn’t bode well for a meaning-ful trade agreement with China,” Mr Jones said. “The track record’s there. We didn’t get much out of Korea, and we got even less out of Japan.”

Australian Dairy Industry Council vice-president, Robert Poole, said the deal with Japan sent “all the wrong signals” to Australia’s key trading partners.

“(It) is particularly troubling in the context of the upcoming FTA nego-tiations with China,” Mr Poole said.

“As we seek to grow dairy exports to China we have one opportunity to get a China trade agree-ment right and it’s time for the Federal Government

to recognise the poten-tial in dairy food export growth and prioritise this in trade negotiations.”

Prime Minister Tony Abbott held one-on-one talks with China’s Premier Li Keqiang just days after concluding negotiations on the FTA with Japan.

He used the talks to promote his economic reform message, stressing that Australia welcomes foreign investment, has always needed foreign capital to develop and wants access to the billions of dollars held in China.

China is pushing for greater access to invest-ment in Australia, prompt-ing speculation that the threshold of $244 million which triggers automatic assessment by the pow-erful Foreign Investment Review Board will be lifted

in line with deals given to Japan and Korea.

Josh Frydenberg, par-liamentary secretary to the Prime Minister, said Aus-tralia wanted to replicate the deal achieved by New Zealand.

Mr Frydenberg said New Zealand has more than doubled its exports to China since the two nations signed a free trade agreement, including a six-fold increase in dairy exports.

“We want to replicate that sort of growth in two-way trade and we can do that through an FTA,” Mr Frydenberg told Sky News.

Mr Frydenberg said there were sensitive issues still to be discussed, including the $248 million cap on Chinese invest-ment without Foreign Investment Review Board approval.

Speaking on ABC radio, Trade Minister Andrew Robb said the focus of China FTA negotiations was to ensure Australia’s trade strengths like agri-culture, resources, educa-tion, health and medical research and tourism, were advantaged by the agreement.

In return, he said Aus-tralia would “liberalise areas that China is strong in”.

“To get Premier Li making these statements about the priority and the acceleration of these nego-tiations sends a signal to everybody throughout his administration, and it certainly gives us the encouragement to bring it to finalisation,” Mr Robb said.

“I see no reason that we can’t conclude this satis-factorily within this year.”

China FTA concerns after recent government deals

Lion forced to recall milk from Hong KongLION DAIRY has recalled three UHT milk products after tests by Hong Kong authorities showed a bacteria count 4000 times over the normal limit.

Lion Dairy last month withdrew Pura brand fresh, skim and Hi- Lo milk from the Hong Kong market.

Tests by Hong Kong’s Centre for Food Safety showed the total bac-teria count of the sample was 130 million per millilitre. According to Hong Kong’s Milk Regulation (Cap 132 AQ), milk after heat treatment by means of pasteurisation should not contain more than 30,000 bac-teria per millilitre.

The CFS has suspended imports of Pura milk until further notice. This is the second bacterial con-tamination case involving the prod-uct in Hong Kong. The recall comes five months after the food authority allowed the resumption of imports of all Pura milk products after a batch of skim milk was detected to have an excessive bacterial count in May last year.

A CFS spokesman says it has informed the sole importer Vitasoy International Holdings Ltd that the batch of product has contravened the milk regulation. He confirmed the affected products were being

sold by retailers including super-markets and were being recalled.

The CFS says a batch of Pura skim milk imported from Australia was detected to have a total bacte-rial count exceeding the legal limit in May last year.

“The CFS thus suspended import of all products of the same brand manufactured by the same processing plant for investigation by the Australian authorities and the manufacturer.

“After investigation, the Austra-lian authorities said the irregularity might be caused by a problem of temperature control and asked the

trade to make rectifications accord-ingly.

The importer of the product was also changed subsequently. The product was allowed to be imported again in October last year.

“The total bacterial count exceeding the legal limit indicates unsatisfactory hygienic conditions. It will be prudent for consumers who have bought the affected prod-uct to stop consuming it.

The trade should also stop selling the affected product,” the spokesman says.

Lion, owned by Japanese con-glomerate Kirin Holdings, says

information received so far from Hong Kong’s Centre for Food Safety “suggests this is an issue of product quality, not consumer safety”.

Lion is urgently testing to verify the facts and investigate the matter thoroughly, the company says.

It says all Pura products undergo extensive testing at its Australian milk plant prior to export, to ensure the highest product safety and quality standards are upheld.

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NEWS JAPAN FTA // 5

THE DAIRY INDUSTRY’S calls to the Government to reduce restrictive tariffs “fell upon deaf ears”, says Australian Dairy Industry Council vice-president, Robert Poole.

And there could be worse to come, Mr Poole said.

All levels of the dairy industry have expressed their disappointment since Prime Minister Tony Abbott announced a Free Trade Agreement with Japan earlier this month.

Japan is the single most important market for the Australian dairy industry, with $511 million in exports in 2012/13, which was 19% of Australian dairy exports by value.

There were high hopes restrictive tariffs would be removed or lessened, which would make Australian exports more competitive.

However, under the deal, Australia’s duty-free cheese quota of 27,000 tonnes will be increased to 47,000 tonnes.

The Government said Australia exports 27,000 tonnes of cheese duty-

free under a global quota but under the new deal has gained a preferential, duty-free Australia-only quota, which will grow to 20,000 tonnes.

Japan will also eliminate 5.4% tariffs on protein concentrates and casein immediately.

However, the Australian dairy industry will save just $4.7 million in the first year of its implementation rising to an estimated $11.6 million by

2031, out of a total export market of $511 million.

This equates to 0.1 of one cent per litre for Australian farmers in 20 years’ time.

Mr Poole, who is also a senior Murray Goulburn executive, said the agreement fell well short of the industry’s expectations with

minimal progress having been achieved in reducing a range of trade barriers.

“We are extremely disappointed with the deal announced by the Prime Minister,” Mr Poole said.

“We were hopeful Government had heeded the industry’s message in regards to freeing up market access in Japan, however it now appears our words fell upon deaf ears.

“There has been no movement in this agreement on fresh cheese – the number one objective for Australian dairy, with tariffs to remain at 29.8%.

“A successful outcome on this tariff line would have

delivered approximately $60 million in tariff savings – instead we have received nothing and the tariff stays in place.”

Mr Poole said Most Favoured Nation (MFN) status has been put in place for cheese in Trans Pacific Partnership (TPP) agreements.

However, the exclusion of all

other product lines leaves Australia vulnerable to one of its competitors reaching a more wide-ranging deal with Japan that could leave the Australian dairy industry worse off.

“This has been an agreement over six years in the making and sadly from the dairy industry’s perspective, will end up providing no meaningful benefit,” Mr Poole said.

“This deal sends all the wrong

signals to our key trading partners and is particularly troubling in the context of the upcoming FTA negotiations with China.

“As we seek to grow dairy exports to China we have one opportunity to get a China trade agreement right and it’s time for the Federal Government to recognise the potential in dairy food export growth and prioritise this in trade negotiations.”

Tariff calls fall on deaf ears

Tyran Jones

UNITED DAIRYFARM-ERS of Victoria president Tyran Jones says he hopes “dairy hasn’t been traded off ” in the FTA with Japan.

“Japanese car manufac-turers have been given free access to the Australian market,” Mr Jones said.

“All we’re getting out of this FTA is a few mil-lion dollars of tariff relief at best.”

Mr Jones said the Fed-eral Government has failed to recognise world dairy markets are under-going significant transfor-mational change and that tariff relief was critical.

“The US and Euro-pean Union are set to swamp the global mar-ketplace with subsidised dairy products, making it even harder for Australia to compete on a level play-ing field.”

Dairy farmers currently pay $116 million a year in import tariffs on $511m of processed dairy products going into Japan.

About 130,000 tonnes of Australian dairy pro-duce is exported to Japan

each year.The National Farm-

ers Federation said the agreement with Japan falls short on a number of fronts.

NFF president, Brent Finlay, said he understood the difficulties involved with negotiating such an agreement but is disap-pointed with the overall outcomes for agriculture with a number of sectors facing marginal improve-ments or limited commer-cial gains.

“The sensitivities sur-rounding some parts of Japanese agriculture has made reaching an agree-ment more challenging,” Mr Finlay said.

“Australia is the first major agricultural exporter to achieve some movement on some of Japan’s high import barri-ers. While the agreement has provided some con-cessions, Australian farm-ers needed more.

“The ultimate objective with any trade agreement is to obtain tangible benefits to farmers.

Agreements must be comprehensive. That means, no sector carve-outs and elimination of tariffs.

“The Japanese agree-ment falls short of the mark on a number of fronts in this regard.

“The agreement does not improve—or margin-ally improves—market access and terms of trade for a number of sectors such as dairy, sugar, grains, pork and rice.

“Given we export 60% of the food and fibre we produce in Australia, our farmers need good commercial outcomes from future trade negotiations.”

Fears dairy traded off

“We were hopeful Government had heeded the industry’s message in regards to freeing up market access in Japan, however it now appears our words fell upon deaf ears.

– Robert Poole

Japan is very protective of its dairy industry.

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6 // NEWS

LION HAS lost its con-tract to supply Wool-worths with milk for its private label in Victoria and Western Australia – 12 months after losing its Coles contracts in Victo-ria, NSW and south east Queensland to Murray Goulburn.

Fonterra won a 10-year contract to supply milk to Woolworths in Victoria from February 2015, while Brownes was chosen for a seven-and-a-half year deal in WA from this July.

Parmalat was chosen to

supply milk for the Wool-worths house brand in NSW on a two year con-tract.

Lion will continue on a yearly contract basis in Tasmania, South Australia and Northern Territory.

“We are however dis-appointed with the out-come in Victoria and Western Australia, where Lion will cease supplying Woolworths’ private label white milk from February 2015 (Victoria) and July 2014 (WA),” the company said in a statement.

“We put forward our most competitive bid in each state, reflecting Lion’s commitment to grow the Australian dairy industry through fair pric-ing that ensures a sustain-able future for the whole supply chain – including farmers and processors – and long term contract certainty that supports investment.

“However, we fully respect that this is a deci-sion for Woolworths, which remains an impor-tant customer and partner

Lion loses second major contract in 12 months

Parmalat buys Harvey FreshPARMALAT HAS bought Western Australia’s second largest dairy busi-ness, Harvey Fresh.

The Italian company said the deal strengthened its position in the Austra-lian market, broadening its geographic footprint and enabled it to become a “fully national player”.

Parmalat’s global headquarters in Italy paid about $117 million (79m euro) for Harvey’s WA and NSW processing assets.

Parmalat also recently signed a two-year deal to supply Woolworths with milk for its private label in NSW.

Last financial year, the company reported revenues of about A$166 mil-lion.

The positioning on the west of the country is also aimed at improving its capacity to export to Asia. The four

existing Harvey Fresh directors will continue to be involved in the busi-ness as consultants.

Harvey Fresh, based in the south-western WA Harvey district, is a family company estab-lished in 1986. It first exported cloudy apple juice to Asia in 1988 and now sends a variety of fruit and vegetables juices to export markets.

Harvey also specialises in producing fresh and ultra-heat treated (UHT) milk dairy products including flavoured and lactose-free milk lines, and packs pri-vate label milk and juice lines for Coles supermarkets.

Its juice beverage business was

expanded with the pur-chase of the Nugan Group at Griffith in the NSW Riverina in 2012.

Parmalat bought the Haberfields Dairy pro-cessing operation at Albury Wodonga in 1996, followed soon after by Brisbane-based Pauls. It outbid National Foods in 1998 to buy Pauls for $436 million, also giving

it dairy plants in Victoria at Bendigo and Rowville.

Parmalat CEO Craig Garvin told ABC Radio the company thinks there is a lot of growth potential in Harvey Fresh.

“There’s a strong capability here for export,” Mr Garvin said.

“Combined with the brands we already have and the iconic Harvey Fresh brand, we think this is an excel-lent acquisition.”

WAFarmers dairy section president Phil Depiazzi told ABC Radio the arrival of a major multinational like Parmalat was a real confidence boost for the local dairy industry.

“I guess we’re hopeful, seeing this big international company that is inter-ested in investing in quality processing outfits and obviously they saw Harvey Fresh as a great opportunity to do that.

“I would hope so far as local pro-ducers go that Parmalat will be hoping to grow that business, particularly get fairly serious on the export market and if they need more milk to supply those markets.

“Then hopefully that will put upward

pressure on the farm gate price and that will only be a good thing for the Western Australian dairy industry.”

Capel dairy farmer Mike Norton chairs the WA Dairy Collective Bargain-ing Group, which held discussions with Coles last month.

Mr Norton told ABC Radio Coles was very keen to set up a farmer brand name, much like the SA Dairy Farmers has done in SA.

“Where Parmalat operate in South Australia they are packaging for South Australian dairy farmers a brand that comes under a dairy farmer brand name.

“Obviously they are prepared to think outside the square in South Aus-tralia and possibly Queensland, so that’s probably good news from what we’re hearing from Coles in relation to Par-malat.”

Phil Depiazzi

for Lion.”Lion said the decision

will impact volumes at Lion’s milk processing plants in Chelsea (Victoria) and Bentley (WA).

“We will work through the detailed implications of this with our teams over the coming weeks,” the company said.

Woolworths hailed the new contracts a win for farmers and customers, saying longer-term con-tracts gave dairy farmers and milk processors con-fidence to invest in their businesses.

Arrangements were also made to keep milk in the state where it is produced, particularly in WA.

Saputo joins new look WCBF board

WARRNAMBOOL CHEESE and Butter will remove the current require-ment for the board to have at least four supplier directors at a general meeting on May 9.

Saputo chairman Lino Saputo Jr will also officially stand for the streamlined WCBF board at the meeting.

In a statement to the ASX, WCB said as a result of Saputo’s 87.92% sharehold-ing in WCB, it has requested a number of modifications to the company’s con-stitution, including a restructure of the board.

The board will be reduced from nine directors to five.

All current directors and associate directors will resign with effect from the close of the meeting and Terry Richardson, Bruce Vallance and Nev-ille Fielke will stand for re-election.

David Lord will continue to assist the board in his capacity as chief exec-utive officer.

John McLean, current associate

director and former CEO and man-aging director, will be retained as a consultant to the board following his resignation.

Saputo executive vice-president, finance and administration, Louis-Philippe Carrièr, will also stand for election.

The proposed board composition will allow WCB to benefit from the experience of directors seeking re-election, in terms of their knowledge of local market dynamics, the dairy industry, the WCB business and its key relationships, while adding Saputo nominees, the statement said.

WCB chairman Terry Richardson said “the contribution by the current directors over a number of years and in particular during the takeover pro-cess is testament to their professional-ism, work ethic and wide ranging skill set that allowed the company to grow and to achieve an outstanding result for its shareholders”.

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NEWS // 7

WESTERN VICTORIAN farmers say a new 10-year deal for Fonterra to supply Woolworths home brand milk across the state will encourage them to increase pro-duction.

The suppliers have welcomed the deal which requires Fonterra to source an additional 100 million litres per year and will create 30 new jobs at an expanded Cobden milk processing plant.

They say the deal gives them added security, confidence to invest in their farms, confidence in Fonterra’s commit-ment to Australia, and hope for more prof-itability.

Larpent dairy farmer and director with the Bonlac Supply Company, Mark Billing, said the deal would be good for the region.

“It gives us certainty of supply for the next 10 years,” he said.

Mr Billing said he disagreed with reported comments from UDV vice-pres-ident Roma Britnell that the deal would just shift milk from one player to another.

“It will be a challenge but I believe there are opportunities for current sup-pliers to grow. There might be some sup-pliers who come across but Fonterra is creating an environment to create inter-nal growth,” he said.

Mr Billing said the milk price would need to remain competitive through-out the 10-year deal. “There’s no point in making more milk if it is not profit-able. We don’t want milk coming into the system that is not profitable,” he said.

