Dairy News Australia May 2013

Processors, farmers respond to Murray Goulburn move pages 4-5

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news // 3

SA Dairyfarmers president Joe Basham has held talks with Australian Dairy Farmers. pg.09

Scott and Belinda McKillop have lifted herd numbers, production through maximising pasture in north east Victoria. pg.26

Joe and Anna Lenssen built the world’s first rotary swing-over dairy on their Cobham farm. pg.22

news ��3-13

OpInIOn �� 14-15

agRIBUsIness �� 16-17

aBVs �� 18-21

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anImaL HeaLTH �� 27-30

macHIneRy & pROdUcTs �� 31-34

Andrew Schulz was recently named Employee of the Year at the Great South West Dairy Awards in recognition of his four years as farm manager on Bryan and Jo Dickson’s farm at Glenfyne in south-west Victoria. In that time he has helped the farm to double production, improve its bulk milk cell count, reproduction rates and overall animal health. pg 27

Burra predicts higher farmgate pricesBURRa FOOds has forecast an increase of up to 20% in next season’s opening farmgate milk price.

The South Gippsland processor opened last season at $4.55 a kilogram of milk solids and fore-cast a closing price of $4.80-$5/kg MS.

Early this month the company announced its fourth step up for the season, with increases of 6c/kg fat and 15c/kg protein lifting its price to $5.15/kg MS.

Burra chief executive Grant Crothers said the dairy market has experienced unprecedented price movements across the main dairy commodities as a direct result of weather events impacting supply.

Looking towards the full season price, Mr Crothers said the improved market conditions would remain for the short term at least, reflecting in an increase of up to 20% to next season’s open-ing price for Burra Foods’ milk supply partners

However, he said the continued strength of the Australian dollar continues to be the limiting factor.

“While much has been said about the resilience of the Australian dollar against the US dollar and its impact on returns, Australia’s largest dairy cus-tomer, Japan, has seen a 20% devaluation of their

currency over the last nine months which places significant pressure on affordability of imported foods,” Mr Crothers said.

“The joy of Asian markets are the growth oppor-tunities as dairy is not a staple but that brings with it a question of affordability and at high local cur-rency price points consumers will quickly turn to alternative sources of fat and protein.”

Global dairy prices have eased from recent highs and the recent rain in New Zealand is partly responsible. The first Global Dairy Trade (GDT) auction of the month saw the trade weighted index drop 7.3% as a direct result of the rain.

However, prices are still significantly higher than they were this time last year.

Bank of New Zealand economist Doug Steel said the rain has severely lessened the supply risk out of New Zealand, the largest exporter of dairy products.

Mr Steel is not surprised by the recent drop in the GDT and said the big factor in nine consecu-tive price rises was supply concerns out of New Zealand.

“While this won’t turn around quickly, the rain has certainly lessened the supply risk for longer

term contracts,” he said.Despite the drop, global dairy prices remain

high. Prices have risen 60% since December and a 7.3% drop is not a surprise, Mr Steel said. And they could drop further as Northern Hemisphere supply enters the market. But the drop will be small as strong demand from China and flat supply from Europe, the US and Australia keep a squeeze on supply.

Westpac economist Nathan Penny agreed prices would drop further. Prices for the new sea-son’s product (contracts for delivery in four to six months time) now account for the majority of products on offer, he said.

“Accordingly, as the new season’s product con-tinues to replace this season’s drought-hit offer-ings, prices should drop further.

“From here, we expect world dairy prices to descend further from their peak, but to remain at elevated levels by historical standards.”

Fonterra’s next GDT auction will be on May 15.The GDT-TWI is now 1580 compared with 894

at the same time a year ago, and represents a 77% gain over that time, despite last week’s fall. The index peaked at 1704 on April 16.

DAi ry NEws AUsTrALiA may 2013

4 // news

aFTeR yeaRs of being one of Murray Goulburn’s most outspoken critics, Koroit dairy farmer and former long-term MG site manager Tom Paton believes the cooperative is now making positive headway.

Paton, who managed most of MG’s sites over his 30-year career, said it was “definitely on the right track now” but warned “we can’t afford another hiccup”.

Paton said the cooperative had been plagued by “20 years of terrible decisions” but was turning the tide through a new 10-year deal with Coles and revival of Devondale-branded milk.

MG has signed a 10-year agreement to supply fresh milk to Coles for its private market.

The agreement includes a premium to deliver additional profits to Devondale farmers, including the likes of Paton.

“The markets are there and this deal will put money straight into our bank

accounts,” he said.“We lost a lot of the fresh milk

market in Sydney and Canberra which nearly destroyed the company, so this deal should be good for us. But Coles are very smart operators so I hope the deal is not too much in their favour.”

The 58-year old farmer, who plans to boost his cow numbers at Koroit from 500 to 600 next year and maintains an interest in a dairy farm at Maffra, has strong opinions about where MG should be heading.

“They should take over Warrnambool Cheese and Butter and they should build a cheese plant at Mount Gambier. We’ve got the milk here and we should try to get into the Adelaide market.”

Paton hopes MG will offer a starting price of $6 this season and “if not we’ll be marching down the street”.

“Things are looking much better than they were a year ago so I’m fairly confident.”

Critic says MG on the right track

Fonterra: Take our milk but at the right priceaUsTRaLLIan FaRmeRs supplying milk to Fonterra are reaffirming their commitment to the co-op – provided the price remains right.

Competition for farm-gate milk is heating up in Australia as the country’s biggest processor Murray Goulburn this month announced a 10-year direct supply deal with supermarket chain Coles.

Bonlac Supply Company, whose 1200

farmers supply Fonterra factories in Victoria and Tasmania, is confident suppliers would not switch to Murray Goulburn. BSC‘s deal with Fonterra has a clause stipulating the co-op must pay its suppliers “equal to or greater than” the largest Australian dairy company.

BSC chairman Tony Marwood said the Coles deal has caused a rebirth of MG. The co-op will aggressively call for new suppliers.

Marwood says it’s widely accepted that MG

is the milk price setter in Australia. “So, our agree-ment with Fonterra is itself protection of the milk supply base. As long as we get equal or greater than Murray Goulburn, the supply base is intact.”

But he admits com-petition for Australian milk at the farmgate will get tougher. “The milk supply base is not grow-ing. Everybody wants more milk and it will be increasing your supply at the expense of the proces-sors.”

Marwood says every year BCS “lose and gain

some suppliers”. But he’s confident there won’t be a drop in milk supply to Fonterra.

Marwood says it’s too early to know if MG’s deal with Coles will trans-late into a big lift in milk payout.

Marwood says most farmers are struggling to break even.

Under MG’s 10-year deal with Coles, it will process and supply the retailer’s house-branded milk from July 1, next year. As part of the deal MG will spend A$120 mil-lion on two factories in

Melbourne and Sydney to supply the supermarket giant’s stores.

MG has already noti-fied its 2480 farmer sup-plier-shareholders that the Coles contract locks in a premium that will deliver additional profits from July 2014.

United Dairyfarmers of Victoria president Kerry Callow says it’s hearten-ing to see that Coles had listened to the UDV and Australian dairy farm-ers, who have campaigned for two years to try to get farmers a better deal in the fresh milk market.

“We’ve heard lots of arguments from processors and Coles claiming they’re not paying farmers any less. Dealing direct means our nation’s largest dairy farmer cooperative finally gets a clear view of what Coles is paying – true transparency.”

Marwood says the deal augurs well for the industry. “It has been very difficult for any commodity to have a good relationship with the supermarkets. The deal

develops a relationship between Coles and the dairy industry.”

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news // 5

Dairy Farmers considers optionsLIOn Has told its suppliers it will fight “tooth and nail” to remain in the dairy industry.

The international processor has been seen as the biggest loser from Murray Goulburn’s 10-year agree-ment to supply fresh milk to Coles for its private label.

The deal will begin from July, 2014 and includes the NSW-based cooperative Norco, on a five-year deal, which will supply milk from northern NSW and southern Queensland.

The two cooperatives replace current house-brand suppliers Par-malat and Lion in those states. Lion has gone from supplying 100% of NSW milk and 75% of Victorian milk to Coles, to retaining its contract of supplying 78% of the Queensland market.

As non-Murray Goulburn sup-pliers consider how the move – and Murray Goulburn’s desire to recruit more suppliers in NSW – will affect them, Lion had a clear message to its own suppliers.

In a letter to farmers, Lion agri-cultural procurement boss, Murray Jeffrey, said: “We have always hon-oured all contracts with our suppli-ers and we expect the same from you.”

Contracted suppliers would be “held to their agreements” he said.

Murray Goulburn is already seek-ing out potential new members in

Lion’s traditional territory in NSW, including the Southern Highlands, South Coast and Hunter Valley to supply the factory.

Eighteen months ago Lion lost the Woolworths private label bot-tling contract in NSW to Parmalat forcing it to dramatically cut milk intake needs from farm suppliers and pay just 16 cents a litre for sur-plus milk.

In a statement, Lion CEO Stuart Irvine said: “Previous experience demonstrates that changes in these contracts can cause significant disruption for farmers, and we are still in the process of assessing the impact on our business and the most appropriate way forward”.

The Dairy Farmers Milk Co-operative, which supplies Lion, has said the situation is reminiscent of the change of Woolworths’ con-tract from Lion and Parmalat in Queensland and NSW in 2010/11.

“It resulted in major disrup-tion for farmers, with some farm-ers having no home for their milk, the switching of other farmers, a dis-tressed market with a fall in milk price, milk contract cuts and the introduction of T2 (tier 2) pricing on

milk that was above Lion’s needs,” DFMC chairman Ian Zandstra said.