“Fonterra is committed to wanting profitable farmers and suppliers I have spoken to see the deal as a positive one.”

Mr Billing said the good season and higher milk price was adding to the pos-itive outlook as farmers emerge from a recovery period and look to the next phase of their business.

“We’re in a growth phase and this part-nership creates opportunities. On our

farm we hope to grow, but it has to be done with profit margin in mind,” he said.

Suppliers Stephen and Tania Luckin from Heywood welcomed the announce-ment, saying it would give farmers confi-dence to invest in their business to grow and become more profitable.

“From a supplier’s perspective, it gives us added security for the medium term knowing there is a market for a por-tion of our milk. It will encourage farmers to supply more and provide more confi-dence to invest to become more profit-able,” Mrs Luckin said.

“We will get more premium eye-level shelf exposure for our product, which is a good thing,” she said.

Colac supplier Simon Scott said the deal would give farmers more access to the domestic market. “It will enhance our product mix and spread it over different products,” he said.

Mr Scott described the deal as a con-fidence booster for Fonterra suppliers in the district.

“It will be good for the Western Dis-trict to have more jobs and an expanded facility at Cobden and it gives suppliers confidence that Fonterra is committed to dairy farmers in Australia,” he said.

“It will deliver more stable returns,” he added.

Mr Scott said he was adjusting his farming system to reduce costs with the aim of producing milk more profitably.

A 10-YEAR contract for Fonterra to supply Wool-worths home brand milk across Victoria is a shot of confidence in the industry, says Bonlac Supply Com-pany chairman Tony Mar-wood.

The chairman has wel-comed the deal and says farmers have been buoyed by the announcement.

“Bonlac Supply Com-pany supports the strategy Fonterra has in Australia and the deal with Wool-worths shows confidence in the Australian busi-ness,” Mr Marwood said.

“It gives farmers con-fidence that it will benefit them in the long term. It helps support long-term farmer profitability so they can grow their busi-nesses with confidence.”

The proposed deal will see Fonterra invest-ing more than $30 mil-lion into a state-of-the art milk processing plant at its Cobden site in South West Victoria.

The investment will support 30 new jobs at the Cobden facility and be commissioned early next year.

Fonterra and Wool-worths are still work-ing to finalise contractual arrangements to reach a

binding supply agreement. The deal requires Fon-

terra to source an addi-tional $100m litres of milk from south west Victoria and while admitting this would be a challenge, Mr Marwood said he was con-fident the growth could be achieved.

“In a competitive market to get an extra 100 million litres will be obvi-ously a challenge, but I think we are in a good place to achieve that,” he said.

Mr Marwood expected Fonterra to attract new suppliers and help existing suppliers to increase pro-duction. “We have a strong pathway to help farmers grow their existing milk flow. We have remod-elled our pricing structure which gives more trans-parency and helps farmers to make better decisions around their business,”

he said.“We have also

improved the way our milk supply group works with farmers. It is far more targeted, with specialist field officers in the likes of agronomy, animal health and milk quality, all tailored to different aspects of what farmers need.”

Mr Marwood said the feedback from farmers was positive. “We are on a pathway of building strong relations between Fon-terra and the farmer and this deal is part of that strategy. The feedback I have had so far has been excellent.”

Mr Marwood said he could not comment on prices or specifics of the deal.

Woolworths managing director of supermarkets, Tjeerd Jegen, said the new contract will be a win for

farmers and Woolworths customers.

“We don’t want to see milk shipped long dis-tances which only adds cost and increases the time between the farm and the supermarket shelf,” he said.

“These new contracts mean local farmers will supply Victorian milk to Victorian families.”

Fonterra Australia managing director Judith Swales said Fonterra is excited to partner with Woolworths.

“It expands our cur-rent white milk portfolio complementing our Riv-erina Fresh milk business in New South Wales,” she said.

“Just as importantly, the proposed arrangement will provide certainty for dairy farmers so they can invest on farm and grow their milk production.”

RICK BAYNE

Deal encourages suppliers to lift production

Fonterra signs 10-year deal with WoolworthsRICK BAYNE

Tony Marwood

Tania and Stephen Luckin

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8 // NEWS

Consumer watchdog puts bite on Coles campaignAUSTRALIAN DAIRY Farmers has welcomed the consumer watchdog’s findings that Coles misled customers in a cheap milk campaign launched last year.

The ACCC found that the ‘Our Coles Brand Milk Story’ video and cartoon released on the internet last year are likely to have contravened Section 18 of the Australian Competition Law.

Section 18 prohibits misleading or deceptive conduct, with Coles admit-ting it is likely to have contravened this part of the act.

ADF board member Chris Griffin said the Coles video and cartoon was a real slap in the face for dairy farmers on top of the damage already inflicted by $1 per litre milk.

“The video and cartoon were a cynical exercise by Coles to convince consumers that farmgate prices had

increased for dairy farmers when they had actually decreased,” Mr Griffin said.

“Coles has also claimed that their own margins decreased on Coles-brand milk – something that the ACCC has said could not be substantiated.

“The ACCC’s ruling is an indictment of Coles and under-mines their key claim that they have absorbed the cost of $1 per litre milk.”

The ACCC found that the cartoon and video represented as ‘fact’ that processors received around $1 per 2 litres of Coles-brand milk in 2011-11 and 2011-12, when in fact these figures were estimates and unable to be substantiated.

ACCC chairman Rod Sims said, “Coles represented in a video and car-

toon on social media that the farmgate milk price increased from 86 cents per two litre bottle of Coles-brand milk

in 2010-11 to around 90 cents in 2011-12, when in fact this was an estimate and final industry figures showed the 2011-12 farmgate milk price actually decreased to 84 cents.”

The ACCC found whilst Coles based the 90 cent figure on an August 2012 report containing an early esti-

mate of the 2011-12 farmgate milk price and had the script reviewed by the same industry expert that prepared this report, at the time it published the mate-rial Coles was aware, or should have been aware, of other reports that pre-dicted that final indus-try figures would show a decrease in the farmgate milk price to 84 cents in

2011-12.In addition to the representation

about the farmgate price, Coles sug-gested that it was a “fact” that on aver-age Coles’ margin on Coles-brand 2 litre

milk decreased from 55 cents in 2010-11 to 10 cents in 2011-12 and that pro-cessors received around $1 per 2 litres of Coles-brand milk in each of 2010-11 and 2011-12. In fact, these figures were estimates that were unable to be sub-stantiated.

Coles has admitted that its making of these representations would be likely to have contravened section 18 of the Aus-tralian Consumer Law, which prohibits misleading or deceptive conduct.

Coles now has to publish corrective advertisements on the same online plat-forms that the original representations were published.

It has also agreed not to make misleading or deceptive representations in relation to the impact of reductions in the retail price for Coles brand milk on the farmgate milk price for three years.

A REPORT highlighting industry priorities identified during the recent ADF National Dairy Farmers Summit will be posted on the ADF web-site this month.

An Australian Dairy Industry Council (ADIC) strategic forum, involv-ing about 30 senior dairy representatives from the farming and process-ing sectors, will be held in the next few months to formulate a dairy industry vision and set of strategic priorities. The ADF said these pri-orities will “guide our collective industry work” and will be presented to the Federal Government, including at two industry events hosted in Canberra later this year.

The March summit involved speaker presentations followed by six themed workshops where participants identified 18 industry priorities. These were then voted on by the 150 delegates, including 90 dairy farm-ers.

Developing a strategy for innovation, investment and growth was the top priority from a dairy summit last week.

This priority from the “market growth” workshop was twice as pop-ular as the next highest, “identify pathways to success to encourage investment and confidence in the industry”.

“Government to continue with trade reform that benefits dairy” was the third priority.

Summit report to shape future priorities

There were 150 delegates participating in the National Dairy Farmers Summit in March.

“The video and cartoon were a cynical exercise by Coles to convince consumers that farmgate prices had increased for dairy farmers when they had actually decreased.”

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NEWS // 9

Recruiters want Kiwi dairy talent

AUSTRALIAN DAIRY, banking and investment interests are out to entice ambitious New Zealand dairy farmers and workers across the Tasman.

They want to rejuve-nate the Tasmanian and Victorian dairy industries and inject new impetus into productivity.

They are dangling the carrot of a cheaper path to dairy farm ownership – about one third the cost of New Zealand, claims Andrew Radford, a director of ATR accountancy and owner of two Tasmanian dairy farms. He and two Rabobank rural managers, from Tasmania and Victoria, Rabobank senior dairy analyst Michael Harvey, and another investment specialist, were delivering the message at four bank-organised seminars around the country last month.

They want Kiwi talent to cross the ditch to help provide “the next wave of farmers to take the indus-try up another notch,” says Leigh Barker, a Rabobank rural manager in Devon-port branch, Tasmania.

They think New Zea-land farmers and work-ers will bring new ideas, new competition and new innovation. “In the late 1990s to 2000s when the first wave of New Zealand-ers came, they contributed to growing the indus-try to a new level,” says Barker. “That contribution can come again with the capacity available.”

With big investment in processing plant in Tasma-nia in recent years, there’s an annual 335 million litres extra capacity in Tasma-nia alone, Barker says. “If you go over there and buy a farm, all processors will turn up on that farm and try to grab you. They need to fill that stainless steel,” says Radford.

“There’s a lot of spare capacity that can be gener-ated by new blood.”

As with farming glob-ally, many farmers in Tas-mania and Victoria are ageing and many are at

“the end of their busi-ness cycle”. Young farm-ers aiming for ownership in Australia don’t have to buy Fonterra shares, says Barker. It is a good way to progress their career.

The dairy industry in Tasmania and Victoria is virtually all export ori-entated and poised for growth. It does not face the same degree of price pressures from supermar-kets as the regions that produce mainly for the domestic market.

“The investment in Tasmania into stainless, which is basically manu-facturing, has been huge over the last three or four years. So we’ve got extra capacity which is driving the need for more milk,” Barker says.

“There’s also a new player in the state – Tas-manian Dairy Products. We’ve now got four pro-cessors so the state is poised for growth.

“The main purpose of my trip is to let the New Zealand guys know there’s opportunity. Tasmania does still have a compet-itive edge in that we still grow grass and plenty of it, we’ve got good rainfall, high quality soils and the important part – available farms.

“We now have water schemes as well; there’s water surety. You’ve got to buy that water surety… but it is there.”

Ron Masin, from Rabo-bank’s branch at Sale, Vic-toria, says on the back of irrigation Victorian dairy is flourishing. Year-on-year production is improv-ing with grass yield going up, the plentiful availabil-ity of grain and the imple-mentation of technology.

“Probably the two big areas that have improved production are automated irrigation and automatic cups-off and that’s helping with labour. Production’s going up and the gains are quite significant finan-cially,” says Masin.

The Rabobank road-show around New Zealand last week aiming to show different ways of getting into the farm ownership or investment in Austra-lia. New channels have opened up within Rabo-

The grass is cheaper on the other side says Leigh Barker, Rabobank, Tasmania (left), Andrew Radford, accountant and Tasmanian dairy farmer, and Ron Masin, from Rabobank in Victoria.

bank as well, so anyone in New Zealand inter-ested can contact their local branch, who can then make the contacts in Aus-tralia.

“Ten to 14 years ago a lot of people from New

Zealand who went out and pioneered did it the hard way because they had to find their own way.

“It is fair to say there’s a community of New Zea-land farmers in Tasmania now.”

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10 // NEWS

WHEN LIZA Fahey was young she was regularly given the choice of either help-ing in the dairy or preparing meals.

The dairy always won.“We’d have a choice to get tea or to

milk. I’d always choose to milk and my sister would do tea,” Mrs Fahey said. “I just preferred to be outside and be dad’s little tomboy.”

Now she encourages other young people to find their right pathway into the dairy industry.

Mrs Fahey’s preference for dairy has never abated and at 40 her commitment to the industry has led to her becoming one of four finalists for the 2014 Victo-rian Rural Industries Research and Devel-opment Corporation Rural Woman of the Year award.

Mrs Fahey and her husband, John, work on the Fahey family farm in Terang which has grown from milking 250 cows in five-hour stints in a Herringbone dairy to milking 400 Ayrshires in a 44-unit rotary.

“We milk Ayrshires all year round, and the goal is to continue producing good quality milk,” she said.

The farm is doing well, as evidenced by 4.9 fat and 3.8 protein test, but Mrs Fahey’s commitment to the industry spans well beyond the farm gate.

While still helping on the farm and filling gaps where needed – mostly just

the odd milking at the moment - her main contribution to dairying over recent years has been in organising events and leading young farmers.

This commitment started through a sporting association with former West-Vic Dairy executive officer Mike Weise.

When the organiser of a Victorian badminton tournament left only weeks before the event, Mrs Fahey stepped in with great success. Mr Weise, the Warrnambool badminton association president at the time, was impressed and asked if she would be interested in coordinating the south-west Young Dairy Development Program (YDDP).

That was in 2008 when the YDDP had 250 local members. Today it has

753 members.The massive increase

has been achieved by encouraging existing members to spread the word of the benefits of being involved, a strong social media presence and recruitment of ser-vice providers.

“We have developed trust and good word of mouth and people see that they get something out of it. It is driven from

the ground up so the members get the information that is relevant to them,” Mrs Fahey said.

“We have encouraged members to encourage others to join and take advantage of social media. About a quar-ter of our members are service provid-ers and they contribute as well as get something out of it.”

Mrs Fahey takes great pride in assist-ing young farmers to achieve their

dreams and grow as leaders in the com-munity. “It’s like being a guide to such a large group of young farmers,” she said.

With an ageing farming community, Mrs Fahey says finding ways to encour-age young people into dairy remains a big challenge.

“The average age of farmers is mid 50s so we need to explore different ways to get young people in. There are oppor-tunities for equity partnerships that can

be considered but we need to explore more.”

She doesn’t have a magic wand to wave to solve the problem.

“Young farmers are out there but they need the tools to help them rec-ognise and reach their goals,” she said.

“They have to understand they don’t have to own their own farm to be prof-itable but they have to be shown these pathways such as leasing, share farm-

ing, farm management and equity part-nerships.”

Mrs Fahey says she is proud to be involved in a dairy business and wants others to feel the same.

“We are doing a fantastic job edu-cating young dairy farmers but it’s up to all farmers to help change any nega-tive image about them.”

Her other industry contributions include being secretary of the Terang–Mortlake United Dairyfarmers of Vic-toria, a member of the Australian Dairy Conference organising committee and recently being appointed to its Board of Directors, being a member of the Aus-tralian Dairy Farmers policy advisory group for people capacity, being part of the planning committee for the Great South West Dairy Awards and helping to run WestVic Dairy programs, such as Profitable Feeding Systems, Manag-ing Business Transitions, In Calf and Taking Stock.

In 2013 she also completed an Advanced Diploma in Agriculture and the National Developing Dairy Lead-ers course.

Mrs Fahey is currently working on a booklet and a website that will help to clarify who does what in the dairy industry.

“It’s not necessarily my opinion, but there is some confusion about who does what and where you can go to voice your thoughts or become involved. Maybe the NCDEA could include a unit on understanding the industry structure,” she said.

Mrs Fahey says if you want to see change you have to roll up your sleeves and get involved.

“There’s no use whinging without standing up and being part of change.”

Helping young farmers find the right pathwayRICK BAYNE

Liza Fahey

“We need to show young famers pathways into the industry such as leasing, share farming, farm management and equity partnerships.”

– Liza Fahey

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NEWS // 11

STAFF RETENTION is a big issue in the dairy industry, says the 2013 NZ Dairy Woman of the Year and business manager for Bel Group, Justine Kidd.

Ms Kidd spoke at the Australian Dairy Confer-ence in Goelong in Febru-ary.

“It’s the nature of our industry: people move to grow,” Kidd told a Dairy Womens Network workshop. “I have been around the industry for just over 20 years and it’s an ethos in our industry… if you are not moving you are not growing.”

Even if we are doing a good job of looking after staff, “if we are not growing and allowing them to move [outside] our business… our industry culture is they are going to move.

“If we are bad [employers] we’ll have crazy high turnover rates. If we are really good [with staff ], compared with town businesses even our good levels of retention are seen at the lower end, not at best practice compared to town.”

The rule of thumb used by the New Zealand Institute of Human Resources is that when a staff member moves on it costs about three times their salary. That includes training, loss of productivity and recruitment.

“It is definitely more than one times the salary and the further up that person is in your business – the higher level of responsibility – the bigger [the cost]. And you are also paying them more, so three times $100,000 is a lot more than $45,000. It’s a really big impact.

“[Given] the time and effort you have to put into them, it’s about

changing dynamics; out of all that is lost productivity.”

Lower stress on an employer is an outcome of better retention. A better team gets you better results; they are easier to manage and you’ve got more time for other things. Retention also builds a better CV for the people working for you.

Retention is usually measured over the June-June dairy season, Ms Kidd says, but that will one day change and the industry will recruit mid-season. Resignations in May-June is a critical

measure for dairy farmers – not just those during the year.

Ms Kidd said the Bel Group targets 85% staff retention for the year.

If you have 100% you have stability but you can get stagnation, she says. “Turnover creates freshness and potential to bring new ideas into your business; it creates pathways for people.”

Fifty per cent retention, which can be common in dairying, is too low: depending on the business size, the retention goal should be 70-85%. Ideally a senior couple should be stable but expect juniors to change every year or two. Planned turnover is preferable to unplanned.

Ms Kidd has been involved in the family business Bel Group as business manager for six years, much of that time dealing with staff. She supervises 10 dairy farms with just under 3000ha of dairy plus dairy support.

The group employs 58 people onfarm and 65 people business-wide, including dairy operations managers and farm managers.

Dairy must change culture to retain staff

Dairy executive Justine Kidd illustrates a point at her ‘Making Your Team Tick’ workshop.

“Our industry culture is they are going to move.”


12 // WORLD NEWS

15,000-cow China hub in full swingFONTERRA’S NEW hub of five dairy farms in China are up and running and already the NZ co-op has started work on a new hub of farms at Ying in Shanxi province.

Fonterra’s vice-president international farming, Sarah Kennedy, said from Beijing that calving at the final farm at Yutian 3, Herbei province, is almost over and all the 15,000 cows at the hub are milking.

At full production the hub will produce 150 million litres of milk a year but with many of the cows first-time milkers it will take some months to reach that target.

Completion of the hub, especially the last farm, ran close to deadline with 1000 construction workers on site to get it ready for the cows coming.

Kennedy says all the cows at the farms have come from New Zealand or Australia under a scheme they call ‘genes on legs’ – selecting a certain genetic profile in partnership with LIC.

“So our beautiful girls get on the ship and take two weeks coming from New

Zealand to China. They are beautiful animals and we treat them like treasured gold. They are hard fed before they [leave New Zealand] to get them used to the hard feed on the trip.

“When they get to China they go into quarantine for six weeks and then onto the farm. When we put them on the farm they are lovely and quiet and adapt to their new home extremely well.”

All calves from the cows that go to China are kept – the heifers for replacements and the bull calves to be sold locally for the beef market. They are said to be popular with the locals.

Fonterra is using a combination sexed semen and is introducing Holstein genetics to increase the volume of milk from each cow: currently this is 34L. The reason is simple: they are paid for volume, not milk solids.

None of the milk produced by the Yutian hub is processed by Fonterra. Instead it’s sold to local processors who turn it into UHT milk, yoghurts and other products. “For them it’s a high quality consistent product produced to all Fonterra’s standards,” Ms Kennedy said.

Lessons learned on the first, pilot, farm at the Yutian hub are applied to the subsequent farms. Cow comfort is one, said Ms Kennedy.

“Sand beds are the gold standard bedding for cows. You can tell when you walk around the barns how well a farm is run. Basically if the barns are quiet and you don’t hear mooing, that is the sign of satisfied cows. We want the cows lying down because then they produce more milk. Of course they are free to roam around the cow houses.”

Raising cows’ body condition score to 5.0 is not difficult, Ms Kennedy said. In fact the staff must ensure the cows don’t get overweight.

Most feed is sourced locally and this helps build relationships with the community, said Ms Kennedy.

“We buy all our maize silage from them and there will be a mixture of cotton seed and brewer’s grain. We have nutritionists who make up the feed; we use some compound feed or pelleted feed to make up a complete diet. We test the food we bring in.”

Fonterra plans to be producing one billion litres of milk in China by 2018.

WHAT’S IN it for us? Fonterra shareholders may well be asking following last week’s launch of a China-New Zealand Dairy Exchange Centre in Beijing.

Announcing the initiative with China’s National Dairy Industry and Technology System, Fonterra said the centre will support sustainable development of the industry in both countries.

“It is a key priority for Fonterra to contribute to the development of the Chinese dairy industry and we believe there is a lot to be gained by both New Zealand and China through the sharing of knowledge, research and dairy expertise,” president of Fonterra Greater China and India, Kelvin Wickham, said.

“Both parties have world-class dairy research and know-how. We are pleased to be playing a key role in bringing this initiative to life.”

Fonterra says the centre will develop policy in the China and New Zealand dairy sectors, arrange academic exchanges, industry promotion, dairy technology research and personnel training.

An annual China-NZ dairy research forum, and a ‘Golden Key’ training programme to assist China’s local dairy industry development will be among early initiatives.

Wang Yuchan, a scientist with the China Ministry of Agriculture’s National Dairy Industry and Technology System said it hopes to learn more about New Zealand’s technology and expertise, jointly do R&D, and undertake technology exchanges and training on dairy sector issues through the centre.

“This will help promote the sustainable development of dairy.”

Kevin Wickham

Fonterra and China exchange centre

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WORLD NEWS // 13

Fair Oaks Farms takes up fight

TEN YEARS ago one of the largest dairy operators in the US saw the writ-ing on the wall: animal welfare lobbyists were increasing their focus on farming and consumers were keen to know more about their food.

Although environment groups were targeting the pig and poultry sectors back then, Gary Corbett, chief execu-tive of Fair Oaks Farms, Indiana knew “dairy’s time was gonna come”.

In 1994, Fair Oaks decided to go on the offensive; it opened the 13,000ha dairy farm to the public, for them to see how cows are looked after and milked. A birthing barn auditorium also allows visitors to see calves being born. Milk, cheese, ice cream and yoghurt are pro-cessed and sold at the farm. Today, Fair Oaks hosts 575,000 visitors annually and is the number one destination for visitors to the town. Fair Oaks’ success has attracted interest from other sec-tors; last year Fair Oaks Farms opened a pig adventure operation with 3000 sows.

Mr Corbett shared Fair Oaks’ suc-cess story with 350 farmers at the Aus-tralian Dairy Conference in Geelong in February. Speaking on ‘People, Planet and Profit- ensuring dairy farming has

a future’, he urged Australian farmers to take their story to the consumers to coun-ter negative publicity from animal rights groups.

According to Mr Corbett, the activists are well funded and passionate in their campaigns.

“Consumers were also becoming well informed; they wanted to know about traceability, the food supply chain and animal welfare,” he said.

According to Mr Corbett, the dairy industry has always believed someone else will take care of the negative pub-licity generated by activists.

Therefore, dairy has never been ahead of the game.

He says people visiting Fair Oaks are very interested to interact with farmers.

“In our experience 99% of the visi-tors have no agenda and come to under-stand agriculture better. Consumers haven’t let us down.”

After touring the farm, consum-ers buy locally produced cheese and ice cream from the Fair Oaks store. Mr Corbett believes there is an emotional attachment after visitors see how it houses cows, feeds and milks them and

takes care of them. Cheese produced at Fair Oaks is sold across the US however ice cream and yoghurt are only available at the store.

Mr Corbett has no regrets about opening the farm to the public. “The question is not whether we can afford to tell the story but can we afford not to? We can’t.”

Fair Oaks practices sustainability on all fronts and Corbett says this will ensure the business will prosper for many years.

Fair Oaks has 37,000 cows; the aver-

age herd size in the US is under 200. The property has 11 milking platforms and a permit to build another one. The free-stall barn operation milks 800 cows every 6 1/2 minutes for 24 hours a day serving the fluid milk market; it pro-duces almost a million litres of milk daily.

The 1.6 million gallons of liquid manure produced at the dairy opera-tion is fed through a digester with the end product used in many ways. For example, liquid manure is turned into gas to power the business’s 45 trucks

and to yield fertiliser, with the water used to grow a source of protein which is added to the herd’s total mixed ration. About 120 calves are born every day.

Fair Oaks Farms also produces at least 60% of its own feed.

Mr Corbett says he doesn’t want to lose any sleep over what to feed the cows the next day.

“We have two years of feed on hand. We try to have big healthy cows, ensur-ing we have feed in front of them 24 hours a day.”

Fair Oaks Farms employs 450 people.

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Visitors take a bus ride through the cow shed. Inset: Gary Corbett

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14 // NEWS

FRESH MILK exports from New Zea-land to China are booming and a key Chinese player in the trade is now buying New Zealand dairy farms.

Oravida has been selling fresh New Zealand milk in Shanghai via direct order since May 2012. Busi-ness has increased 100% since the launch and every week 5-10 tonnes is freighted.

Oravida is said to be charg-ing NZ$20 for a 2L container.

The com-pany recently bought a 300-cow farm south of Auck-land, close to the Green Valley Milk plant which processes and packs Oravida milk for China.

Green Valley also packs milk for Ruima Foods, which sells in Guangzhou.

Green Valley general manager Corrie Den Haring says orders are received weekly. Milk is processed at 4am every

Monday at the Mangatawhiri plant, put on Air New Zealand’s direct flight to Shanghai on Tuesday and is in Orav-ida’s warehouse on Wednesday.

Consumers get to buy it before the weekend.

Oravida is the main part-ner in the business, and “very

professional,” Mr Den Haring said.

“A very good cus-tomer; we can’t

speak highly enough of Orav-

ida and the relationship we have,” he said.

Chinese consum-ers gener-ally mistrust dairy prod-ucts but New Zea-land is seen as the home of quality dairy, Mr Den Haring said.

“Some latest scares

tested this but most

people have a high degree of trust in our

products. Based on this trust, business for us is growing every week.”

Green Valley’s confidence in Orav-

ida has been boosted by the purchase of the 300-cow farm which begins supply-ing on June 1.

“Our Chinese partners have invested in dairy farming and they are interested in the pasture to plate concept.”

The Green Valley owners also owns Marphona farms milking 2000 cows and plans to raise this soon to 3000 cows. It also buys milk under contract from nearby farmers, as well as organic milk and cream from Fonterra.

Mr Den Haring said Green Valley and Oravida are looking at moving the Chinese business into organic milk,

seen as another point of difference and ensuring consumers remain ‘close to nature’.

But Oravida is unlikely to use organics as its main marketing tool in China.

“We won’t sell it as organic milk…. We’ll say this is New Zealand milk and by the way it’s organic. It’s a point of dif-ference but not the main selling point.”

He believes organics help farmers reconnect with urban dwellers.

“The farming community needs to understand the city people are their customers. You can sell them products

but you better have the right story on the product.

“If you want to talk about pasture to plate you must tick all the boxes, not just the ones you want. Organics plays a part; it’s not the only story but it is one story we can put to the consumer – be it New Zealand or China.”

Green Valley processes about 25 mil-lion litres of milk annually. The China fresh milk trade makes up only 3% of the business.

Mr Den Haring said growing the domestic market in New Zealand remains its main focus.

THE REPUBLIC of Korea is Austra-lia’s ninth largest dairy export market (in value), and imports considerable quantities of cheese, whey powder and other dairy commodities.

Korea imported about 200,000 tonnes of dairy products in 2012/13, worth at least US$700 million. Austra-lia’s market share was 12%, down from 19.9% (in USD terms) in 2008/09. The conclusion of Free Trade Agreement (FTA) negotiations between Australia and Korea in December last year makes it timely to consider why this market, and the FTA, are important to Australia.

Australia exported 21,000 tonnes of dairy products to Korea during the 2012/13 financial year, worth US$87 million. Cheese was the most signif-icant category (representing 34% of exports by USD value), followed by skim milk powder (SMP) (23%), and infant powder (15%). Exports of infant powder from Australia to Korea grew by 46% (in USD value terms) over the five years between 2008/09 and 2012/13.

Cheese is not only Australia’s larg-est dairy export to Korea, it also repre-sented 47% of Korea’s dairy imports (by USD value) last financial year. While Korean raw milk production (and the number of milking cows), increased by 12% (2.18 billion litres) between 2011 and 2012, increased milk prices and rising labour costs have seen a decrease in the proportion of raw milk used for products such as cheese. At the same time, demand has been rising.

Total domestic production of fresh and processed cheese was 25,000 tonnes in 2008, while consumption was 72,000 tonnes, and the shortfall 47,000 tonnes. In 2012, production was 22,400 tonnes, consumption 82,400 tonnes, and the shortfall 60,000 tonnes. The growing gap between domestic supply and demand has resulted in a 93% increase over the last five years (2008/09 to 2012/13) in the volume of cheese exported to Korea by interna-tional suppliers.

Increased demand for cheese is a

result of increasing consumption of Western style foods. Mozzarella is the most popular, and is used in pizza fast-food outlets and European restaurants. Unusually for the region, consumer preference for chilled fresh/pasteurised milk results in limited retail demand for long-life/UHT milk (USDA-FAS GAIN report KS1347, 2013).

The USA (March 2012) and EU (July 2011) both have FTAs in place with the Republic of Korea. Australia is at a com-mercial disadvantage as a result. Under the FTA agreement concluded by Aus-tralia and the Republic of Korea (known as KAFTA) in December 2013, import

duties and volume restrictions will cease to apply to most Australian dairy products in the long run.

KAFTA tariff phase-down peri-ods are three or five years longer than those agreed under the Korea-US FTA (known as KORUS), and will not start until KAFTA is ratified. For example, if the KORUS phase in period is 10 years, then KAFTA will be 13 years – and if the agreement is ratified in 2014, the phase-in period will be completed in 2026. The exceptions, which will not be lib-eralised for Australia, are milk pow-ders and evaporated milks, buttermilk, curdled milk, kephir, and other acidified milk or cream.

Steps toward trade liberalisation are a welcome development, however other challenges remain. Aside from the head starts on tariff reductions and quota increases enjoyed by Australia’s com-petitors in trade agreements such as the Korea-US FTA, one of the biggest influ-encers on US dairy export performance is the Cooperatives Working Together

(CWT) export subsidy program. Total assisted exports under the pro-

gram in 2013 exceeded 94,000 tonnes, 62% of which was cheese. Of the cheese exported under the program in the first quarter of 2013, 47% was des-tined for Asia. As noted earlier, inter-national exports of cheese to Korea have grown considerably over the last five years. The share of these exports held by North America has risen from 23% to 46%, while Australia’s share has fallen from 15% to 8%. New Zealand have barely held steady, going from 32% to 31%.

The announcement of the Korea-Australia FTA presents an opportunity to start reducing the commercial dis-advantage that Australia faces in one of our top-10 destination markets for dairy. While we await ratification of the agreement so that phase-down periods can start, attention turns to the newly announced Japan-Australia FTA. • Amy Bellhouse is an industry analyst with Dairy Australia.

GLOBAL IMPACTAMY BELLHOUSE

Dairy NewS aUSTraLia june, 2012

With season 2011/12 only a few weeks from ending, attention is now focused on 2012/13 milk prices as farm-ers consider strategies for the coming year. In some domestically-focused regions, renegotiated contracts incor-porating lower prices and reduced ‘tier one’ access are undermining farmer confidence and supply stability. For many farmers in export-oriented regions, a lower price outlook relative to the current season not only adds to the challenges of doing business, but seems to contradict the positive medium term outlook of Asia-driven dairy demand growth.