“Every effort must be made to avoid a repeat of that economic dis-location upon farmers.”

Mr Zandstra said the DFMC and its suppliers have “many, many months to decide how to adjust”.

“Milk supplies have tightened in these northern states, demand is strong and southern commod-

ity prices are predicted to be stronger next year so there are positive trends for our farmers.

“The board of DFMC met

recently to discuss the implication of the Coles decision on both the cooperative’s business objectives and on our 1000 plus members.

“Our philosophies and goals are strong; DFMC is chartered to act in the best interests of our mem-bers and their aggregated milk. We are not a profit making entity and receive no margin on the sale of our members’ milk.

“DFMC will seek to engage and talk openly to all key stakeholders in the industry, to ensure our suppli-ers have a home for their milk either as a national collective or in regional hubs to meet the needs of the chang-ing dairy landscape.”

Farmers voting with their feetdaRLIng dOwns producer Chris Kunde knows of eight farmers in his region planning to quit the industry over the next few months.

“Everyone is looking around to see who is next to go. There is just no confi-dence in the future,” Mr Kunde said.

A lot of farmers are very nervous not knowing what their future supply arrangements are going to be from next year,” said the Lion supplier from Cam-booya.

After being threatened with tier one cuts and a tier two price of just 15 cents a litre last year, the loss of Lion supply contracts to Murray Goulburn and Norco next July is looming as another heavy blow.

With tightening milk supplies, the cuts have been put on hold in the short term, but Mr Kunde said the uncertainty was taking a heavy toll.

“Lion never tells us much. We just

don’t know what is going to happen,” said Mr Kunde.

Queensland is already short of milk and it’s going to get shorter, but how much milk is Lion going to need once the Coles contract goes?”

He worries that the new marketing arrangement is dragging prices down with Murray Goulburn and Norco getting the offset of increased market for their man-ufactured products.

“Norco has quite a few suppliers on the Darling Downs. They will be taking on more, but they’ll be able to choose from a long list of people wanting to join them,” said Mr Kunde who is one of more than 1000 suppliers to Lion through Dairy Farmers Milk Cooperative.

In a letter to members, DFMC chair-man Ian Zandstra said the co-op was already in negotiations with Lion to roll over contracts which are in place until 2019.

“We have always honoured all contracts with our suppliers and we expect the same from you.” – Lion

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mURRay gOULBURn bought an additional 1.2 million shares in Warrnambool Cheese and Butter Factory (WCB) last month, increasing its investment in the company to 14.5%

MG managing director Gary Helou said the purchase was “a strategic investment”.

“There is no current intention to make a takeover offer for WCB, nor do we currently intend to seek board representation,” he said.

“The acquisition of these additional shares and the increase in our stake to 14.5% is a reconfirmation of Murray Goulburn’s commitment to its long-term investment in WCB.”

Murray Goulburn also announces it is willing, for a limited period, to acquire additional shares in WCB at the same price as paid for the stake acquired last week - $4.60 per share.

The maximum MG can acquire under the Corporations Act consistent without making a takeover offer is 19.9% of WCB.

Mr Helou said there was no assurance MG would acquire any further shares in WCB. He said the co-op was satisfied with its 14.5% stake.

The price represents a premium of 18% to WCB’s 30 day Volume Weighted Average Price (VWAP), a 23% premium to WCB’s 6 month VWAP and a 25% premium to WCB’s 12 month VWAP.

It is a 16% premium to WCB’s last closing price of $3.98.


6 // news

Murray Goulburn increases WCB stake

Woolworths boosts order from direct supply groupTHe gROUp of seven NSW dairy farmers contracted to supply Wool-worths direct has already been asked to supply additional milk.

The group of farmers from Taree in northern NSW has been asked to increase its initial requirement of 54 million litres by 10 million litres.

The request was made after Coles announced its 10-year deal with Murray Goulburn.

The farmers will supply milk for a new Woolworths brand called Farm-ers Own and the Australian Competi-tion and Consumer Commission has granted permission for price talks.

Farmers Own is expected to be sold between the $1-a-litre house-brand milk and the price of branded milk.

The move by the small Taree group of suppliers has been quite controver-sial throughout the industry.

Dairy Farmers Milk Cooperative chairman Ian Zandstra said speak-ing as farmers, it is hard to criticise a model that potentially will give farm-ers a better milk price.

“But as with $1 milk it is what it does to the whole industry and supply chain that farmers should be concerned about and speak up about,” he told suppliers in a letter.

“DFMC has a genuine concern about this theme of blaming the middleman, the processors, increasing pressure on the supply chain.

“It implies farmer problems are from excessive processor margins.

“For a more balanced view it comes back to the fact it is the big processors that look after lots of farmers with lots of milk to get to lots of consumers (50% outside of retailers) and that is where a sustainable market should focus, rather than a special deal for some.”

Mr Zandstra said the Woolworths deal might mean some increased milk prices for some farmers, but does not

address the value degradation of retail-er’s behaviour.

“It is brand value that sustains the industry. Woolworths is not the leader on $1 milk, but $1 milk has changed the whole value mix of the industry, less money to go around. A better way would be to lift all milk prices.”

Mr Zandstra said the DMFC was not an apologist for processors, but it is partners with Lion in a supply chain “that is getting another bruising”.

“Deals have to be done for the better-ment of all in dairy. It is in this market that Lion has no return on capital (as maybe with others) in the milk divi-

sion, low EBIT margins and has written off approximately two billion dollars.”

DFMC has registered the brand, “Farmers First”, with the by-line “we treat our farmers better”.

Mr Zandstra said DMFC had no immediate plans for the brand but said it gave them options and flexibility in the future and that space of farmer provenance is very readily being taken up by retailers.

“The most powerful farmer milk brand is still ‘Dairy Farmers’. Should we need to be more aggressive to pro-tect our members, we will consider all options,” he said.

Lion could reduce Vic milk requirementswesTeRn VIcTORIan dairy farmers supplying Lion have been notified the company could drop its current require-ment of milk from the area by 21%.

In a letter to suppliers, Dairy Farmers Milk Coopera-tive chairman Ian Zandstra said there could be a decrease due to further rationalisation of Lion’s mainland cheese business, but despite earlier signals, this was not certain.

There is also uncertainty for Lion’s northern Victorian and Riverina suppliers, according to Mr Zandstra.

Lion’s Woolworths contract is up for tender, the outcome of which will be known before June.

“Clearly there are new fac-tors in the Woolworths con-tract arrangements now they

are talking of direct farmer deals,” Mr Zandstra said. “We are in close talks with Lion as to the outcomes of this Wool-worths strategy.”

Mr Zandstra told suppliers it is anticipated that tier 1 pric-ing will be stable in the north-ern regions. He said southern pricing would reflect the com-petitive landscape which would mean an anticipation of what MG might pay on an annual 2013/14 basis. MG has come out with positive messages for next year, he said.

Next year’s Tier 2 (T2) pric-ing will be announced shortly but Mr Zandstra said there should be no T2 in the south while the T2 price will be con-siderably higher in south east Queensland and NSW.

“There will be fewer T2 months, perhaps only spring

months,” he told suppliers.“There will be less excess

milk because some farmers have exited and some farmers who had excess milk have now traded contracts.”

That still means that if there is regional excess milk, all farm-ers with milk above contract will have T2 (after allowing for the 10%), he said.

Mr Zandstra said the rises in the Global Dairy Trade Price Index was positive for farmers.

“These sales are virtually spot prices at a time of low volume, not a lot of product being offered,” he said.

“However futures markets are stronger as well so next year could see a considerable increase in southern pricing.”

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news // 7

THe new Coles milk deal has divided the dairy industry and set back rela-tions between producers and proces-sors, farmer leader Brian Tessmann said this week.

The Queensland Dairyfarmers Organisation president said initiatives for the sectors to work together had now been soured as a result of Lion being dumped in favour of Murray Goulburn and Norco.

“There is a lot of suspicion and divi-sion now. With no detail on the new arrangements coming out, we can only speculate,” Mr Tessmann said.

“It’s been a great propaganda exer-cise for Coles which has created the illusion that farmers are going to get a

premium while it has no inten-tion of chang-ing its $1 a litre policy.

“There is plenty of uncertainty and sleepless nights with farmers who are continuing to leave the industry.

“What is the future for Lion which is being driven into the ground and its supplier groups?

“In the north we need some clarity on how Lion’s excess milk will transi-tion to Norco. This needs to be worked through before the new arrangements come into effect next year,” Mr Tess-mann said.

Coles deal sours relationships

Brian Tessman

Fodder shortage looms with winter on horizona dRy summer, no autumn break and cooling conditions across south-east Australia has placed pressure on farm-ers and put fodder in high demand.

Bureau of Meteorology forecasts predict below average chances of aver-age rain for south-east Australia.

In its latest drought statement, the bureau said the seven months to April 30 were the driest on record for parts of western Victoria, South Gippsland and South Australia’s south east.

The autumn break has arrived in iso-lated pockets although in most areas it remains elusive with no significant falls to prompt pasture growth or reduce feeding.

Temperatures have also dropped sig-nificantly in the last week, reducing the

chance of pasture growth even if there is rain.

Dairy farmers in south-west Victoria are starting to feel the pinch of the pro-longed dry spell.

Heytesbury District Landcare facil-itator Geoff Rollinson said farmers were commenting on the lack of sub-soil moisture.

“It’s really unusual for this time of year. We’ve gone without much rain since October and a number of farm-ers have had to change their fertiliser regime because of it,” Mr Rollinson said.