Dairy Australia’s indicative outlook for southern farm gate milk prices – published in the recent Dairy 2012: Sit-uation and Outlook report, is for an opening price range of $4.05-$4.40/kg MS and a full year average price range between $4.50 and $4.90/kg MS. The report considers the wider market pic-ture and summarises the many factors at play; the key theme of the current sit-uation being that of re-balancing in the dairy supply chain.

In regions of Australia focused on producing drinking milk, many farmers face a re-balancing market in the form of renegotiation of supply contracts and reduced access to ‘tier one’ supply.

Shifts in private label contracts and pro-cessor rationalisation have seen milk companies adjust their intake require-ments and pricing to meet the chang-ing demands of a highly pressured retail marketplace. Lower contract prices and a lack of alternative supply opportuni-ties present challenges in a market with limited manufacturing capacity. Despite these challenges, the underlying domes-tic market is stable, with steady per-cap-ita dairy consumption and a growing population providing a degree of cer-tainty beyond the current adjustments.

In the seasons following the 2008 financial crisis and subsequent com-modity price recovery, farmers in export-oriented regions have seen solid global supply growth (see chart) - with higher-cost competitors in the North-ern Hemisphere amongst those expand-ing output as their margins increased. This season, favourable weather con-ditions have further enhanced milk

flows. 2012 milk production in the US is up around 4% on 2011 for the year to April (leap year adjusted), whilst early data suggests EU-27 milk production finished the March 2012 quota year up 2.3% on the previous year. New Zealand production is widely expected to finish this season up 10% on last year - a huge market influence given 95% of NZ milk is exported. Argentina is also enjoy-ing solid production growth, but a sig-nificant supply gap in Brazil prevents much of this additional milk from leav-ing South America.

Despite wider economic uncer-tainty, demand has remained resilient as importing countries like China and

those in south-east Asia and the Middle East maintain consistently higher eco-nomic growth rates that support increased dairy consumption. How-ever, the surge in supply has outpaced demand growth in the market.

This situation has seen the scales tip in favour of buyers in dairy mar-kets, with commodity prices retreat-ing steadily over recent months. Butter prices are down some 30% from their 2011 peaks, whilst powder prices have lost more than 20%. Farm gate prices have subsequently been reduced in most exporting regions. The average basic farm gate price for milk in France for example, dropped 12% from 32 Euro

cents/litre in March (AUD 41c/L) to 28 Euro cents/litre (AUD 36c/L) in April. Profit margins are under pressure in the US, and in NZ Fonterra has announced the final payout for the 2011/12 season has been cut from NZ$6.75-$6.85/kg MS to NZ$6.45-$6.55/kg MS (AUD$4.96-$5.04).

Effectively, global dairy markets are rebalancing. Lower prices will both slow production growth and stimulate demand, and as this occurs we will ulti-mately see a price recovery. Key factors to watch on the global scene will be the rate at which milk production overseas slows in response to lower prices, the impact of the current financial worries on consumer confidence, the path of China’s economic growth, and the value of the Australian dollar.

Demand for exported dairy prod-ucts remains a positive and will con-tinue to grow with the middle class in large emerging markets such as China, with changes in diet and with increasing urbanisation - and also in conjunction with global population growth. Locally, the domestic market is supported by a growing population and stable per-capita consumption. Whilst the dairy market is currently a challenging place to be a seller, all signs indicate that bal-ance will ultimately return.

agribusiness // 17

austraLian FooD company Freedom Foods Group Ltd is to build a new milk processing plant to cash in on growing demand in Asia.

The plant, to be built in southeast Australia, will be the first Australian green-fields expansion in UHT in 10 years.

Freedom’s wholly owned subsidiary Pactum Australia will run the plant. Some of its products will be sold in Australia.

The company says given Asian consum-ers’ rising incomes and improving diets, demand there will grow for qual-ity dairy products from low-cost production bases such as Australia, whose milk is well regarded.

The new plant will allow Pactum to meet growing demand for UHT dairy milk, and add to capacity for value-added beverages at its Sydney factory. Pactum is expanding its capabili-ties at the Sydney plant

to provide portion pack (200-330ml) configura-tion for beverage prod-ucts.

The NSW location will provide access to the most sustainable and economic source of milk. Pactum has strong links to the Austra-lian dairy industry and will expand its arrangements with dairy farmers for supply of milk. The new plant will increase scope for Australian milk supply – value-added, sustainable and export focused.

Initially the plant will produce 250ml and 1L UHT packs from a process line capable of 100 mil-lion L. The processing and packaging plant will emit less carbon, use less water, and be more energy-effi-cient than equivalent UHT facilities in Austra-lia and SE Asia. Pactum expects site preparation to begin in October 2012 and start-up by mid-2013.

Pactum makes UHT products for private label and proprietary customers.

Freedom Foods planttargets Asia

Malaysia FTA benefits dairyaustraLian DairY, rice and wine exporters to Malaysia are the biggest winners in a free trade agreement (FTA) signed between the two coun-tries last month.

The deal, signed after seven years of negotia-tions, allows a liberalised licensing arrangement for Australian liquid milk exporters and allows access for higher value retail products.

It guarantees Aus-tralian wine exporters the best tariff treatment Malaysia gives any coun-try. It also allows open access arrangements from 2023 for Australian rice with all tariffs eliminated by 2026.

The National Farmers’ Federation says the trade deal will improve inter-national market access for Australian agricultural goods.

“After seven years of negotiation, the NFF is under no illusion of how challenging it has been to complete this FTA with Malaysia,” NFF vice presi-dent Duncan Fraser says.

The FTA will fill a number of gaps within the

ASEAN-Australia-New Zealand FTA (AANZFTA).

“Protectionist senti-ment over agricultural goods is rife and grow-ing across the globe, so in this context it is pleas-ing Australia has managed to forge an agreement with Malaysia that has dealt with some sensi-tive agricultural issues not effectively covered by AANZFTA,” says Fraser.

“While under the AANZFTA agreement most of Australian agri-culture’s key interests had tariffs bound at zero, dairy and rice are two sec-tors where incremental market access improve-ments have been negoti-ated under the Malaysian FTA.

“This trade deal was also particularly impor-tant for sectors such as dairy that have been facing a competitive dis-advantage in Malaysia compared with New Zea-land which already has a completed FTA with Malaysia in place.”

The FTA also sig-nals some administrative benefits for Austra-lian agricultural export-

ers through streamlining of rules-of-origin dec-laration processes and improved marketing arrangements for certain commodities.

The Malaysian market is worth about A$1 bil-lion in Australia agricul-tural exports – including being its fourth-largest sugar export market and fifth-largest wheat export market. With an annual economic growth at about 5%, Malaysia forms an impor-tant part of the ‘Asian Century’ story and the opportunity this presents for Australian agricultural producers, says Fraser.

Despite the comple-tion of this agreement, much remains to be done for Australia’s farmers to tap into the full potential of the Asian region and beyond.

He says the NFF will now throw its attention towards ensuring agricul-ture remains front and centre in completed FTAs with South Korea, Japan, China and Indonesia as immediate priorities.

“These are all markets with enormous growth opportunities and where significant barriers to trade in agriculture still exist, not only through tariffs that restrict trade

but also through technical or so called ‘behind the border’ restrictions.”

The FTA was signed on May 22 in Kuala Lumpur by Australia’s Trade and Competiveness Minis-ter Craig Emerson and his Malaysian counterpart Mustapa Mohamed.

Emerson says Australia will be as well-positioned in the Malaysian market as Malaysia’s closest trad-ing partners in ASEAN, and in some cases better. The FTA will guarantee tariff-free entry for 97.6% of current goods exports from Australia once it enters into force. This will rise to 99% by 2017.

incremental change in milk production (year-on-year)

Export demand remains strong

Sealing the deal: Malaysian trade minister Mustapha Mohamed with Australian counterpart Craig Emerson after signing the deal.

gLobaL impacTJohN DropperT

016-017.indd 17 6/06/12 1:41 PM

Australia behind USA, EU in South Korean pecking order

Chinese company expands NZ footprintSUDESH KISSUN

Green Valley general manager Corrie Den Haring with fresh milk exported to China.


MARKETS // 15

INTERNATIONAL DAIRY commodity prices have weakened in past weeks, as milk supply picks up in the Northern Hemisphere, and New Zealand finishes off its bumper season.

Futures prices and recent GDT (global dairy trade) auction results indicate the softening will continue through 2014.

Of course there is no cause for panic, a supply response has been building for some time, and commodity prices are still well up on where they were a year ago, in fact to the tune of 30% in Australian dollar terms. On this basis 2014/15 farmgate prices look pretty solid.

The question is, how long will the good times roll? Farmers will recall all too well the last time farmgate prices reached these levels in 2008. At that time rising commodity prices were largely based on supply shortages with modest supply growth in some exporting regions and falls in others and the elimination of intervention stocks in the US and EU.

Subsidies (remember those?) had been removed and demand was pretty good, but it was mostly a supply driven peak in the international market. What followed was a major correction, production recovered strongly in New Zealand in particular, and of course the financial crisis and subsequent economic downturn cut global dairy prices in half. While no one is signaling a repeat of the

wider financial and economic problems that caused the spectacular meltdown in 2008 and 2009, how does the current dairy market situation compare?

In early 2014, there are some similarities – New Zealand has once again made a spectacular recovery from drought, and output in many EU regions is gearing up for next year’s production quota removal. We are starting to see buyer resistance at the high prices of late 2013. What is different this time it that so much depends on China’s continued appetite for imported dairy products.

Looking back at this chart of Chinese WMP imports, it’s startling to see how low the volumes were in 2008 compared to today. Lower domestic milk output and the restructuring of China’s farm sector explain the surge in imports in 2013, and why demand is likely to continue well into 2014. The fundamentals for dairy in China seem sound, and there is plenty of investment going on in the sector to service this market.

But could the party once

again be spoiled by broader financial and economic issues? Trade, investment and consumption figures have been disappointing – causing many analysts to cut their forecasts for economic growth. Reports of loan defaults, import orders for metal and more recently soft commodities being cancelled or refused, property price bubbles and credit crunches are starting to permeate commentary about China’s outlook.

The truth is China’s rapid rise as an economic superpower has been unprecedented in history, its mode of centralised government and state-owned or influenced capitalism is not replicated anywhere else. We are all part of a very large experiment, and we are heavily reliant on the ability of China’s leadership to manage some major issues – credit blowout, corruption, pollution, massive urbanisation and the transformation of their citizens into consumers not savers. The task is mammoth, and the question marks over the transparency and accuracy of Chinese data just add to the discomfort

many commentators are feeling.

There is no doubt that China wants dairy, but there has probably never been a better time to diversify markets at the processor level and focus on costs and margins on farm to capitalise on the good times. While many economies would be affected by a significant Chinese downturn, including our own, lower commodity prices combined with a softer Australian currency could allow the further development of demand in other markets that would still provide favourable returns to Australian dairy farmers into the longer term. Given the structural changes a full retreat from imports seems unlikely for China, even if trade is hampered by some adverse financial market developments in the short term. So the message is – be alert not alarmed, markets adjust – but it’s almost never smooth.• Jo Bills is a director of Freshagenda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.

Watching China as prices soften

AFTER HITTING a record in early February, Freshagenda’s export index has been steadily losing ground with weaker com-modity spot prices.

The mood in the global dairy market has now changed with the expectation that there will be more product available at least in the short-term from the three biggest exporters – New Zealand, the EU and the US. Spot prices are still well above US$4,000/tonne and as you can see in the chart below, the index remains relatively high.

The results of the latest GDT auctions highlighted the fragil-ity in the market. The chart below also tracks GDT price move-ments against our own export index. GDT prices show sharper movements up and down – reflecting the large proportion of WMP in the sales mix, and price movements in US dollar terms.

The Freshagenda index – based on Australia’s export mix and affected by Australian currency movements has been less vola-tile, and is weakening at a slower rate.

The stronger $A in the past few weeks hasn’t helped the situ-ation for Australian exporters. It has gained 6 cents against the US dollar for a host of reasons, including the belief that China’s government will stimulate their economy to protect it from a hard landing. Money flows into Australia would benefit from that move.

The durability of China’s import hunger past the first quar-ter of 2014 are crucial to the outlook.

The index is a lead indicator of average export returns - based on spot prices, currency movements and export mix. The index measures current market sentiment, but in reality it takes 3 to 6 months for prices to translate into actual returns, depending on the timing of contract negotiations.

For weekly updates, visit http://www.freshagenda.com.au/

Export index falls from record high

FRESH AGENDAJO BILLS

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16 // OPINION

EDITORIAL

Cheese with that?IT SEEMS every cause has its own day to shine�

Some are worthy – take the International Day for Literacy, for example – while some are, well, more interesting, like the Interna-tional Day for Happiness�

One cause that we fully support – and we know we’re not alone – is Grilled Cheese� And because it originates from the USA, where everything is bigger, it lasts for a full month�

Yes, April is Grilled Cheese Month in the US�

Statistics show average annual cheese consump-tion in the USA is 10½ kilograms per person, up from 3½ kg in 1970�

If they can’t add an ex-tra kilo or two in the month of April alone, then Grilled Cheese Month may need to be extended�

The ultimate farmTYPOS IN newspapers unfortunately happen despite the best inten-tions� This editor has been responsible for his share of clangers over the years�

We laughed at one story recently where a missing word may have inadvertently convinced dairy farmers the holy grail of profitability was easier to achieve than they thought�

The western Victorian paper had a DemoDAIRY spokesman say “we aim to dispel the myth that you have to milk cows to make profit”�

No milking cows? So no associated problems, a sleep-in and a healthy bank account – tell us more!

Unfortunately, it should have read: “We aim to dispel the myth that you have to milk MORE cows to make profit�”

Bugger! Back to work everyone�

Wombat milkWHAT DOES it take to fool people on April fool’s day?

ABC Radio had the an-swer when they ran a story on an emerging wombat dairy industry� Links to the story were spread quickly on Twitter and throughout the web�

The experimental herd of 30 wombats were milked by a new device with a “sensitive telescopic suction cap to reach into the single teat in the lady wombat’s pouch”�

Hard work was worth it as the milk produced cheese planned for export to Europe, America and Japan with a starting price of $3226 a kilo�

It wasn’t until later in the day that the good folk at the ABC alerted people to the date�

Well played�

Missing mailYOU THINK you’ve heard it all but then you’re left shaking your ahead again�

Such was the case when we heard from a farmer contacted recently from a most officious of-ficial from Australia Post�

For decades this partic-ular family had sometimes received mail addressed with an extra “S” on the end of their road name�

You would think correct family name, correct town, correct post code and a road name with or without a superfluous “S” on the end would be enough�

No, they have been told any mail with the extra “S” will not be delivered� End of story�

Clearly the postmaster has too much time on his hands�

Advertising�Chris Dingle 0417.735.001

[email protected]

Editor��Stephen Cooke 03.9478 9779 or 0427.124 437 [email protected]

� Publisher� Brian Hight

� Production� �Dave Ferguson Becky Williams

Sub�Editor Pamela Tipa

� Published�by RNG Publishing Ltd

� Printed�by PMP Print

Dairy News Australia is published by RNG

Publishing Limited. All editorial copy and

photographs are subject to copyright and

may not be reproduced without prior written

permission of the publisher. Opinions or

comments expressed within this publication are

not necessarily those of the staff, management

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PROCESSORS ARE giving farmers mixed messages.Export is the main game, they say. The domestic market place

is too crowded. We have to capitalise on the growing demand for high quality dairy product in Asia.

It makes sense, and the message has been sold as hope for better farmgate prices.