Deteriorating weather condi-tions across South Australian dairying regions are starting to seriously impact on the State’s milk production.

South Australian Dairy Farmers

president David Basham said the season had been shocking.

“There was about an inch of rain three weeks ago and before that you had to go back to last October,” he said.

“We badly need follow-up for crops and pastures which are really suffering.”

Mr Basham said hay supplies were running extremely low.

“It’s not so much a question of what price, there just isn’t any fodder avail-able. The situation is becoming quite desperate,” he said.

The key dairy areas in southern Australia are now starting to increase demand for all fodder types and prices are expected to follow suit in the next month to six weeks as temperatures continue to drop, according to the Aus-

tralian Fodder Industry Association.Dairy farmers across Australia have

already been dipping into their hay and silage reserves and are being forced to pay much more for replacements.

While prices in some areas have increased by more than $100 per tonne on 2012 levels, the quality of hay gener-ally remains high.

Australian Fodder Industry Associ-ation industry development manager, Caitlin Scholfield, said that while farm-ers were paying more, they were receiv-ing higher quality hay.

An analysis of recent prices com-pared to 2012 shows “definite increases” in all key dairy areas, Ms Scholfield said.

Dairy farmers are paying more across the country with lucerne prices topping

$300 in the Darling Downs, Gippsland and north coast NSW.

Fodder supplies are a concern for south east South Australia, south-west Victoria, Tasmania and particularly Gippsland.

“All key dairying areas are increas-ing demand for all fodder types which will lead to more pressure on prices,” Ms Scholfield said.

“High quality stocks are being snapped up and farmers should source what they need as soon as possible.

“Supply will become more restricted as we enter into winter. It will probably be into spring before prices come back.”

Lucerne supplies are holding but cereal supplies are low with demand remaining strong due to its high quality.

Standing in a green droughtIT LOOKs green at first glance as you drive around Gippsland but on closer inspection there isn’t much pasture in the paddocks.

“We’re in a green drought,” Kong-wak farmer Brian Anderson says. “It looks alright but there’s not enough there.

“It’s not growing quick enough after the cows eat it.

Mr Anderson said his southern Gippsland property experienced an extremely wet winter, followed by a short spring before a hot summer.

“We had a reasonable amount of wind during summer and autumn too. We had a warm wind from the north west at one stage that blew for too long and dried out and burnt what we had.

“We haven’t had one big rain to set us up.”

Mr Anderson said rain in Gippsland in the last few years has been more patchy and varied than in the past.

“You either get it or seem to miss out. We don’t seem to get the amount others close by get.

“Inverloch could get rain but 10km away they would not get anything. Twenty years ago, showers would come across one after the other.”

Mr Anderson said wet winters and short springs bring their own pain as there is not enough recovery time.

“We’ve been cutting into our winter feed, and it’s going to be harder to find it later on because everyone is using more.

“It’ll also be more costly.”

Brian Anderson on his South Gippsland property.

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geneTIcs aUsTRaLIa admits it’s like selling “coals to Newcastle” but says the decision to export Australian genetics to the US will help both diversify and contribute to the co-op’s income stream.

Genetics Australia (GA) has joined forces

with the largest indepen-dently owned and oper-ated US-based AI genetics company, Taurus Service Inc, to distribute Aus-tralian dairy genetics in North America.

The alliance gives US and Canadian dairy farm-ers access to leading Aus-tralian dairy sires and

reverses the long trend of Australia importing dairy genetics from North America.

GA export marketing manager, Rob Derksen, said Australian genetics would suit US and Canadian dairy farmers interested in grazing, cross breeding and

outcross sires.“The flow of genetics

has been a one way street for many years and it is long overdue that some of the top genetics devel-oped by Genetics Austra-lia go back to the Northern Hemisphere,” Mr Derk-sen said.

Mr Derksen said the

Australian dairy indus-try was ideally placed to satisfy the growing global demand for dairy genet-ics capable of producing a medium size, functional cow suitable for long term, efficient milk production.

“Genetics Australia has been progeny testing for over 50 years under

GA targets US farmers

the diverse and often harsh dairy conditions in Australia and it is not surprising that Australian proven bulls dominate the top local bull lists,” he said.

Taurus president and CEO Dick Witter said Taurus was keen to include the best Australian genetics in their product range. Genetics Austra-lia bulls will be included in a new Taurus “New Age Sires” program soon to be released. GA hopes semen will be available in the US next month.

Mr Witter predicted Holsteins, Jerseys and red cattle would all be of inter-est to North American farmers.

“The Aussie Red was developed over 30 years ago by blending the strengths of Scandinavian genetics over the Austra-lian Illawarra Shorthorn,” he said.

“This breed is an ideal option for those farmers interested in cross breed-ing or following a three way cross breeding strat-egy.”

Mr Derksen said the North American alliance followed recent announce-ments of alliances with Sterling Sires in the UK, and with Xseed in South Africa.

“South Africa has been our most successful market for many years for Genetics Australia,” Mr Derksen said. “More than 100,000 straws of Austra-

lian Jersey bull BADGER have been exported to South Africa in the past so we are very pleased to see that a recent agreement between DAFF and South African authorities will allow the entry of Austra-lian genetics.”

GA has significantly bolstered its international export program over the past 18 months, including appointing Fred Bowman as Latin American busi-ness manager late last year.

Mr Derksen said having someone fluent in Span-ish in Latin America has helped enormously and they hope to export to Argentina and Brazil – both pasture-based dairy systems like Australia - soon.

It has also recently exported dairy genetics to Uruguay, Thailand, Costa Rica, Brazil and Sudan.

Mr Derksen has been charged with identify-ing countries with export potential and opening dia-logue and establishing export protocols, which Mr Derksen said was a time-consuming and often frustrating task.

“You may think if you’re EU-qualified, which is the gold standard of export protocols, then you would be qualified to export anywhere,” Mr Derksen said. “That’s not the case unfortunately.”

GA is also planning to export live bulls to China in the future.

Rob Derksen

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news // 9

TaLKs In Queensland and South Australia early this month have raised hopes that Australian Dairy Farmers (ADF) could again be a national representative body.

South Australian Dairy Farmers (SADA) was expelled from the ADF last year and the Queensland Dairyfarmers Organisation (QDO) has given notice of resignation, effective next February.

The recent ADF restructure has been at the heart of the unrest from the two state bodies with South Australia signalling its intention to resign before it was expelled.

Since the restructure, ADF has a smaller national board (without a representative from each state), a national board sitting beneath it and policy advisory councils.

SADA was originally removed from the national body last July when ADF members decided at a board meeting that it had engaged in conduct prejudicial to ADF.

SADA was removed from ADF immediately. At the time, ADF said concerns of prejudicial contact were raised with SADA the previous May.

At the time, SADA denied it acted in a manner ‘prejudicial’ to the interests of ADF.

An independent mediator held preliminary talks with SADA this month (May 8) while ADF president Noel Campbell led a delegation which met with the QDO in Brisbane the day before.

SADA president David Basham said mediation has been planned since

before Christmas.“This first meeting

was very much a fact finding exercise and it’s still very early days yet. If it happens (re-joining) it happens,” he said.

“We believe in having a strong national organisation and we are trying to find a way forward while at the same time protecting the

interests of South Australian farmers.”

Mr Basham said financial issues were a consideration for SADA with fears that there could be rises in membership fees under a proposed constitutional change.

“We believe it is our democratic

right to ask questions and we still don’t believe we have done anything to warrant expulsion.

“We put our resignation notice on the table and the ADF decided we should go.”

He said the ADF needed to recognise the importance of having every state represented as so many dairy issues were the subject of state legislation.

State-based groups were in the best position to deal with their respective governments to get the best overall outcome for the industry, Mr Basham said.

QDO president Brian Tessmann said the meeting with the ADF team in Brisbane was a step forward.

“We do have some issues with the structural changes to the ADF, but I don’t think these are insurmountable.”

The QDO was also unhappy with the expulsion of South Australia.

“We definitely believe it was not the right thing

Qld, SA in talks on ADF future gORdOn cOLLIe

State-based groups are in the best position to deal with their respective governments to get the best overall outcome for the industry.

– David Basham

to do and that South Australia needs to be engaged in finding a way forward. The delay in getting mediation started has been frustrating.”

“At this stage, we are hopeful that the ADF can again become a national

representative body. The fact that people are now talking is positive, but we are not there yet,” Mr Tessmann said.

SA Dairy Farmers Association president David Basham.

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10 // news

cHInese demand for New Zealand dairy products has well and truly “kicked”, however there is not enough Kiwi supply to satisfy “the dragon’s” increasing con-sumption needs, providing opportunities for Australian dairy exports, according to a Rabobank dairy expert tour-ing regional Victoria earlier this month.

Visiting from Christchurch, Rabobank director of Dairy Research New Zealand and Asia, Hayley Moynihan pre-sented to local farmers on the Sino-NZ dairy trade relation-ship, highlighting where the Australian industry can gain increased international market share.

Ms Moynihan said Chinese demand for dairy products had sharply increased with prices skyrocketing by more than 50% over the past two months.

“This price spike has been

driven in large part by the New Zealand drought limiting pro-duction potential for export, however this event shows how tight global markets are right now,” she said.

“When there is no buffer for a supply shock, mar-kets respond with high prices. This is a ‘here and now’ story.”

Although dairy com-modity prices have eased slightly since the peak in the recent spike, Ms Moyni-han expects the market will remain at elevated levels until more product is deliv-ered around spring this year. Ms Moynihan said while cur-rency remained strong in both Australia and New Zealand, partially eroding returns on dairy commodities exported,

market forces have prevailed. Regarding the free trade agree-ment (FTA) between New Zea-land and China, Ms Moynihan said while the arrangement allowed a specified volume of New Zealand product into

China tar-iff-free, tar-iffs still apply on exports above this level.