So why has Fonterra followed Murray Goulburn’s lead by signing a 10-year contract to supply milk for a supermarket’s house brand?

Last year, Murray Goulburn signed a 10-year house deal with Coles and is currently spending $120m dollars on new plants in Melbourne and Sydney.

Just last month, Fonterra Australia managing director Judith Swales said an “increasing majority” of Australian farmers want to be part of the global food scene.

This month they announced they had signed a 10-year deal to supply milk to the Woolworths label.

It says it will make a profit on the deal, but it would be safe to say it’s not going to be profit on the scale of high-value high-end produce exported to Asia.

There’s also the matter of how it plans to source the additional 100m litres it requires from south west Victoria.

It may have a 10-year contract to supply domestic milk, which it says will offer farmers security to plan ahead, but will they offer farmers a 10-year fixed price? Or even a 3-year fixed price?

That would give farmers security to plan ahead.The mantra of the dairy industry is now profitability, and rightly

so. Don’t push for extra production at a higher cost, but concen-trate on your margins and make your business work for you.

It is now repeated by Dairy Australia.Farmers are becoming more reluctant to push too far beyond

their profitable zone to produce more milk because they are the ones that will wear it when the milk price comes down.

There is talk of the national interest in producing more milk, but all processors must lead the way by sharing the risk.

It’s no good for them to say we want more milk (except for in spring, when we’ll pay less for it) but farmers must take the risk.

When the farmgate milk price falls, global factors are cited. Farmers realise this, but a genuine partnership shares the losses in the aim to build a profitable future.

Farmers need to be partners in the journey. And mixed messages don’t help.

Farmers gettingmixed messages


OPINION // 17

Trying to find the middle groundYOU COULD be forgiven for thinking there are parallel universes when experts speak about the state of Australian agri-culture.

The eternal optimists see nothing ahead but blue skies; the glass-half-empty brigade sees only doom and gloom.

Clearly, the reality is somewhere in between. Attendees at last week’s Global Food Forum in Sydney, organised by the Australian newspaper and the Visy Corporation, had the opportunity to assess what “in between” means. Interestingly, the audience was almost entirely com-prised of city-based ‘suits’ – scarcely an Akubra to be seen.

This is a reflection of the growing interest in agriculture from the more traditional business and investment sectors – largely focused at this stage on the food sector, but with some trickle down already spreading into the farming sector.

But that’s a conversa-tion for another day. Covering the forum, the Australian’s rural reporter, Sue Neales, wrote: “One scenario painted the Australian farming and food scene as the world flavour of the month; with investment bankers and local real estate compa-nies being inundated daily with offers and glittering deals to buy Aussie farms, meat works, water rights, almond orchards and land by everyone from the rich-est man in Russia to Cana-dian pension funds and secretive Chinese quasi-government companies.

“The second perspec-tive had Australian agri-culture as mired in red and green tape; beset with ailing, ageing or lacking infrastructure; bogged deep in drought and debt; and faced with whinge-ing farmers quitting the industry in frustration as profits and commodity prices failed to keep pace with high land values and soaring costs.”

Somewhere in the middle of these extremes

of opinion, experts are trying to work out how to maintain our industry’s potential to help feed and clothe the world.

In a business-as-usual response, farmers are gamely attempting to return a decent profit in the face of increasingly vigorous competition from the emerging world, from our friends across the Tasman and, further east, those across the Pacific in South America.

Australian farmers are faced with a range of chal-lenges beyond their con-trol.

They have to deal with the highest labour costs in the world; the perpetually high Australian dollar; and our Government’s seeming inability to reach a free trade deal with China – despite the fact that the New Zealand/China FTA will be celebrating its sixth anniversary next week.

While the Australian dairy industry is moving ahead with higher prices and significant expansion, particularly in Tasmania, it is losing market share.

The forum was told that since 2006 Australia’s share of the international dairy and milk market has dropped from 12% to 7%, because that part of our industry has not kept pace with global productivity gains and has not always had its foot in the front door of the booming Asian markets. Who has? New Zealand.

If Australian dairy farmers want to meet their target of increasing pro-duction by 70% by the year 2050, they will have to use much the same area of arable land that they have now and increase their output by an average 1.75% a year, compounding.

On my calculations, it is slightly less than that. At 1.75% growth a year, you would reach 70% after 30 years, but that’s dickering around the edges.

The dairy sector is actually improving its pro-ductivity per cow by 1.6% a year.

The beef industry has an annual productivity growth rate of 0.8%. In the wool and sheep industries,

the annual productivity gain is 0.1%.

The increase in the grain yield has slowed from 2.5% in the last half of the 20th century to just 1% now. There is one great incen-tive to increase yields and productivity: higher prof-its. Some farmers would settle for even just a profit. If a farmer can see a chance for a return, they

will do all in their power to grab it.

If we are to achieve even a small part of the potential that so many experts are identifying for agriculture, everyone involved from paddock to plate needs to be focusing on ensuring that farmers can do just that.• Jan Davis is the CEO of the Tasmanian Farmers and Graziers Association.

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18 // BREEDING MANAGEMENT

BETTINA AND JOHN McLeod’s herd ranks number 155 for profit

among Australian herd-tested Holsteins. It also ranks well above the

national average for type, milkfat and protein.

But the McLeods

Report highlights good and bad breeding decisions

don’t spend hours study-ing bull catalogues. Their achievement of a high genetic merit herd has come through a success-ful partnership with their breeding advisor, Graham Heaver over the past 15 years.

The McLeods dairy at Grasmere West, near Warrnambool, Victoria, with help from a full-time employee and John’s parents, Neil and Penny. Their 350-400 cow herd is milked three times a day, averaging 11,200 L/cow and 770kg milk solids/ cow (306-day lactation) and achieving a conception rate of 78.5% over a 10-week joining period.

A couple of times a year Mrs McLeod and Mr Heaver discuss the

herd’s breeding objec-tive, progress towards that objective, and specific pri-orities for the coming join-ing season. Mrs McLeod trusts Mr Heaver’s bull selections, and her metic-ulous record keeping allows them to keep a close eye on the results. This year they have been able to use the herd’s Genetic Progress Report to monitor long term trends and the impact of specific decisions.

“Graham understands what we want to achieve – improvements in the herd’s genetic merit for profitability and calv-ing ease – and within that brief, I leave it to him to choose the individual sires we use each joining. We have always been happy with the progress we’ve made and our Genetic Progress Report confirms we are heading in the direction we want to go,” Mrs McLeod said.

Mr Heaver selects sires from the Good Bulls Guide, focussing on prof-itability - the Australian Profit Ranking (APR), based on domestic ABVs

or overseas proofs – ABV(i)s.

“About 30% of sires are high genomic bulls as we see this as the next big step in genetic progress,” Mr Heaver said.

“Within those top APR sires we look to improve specific traits in the herd. Initially we looked at pins, but now that we’ve elim-inated high pins, it’s no longer a priority. All the bulls in the top for APR are pretty good for over-all type so we don’t look at that specifically. We look at components, mastitis, teat length, rump and calv-ing ease.”

The Genetic Progress Report has been useful in fine tuning the McLeod’s selection criteria.

“The report highlighted how much progress has been made for mastitis resistance in recent years; and as a result Bettina and I decided to place higher

priority on selecting for fertility within the top sires,” Mr Heaver said.

Mrs McLeod finds the Genetic Progress Report particularly useful for identifying and learn-

ing from past mis-takes.

“When I look at the graphs, I’m interested to see the dips – because they show where we made a mis-

take.”For example in 2006,

when Graham was over-seas on study leave, another breeding advi-sor chose the sires, purely for type without consider-ation of other traits. While the report shows a sub-sequent peak in genetic progress for type, it was accompanied by dips in profit, fat, protein, fertil-ity, and longevity.

“We now select our bulls well in advance, while we both have plenty of time – the herd was already above average for type and those high type bulls involved too much compromise in other traits that are more important to us.” she said.

“About 30% of sires are high genomic bulls as we see this as the next big step in genetic progress.”

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20 // BREEDING MANAGEMENT

FARMERS HAVE until the end of this month to influence the National Breeding Objective, with fertility and longevity among traits under the microscope.

With the release of the Australian Breeding Values (ABVs) for dairy cattle earlier this month, dairy farmers will be thinking about the type of cow they want to breed for their future herd, and selecting the appropriate sire.

Australian Dairy Herd Improvement Scheme (ADHIS) general manager Daniel Abernethy said it’s a perfect time for farmers to complete a survey about the NBO while they are focussed on their breeding priorities.

“The survey, which can only be completed on-line at www.adhis.com.au, uses a novel approach to enable dairy farmers to place a value on traits such as fertility, mastitis, lameness and feed conversion efficiency.

“It will give us powerful information about the traits that are important to farmers. And it will enable us to better align the national breeding objective to farmer preferences.”

Mr Abernethy acknowledged not all farmers have the same breeding objective.

“Individual farmers will prioritise traits differently. The survey is part of a review to develop a national breeding objective that most farmers are comfortable with. It’s about getting the big ticket items right,” he said.

Ray Kitchen, Carenda Holsteins, Bunbury, WA, said it was a good time to re-consider the amount of weight given to fertility in the Australian Profit Ranking.

Lucas Licciardello, Marden, South Gippsland, said he filled in the survey because he wanted to see more weight given to longevity in the Australian Profit Ranking (APR).

Bryan Dickson, Emu Banks, Terang, said the APR and Australian Breeding Values for fertility and cell count are good tools for us to use in achieving our breeding goals.

“The survey is an important step in reviewing the national breeding objective to ensure it continues to serve the collective needs of Australian dairy farmers.”

Brent Mitchell, Echuca, said he has strong views he plans to share.

“There’s no shortage of opinions out there. I’ve heard them at the pub, at field days and at shows.

“The survey is designed specifically to hear farmers’ views so that we can have a real influence on the evolution of the national breeding objective.”

Ray Kitchen

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BREEDING MANAGEMENT // 21

THE LAST 50 years have seen enormous changes in the area of assisted cattle reproduction.

Artificial insemination (AI) caused a revolution when it first appeared in the 60s. It has become pro-gressively more popular since and today we cannot imagine a dairy farm that does not use AI.

In the 80s multiple ovulation embryo transfer (MOET) became available as an alternative repro-ductive method for cattle. The animal is given mul-tiple hormone injections to stimulate and multiply her ovulations, after which she undergoes multiple inseminations.

In the late 90s the appearance on the market of sexed semen created a sensation, because it allowed the farmer to produce only female calves. This devel-opment was especially important for the dairy indus-try.

Then in 2000 the production of bovine embryos in vitro left the research laboratories and became a commercial proposition. This happened first in Brazil.

By 2003 IVF had been recognised by most Brazilian farmers as an important additional method of animal reproduction. Initially it was the preferred choice only when sexed semen was being used.

However, over time the economic advantages of IVF generally became apparent. One dose of semen can fertilise 150 eggs using IVF, whereas using MOET the same dose would yield a handful of embryos at most.

I see the same trend occurring in Australia, but in a much shorter time. It is my prediction that within the next two to three years, every dairy farmer in Austra-lia, like their Brazilian counterparts, will recognise the critical importance of IVF to their business.• Luiz Porto is business development manager for Inven-tia Genetic Technologies.

Brazilian farmers rapidly adopt IVF

LUIZ PORTO

GIPPSLAND DAIRY farmer Robert Low has won $10,000 to finance further development of his Heat Strap device that identifies cycling cows.

The device, which helps farmers determine when their cows are ready for artificial insemination, won Rural Finance’s Great State of Ag’s 2013 Seed Fund program.

Mr Low was presented with his giant cheque at Farm World last month.

Robert and his wife, Karen, milk a mixed herd of 239 cows at Trafalgar. The genesis of the idea began four years ago when many of their herd failed to conceive as expected.

“I contacted a company that has a type electronic device that goes on the cow’s leg and is hooked up to a complex computer system through readers placed in the dairy,” Mr Low says.

“This tells you when the cow is ‘on heat’ as they are more active during this period. The price was very high and out of my price bracket.

“I thought to myself why ‘can’t there be a sim-pler version of the same sort of device, one that doesn’t rely on being linked to an expensive computer program, a

devise that flashes lights when the cow’s activity shows that she is ‘on heat’.”

The Heatstrap is a small electronic unit that is attached to a cow’s rear ankle by a velcro strap. It records all of a cow’s movements and rests; and uses proprietary software to analyse this data to reli-ably detect when the cow’s behaviour changes.

This activates lights that cause the Heatstrap to glow red and alert the farmer to the cows that are ready for insemination.

After each detected heat event the Heat-strap automatically resets before continuing to mon-itor the cow for the next heat. It is designed to work for well over 16 weeks; long enough to cover pre-mating heats, three rounds of mating and a post-mat-ing round.

It can be furnished with new batteries and strap and reset to be used over again.

Mr Low said the Heatstrap was initially conceived as a particular form of pedometer; however early field trials were not able to achieve the targeted accuracy for all types of farms; considering cows, terrain

and climate. “Over the next three

years the product was developed to contain additional micro instruments; with more sophisticated software developed to collate, analyse and interpret the additional data.

“In parallel with this was development and tri-alling of enclosures to be small, strong and dura-ble enough to withstand the rugged service condi-tions.”

Mr Low said the final product has exceeded expectations in small scale trials. They are about to go into a trial involving 4000 cows. Mr Low said success in a large trial will enable him to quote its durability and reliability with statis-tical accuracy.

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22 // MANAGEMENT

THE NEED FOR feed pads on dairy farms is coming under question with farmers advised not to be distracted from growing their own pastures.

A Perfect Profitable Pastures workshop at Hawkesdale heard the costs of establishing and running a feedpad might outweigh the benefits for some farms.

Constant use of a feedpad might also impact on a farm’s ability to optimise direct grazing of home-grown feed.

Speaking at the workshop, John Mulvany of Onfarm Consulting, said he was “suspicious” of the benefits from feed pads on some farms.

“I’m not damning people who have feed pads,” Mr Mulvany said. “A feedpad if necessary on a farm can be very useful but don’t let it distract

you from making sure cows consume as much grass as possible and make sure you don’t waste fodder and create a problem which then has to be dealt with.”

Mr Mulvany said farmers could be tempted to overuse feed pads at the expense of home-grown pasture.

“You don’t have to use a feed pad all year round,” he said. “Just because it’s there doesn’t mean it has to be used. The more tools you’ve got, the more temptation you’ve got and the more you will use them.”

While saying farms need an area to put cows when it is wet to avoid pugging and paddock damage, Mr Mulvany said he was not convinced feed pads were a year-round option.

He said the industry was pushing concentrate levels to the limit but low fibre was affecting milk components and rumen health.

“We need a newsletter telling people

how to deal with low components,” he said.

The problem is exacerbated by the development of rye grass low in fibre and high in fat which means additives are needed to overcome unhealthy rumens.

“We need to add fibre at a cost and high substitution ratio and we then need a feedpad to feed our fibre. We then need to clean our feedpad which takes time, and we then need dollars to turn fibre waste into active compost and spread it on pasture,” Mr Mulvany said.

“That doesn’t seem real smart to me.”

He questioned whether some farmers would get a return on their investment, depending on their winter paddock conditions. “You will need extra production to get that money back.”

Mr Mulvany said at one recent

discussion group a farmer had a feedpad with “OK” quality silage that cows sift through.

“When we get out in the paddock, the cows are not eating grass as well as they were.

“The cows will manipulate you. You’ve got to create a world where they will not manipulate you.

“I wonder whether the wastage on the pad counterweighs any loss in the paddock. You can’t waste feed at 40 cents a kilo.”

Peter Notman, for Notman Pasture Seeds, who also spoke at the workshop, said his 550-cow farm has a feed pad but his 1000-cow farm does not.

“As a farmer myself, I would look

closely before I implement a feed pad. I’m not saying farmers who put them in have made silly decisions, but you want to question it first and make sure you’re doing it for the right reasons,” he said.