“In reality, the FTA isn’t dictating

overall competiveness for New Zealand, as the tariff-free volumes only represent around one fifth of the volume that China is importing – Australia is in a great position to make up some of that extra supply, even without a tariff-free provision,” she said. “The Chinese dairy market has grown so much and Rabobank expects

that consumption will continue to expand.”

Rabobank regional manager for Gippsland, Scott Price, is accompanying Ms Moynihan on the tour across parts of Vic-toria.

Mr Price said it’s been a tough few years for the local dairy industry experiencing unfavourable seasonal condi-tions and tight margins, how-ever looking to the long-term, prospects of what has been taking place on the global stage looked positive.

“We need to keep an eye on these global signals so we can try to gauge what’s coming, particularly with the nature of how dairy commodities work with regard to forward selling,” Mr Price said.

“Overall, it’s great that our clients are able to hear Hayley Moynihan’s global perspec-tives and her local views from New Zealand.”

Dragon too much for New Zealand to handle alone

BOB KaTTeR’s Austra-lia Party will introduce the Fair Milk Mark Bill to the Queensland State Parliament, which aims to introduce a fair milk mark on a milk bottle that identifies the farmer was paid a price above the cost of produc-tion.

Member for Dalrymple, Shane Knuth, who will intro-duce the bill, said the marketing tool would be non-compulsory and hoped it would “address the market failures resulting from the supermarket duopoly”.

Queensland Dairyfarmers Organisation president Brian Tessmann said the majority of Queensland dairy farmers are currently receiving prices less than the true cost of produc-tion.

Mr Tessmann said the QDO welcomed the attention to the issue of the supermarket duo-poly.

“Industry remains com-mitted to working with gov-

ernments to establish an industry ombudsman and a national mandatory code of conduct, and this remains the primary focus of our negotia-tions with both major parties,” Mr Tessmann said

“But we welcome this rec-ognition of the crisis from Mr Knuth.

“It is clear that measures must be urgently taken to stem the losses being inflicted on the industry. Without government action, the implications for the Queensland industry are dire.”

Mr Tesmman said it was time for the Federal Government and the opposition to spell out what their policy intentions are and where they stand in terms of supporting the Queensland industry and other dairy farm-ers being impacted right around Australia.

“So far, they’ve been frus-tratingly silent, even though their own ACCC admits stron-ger rules are required.”

Katter introduces fair milk bill

“The FTA isn’t dictating overall competitiveness for New Zealand.”

Fixed Time AI helps to 'simplify' reproductionADVERTISEMENT

Ten years ago Jock O’Keefe had to decide whether to reduce cow numbers or build a new dairy at his Winslow farm near Warrnambool in south-west Victoria.

Mr O’Keefe went with the latter option and has since expanded the herd from about 400 to nearly 1000 cows.

“We were milking about 420 on a 20-a-side dairy and couldn’t cope, so we had to decide whether to build a bigger dairy or milk less,” he said.

The farm built a new 60-unit Waikato rotary dairy, which has been further developed in recent years to include cow identification, auto drafting, retention bars, somatic cell and yield meters and automatic teat sprays.

The property has also expanded with new leased and purchased land bringing it to a total of about 2000 acres.

Mr O’Keefe has no regrets about the massive expansion, but along with the bigger herd came a bigger problem…how to simplify his reproduction systems.

To help him achieve his goals, the fifth-generation dairy farmer has introduced a Fixed Time Artificial Insemination (FTAI) program.

“In larger herds you need to have fixed time programs because it’s too big a job without it. Because there are more cows, heat detection is more difficult and you’re more likely to miss cows on heat,” Mr O’Keefe said.

The farm hit a peak of nearly 1000 cows last season but has gone back to 900 this year. “We had gone from 850 the year before but had to come back a bit because there were too many for the acreage,” Jock said.

The business requires three full-time and one part-time staff member.

The farm has been a keen participant in reproduction trials to test new products.

One trial conducted by the Warrnambool Veterinary Clinic used the Bayer Cue-Mate® in a Bayer Prosynch FTAI program.

Cue-Mate progesterone releasing devices prevent the development of follicles and ovulation. Following removal of a Cue-Mate device, follicle development resumes, with mature follicles ovulating at a similar time. This allows for timed insemination, minimising time and labour.

Dr Jon Kelly from Warrnambool Veterinary Clinic said the results showed a significant difference in the first service conception rate in the cows not cycling prior to the mating start date.

“These cows were nearly twice as likely to conceive to the first service using Cue-Mates,” Dr Kelly said. “The conception rate went from 17 to 31 per cent which is getting back to what we like to see.”

To help with his heifer program, Jock has adopted a three-tiered system for AI. His biggest heifers use fixed-time AI with Holstein sexed semen; mid-range heifers are joined to Jerseys through AI over 2-3 days and lighter cows are run with Jersey bulls.

“It’s easier with heifers to synchronise them if you can. You can work your plan around the insertion and removal of the Cue-Mates because you know she ovulates when you pull it out,” Jock said.

“One day last year we used AI on 90 per

cent of the milking herd. We had nine technicians here and did approximately 600 cows. There were costs involved but it paid off.”

“I think our overall conception rates are fairly good…we do pretty well with total cows in calf.”

“Fixed timed AI using Cue-Mate has certainly helped us tighten up our calving pattern and helps us get more calves earlier.”

Mr O’Keefe, one of the driving forces behind the dairy industry representative group ‘Farmer Power’, said an increase in the milk price would encourage more farmers to use Cue-Mates and fixed time AI programs.

“If you want to join a lot on one day you

need not only the willingness to take it on but also suitable infrastructure. If you have a rotary platform it will be a lot easier. We are lucky and have the right facilities and can run them through on the platform.”

He suggested farmers to get advice from their vets and ask about ProSynch Plus programs.

“It comes back to how much we get paid for our milk. In tough times people want to spend money wisely. If you can afford it, fixed time AI is worthwhile and if we were paid more for our milk it would be more common and benefit more farmers.”


news // 11

FaRmeR gROUps have applauded the Fed-eral Government’s Farm Finance package unveiled last month.

The Farm Finance package will provide $60 million in loans in each state and the Northern Territory over two years to help farmers across the country restructure their debts.

The money will be administered by the States to farms who can show they are viable and under financial stress.

Extra rural financial counsellors will be hired to work with agricultural businesses, while a tax relief deposit scheme will be overhauled, includ-ing raising the off-farm income threshold to $100,000.

The assistance pack-age follows a rural finance

roundtable held in Octo-ber last year, convened by Mr Swan, who said he had been concerned to hear how farmers had been hit by the high Australian dollar and depreciating land values.

“These are big issues for our farmers and mean many of our farming busi-nesses find themselves moving towards a nega-tive equity situation,’’ Mr Swan said.

The Western Australia Farmers Federation (WAFarmers) warned farmers that the funding package was unlikely to be available to producers until July, at the earliest.

WAFarmers President, Dale Park, said he believed the package would be available from July 1 but the details of exactly how this would be distributed and who would be eligible

Finance package welcomedwas yet to be quantified.

The Federal Govern-ment’s Farm Finance package initially offered farmers concessional loans of up to $650,000 over five years, then at market interest rates for the 20-year life of the loan to help them restructure debt and invest in produc-

tivity.The State Govern-

ment then negotiated with the Federal Government a reduced loan amount to $200,000, to enable greater access, and a five-year life of the loan. Victo-rian Farmers Federation president Peter Tuohey welcomed the packaged,

saying farmers across the nation were strug-gling with market failure, drought and the impact of the high Australian dollar.

“Concessional loans and debt restructure are crucial at a time when so many farm sectors are battling,” Mr Tuohey said.

“It’s good to see the government has listened to the concerns raised by the VFF and its dairy arm – the United Dairyfarmers of Victoria.

“It was the VFF and UDV that called for con-cessional loans as part of its dairy support proposal to Federal Agriculture

Minister Joe Ludwig ear-lier this year.”

Mr Tuohey said the VFF and UDV also called for the off-farm income threshold to be raised on gaining access to Farm Management Deposits, as well as additional funding for rural financial coun-sellors.

Nothing new in drought reform talksTHe FedeRaL Government must clarify the drought policy provisions that will apply from next year because of the failure of a recent meeting between federal and state agricultural ministers to do so, according to the Tasma-nian Farmers and Graziers Association.

Last October, it was announced that all govern-ments had agreed to a drought program reform process. Last week, this decision was re-confirmed. However, little prog-ress has been made on the detail of the new program beyond the headings, TFGA chief executive Jan Davis said.

The headline components are: ■ Promoting farm management deposits and taxation

measures. ■ A national approach to farm business training. ■ A collaborative approach to the provision of social

services (including rural financial counsellors). ■ Tools and technologies to inform farmer decision

making. ■ Farm household support.

“What does it all mean? What access to services and support does a farmer in a newly declared drought area now have?” Ms Davis asked.

“We are no further advanced than we were last Octo-ber. It is critical that the framework and eligibility criteria for each of the five elements be fleshed out and that the level of support that will be forthcoming once we get into a drought is also clearly identified.

“At the moment these things appear to be a matter for each individual state or territory. This will then depend on the ability of each jurisdiction to pay – and there is no equity or consistency in that approach.”

Ms Davis said Tasmanian farmers wanted to see a national drought relief structure that was backed by the federal government.

“We are no further advanced than we were last October.”

– Jan Davis

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12 // wORLd news

New Fonterra UHT plant underway to cater for rising Chinese demand

cHInese gROwTH and consumer demand is changing so fast that arguably Fonterra’s new $126m UHT milk pro-cessing plant at Waitoa should have started 18 months ago, says Fon-terra chairman John Wilson.

The shift in consumer taste in China is happen-ing so fast that your busi-ness plan can become obsolete in 90 days, Mr Wilson said at the formal opening of the site last Tuesday attended by Prime Minister John Key. Foundations are being laid for the plant to be started by April 2014; it will boost Fonter-ra’s UHT production by 100%.

Wilson led the business delegation on the trade mission to China with the Prime Minister. He says talking to consumer-involved

Chinese on the coast and in big cities, he noted that demand is evolving so rapidly that “if they have a business plan for a product for 90 days, they had better be thinking about what the next 90 days looks like because it is just evolving so rapidly. You’ve got to be very fast.

“With UHT, if you go back two or three years it wasn’t economic to shift UHT into that Chinese market at the sort of scale we need in Fonterra,” he said. “And today – here it is – and we would prob-ably argue that the UHT plant is 18 months too late. We are completely constrained for UHT pro-cessing in New Zealand at the moment and this will be five, six lines and 200-300 million litres at full noise. It will drive not only the UHT drinking market; a significant part is for our food service business and our cream market. So that market is changing dramatically.

“With the move from historically an emerg-ing economy to a devel-oped country, consumer demand goes from stan-dard whole milk powder to advanced nutritional powders and into UHT and ultimately there will be a fresh milk offering. This is why we have our farms in China producing 150 million litres, on the way to a billion litres.”

Asked if he foresaw Fonterra ever exporting fresh milk from New Zea-land to China, Mr Wilson said on the trip he met a woman exporting fresh milk out of New Zealand into the Chinese market. His understanding was she sold it at about $20 a litre because of the cost of getting it there. “There is a limited market today, but if you look in the future, that why the bil-lion litres in China will give Fonterra those options.”

The Waitoa UHT plant will be supplied by

farmers north of Taupo. Fonterra already has enough winter milk in the

greater region to supply stage one of the plant because so many farmers

north of Taupo milk some cows through the winter, Mr Wilson said.

In the future there will be milk contracts in these regions.

pam TIpa

China aware of production limitationscHIna Is now much more aware of its limitations in producing its own food so demand for New Zealand products is still going strong, says Fonterra chief executive Theo Spierings.

“The Chinese government is much more

aware of the limitations of China…. Land and environment are two key angles for China to look at,” he said following the trip with the Prime Minister’s delegation.

“The New Zealand export game we are playing will continue and

the Chinese government understands that as well because demand is growing much faster than supply. So developing a Chinese milk pool, yes, but can it be fully self-sufficient? I don’t think so. That’s for growth reasons, land reasons and

environment reasons.“But on the other hand

we can’t commit only to exports, we also need to commit to investments onshore in China. That is why we are building the Chinese milk pool: we protect New Zealand milk to China – it has to be

both, a win-win. We can’t just export commodities to China, we have to provide value on the ground in China.”

Meanwhile Fonterra board chairman John Wilson said Chinese government ministers

“at the highest level” are aware of Fonterra’s contribution to development of animal husbandry and quality milk in their country. They have “a very high understanding” of what Fonterra is doing in producing milk locally

on its own farm and also working with its farmer suppliers to gain knowledge and confidence.

The trip to China with the Prime Minister’s trade mission was very successful, said Mr Wilson.

a UK dairy coalition, pro-moting higher farmgate prices for farmers, wants Government help to rein in milk buyers.

The Dairy Coalition wants Farming Minister David Heath to call in milk buyers failing to imple-ment the voluntary code.

Processors were given until March 31, 2013, to comply with the code by offering fairer and more balanced contracts to farmers. Both parties had agreed to the code, adopted by Defra as the favoured policy alternative to legislation proposed by the European

Commission. The Dairy Coalition,

the NFU, NFU Cymru, NFU Scotland, TFA, WFU and the RABDF has writ-ten to Farm-ing Minister David Heath calling on him to act on its con-cerns over the compa-nies not yet signed up to the code.

NFU dairy board chair-man Mansel Raymond said though some large milk buyers are implement-ing the code, some have

not made the changes demanded.

“Since our March dead-line passed, the coalition has been applying pressure

in various ways to get proces-sors to act. This has included calling on retail-ers to insist that their supply base offers farm-ers compliant contracts. This however isn’t

enough. We need Defra to ramp up the pressure to ensure the code is the suc-cess it can and should be.”

TFA dairy

representative Richard Elliot said its members’ patience is growing thin. “If milk buyers can’t be trusted to do the right thing and work with farmers to deliver better contracts, then Government needs to step in. This isn’t rocket science, we just want a fair deal.”

RABDF chairman Ian Macalpine said farmers have the power to change contracts. “With milk supplies short and processors crying out for milk, farmers need to stand firm and demand change.”

UK processors fail to implement voluntary code

NZ Prime Minister John Key (right), Fonterra chairman John Wilson and chief executive Theo Spierings attend the site blessing ceremony last week.

“This isn’t rocket science, we just want a fair deal.”


wORLd news // 13

The threat of house brands growsHOUse BRands are going viral: a catchy heading, but a real-life threat to those on the land.

House brands are cheaper and in the supermarket wars it isn’t the New Zealand farmer that is winning: house brands are more than twice as likely to be made from imported produce as market-leading brands.

A Campbell Live investigation, last month, urged shoppers to ‘Buy New Zealand’ wherever possible, but ‘pos-sible’ depends on the concept of food price. New Zealand has very high animal welfare, human employment and envi-ronmental standards, and costs of pro-duction are therefore higher than in some other countries.

When supermarkets are trying to achieve market edge for their prod-ucts, they source the cheapest produc-

tion system. This could reflect climate and ease of growing, or it could reflect standards to do with animal welfare, human working conditions and/or envi-ronmental impact. Supermarkets also play suppliers off against each other. This is well known in respect of UK supermarkets and the New Zealand meat companies, but also occurs within New Zealand.

What the supermarkets say is that house brand products can be sourced in bulk, manufacturing is stream-lined, R&D can achieve economies of scale, and marketing is easy – just one ‘brand’. But social media articles (see Michael Bracka, managing director of Freedom Foods, on Facebook) have indicated that supermarkets allow companies to undertake the expensive areas of product development, market

awareness and initial market penetra-tion with supply chain logistics. When the product is achieving traction, they will reduce distribution and sales while they launch their slightly cheaper ‘house’ brand.

The indication is that the supermar-kets don’t have to bother about R&D as they let others do it for them.

Last year Coles supermarket in Australia stopped selling Mainland cheese. The reason given was their philosophy that 90% of food should be Australian. Nobody appears to have challenged the calculation – and though such things as chocolate, cocoa, coffee, rice are mostly (or entirely) not grown in Australia, the minute they are in a house brand they apparently count. Fonterra refused to repackage Mainland into a house brand.

Fonterra has indicated that the 21 brands currently in Australia will be reduced to four or five, and its 65 global brands will be trimmed. The cost of this to the Fonterra shareholders is considerable. Last year earnings in Australia before interest and tax (excluding the Western Australia dairy business) were down 15.9%. This year the half year (to

January) net profit released at the end of March indicated that earnings before interest and tax from the Australia-NZ foods business were down 32% to $NZ98 million. • Jacqueline Rowarth is Professor of Agribusiness, University of Waikato, NZ.

House brands pose a major risk to the likes of Fonterra’s Anchor brand.

House brands are also having an impact on New Zealand dairy farmers, writes Jacqueline Rowarth

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Dai ry News aUsTraLia may 2013

14 // OpInIOn

edITORIaL

mILKIng IT...

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One jump ahead

With limited feed in the paddock, kangaroos are always unwelcome visitors on a farm�

However, it seems they do have some uses, ac-cording to Kongwak farmer Brian Anderson�

“They’re two days ahead of the cows normal-ly,” he said�

“They let me know where to put the cows next�”

Have you shot all the cows?A photo in the New Zea-land Herald of a cow being shot by a farmer in drought was one of the first images a Chinese film crew saw when they entered NZ�

The crew was sent from Sydney by a big Chinese network to report on the drought and the impact on the economy�

The film crew drove from Auckland airport to Hamilton on a road nor-mally bereft of cows�

When the film crew got to their destination they asked: “Have you shot all the cows?”

It took 10 minutes to convince the crew that New Zealand still had cows and the drought wasn’t that severe�

Bachelors go global

An opportunity has arisen for two rural bachelors to claim brag-ging rights over their New Zealand counterparts and expand their international presence�

The NZ National Agricultural Fieldays – the country’s largest – is opening its Rural Bachelor of the Year competition to Australian entrants�

Anyone that can drive a digger, reverse a trailer, chainsaw a tree and then rustle up a roast dinner could take the title�

Six Kiwis and two Auss-ies will be flown to a secret location on June 10 and need to make their way to Mystery Creek, south of Hamilton, the following day, stopping in specific towns along the way to complete various tasks� They must then take part in four days of events�

The winner will secure the coveted “Golden Gumboot” trophy and the hearts of many admirers�

Check out: www�fieldays�co�nz/ruralbach-elor2013

cool stuffGIVE A cow a cold shower and it will produce more milk� That is the hope of the owners of a dairy farm in Dubai, which has installed a state-of-the-art shower system for its 11,000 cattle�

So far, the cows at the Al Rawabi dairy farm in Dubai’s Al Khawaneej seem well pleased with their showers� “When they lie down, it means they’re comfortable,” said Rami Hamad, the farm manager� “And since they started showering, they’ve been very happy�”

Last February, the farm installed 20 motion-sensing shower sprinklers that switch on when a cow is under them� The farm’s 2300 cows shower each time they are milked – three times a day; the other 8700 shower once a day�

THERE’S NO shortage of advice for the government and oppo-sition on how to help the Australian dairy sector.