“You’ve got ask is your ground firm enough to drive on in winter to feed out and think about those sort of factors.”

Mr Notman said farmers also needed to consider effluent control, how to get rid of waste and if the system is efficient, fast and easy to clean, feed pads offer advantages in wet soils and undulating terrain.

“I believe a farm that doesn’t have one can be just as efficient as one who has and there’s less work.”

Feed pads come under questionRICK BAYNE

A FOCUS ON profitability and cost control rather than high pro-duction has helped DemoDAIRY to reverse its financial situation.

The Terang farm has reduced its stocking rates and imple-mented strict cost controls to achieve savings of more than $530,000 this year.

It has turned substantial losses of the past two finan-cial years into a profit of about $60,000 due to big savings in feed costs, herd costs, repairs and maintenance, and labour costs.

The farm is now sharing its experiences with the dairy indus-try.

DemoDAIRY farm manage-ment consultant Paul Groves told a `Focus on Profit – how to cut costs and achieve profits’ workshop on April 2 that “margin is king”.

“You can cope with good and bad years provided you have that

margin,” he said.Mr Groves said the first step

in achieving profit was looking at costs and making sure they are under control.

He said on the DemoDAIRY farm, costs were brought under control by reduc-ing the stocking rate by about 75 cows to 220 cows, from 2.5 to 1.9 cows per hectare.

The farm was achieving more milk solids per hectare than profitable farms, 1248 kg of milk solids per hect-are compared to more profitable farms producing 775, but produc-tion costs were prohibitive.

“For this farm it all came to adopting a reasonable stocking rate and reviewing costs, particu-larly feed costs,” Mr Groves said.

“Before you listen to a sales rep saying you will get more

production by adding this prod-uct, ask does it make me more margin?

“This farm had a history of putting in more feed to get more

production, but it didn’t make more money. You make more money if you use more home-grown grass but, more cows does not always mean more grass is consumed. It’s very difficult to achieve high per cow produc-tion, it is almost impossible to do high production and high stock-ing rate.”

Mr Groves said if the 2011-12 costs were repeated, even with

the improved milk prices, the farm would have lost $150,000 this year. “The changes have improved the business by $210,000 at today’s milk price,

and will result in a profit of over $60,000.”

For similar farms to com-pare to Demo-DAIRY they need to remove finance and labour costs.

The DemoDAIRY profit in 2013/14, excluding finance and labour costs, will be more than $260,000, or $1,155 per cow.

Before the changes were made, the farm was paying $211,103 for feed above industry averages for the amount of milk coming off the property.

“Because of the heavy stock-ing rate, the farm had been pushed into the corner to have

buy-in feed. The production cost per hectare was very high because of $1200 per cow of brought-in feed; it should be about $500 for the level of pro-duction that was achieved,” Mr Groves said.

“With this stocking rate we have more control. This autumn we’ve got the decision to feed more because we have a good milk price or feed with the feed we’ve got.

Mr Groves said the high stocking rate had impacted on repair and labour costs. “The repairs and maintenance bill was almost double the best perform-ing farms, which is systematic of a high stocking farm.”

The total farm costs/kg in 2012-13 was $5.90 compared with a five-year average of $6.40.

The total kg of milk solids production in 2012-13 was 102,000 compared to an aver-

age of 140,220 in the previous five years.

Mr Groves said this meant a $240,000 drop in income but that was balanced by the drop of more than $500,000 in costs.

He said farms would benefit from monthly budget reviews. “If people spend too much money in one month they should try to make it up in the following month. You need to control your business and know where your expenditure is.”

The farm expects to increase to 260 cows this year as more land becomes available due to trials finishing on about 20ha. Mr Groves said the stocking rate would remain about the same.

He said he did not believe the farm could achieve much more in cost cutting but could increase production from appropriate feeding and improved calving rates.

DemoDAIRY axes high production focus

Farmers at a Perfect Profitable Pastures workshop at Hawkesdale.

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MANAGEMENT // 23

DAIRY FARMERS should stay seasonal and make sure they get in the “$2 shop” when it comes to feed costs, a workshop has been told.

Speaking at a Perfect Profitable Pastures workshop at Hawkesdale, John Mulvany from Onfarm Consulting, said feed costs are the major outlays on any dairy farm and they can get out of control very easily.

“The daily feed cost per kilo milk solids can be a really good guide to how much grass you’ve got in the diet and how well things are working on a daily basis,” Mr Mulvany said.

“You can use a simple calculation – kilograms of milk solids being sent from the farm divided into the daily costs of feed. You need the daily feed cost divided by the fat and protein being sent off the farm to be less than $2.

“To be resilient in the long term with lower milk prices when they come back, you want to be in the $2 shop for a significant proportion of the year.”

Mr Mulvany said that farmers liked to quote margins and this year would likely have good figures because of the higher milk prices.

“Everyone should have a good margin this year because the milk price is carrying a very big chunk of that margin. But don’t assume a $6 plus milk price. Before people get too chest puffy, they should look at feed costs per kilo milk solids and if they are in the $2 shop then they can get chest puffy and be ready for when the price inevitably comes down.”

Mr Mulvany told the workshop that producing home-grown feed was still the best option for controlling costs. “When you look at the cost of $78 per tonne of dry matter pasture compared to $380 per tonne constitutes, you’re

not in the hunt unless you’re consuming direct-grazed pastures,” he said.

“March and April is the time to get your act together with your pastures.”

While getting their grass right and constantly monitoring feed and labour costs, Mr Mulvany advised farmers to stay seasonal but to throw out their traditional thoughts about the meaning of seasonal.

“We need to change our traditional understanding of seasonal meaning single calving just before spring. That’s an old-fashioned definition that no longer applies,” he said.

“You need to define seasonal for what suits your farm.

“People have split calving and are calving all over the shop. The term seasonal implies that you are calving to suit a pasture growth curve on the farm. That doesn’t have to be just before spring; it is calving and producing milk to match the pasture/forage growth

curve on a farm, plus hopefully other natural factors such as soil type and aspect.”

Mr Mulvany said seasonal should refer to a farm that tries to have as much direct harvest feed, pasture or crop, down a cow’s throat for as much of the lactation as possible.

“The ways of doing that and the time of doing that will vary from farm to farm right through the state. Each farm can have its own season.”

In south-west Victoria, for example, the Stony Rises will have good winter growth; Timboon will be better in spring and everywhere will struggle over summer.

“There are hundreds of low risk seasonal calving farms throughout Victoria, all with individual milk production patterns. This is the foundation of an efficient and equitable dairy industry,” Mr Mulvany said.

There was no statistical difference

in annual feed cost per kg MS of well managed seasonal herds that calve in autumn, spring or split calve.

However, he said milk processors have to come to the party and adopt payment systems that encourage farmers to produce milk in the most efficient manner and at a time to suit their natural resources.

“There is enormous variation in natural resources on dairy farms within all supply regions,” he said.

“The current range in milk price between farms is causing farmers to change from their most efficient pattern for their resources to a higher cost pattern, in an attempt to increase net revenue.

“There are far greater variables than seasonality of production that determine cost of production and profit.”

Mr Mulvany said studies showed annual farm operating costs are

poorly correlated with off peak milk production. He urged processors to think long term and reduce complexity and encourage efficiency.

“The evidence, based on farm costs, supports a differential of $1.00/kgMS maximum in Western Victoria between spring and non-spring months. This would lead to a “seasonal” farm variation of 35c/kgMS on an annual basis. The current differentials are spring zero, summer+ $0.45, autumn/winter +$1.48. This is not efficient, not equitable, and not justifiable.”

Mr Mulvany said Fonterra had acknowledged the inequities and would introduce a more transparent and fairer system from July 1.

“The seasonal differential will be more equitable.

“There will be no complex seasonal ratio payment system and every month will be independent. Hopefully the wheel is turning,” he said.

RICK BAYNE

Farmers should aim for $2 shop

THIS SEASON farmers should aim for quick feed because of higher out-side feed costs and stick to evidence-based proven options, says Peter Notman from Notman Pasture Seeds, speaking at a Perfect Profitable Pastures work-shop at Hawkesdale.

He recommended annual ryegrass for farms needing quick feed for low cost, Italian ryegrass for those needing quick feed and full year growth out of their investment and good quality perennial ryegrass for long-term invest-ment.

Mr Notman emphasised the need to do soil tests and add fertiliser if needed with nitrogen applications as early as moisture permits.

Getting pastures right is a key part of any farm business strategy, he said. “We have to optimise pasture productivity. If you don’t utilise pasture then

clearly it is going to make it hard to have a profitable farming system,” he said.“It’s about making sure things are done well…weed control, pest control

and fertility and putting in genetics at the right time.”Mr Notman said timing was important for autumn sowing and farmers

should use their observational skills, discuss pasture renewal with those knowledgeable in the area and recognise what works.

“Your past experience counts,” he said.

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24 // ANIMAL HEALTH

IN JULY 2012 the McDowall family farm at Childers Cove in south-west Victoria had a calf mortal-ity rate approach-ing 30% and

many surviving calves were being treated for ill-ness.

Calf rearing had been a problem on the farm for many years, but it was getting worse and with

a need to increase cow numbers after estab-lishing a second farm, dramatic changes were needed to reverse the

trend.

Following advice from Dr Gemma Chuck of The Vet Group, the farm totally revamped its calf rearing system, from feed-ing to housing to health management.

The turnaround has been amazing and has

given great relief to the family.

Today the farm has a mortality rate of less than 2% in pre-weaned

calves and

morbidity of 5%.“It is a headache that

we no longer have, which is a major relief for the family,” family spokesman Paul McDowall said.

The McDowalls had explored many options before but none had worked.

“It had been a problem the family had been trying to fix for years but it was snowballing and getting out of hand. It was becom-ing more costly because there are so many more animals.”

The farm had been bringing vets on site each week to monitor the prob-lem.

Dr Chuck, who is undertaking additional research into calf rear-ing through the Univer-sity of Melbourne, said the farm had been desperately trying to solve the prob-lem.

“They worked really hard to keep these animals alive, it wasn’t through lack of trying,” she said.

“The 70% who lived were a credit to them but they were in a sticky spot because they had some very virulent pathogens on their farm.

“When you’ve got a combination of different pathogens such as mul-tiple strains of Salmo-nella, E.coli, Rotavirus, and coronavirus, it was a recipe for disaster.”

It is believed the prob-lem escalated when the farm bought in cows to increase the herd size.

“It is likely that they also brought in pathogens without knowing,” Dr Chuck said.

Apart from the unac-ceptable death rate, the surviving calves never reached their full poten-tial because they had such a long period of sick-ness which reduced their growth rate and rendered them more susceptible to other illnesses later in life.

With bleak survival rates in July 2012, the farm undertook holistic change to correct the problem.

“It was attention to detail in all areas,” Dr Chuck said. “You can’t just change the feeding or the housing and expect every-thing to get better. It is all part of a larger puzzle.”

The new system was adopted in the existing farm shed and then repli-cated at the second farm.

The calf shed under-went a dramatic change with an automatic feeder replaced by individual

lock-in head bales at the front of newly configured, self-contained pens.

“I’m not against auto-matic feeders but it wasn’t working in their system because there were too many calves of different ages in a big pen. Younger calves weren’t using the feeder. They have a tight calving pattern and could only use the feeder for about 10 days before making room for new calves coming in,” Dr Chuck said.

“It wasn’t good use of the shed space so we changed the configuration and changed the method of milk feeding.”

Dr Chuck said it was important to have an indi-vidual feeding system for calves when feeding forti-fied milk (see story below) to ensure that each calf is getting its correct con-trolled volume each day.

Self-contained pens were installed featuring

RICK BAYNE

Drastic calf rearing changes reap benefits

CHANGING THE feeding system was a key ingredient to the successful trans-formation of calf rearing practices on the McDowall property.

The farm started using fortified milk, which involves adding calf milk replacer to whole milk. Calf milk replacer is usu-ally mixed with water but in this system it is mixed with whole milk from the dairy to create a high energy, high pro-tein feed. The mixing rates are con-sistent and very specific to avoid any nutritional upset in the calves.

“The system was used so we could feed the calves once a day with a smaller volume of fortified milk without com-promising nutrient intake,” Dr Chuck said.

“Because of the pathogens, we didn’t want to flood their gut with milk twice

a day. The calves still grew but we could keep the balance in our favour when we had such virulent pathogens present.

“If you try to feed high volumes of milk in a challenged environment where there are a lot of pathogens, their gut can’t cope with it.”

The same level of nutrients in eight litres of normal milk can be achieved in about 4 1/2 litres of fortified milk.

The fortified milk is transported in a milk cart from the dairy, and a trig-ger pump is used to fill each individual drinker.

Dr Chuck hopes to start trials later this year to support the theory that fortified milk can be used to achieve the same growth rates as conventional accelerated growth programs in the US.

Fortified milk boosts calf health

WHO: McDowall family WHERE: Childers Cove WHAT: Calf rearing changes

Paul McDowall and vet Gemma Chuck.

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ANIMAL HEALTH // 25

Drastic calf rearing changes reap benefitspiped-in water, solid par-titions between each pen to avoid nose-to-nose con-tact, improved ventila-tion from installation of whirly birds in the roof, and a three-layer bedding system on scoria, shade mesh and woodchip on top.

This allowed drainage and warmth and calves can stay in the pen until weaning without the need to top up bedding in between.

It also reduces creation of dust and aerosolising of pathogens when bed-ding needs to be topped up or removed when calves are still in the pen. Soiled bedding can be easily removed and cleared within half an hour using machinery.

There is a six-pen shed at the new dairy and a four-pen shed at the home farm. Each pen houses 20 calves. The set up means 200 calves can be fed in just over an hour.

The hastily estab-lished first trial of the new system was a failure with only three calves surviv-ing from the first pen, but the second pen was sub-stantially better with only two deaths and since then the farm has been virtually without loss.

The farm has also adopted a strict vaccina-tion and biosecurity pro-tocol. “Vaccination has been an important health management piece of the puzzle. We strategi-cally vaccinate for various pathogens to help control disease,” Dr Chuck said.

The changes have also improved the biosecurity of the herd. “They don’t

have to buy-in cows now and can operate a much more closed system.”

Mr McDowall said the farm, which has about 1050 cows across the two properties, was purchasing high quality Holsteins but constantly having major issues with rearing calves that were progressively getting worse.

“We had bought top 10% of cows but couldn’t rear the calves as success-fully as we wanted even though we put a lot of work and a lot of money into it. Unless we can carry on with that quality and keep the calves and prog-eny from those cows it’s a waste,” he said.

Mr McDowall said the farm had unsuccessfully tried for years to fix the problem.

“Gemma explained her research. We were a bit sceptical at first about changing everything but if we lost 100 calves that’s potentially $100,000 and the problem was beyond that with so many sick calves.

“When we brought in cows for the new farm they brought in pathogens and the problem grew. We are fortunate we now know the problems and can deal with it.

“We started vacci-nating the cows for the different viruses and dis-eases Gemma had found and in spring 2012 segre-gated them into pens of 20. It was a complete turn-around. It was the system Gemma uses that made us successful.”

Dr Chuck also con-ducted autopsies on dead calves to find the cause of death.

The changes have been profitable for the farm.

“Up until last year we were still buying replace-ments, now we will have an excess within the next six months. That has never happened before. We’ll get to the point that instead of buying heifers we will be selling heifers.”

That has helped to make the investment cost effective. The McDow-alls spent about $10,000 updating the old shed and

about $60,000 on the new shed.

“It‘s really only the cost of the head bales to make feeding individual to ensure the volume is right. It is far less stressful as well because the calves aren’t jumping all around the place,” Mr McDow-all said.

Mr McDowall and Dr Chuck spoke at the recent Australian Dairy Confer-ence about the calf rearing changes.

FROM PAGE 24

Automatic feeders were placed with individual lock-in head bales at the front of newly configured, self-contained pens.

The McDowall family built a new calving shed for $60,000.

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I AM WRITING from the beautiful Hunter Valley in NSW where I have just spent a couple of days touring the manufactur-ing facilities of Jurox, one of the only manufactur-ers of animal drugs left in Australia.

Living in Shepparton, I have a good insight into the challenges facing the manufacturing industries in Australia, and to see an

Australian owned com-pany manufacturing veter-inary drugs and chemicals to world’s best practice, and undergoing such impressive expansion, was inspiring.

In addition to the plant tour, and partaking of the Hunter’s fine produce, myself and some other vets representing some of the biggest dairy practices in Australia had an open

and interesting discus-sion with the key staff and

the owner of Jurox about where things are heading regarding the use of veteri-nary medicines.

One topic discussed was the vexed question of Antimicrobial Resistance (AMR) and the challenges that agriculture in Australia, and worldwide, faces as the regulators look for ways to prevent AMR creating “superbugs” for which there may be

no effective antibiotic treatment.

Superbugs have been receiving a lot of media attention lately, and with good reason.

Because animal agricul-ture, by volume, is prob-ably the largest user of antimicrobials, a lot of scrutiny, and a lot of the blame for emerging resis-tance is being placed at our feet.


26 // ANIMAL HEALTH

ANIMAL HEALTHROB BONANNO

Farmer role critical in preventing superbugs

In Australia in the year 2010, it was estimated that 359 tonnes (that isn’t a misprint) of antibiotics was used in Animal pro-duction in Australia.

Admittedly, dairy farm-ers make up only a tiny proportion of that, but none the less, it is impor-tant we look at ways we can better manage our stock to reduce the use of antimicrobial products.

It got me thinking about how responsibly I actually prescribe antibi-otics for the animals in my care.

As a veterinarian, I am bound by the law to follow the prescribing rules outlined in the rel-evant acts of parliament. As a member of the Aus-tralian Veterinary Asso-ciation, I also strive to uphold the ethical obliga-tions that come with being a member.

This relates to not just lawfully prescribing med-ications but to providing adequate education and instruction to my client to ensure prescription animal medicines are used responsibly.

This is still a work in progress because many times I am too busy or oth-erwise occupied to fully explain the reason why I have prescribed a certain medication. This can lead to people accidently mis-using a medicine which can have serious conse-quences.

I don’t think I have ever been on a dairy farm anywhere and not seen shelves, boxes or rusty old fridges with half used bot-tles of various drugs lying around.

Did the vet prescribe more of the medication than was needed, or did the farmer just give one or two doses and just stop when the cow looked better?

The other concern is the illegal or unethical supply of veterinary medicines by veterinarians, or increasingly by non-veterinarians who have minimal, or sometimes even no valid client-patient relationship with a farm.

These lawbreakers have no respect for their role in hastening the emergence of superbugs and the risk that unregulated supply of veterinary medicines is to our local and international trade.

The bottom line is this: As an industry, dairy farm-ers and the veterinari-ans who service them can either pro-actively address responsible use of antibi-otics issues, or rules will be imposed on us as has happened elsewhere in the world.

In parts of Europe, the use of antibiotics is so restricted, farmers cannot even administer them, instead they must use a veterinarian or licensed person to administer all prescription animal medi-cines.

Our industry could not bear a cost imposi-tion like this and hence I would encourage all farms to review their own antibi-otic use, and ensure they are compliant with not just the law, but achiev-ing best practice stan-dards before regulation is imposed on us.

This isn’t a joke! The World Heath Organisation is calling for critical action on AMR and antibiotic resistance is estimated to cost the Australian com-munity up to $500 million each year with the poten-tial for that to grow expo-nentially.

The WHO has listed a number of antibiot-ics of critical importance to human health which include such commonly used antibiotics in dairy practice as Penicillin and Excenel. Imagine if we were no longer able to use these antibiotics.

Maybe it is time for all readers of Dairy News Aus-tralia to take a look at their own use of antibiotics on their farm, and to make an appointment with the local dairy veterinarian to discuss how you can help to prevent the emergence of antibiotic resistant bac-terial “superbugs.• Rob Bonnano is a past president of the Australian Cattle Veterinarians Asso-ciation and a director of the Shepparton Vet Clinic.

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ANIMAL HEALTH // 27

RAIN IN autumn and winter can come with a sting in the tail as the risk of nitrate poisoning of stock increases when a dry spell is followed by rain or a run of moist, overcast days.

Ballance Agri-Nutrients science manager Aaron Stafford said after a dry period, lack of moisture stops plant roots from absorbing nitrate.

“When the rain finally arrives, roots suck up nitrate rapidly, with the pasture accumulating high levels in the stem and leaves,” he said.

“After a drought-ending rain, it could be two weeks before nitrate levels in pasture stabilise at safe levels, provided environmental conditions are favourable.

“Hail or light frost can also damage plants, affecting photosynthesis and leading to elevated nitrate levels.”

Mr Stafford said plants usually absorb soil nitrogen as nitrate and convert most of it into ammonium and amino acids.

But weather conditions in late autumn and winter can sometimes interrupt the conversion process, increasing the risk of nitrate poisoning.

All ruminants can be affected. Cattle are the most susceptible with young stock more vulnerable than old.

Nitrate poisoning sets in rapidly after an animal eats pasture or feed with excessive nitrate levels (0.21% or 2100 parts per million and above is considered ‘at risk’).

Mr Stafford said rape is known for high nitrate levels, closely followed by other brassicas.

Vigorous ryegrass (especially annuals) can create problems, as can cereal green-feeds. Nitrate concentrations are generally higher in new plant growth and decrease with age.

Stalks are highest in nitrate content, followed by leaves and then grain. Notably, young pastures (eg those re-sown in the last 1-2 years) generally

present greater risk to grazing livestock than older pastures.

“Nitrate poisoning progresses quickly and has no ready cure so prevention is important. Testing pasture and feed for

nitrate is one option but there are other ways to mitigate the risk.”

Farmers who suspect they have a high nitrate risk can use the following strategies:

■ Split nitrogen applica-tions late in the season to distribute nitrogen better. Apply nitrogen after grazing.

■ Don’t put hungry stock on high-nitrate feeds. Give them a low-nitrate feed first, preferably one that takes a while to digest (such as straw or hay) so they are less likely to gorge them-selves on risky pas-tures.

■ Dilute high-nitrate feeds with low-nitrate feeds. This helps microbes in the rumen adapt to high nitrate feeds. Adjustment can take three to four weeks.

■ Pasture nitrate levels are highest overnight and in the morning. Where possible restrict stock access to pas-ture (particularly in the morning grazing) until animals have been sup-plemented with low nitrate feed. This could involve in-shed feed-ing, use of feed pads or laneways, or fencing off areas on pasture to feed out supplementary feed and reduce pasture

Rain a blessing, but beware nitrate poisoning

access. ■ Minimise stock intake

of pasture in the first 1-2 weeks following drought-breaking rain. This requires adequate supplementary feed to cover this most at-risk period.

■ Stock lightly, so ani-mals can selectively graze and avoid hard grazing - the lower part of stems have the high-est nitrate content.

■ Provide a lot of clean drinking water for stock on high nitrate forage.

“Nitrate poisoning sets in rapidly after an animal eats pasture or feed with excessive nitrate levels.”

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now without this sort of system,” Mr Smith said.

The farm has been able to reduce its mastitis rate, increase milk production, save on feed and herd test costs, and mostly main-tain premium cell count levels since introducing the system.

It uses CMT chemis-try to provide a cell count measure, and is combined with a YieldSense+ sensor that measures volume, fat, protein, temperature, lac-tose and conductivity.

Mr Smith said the farm had been able to better target its feed as a result of the daily flow of informa-tion from CellSense.

“When you’re feeding for production you need to know how many litres a cow is producing each day. We can feed to pro-duction; higher cows get fed more, lower cows and

stale cows get fed less,” he said.

“We don’t have to herd test to that. We can do it all in-house which is much better and much less hassle.

“We save a lot of money on grain. Stale cows don’t need to be fed as much as fresh cows and once you’ve got that under control you’ve got a big saving.”


28 // TECHNOLOGY

Cell count sensors help lift milk production

Paul Smith with his parents, Barry and Andrea.

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In late 2011 the Smith farm in south-west Vic-toria installed Jantec Sys-tems’ CellSense in-line cell count sensors.

With extra cows and a

desire for extra produc-tion, the farm needed to better monitor inputs and outputs and herd health.

Two and a half years later the investment has proven worthwhile, espe-cially in a year with better milk prices.

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MI11527_280x187.indd 1 6/04/14 5:42 PM

SOME FARMERS may be able to milk an extra 10 cows per robot by changing the amount of feed offered in the early evening, according to recent research conducted by FutureDairy postgraduate student, Alex John.

Most of Australia’s grazing based automatic milking systems (AMS) operate with voluntary cow movement: the cows move by themselves from the paddock to the dairy and around the farm.

Grazing cows tend to be less active after mid-night, so robots are often idle during the early hours of the morning.

Better cow movement is achieved by offer-ing cows three allocations of pasture a day rather than two which is typical of a conventional milk-ing system.

Mr John studied two commercial dairy farms with consistently good voluntary cow movement.

On most AMS farms, cows receive about the same amount of feed at each allocation but both of these farmers offered less during the evening. One of the farms achieved more evenly distributed milk-ings, which meant better robot utilisation and less time spent fetching cows.

In addition to the labour saved in fetching cows, Mr John said the results suggest this system may enable AMS farmers to milk more cows per robot, achieving a better return on investment in milking equipment.

This study is the first evidence of being able to achieve an evenly distributed milking pattern over a 24-hour period with a reduced need for fetching in a commercial, pasture-based automatic milking system.

Change pasture allocation for robots


TECHNOLOGY // 29

Cell count sensors help lift milk productionBefore the CellSense

was installed, the farm was blanket feeding all cows. “The fresh cows and the stale cows were all getting the same which wasn’t efficient,” Mr Smith said.

Now fresh cows up to 150 days are getting a basic feed of about 9kg from dif-ferent sources. After about 150 days they will switch over and get fed according to how many litres they are producing. As they start to dry off, the feed will again be cut.

Every fourth bale has a meter which means every cow gets read once a week. “As soon as a cow gets read it gets logged on the computer and depend-ing where she is, we decide how much she gets fed,” Mr Smith said.

The technology is con-tributing to the farm’s improved production over the past two years.

“We are about 2000 litres a day up on last year; we are milking a few more than this time last year but only 20 or 30 more. We’re having a good year,” Mr Smith said.

“We want to push it to what the farm can hold. While the milk price is up, why not go for it?”

Mr Smith said a lot of factors contributing to the improvement. “It’s hard to put it down just to cell count. Whether it’s the season or we’ve done better on irrigation, there are a lot of variables.”

The system has also helped with health man-agement.

“When you have 850 cows going around and different workers in there, it’s hard to keep on top of things like mastitis,” Mr Smith said.

He said the farm’s mas-titis rate per cow had

dropped since installing the system.

“It will pick up what cows have a high cell count and throw up an alert on the computer. It identifies those cows with high cell count so you can strip test them, see what it’s like manually and then treat it accordingly.

“If we find a cow with a crook foot we manually put it in and it will auto draft it for us once we log it. After it’s treated it will remind us to retreat it and tell us how long she is out of vat as she comes on the platform. It is much easier than checking more than 800 cows. It helps a lot.”

Mr Smith said the system had led to time and expense savings in herd tests and book work.

“We were doing herd tests every six weeks, which is a hassle. You also save on a lot of book work

because it is done auto-matically on the com-puter.”

The farm is keeping its cell count well controlled and is mostly in the pre-mium milk level.

“We teeter on the edge of going from premium

into first grade which I put down to our wide calving pattern,” Mr Smith said.

“We start calving in December and go right through till September. If you’ve got a lot of stale cows out and fresh cows at the same time, the cell

count is hard to keep under control. We manage mostly to keep in premium and I think CellSense helps a lot.”

The system cost about $50,000 but Mr Smith said it had been a good investment and

was leading to significant savings in herd testing and feeding time and costs while contributing to higher production.

Mr Smith runs the farm with his brother Stephen and parents Barry and Andrea Smith.

Barry and Andrea Smith.

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30 // MACHINERY & PRODUCTS

Effluent push drives expansionA RECENT INCREASE in farm-ers interested in composting their on-farm waste has led to a West-ern District contractor purchas-ing their second purpose-built rear discharge manure spreader. Aghire Contracting, based at Naringal, just east of Allansford, handles pit silage and pasture renovation among other jobs, but effluent management has become a key ele-ment of the business.

The Membrey family, Bruce and Maureen, run the business, with Bruce being a third generation farmer on the property. One son, Brett looks after the dairy, milking 800 cows on an automated 60-unit rotary, and Travis, who spent seven years as a diesel mechanic with a John Deere dealership, has the responsibility of maintenance. As he says, “Making sure everything is ticking along.”

For effluent management they have a 17,000 litre Garcia vacuum tanker, from Spain with a Ger-man-built Nevada PTO pond stir-rer, imported from New Zealand, to pump out and distribute the manure.

They originally purchased a Bunning Lowlander 120HBD spreader in December 2012.

G.T. Bunning & Sons Ltd are based in Norfolk, UK, and have an established reputation for manu-facturing manure spreaders. Travis likes it because it is low to load, the bin basically sits inside the wheels and they can load it easily with a JCB 513-70 telehandler. It has scales and an automatic rate control with electronic monitor.

Their second Bunningsspreader, which is a similar model, came on board in February this year, as part of an expansion in the efflu-ent management area of the busi-ness. “More farmers are going to composting,” Mr Membrey said. “It has really increased in the last two years, spurred on by the high cost of fertiliser. You have to use your waste, putting it on to the paddocks is an obvious solution.”

An interesting element is, unlike most ag equipment, cus-tomers can choose the colour of their new Bunning machine. The original one was blue, because it was already in stock in Victoria, but for the second one, because Travis is a dyed-in-the-wool John Deere man, they went for green. The machine was supplied through Landaco Equipment, based in Wagga Wagga, NSW.

Mr Membrey said the Bun-ning spreaders are great for car-rying up to 16 tonne and are used mainly for compost and lime. Lime is spread at about 3 tonne/hectare and compost at 4 tonne/ha. “Lime

will get busier; we can do 15 tonnes per load.”

The Bunning Lowlander 120HBD has a carrying capacity of 14.6 cubic metres and uses large diameter spinning discs with multi-position spreading blades. Blade angle is adjustable to achieve the correct spread patterns for a wide variety of materials, spreading from 12m to 30m, depending on the nature of the product being spread.

Horizontal beaters are dynam-ically balanced and fitted with removable hardened Boron shred-ding blades to process tough mate-rials and deliver a consistent flow to the spreading discs. Full width floor slats clear the whole floor eliminating the possibility of bridg-ing – a problem sometimes encoun-tered with multi slat floor systems.

Travis Membrey said main-tenance on the spreaders hasn’t presented any problems. “A set of paddles lasts a season, running them at 1000 rpm creates wear par-ticularly with big rocks in the pad-dock.”

He said the machines are very

easy to use, they have had a vari-ety of drivers; up to five during the year, so swapping around hasn’t seen any issues.

The fleet of John Deere trac-tors at Aghire Contracting encompasses a JD7200R, two 7730s, a 7920, a 6150R, a 6430 and they have just taken delivery of a 6125M. All the tractors have come from Windmill Ag in either Terang or Hamilton. The spreaders are usually operated by one of the John Deeres between 170 – 200 hp, with GPS guidance.