Farmer Power wants a 50 cents a litre levy on milk; Katter’s Australian Party wants a thumbs up affixed to every milk brand that pays above the cost of production; the Queensland Dairy-farmers’ Organisation wants an industry ombudsman.

The Federal Government recently allocated $60 million to be spent over two years to help farmers rearrange debt loads. It’s an insignificant amount of money to the Government, espe-cially when creative budgeting comes into play.

Opposition leader Tony Abbott recently told farmers at Koroit in Western Victoria that the carbon tax was their main concern and an Abbott Government would abolish it.

(He didn’t listen when farmers said it wasn’t their main con-cern – he had a message and he wasn’t going to deviate from it.)

With so many opinions aired, here’s what we think: let’s sign off on some Free Trade Agreements, and prioritise China.

We don’t agree that future Asian demand is the absolute cure all for current and future ailments of the industry. There may be huge demand for dairy but it will take innovative compa-nies to supply it.

International tariffs hold the Australia industry back and the Government needs to support Australian businesses by step-ping up the fight to have barriers removed.

Murray Goulburn is a case in point. It’s getting its act together under managing director Gary Helou.

Mr Helou isn’t sitting around blaming supermarkets. He’s not whingeing about the dollar and other rising costs, as these are out of his control.

However, he has offered similar advice to the Government regarding free trade when he called on them last year to: “Get off their bums and do something.”

The Government has to play a leading role in negotiat-ing trade agreements and reduction of trade sanctions, like former New Zealand Prime Minister Helen Clark negotiated with China.

New Zealand imports to China attract tariffs of 0-7% and this will fall to 0% in the future. Australian exports currently attract a 10-15% tariff to China. China has lifted its imports from 309 billion tonnes in 2001 to 3831 billion tonnes last year. It’s obvi-ous which country’s dairy industry is in the box seat.

If Prime Minister Gillard or Mr Abbott really wanted to help the Australian dairy industry, they need to crack the whip on their trade teams and help level the playing field.

Tony, Julia, bring us free trade


OpInIOn // 15

aLmOsT weeKLy I watch with interest an essential Australian indus-try losing credibility through its own actions. These include degrading its power base to being not only ineffec-tive but counterproductive; ongoing non-compliance to consumer/voter expectation that causes massive dis-ruption to their own business and the unintentional attack on the largest and most influential unofficial lobby group buying their products, the city con-sumer/voter.

This is the wider agriculture sector I observe. I appreciate dairy is heav-ily regulated and, by enlarge, complies. Unfortunately however the city con-sumer/voter lumps all farmers together.

I was raised by a builder in Gippsland and for many years our lives were affected by the fortunes of farmers. My old man would follow the wool price and if they were high he could count on some new sheds to build and if there was a drought or prices fell, we went from eating roast to mince. This devel-oped true empathy for the ag sector, reconnected in the last few years with meeting my partner who works across most of the ag sector.

My path was 30 years in the oil and gas sector that culminated in co-found-ing engineering and design company Plexal Group. In 10 years we expanded from our head office in Perth to Bris-bane, Thailand and Bangladesh, with a workforce nearing 200 and servicing majors such as Chevron and Woodside. At the beginning of this year a multi-national acquired the company and I no longer work in the industry. The views I share are mine alone and in no way do I represent Plexal Group.

In those 10 years we had our share of droughts and floods. The Global Financial Crisis (GFC) wiped out years of earnings; the flood in Queensland saw our office shut for weeks; floods in Bangkok virtually shut down our oper-ation for two months and the Bangkok airport was taken over by protestors, isolating us for several weeks. We never received an ounce of financial support or direct bail-out.

Nor was this the case for the 30,000 small, privately owned and often family-run businesses that went under during the GFC. Reportedly the rate of small business collapses is 12% higher today than during the GFC and rarely talked of in the media. Their cries for a bail out don’t make the light of day.

During my time in the resource sector I witnessed significant growth and with it their power and influence. They understand their power base and how to use it effectively. They have adapted to the expectation demands of consumer voters far quicker than ag in the last 3-4 decades and do con-sumer compliance exceptionally well. This has helped grease the wheels for

approvals, influenced legislation and enabled them to continue even after a major non-compliance.

It seems to me that the ag sector has the biggest stick of all in terms of power and influence over government policy - it provides 93% of all our food. His-tory will tell us repeatedly that anarchy is only an empty belly away. In no way do I advocate blocking of supply as it is a form of blackmail. None-theless it is a massive stick and one I see thrown away or broken into pieces time and again by the owners of it.

Last week I watched in amazement as the WA Farmers Federation and the WA branch of the Pastoralists and Graziers Association very publicly dis-agreed with each other over whether the WA wheat grow-ers should get another finance assist package or not. Divide and conquer is 101 ‘art of war’. But one you are meant to inflict on your enemy, not yourself.

Behind closed doors government members must shake their heads in bemusement and largely ignore because they are handed this gift. Then for a moment put yourself in the shoes of 70% of the nation’s voters, living in our cities. They see farmer against farmer squabbling over a finance assist package that their tax dollar is paying for...mean-while their job is under threat if they happen to work for an east coast gov-ernment or a small business. It doesn’t feel like winning hearts and minds.

And then this week my lounge is filled with sad and terrible images of mistreatment of Australian cattle in an Egyptian abattoir. Yet another non-

compliance with immediate and crip-pling affects on the industry. I admire the swift response by the ag sector with the self-imposed ban however the NGO produced footage it is another step closer to the cliff of total abandonment of this important industry.

Self-regulation often presents inter-nal conflict with trying to justify the endless compliance cost. It can be hard

to swallow the expenditure when more pressing issues of commodity prices, falling equity, exchange rate all threaten viability. However non-compliance to regulations or, worse still, betraying consumer/voter expectation, inflicts costs that make the alternative pale to insignificance. Although the live export industry is making significant inroads to detecting and rectifying the non-com-pliances, it is a process than needs to be better regulated. It is fantastic to see the industry come so far and improve animal treatment in places outside of Australia. I just hope they can find the improvements to limit opportunities for NGOs to brand the whole effort as a failure before it is too late.

Unfortunately the city voter is largely disconnected from the real issues and efforts of farming groups. Compliance

is not just about legislated regulations, the ag sector must always strive to hold the high ground in the eyes of voter sen-timent. If the city consumer feels trust has been breached they will happily bite the hand that feeds them. ‘Con-sumer Expectation Compliance’ is not optional, get on board or be forced out by new and more onerous legislation.

As a CEO and then chairman I had one not negotiable policy - never, ever publicly criti-cise your client. Of course we had robust negotia-tions behind the scenes but there is nothing to gain through public spats other than alienation with the client and their customer - the public consumer/voter. We actually sang the praises of our clients in the

press and I wish to point out that for 25 years there was a monopoly in the Aus-tralian Liquid Natural Gas sector.

On almost a weekly basis I can find examples of farmers and their lobby groups publicly flogging Coles and Woolies. For example I watch the milk price fight with Coles in com-plete bewilderment. Put yourself in the lounge of a city voter - 70% of our nation - most with a small asset and struggling to meet the mortgage pay-ments, compared to their perception of farmers being wealthy. A ‘hectare’ in the city costs $10,000,000 if you con-sider an average home of $500,000 on 500m2 block. In their lounge they see the dairy farmer being interviewed lamenting how hard they are doing with hundreds of hectares of prime land in the background and discard the cry of

going broke. I realise this is not reality but it is all about perception.

The government health depart-ment and health groups advertising campaigns stress you must eat a bal-anced diet of fresh produce. So you’ve just bought some nutritious milk for $1/litre over a bottle of coke at $2.25/litre for your kids. Coles have told you they are have provided that great personal achievement cheaper. You’re feeling pretty good about yourself. You don’t care how it has come cheaper, after all we’ve all been conditioned to expect cheaper goods for the last three decades and it has become our right not a gift.

Then they see farmers attacking Coles and that they are sending them broke.

City employees rarely understand the daily struggle of the very business that pays their mortgage let alone a farm business. So every time farmers attack Coles, they are attacking the most influ-ential lobby group that all political par-ties jump to - the city consumer/voter. This does not feel like a winning strat-egy.

Even though the resource sector is selling all their product overseas they know they must have the heart and minds of the city voter. Next time look a little closer at the “We Agree” campaign Chevron is running. It is all about win-ning empathy of the Australian voter - to ensure they support their develop-ments rather than calling for them to be stopped or shutdown. Perhaps the ag sector can learn from the resource sector?• Steve Jones worked in the oil and gas sector for 30 years and sold his engineer-ing and design company last year.

Strategy failing to win the hearts of consumerssTeVe jOnes

“It seems to me that the ag sector has the biggest stick of all in terms of power and influence over government policy - it provides 93% of all our food. History will tell us repeatedly that anarchy is only an empty belly away.”

– Steve Jones

Queensland dairy farmers made their feelings about Coles clear at last year’s Royal Show.

InFanT FORmULa made from A2 milk should be on Chinese shelves by September in the start of what A2 Corporation believes will be, conser-vatively, a $60 million business by 2016.

New Milk, Auckland, began the first packaging run of A2 Platinum infant formula on Sat-urday April 20 in a cer-emony attended by representatives of A2’s Chinese distributor, Chinese State Farms. They included Chair-man Xu Jun and senior executives of CSF.