Other equipment in the con-tracting side includes three Schuitemacher silage wagons, a rake and tedder, Roterra harrows

and air seeder, plus a four furrow reverse mould-board plough. For their own on-farm work, they have a Bogballe spreader, Duncan drill and a GoldAcres sprayer with 3000 litre tank and 18m boom. A Keenan

mixer wagon is used at the feedpad.“We are utilising a lot of our

own compost and this year we used 1400 tonne, we’re much more con-scious of preserving manure,” said Travis. ”Instead of washing it down the drain, we pick it up and take it back, including scraping the tracks twice a year. Anything can get com-posted, including all the calf bed-ding.”

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WHO: Membrey family WHERE: Naringal via Allansford WHAT: Bunning manure spreaders

Travis and Sasha Membrey and their daughter, Taylor.

Travis Membrey with his daughter, Taylor, and new calves.


MACHINERY & PRODUCTS // 31

Feed tested in 24 hoursNEW FEED TEST analysers based in Toowoomba, Shepparton and Charlton will give dairy farmers a 24-hour turnaround in assessing the feed quality.

The new FOSS NIR DS2500 machine based at Feed Central’s laboratories is described as a major breakthrough for farmers.

Feed Central managing director Tim Ford said the quick turnaround time would allow farmers to use the information while it is still relevant.

“This allows farmers to implement any changes as a result of the feed analysis results before any pro-duction implications have occurred,” Mr Ford said.

“Feed rations are becoming increasingly sophis-ticated. Even on a traditional 200 cow family dairy farm knowing that your hay or silage is 10 Metabo-lisable Energy (ME.) or 9 ME can make a massive dif-ference to your milk production. It will allow you to change other ingredients to maximise milk in the vat the very next day so it is critical to have the informa-tion we provide within 24 hours.”

Feed Central has secured the exclusive Australian licence with USA-based laboratory Dairy One for the FOSS NIR (Near Infra-red) machines that produce more than 30 key parameters for each sample.

Feed analysis is currently available on hay, grain and silage with calibrations only weeks away for TMR (Total Mixed Rations), and pellets. All information is emailed to customers on a Feed Central Quality Statement for their records.

The machines deliver precision results in under a minute, with analyses fully calibrated with Dairy One.

Consistent weight gain anywhere on farm GIPPSLAND DAIRY farmer Ian Hooker had problems with calves gorging on pellets and developing grain overload.

It’s a serious condition that can leave stock with damage to the rumen, or even kill them.

The dilemma Mr Hooker faced was how to spread rations out over the full day without having to visit them constantly.

He purchased a Lely Cosmix M mobile feeding station, which is designed to tow to wherever the calves are and left in the paddock.

The electronic scanner reads a calf ’s ear tag and dollops out 50 grams of pellets. The calf can come back as often as she likes, until, over 24 hours, she’s received her full 2kg ration.

Mr Hooker bought the Lely Cosmix M for his 190ha dairy farm at Loch, Vic. He’s had up to 80 calves feeding from it though he reckons a maximum of 70 is better.

“They get a set diet and I only have to fill it up once a week. The

animals take to it once they know it’s there. It has a stainless steel tray and the feed makes a rattle so all the other animals put their heads up and they quickly cotton on.”

Power for the Cosmic M comes from solar-charged batteries, allowing farmers to put the calves wherever the best feed is on the farm.

It takes one tonne of feed and is easy to load. Just roll back the canvas top and bucket it in with the front-end loader.

The Lely Cosmix M can feed out grain – straight or mixed – but Mr Hooker always uses pellets.

The Cosmix M can be set up to give different sized rations to dif-ferent animals.

Livestock around any feeder make a mess so Mr Hooker moves his Cosmix M every time he fills it. He also puts rubber mats down to minimise the pugging and will eventually put in a concrete pad.

Mr Hooker bought his Cosmix M two years ago from sales rep Daniel Upston at Traf Tractor and Machinery in Trafalgar.

Ian Hooker with his Lely Cosmix M mobile feeding station.

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SPRAYING IS such an important process that today you just can’t take chances. You have to comply with the label requirement, use the right droplet size and observe no spray zones.

It’s not easy, but Hardi is making it easier with the Ranger 2500.

It has a 2500 litre main tank, 19 litre personal hygiene tank, 1203 PTO diaphragm pump, three-stage filtration and boom options from 12.5m to 21m.

There are many additional optional features avail-able.

Farmers can unfold and fold the boom without get-ting out of the cab and can adjust the boom height on the run which is great for those paddocks where you need to get the boom up out of harms way quickly.

The boom has coil spring suspension so it won’t fall apart while you’re bouncing around the cab. The noz-zles are protected behind the boom so you won’t knock them off the operator misjudges things.

The 2500 litre tank is integrated into the chassis with low centre of gravity, and a single axle with 14.9 x 24 tyres easily carries the load with floatation and plenty of crop clearance.

A ChemFiller is also available so the operator doesn’t have to climb up the tank to tip it in the top.

The standard SprayBox in-cab control gives the operator boom section and pressure, or there is the option of application rate controller.

The options available for the Hardi Ranger 2500 are there to make spraying easier and more convenient.

Hardi has provided the following spraying tips: ■ Visit the Hardi website and use the nozzle calcu-

lator to find the best nozzle for the spraying task at hand. Click on the red nozzle cap to access the nozzle calculator page.

■ If not sure about which nozzle type to use then consider Mini-Drift. This produces a coarse spray quality which most labels are moving to.

■ Read the label as there is a lot more information on them today that you should be aware of.

■ Boom suspension is a must.Tel. 1300 042 734

Hardi makes spraying easier

NEW ZEALAND DAIRY manufacturer Waikato Milking Systems recently supplied a 54-bail Orbit Concrete Rotary for North East Victorian dairy farmers Peter and Rachel Romans, Kergunyah.

The Romans also selected a range of products designed and manufactured by Waikato Milking Systems, including SmartECRs electronic cup

removers, the SmartD-TECT automatic mastitis detection system and SmartWASH for an excellent clean every milking.

Mr Romans said he wanted a system that would be efficient, reliable and future proofed, and he went with Waikato Milking Systems because of its excellent reputation.

Waikato is now also

supplying top-end systems to several Chinese farms with high yielding animals, milking several thousand cows up to 22 hours per day, every day of the year.

Waikato Milking Systems and automation partner Afimilk have contracts to supply a large number of total milking systems to a number of China’s biggest dairy entities, including

Mengniu Dairy and Bright Dairy. One customer has purchased 12 80-bail rotaries and one 40-bail rotary and is expecting to milk over 50,000 cows through these systems.

Each rotary will milk several thousand cows, three times a day. Waikato Milking Systems says its products are exceptionally durable and reliable with very little

maintenance needed – ideal for withstanding the rigours of 24-7 milking environments.

Design innovations unique to Waikato Milking Systems include extra strong and lightweight composite rotary platforms.

“Waikato Milking Systems specialises in rotary milking systems for quick and efficient

milking of large herds. Our state-of-the-art rotary technology makes herd management easier, more accurate and more efficient,” said international sales manager, Grant Wisnewski.

The company is operating in more than 30 countries with expansion plans underway for the Australian, UK and

Chinese businesses. Waikato Milking Systems partners with international herd management experts Afimilk on many installations around the world.

Afimilk’s extensive range of products includes milk yield, fat and protein measurement, auto sorting, feeding, weighing, and heat detection.

Waikato extends global reach

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MACHINERY & PRODUCTS // 33

LOGAN CONTRACT-ING, at Ecklin in Victo-ria’s Western District, has recently expanded its agri-cultural contracting ser-vices to dairy farmers to include effluent manage-ment, pumping out efflu-ent ponds and spreading the manure over farm pad-docks.

Glenn Logan said he was originally looking at a vacuum tanker, but spoke to John Moloney from GEA Farm Technologies at the Sungold Field Days in 2013.

A consideration was that vacuum tankers are slow to load and unload when the effluent gets too thick. If the effluent is very thick, sometimes they cannot load at all.

So he purchased a Houle EL 44 6D tanker and manure spreader with a capacity of 23,300 litres, along with a Houle Super Pump, just prior to Sun-gold 2014, where they were on display at the GEA stand and were put to work straight after.

The Houle effluent management products are part of the range offered in Australia by GEA Farm Technologies.

The Houle EL 44 6D has a triple axle with steer-ing on the front and rear wheels and air brakes.

“Both machines have performed very well in the month or so since Sun-gold,” Mr Logan said.

“We have worked on about 15 farms with most effluent ponds being between one and two megalitres, up to 4 ML. It takes 43 loads per megali-tre. A two megalitre pond takes about 18 hours to empty, depending on the distance that we have to take it to the paddock.”

The stand-alone Houle Super Pump is powered by a 180hp John Deere 7530 tractor to agitate the material in the efflu-ent pond, break down the solids and pump it into the manure spreader which then spreads the manure onto the paddocks in a 12m swath.

Mr Logan has a 7 series John Deere 7280R to oper-ate the tanker.

The Super Pump is designed to pump thicker manure, with shredder blades to break up large chunks. The manure is transferred to the tanker through a 25 foot alumin-ium loading pipe.

The Super Pump takes about five minutes to set up at the pond and it is easy with its levelling legs. The tanker can then arrive and start straight away.

“The thicker the efflu-ent gets, the harder it is to pump. The Super Pump is down in the pond and pushing the effluent up into the tanker. The 23,300 litre tanker fills in about 2½ minutes.”

Mr Logan said once on the paddock it takes just two minutes to spread the manure.

The throw width and volume of the manure dis-persal from the tanker is constant and the degree of coverage is governed by the forward speed. They run at between 4 and 8km/h.

“We’ve had no problems with the tanker in the paddocks in the work that we have done so far. It is very manoeuvrable with front and rear wheel steer and it leaves a light footprint.”

The whole operation of the Super Pump and the tanker/spreader is han-

Breaking up the thickest effluent ponds

The Houle EL 44 6D super tanker and manure spreader.

dled from the cab of the JD7280R by a remote con-trol hand-controller sup-

plied with the Houle set-up. Tel. GEA Farm Technolo-gies 1800 789 100

ABVsDairy farmers who want to breed for improved fertility and workability will be keen to investigate the April release of the Australian Breeding Values (ABVs).The new fertility ABV is a better indicator of the fertility of a bull’s daughters because it draws upon the data for for several traits, including lactation length, mating and pregnancy data. This is something farmers have been asking for and Dairy News Australia will investigate how it can impact on-farm breeding programs. We’ll also examine the bulls with the highest Australian Profit Rankings and how they could influence your breeding program.

BOOKING DEADLINE: April 30 AD MATERIAL DEADLINE: May 6PUBLISHED: May 13CONTACT: CHRIS DINGLE | T: 0417 735 001 E: [email protected]

NEXT ISSUE: MAY 2014

SPECIAL REPORT



THEY SAY YOU can take the boy from the farm, but not the farm out of the boy. That prob-ably best explains how a lot of us who grew up on a farm but work in offices find ourselves running a few acres on the side. And if you grew up ‘dig-ging’ heavy machinery like I did, those acres are also a means to an end: owning

some diesel-burning steel of your own.

Whether you drive tractors for fun, a living, or both, the Deutz Fahr DX series would have to be one of the classics in the midsize segment. In many ways the answer to the Case 5100/5200 Maxx-ums and the John Deere 6000s before these even appeared. You don’t have to go far in most farming areas to find a DX, yet they hardly ever turn up for sale

in any numbers. That’s got to say something.

So what is it about these machines that make them worth holding on to? It can’t be the looks - I mean they do grow on you but a DX will never look as smooth as a Case 5250. The hydraulics are slow, and the gearbox - with-out a shuttle - is nothing to write home about (even if they finally sorted out the early issues by the third series). The legendary air-

cooled Deutz engines are something special though. Solid and reliable - you know you’re getting every one of those horses prom-ised in the brochure. It’s a terrible shame they don’t fit them to tractors any-more. Maybe that limited edition feel is part of the appeal.

In terms of an opera-tor experience, tractors have certainly come a long way since these machines were built. Placement of the various controls seems more to do with where all the mechani-cal linkages can be routed than it is with ergonomics. The only suspension is in the seat, and sticking the exhaust and air cleaner directly in the field of vision obviously wasn’t considered an issue. Fur-thermore, my DX is the only tractor I’ve ever driven where the engine

Deutz Fahr DX ahead of its time

Case IH expands CVT offeringCASE IH HAS announced its Continu-ously Variable Transmission (CVT) tech-nology is now available for the Maxxum tractor line up, on the Maxxum 110, 120 and 130 CVT models.

First introduced into the Australian market with the Puma family in 2008, Case IH says the CVT simplifies tractor operation while also delivering the best balance of power and fuel efficiency.

“Case IH continues to deliver on cus-tomer requests by taking the multi-pur-pose Maxxum tractor, which is known for its ability to handle large workloads, and furnishing it with technology to improve engine performance and fuel efficiency,” said Case IH product specialist, Peter Elias.

“And customers tell us they really appreciate how easy the Case IH CVT is to use, even for inexperienced drivers. There’s no programming required; you set the speed and direction you want to go and the tractor does the rest.”

CVT combines the stepless speed variability of a hydrostatic transmission with the mechanical efficiency of a tradi-tional gear transmission.

“It delivers power to the ground effi-ciently at every speed, for the ultimate in smooth, stepless shifting—from creeper speeds as low as 30m per hour all the way

up to 50km per hour for transport opera-tions,” Mr Elias said.

Case IH offers an active stop feature that is especially popular, according to Mr Elias.

“You simply pull the MultiFunction Handle all the way back, and it will stop the tractor without having to push the clutch. This makes it easier to operate the tractor, and it makes starting and stop-ping simpler than driving a car.”

This functionality also applies to the foot throttle and is especially useful when backing the tractor up to hitch to implements. Not only is this process easier, it’s also safer.

All Maxxum CVT tractors are equipped with standard Power Boost, which provides additional engine power of up to 20 horsepower to main-tain working speeds in tough crop condi-tions or on inclines, and to provide more power for roading or for mobile hydrau-lics or PTO applications.

Maxxum CVT tractors also feature increased hydraulic capacity for more responsive implement and steering con-trol.

Adding to the ease of operation for new Maxxum MultiController models is an updated Case IH Multifunction Handle that simplifies operation.

noise seems louder inside the cabin than outside.

But they get the job done. And these days they still fill many roles as well or better than a much newer equivalent. Maybe no longer the best tool around for a long day on rough paddocks, but more than tough enough to handle utility work around the place.

Rough and reliable, simple but powerful, noisy yet frugal on fuel, these tractors also appeal to those who don’t mind a bit of a racket, and secretly enjoy crashing around the cabin as part of the expe-rience. And after all, any control placement seems ergonomic compared to reaching over your shoul-der to wrench on the ropes

of the old Buttsworth scoop I’ve got on the back to build my laneways and drains with...but that’s another story.• John Droppert has no mechanical qualifications, but has been passionate about tractors since before he could talk and has oper-ated many different makes and models in a variety of roles for both profit and fun.

JOHN DROPPERT

John Droppert and his Deutz Fahr DX.

www.seymourrural.com.au

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The new Seymour Composter 3000 is the ideal machine for you to create compost on your own farm.

• Designed for tractors from 75 hp

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To find out more about this innovative machineContact Colin Stray, Seymour Rural Equipment, Seymour VIC 03 5792 1100 or 0418 576 660 email: [email protected]

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www.seymourrural.com.au

SR11523_SRE_100x148_SR.indd 1 6/04/14 5:44 PM

See your local dealer for all available configurations. Visit www.hardi.com.au or call 1300 042 734

With the best boom ride in its class and booms from 12.5 to 21m, RANGER 2500 delivers outstanding performance that will boost your application efficiency and productivity. PADDOCKS AHEAD

Apply Liquid Urea

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A HARD-WORKING FARM NEEDS A STRONG, LOYAL AND DEPENDABLE WORKFORCE

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Dairy News Australia April 2014

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Transcript of Dairy News Australia April 2014