Meanwhile A2 Corporation will be looking for more A2 farmers in Canterbury, NZ to supply the processors, Synlait Milk Ltd. A2 managing director Geoffrey Babidge told Dairy News they are looking for about 20 suppliers – currently they have three or four.

A2 pays a premium averaging 10% on the standard milk price, another company representative said. About 30% of New Zealand cows produce the A2 form of the beta-casein protein and some A2 farmers milk both A1 and A2, but they are milked separately.

The first shipments of A2 infant formula leave New Zealand for China next month, but as a new product it must go into quarantine. The planned roll-out in China will start in Beijing, Shanghai, Guangzhou, Tianjin and

Chongqing, then progress to other big cities plus Hong Kong and Macau.

The A2 formula will also be marketed in New Zealand and Australia in the second half of this calendar year, Mr Babidge said.

The company has three major strategies: continuing to build the business in Australia and New Zea-land in fresh milk; developing its UK joint venture business – the prod-

uct was launched in October last year in UK; and advanc-ing the China infant formula initiative, Babidge says. The latest announcement is the culmination of 18 months work.

The first A2 for-mula is being mar-keted in China for obvious reasons: strong demand and growth in China, and the high regard in which New Zealand-

sourced infant formula is held. During the two years spent developing the A2 infant formula strategies “there have been a number of health issues… or problems with products sourced or identified in China; that further underlies the opportunity not just for A2 but for all infant formula sourced from this part of the world.”

A2 announced in October last year the appointment of the China State Farm Group, a state-owned enterprise in Shanghai, to organise a distribution network for A2 formula in China.

“We’ve been doing further work with State Farm in developing the

strategy, completed the work on pack-aging and branding and have been working with our key manufacturer in New Zealand, Synlait. That culmi-nated in the first canning of A2 for-mula – the first A2 infant formula produced in the world,” Mr Babidge said.

“We had in Auckland our China representatives of State Farm, includ-ing the chairman, to attend the cer-emony at the canning facility near Auckland Airport. The first batch of product will be sold to China State Farm in May.

“Between now, the first ship-

ment going on the water, and release, China State Farm will continue to develop the network of distributors that will distribute in China. Initially we will be looking to access the baby and maternity store network as a first market entry and China State Farm will follow a wider distribution from there.

“We are branding it as A2 Platinum which is part of positioning the prod-uct as a premium product from New Zealand.”

On the need for more suppliers he said: “There’s sufficient for the infant formula that we’ve needed at the

moment but we are going to ramp it up pretty quickly.”

Mr Babidge said a2 brand products are based on intellectual property the company holds, in a world interested in digestive health, allergies and intol-erances.

“Infants in Australasia and China will be the first to enjoy a2 Platinum infant formula which contains only the A2 form of the beta-casein pro-tein, which is more comparable to the protein mothers naturally produce than to other beta-casein types linked to a range of potentially adverse health conditions.”


16 // agRIBUsIness

A2 infant formula sales in China tipped to hit $60m

A2 managing director Geoffrey Babidge (left) and China State Farm Holdings chairman Xu Jun at the prouct launch in Auckland.

“The A2 baby formula will also be marketed in Australia in the second half of this year.” - Geoffrey Babidge

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THe RecenT dairy commodity price surge has attracted significant attention as many in the Australian industry keenly search for signs of an end to the pattern of margin squeeze and unfavourable weather that has bedeviled the sector over the 2012/13 season.

In scrambling to cover an unfolding prod-uct shortfall, commodity buyers have been pushing prices to record levels in recent weeks.

On the NZ-based Glo-balDairyTrade (GDT) auction platform, the Trade-Weighted Index (TWI) has increased 35% since early March – even taking into account the widely anticipated correc-tion on May 1 (event 91).

The most recent weighted average price for WMP (US$4721/t) repre-sents a 50% increase since the start of 2013, while SMP average pricing has increased 25% during 2013 to date.

Volumes are low and transactions outside GDT platform for both these products are occurring at a wide range of prices – in

many cases significantly higher than the GDT equivalent.

Like the period of low prices that preceded it, the dynamics of the current environment are being driven largely by global dairy supply factors – so a recap of the key players is timely.

A leading contribu-tor to the wave of supply on dairy markets in late 2011/12, New Zealand has seen more modest growth this season due to signifi-cant rainfall deficits across some of its most impor-tant dairy regions.

The entire North Island and part of the west coast of the South Island are officially drought declared, although widespread rain-fall in late April brought an end to the immediate crisis.

Production in the cur-rent season is unlikely to significantly recover, as drought management strategies such as early dry off are not reversible in the short term.

With better prices on the horizon for 2013/14, farmers are likely to focus on preserving cow condi-

tion and rejuvenating pas-tures over the winter.

February data sug-gests NZ milk produc-tion decreased 2.6% for the month, compared to February 2012 (leap year adjusted) – season to date; production is up 5.3% on the same period in 2011/12.

NZ milk data is released on a lagged basis, so the full effects of the drought are not yet captured. A full-sea-son growth figure of +/- 1% relative to 2011/12 is expected.

In the United States, milk production for March 2013 was down 0.3% com-pared to March 2012, rounding off a first quar-ter that sees output down 1.1% for the year to date.

Whilst US domestic prices for dairy products are currently substantially lower than international levels, US data continues to show the more export-

oriented western states struggling to gain traction.

Most of the growth in US milk production has been in areas where cheese – rather than pow-ders and fats – is the focus.

Industry exits continue in the western states; how-ever local reports suggest many other producers are expanding to get ahead of any supply management schemes that may form part of the new Farm Bill legislation.

Feed prices and fodder availability are the cur-rent production-limit-ing factors for many, and will determine the extent of the role the US plays in global dairy markets through the rest of 2013. USDA forecasts indicate overall growth of 0.7% for is expected for the year.

Milk intakes for the 27-member European Union were down 1.1% for February (leap year

adjusted) and down 0.3% year to date, according to the latest official data. EU commission forecasts reflect growth expecta-tions of only 0.4% for the full year.

European produc-tion is only now begin-ning to gather pace after a cold spring, and as of late April weekly intakes are well below 2012 levels in a number of countries such as France, Ireland and the UK.

Production in South America remains weak after weather and feed cost pressures in 2012, but is recovering as margins improve.

Aggregate production for Argentina, Brazil, Chile

and Uruguay is expected to grow by around 3%, to just over 35 billion litres in 2013, however unlike the key Oceania and Northern Hemisphere producers, production growth in this region is largely matched by increases in consumption – particularly in Brazil and Chile – so the majority of additional product is finding its way into local markets.

In the same way that strong growth in all of the above regions led to a surplus in early 2012, the market is currently short of product as output in most places is sluggish at best.

Improving margins

at farm gates around the world are likely to see farmers ramp up produc-tion wherever the climate is favourable to make up lost ground.

A near term US turn-around is possible but most market participants see a strong 2013/14 season peak in New Zealand as the likely source of suf-ficient supply to take the heat out of pricing.

In the meantime, a window of opportunity exists for Australian dairy manufacturers to take advantage of a seller’s market – if they can find sufficient milk to do so.• John Droppert is industry analyst with Dairy Australia.

Prices surge as milk decline bites

GLobAL imPAcTJohN DroPPErT

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

FOnTeRRa ceO Theo Spierings says he has con-fidence new Fonterra Aus-tralia managing director, Judith Swales, can “accel-erate the turnaround and growth of our Australian business”.

For six months ending January 31, 2013, Fonter-ra’s Australia New Zealand (ANZ) business earned $98 million, 32% less than the previous year’s $145m.

The ANZ business includes brands in Austra-lia and New Zealand.

“Judith has been cred-ited with leading successful turnarounds and generat-ing extremely strong busi-ness results,” Mr Spierings said.

“She has extensive experience across retail, sales, marketing and man-ufacturing operations, together with a strong track record in developing talent and building leader-ship within businesses.”

Ms Swales was previ-ously with Heinz Foods Australia as managing director and prior to that the chief executive officer and managing director of

Goodyear Dunlop.She started her career in

the food division of Marks & Spencer in the United Kingdom.

Ms Swales said she sees tremendous opportunity in Fonterra’s business.

“It’s no secret that the Australian food manufac-turing sector is facing some tough challenges, she said.

“As I see it the challenge is to get even closer with our customers and con-sumers and really under-stand how we can deliver to them the next big thing in dairy.”

Fonterra is also look-

Swales charged with restoring Fonterra’s fortunessUdesH KIssUn

ing for a new head for its revamped global brands business.

Mark Wilson left the co-op last week citing family health matters. Before he left, the co-op announced a new leader-ship team for its new Asia Pacific Middle East Africa (APMEA) business unit.

In Fonterra’s half-year results announced in March, the APMEA business unit contributed $271 million to normalised earnings before tax compared to $293m the year before.

Consumer and food service earnings rose in Asia and Middle East. Fon-terra’s Chilean subsidiary Soprole also performed strongly.

Spierings praised Wil-son’s important contribu-tion to Fonterra, leading sustained growth in the cooperative’s Asian and Middle East consumer businesses over the past five years.

He said Wilson had overseen the creation of the new APMEA

business unit. “It has been a big

undertaking and with all the key management now in place for APMEA, Mark has decided due to some family health matters that the time is right for him to leave the cooperative.”

The co-op has also appointed Juan Carlos Pes-

tana as managing direc-tor ASEAN. He is currently head of Fonterra’s Latin American joint venture with Nestle.

The new managing director ISMEA (Indian sub-continent, Middle East-Africa) is Alan Fitzsimmons, general man-ager of Fonterra’s Indo-

China business. The managing director

of Fonterra Brands New Zealand, Peter McClure, is retained in the role. The chief financial officer for Fonterra’s ASEAN—Middle East North Africa business, Malcolm Smith, becomes the new director commercial.

New Zealand’s entire North Island and part of the west coast of the South Island are officially drought declared.

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18 // aBVs

THe ImpROVed Fertil-ity ABV (Australian Breed-ing Value) is expected to increase the average reliability of the trait by 6-10%, depending on the breed.

The latest Austra-lian Breeding Values were released by the Austra-lian Dairy Herd Improve-

ment Scheme (ADHIS) last month.

ADHIS general man-ager Daniel Abernethy said there are many more bulls with fertility ABVs and overseas bulls with fer-tility ABV(i)s than in the past.

“This is something farmers have been asking

for, and an exciting out-come of collaborative research by ADHIS and the Dairy Futures CRC,” he said.

The new model is a

better indicator of the fer-tility of a bull’s daughters because it uses a multi-trait approach including calving interval, lactation length, mating and preg-

nancy data. The Fertility ABV was

first released in 2003, and is included in the Aus-tralian Profit Ranking as daughter fertility makes a significant contribution to farm profit. In the past, the Fertility ABV has been based mostly on a calv-ing interval and days from

New ABVs strengthen fertility, workability

calving to first service.The more daughters

that got back in calf within six weeks, the higher a bull’s ABV for fertility.

The Good Bulls Guide, which is mailed direct to dairy farmers, now includes a dedicated list of bulls sorted on their Fer-tility ABVs.

The April ABV release will also give farmers more bulls with work-ability ABV(i)s to choose from.

Workability ABV(i)s include temperament and milking speed. This is the first time workability ABV(i)s have been avail-able for overseas proven bulls with few daughters in Australia.

Mr Abernethy said it was a significant develop-ment in enabling farmers to make improved selec-tion decisions using these traits. In comparing the new Fertility ABV to its pre-decessor there are some winners and losers. Some bulls will have higher Fer-tility ABVs and others will be lower.

The Fertility ABV of bulls that change most compared to their previ-ous Fertility ABV are those bulls whose daughters were culled before calving again due to fertility.

This is because the new Fertility ABV includes information on culled daughters; by using lacta-tion length and predicting calving interval for cows that are reported as culled for poor fertility.

The re-ranking is less among the most reliable bulls with large number of records as their daughter fertility is well known. The

spread of bulls between the best and worst for fer-tility ABV has increased.

Genetics is responsible for about 5% of the variation in fertility between dairy cows. The rest is determined by environmental factors, especially management of nutrition, body condition, animal health and other issues. Selecting superior sires for fertility should form one component of the overall fertility management plan.

Research has shown that selecting for fertility using the ABV for fertil-ity can result in significant differences in reproduc-tive performance within Australian herds.

In 2011 the Dairy Aus-tralia InCalf project reported a 14% greater 6-week in-calf rate in daughters of bulls with a Fertility ABV of greater than 105, compared to bulls with an ABV of less than 97.5 (Dairy Austra-lia In Calf Data Project Report, 2011).

Every mating deci-sion is an opportunity to improve herd genetics, so if fertility is your pri-ority select bulls within the Good Bulls Guide that rank highly for Fertility ABV.


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Daniel Abernethy

The improved Fertility ABV will increase average realiability of the trait by 6-10%.

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Andrew Younger with his Jersey herd, which has been heavily influenced by Sandblast.


aBVs // 19

jeRsey BULL Sand-blast has once again topped the Jersey Austra-lian Profit Ranking in the April ABVs and to see what impact he can have on a herd, look no further than Zeerust in northern Vic-toria.

Sandblast has had a significant impact on the Jersey herd of Andrew Younger, who milks about 200 head on 100ha of irri-gation just north of Shep-parton.

Mr Younger also estab-lished his Jersey stud, Kaddy, in 1981, and has used AI extensively since then. Homebred sons of AI bulls are used over heifers or to mop up after AI.

Mr Younger currently has over 30 daughters of Sandblast milking with more to come. He has 80 Sandblast calves so far.

Although highly sought now, there was a time when Sandblast could not attract any atten-tion from AI compa-nies. In fact, breeder Noel Furze, Nowell Jer-seys at Kyabram, had to run his own progeny test program in herds across Queensland, Victoria and Tasmania because no one showed any interest.

Mr Furze was having semen collected from Sandblast five years ago when he contacted Mr Younger, saying he had a bull that would suit his heifers.

“We put Sandblast in the paddock – it’s the easiest way I know to AI heifers,” Mr Younger said.

“I had him the first year, then Ian Richards, Gippsland, had him the second. Then I put him in with my heifers 12 months later, then used him as a mop-up bull. So the major-ity that I’m milking are natural bred from random matings.

“When the first of his daughters calved I said I’ll have 100 straws thanks. That was three years ago,

before he had a proof.”As soon as the figures

came through, Mr Furze was able to sign a deal with Agri-Gene, which now dis-tributes semen.

Mr Younger chose to use the then unknown Sandblast over his herd because Sandblast’s brothers had a proof and he was from a NZ cow family he was familiar with which had bred good bulls for many generations.

“I liked the cow and liked the mating. His mother has three proven bulls, in fact the cow family has had five bulls put through progeny tests and four would have made active service (One died before receiving a proof.) This family now is one that dominates genomic proofs.”

Sired by AI bull Flower Power, Sandblast is out of a cow called Admiral Sandra, who Mr Furze pur-chased 14 years ago, when he was a teenager, at the IDW Showcase Sale.

She produced Tailboard, a previous number one bull in the breed, and Samboy, which reached number three on the ABV charts.

Mr Younger said Sand-blast is the most consis-tent bull he has used when it comes to uniformity.

“I’ve not had one that would not milk,” he said.

“His type in my opin-ion is identical to Flower Power but he has more strength in the front end and more milk with better components.”

Sandblast leaves an early mark

sTepHen cOOKeMr Younger said Sand-

blast daughters have less variation than those pro-duced by other sires.

“When they’re more even, it makes them easier to breed from” he said.

who: Andrew Younger whErE: Zeerust via Shepparton whAT: Sandblast

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20 // ABVs

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

PrOfIT PrOducTION SurvIvALcONfOrmATION

TrAITSWOrkAbILITy

dAugHTEr fErTILITy

rank bull Id bull Namegenomics included

Australian Proven or

Intl

Profit$

Profitref

ASIASIref

No. dtrs

No. Herds

Survival refOver Type

mam Syst

Type ref

milk Spd

Temp Like reldtr fert

rel Source

1 RoumaRe RoumaRe g a 316 94 254 97 387 84 107 87 106 106 95 103 102 102 93 97 91 CRV

2 RouFeCToR BuNDaLoNG RouFeCToR g a 295 75 243 81 66 29 107 63 111 108 76 106 104 104 76 96 57 aLT

3 29Ho12470 INDIJKS BaBYLoN g a 288 81 196 87 73 34 103 68 101 100 75 101 102 102 77 105 69 aBS

4 uSeaGe KaaRmoNa CaLeB g a 285 84 199 90 100 45 108 69 102 109 78 102 100 104 80 100 75 GaC

5 ReaLm eCLIPSe RoumaRe ReaLm g a 284 71 271 77 57 28 105 59 98 102 70 104 103 102 69 94 49 GaC

6 CaRmaRe KaaRmoNa CaRmaRe g a 282 69 212 73 41 22 106 60 105 103 72 103 103 103 69 100 48 GaC

7 SHoLTZ ST. CLaIR SHoLTZ-TWIN a 281 72 198 80 48 26 105 58 105 103 72 101 104 104 64 101 55 aBS

8 WeSTGaTe GaLLRae JoCKo 3438 g a 269 82 178 88 94 46 110 66 111 108 78 104 103 103 83 96 65 GaC

9 DeaNCoX maNNa FaRm DeaNCoX g a 262 81 197 87 86 41 106 66 108 104 77 101 102 103 81 100 64 GaC

10 DeLSaNTo maNNa FaRm DeL SaNTo g a 261 81 230 89 95 48 102 64 110 110 64 100 101 102 80 100 71 GaC

JErSEy TOP 10 Profit - Australian proven

1 SaNDBLaST NoWeLL SaNDBLaST g a 320 82 246 88 94 27 102 68 110 112 77 101 105 106 83 105 71 aGR

2 TBoNe RICHIeS JaCe TBoNe a364 a 272 82 202 87 67 24 106 72 118 115 83 104 105 106 76 100 77 aGR

3 aLToN CaIRNBRae JaCeS aLToN g a 266 93 214 98 913 168 105 78 110 108 87 104 106 105 94 98 82 aBS

4 VaNaHLeN PaNNoo aBe VaNaHLeN g a 241 76 179 81 50 26 107 62 123 117 74 102 105 106 74 98 63 aLT

5 VaVoom RoCKLeIGH PaRK VaLeRIaN VaVoom g a 236 72 234 79 53 21 102 59 102 99 71 102 103 104 73 98 43 aBS

6 LaRFaLoT LIGHTWooD LuCRaTIVe g a 230 93 187 98 894 193 105 81 110 106 90 100 102 103 97 98 80 GaC

7 GaINFuL KaaRNoNa GaLeao g a 205 82 174 88 84 46 105 67 114 111 75 100 103 102 84 93 71 GaC

8 TaILBoaRD NoeLLe TaRSaN g a 203 97 165 99 1246 239 103 91 105 103 88 100 102 101 97 98 95 GaC

9 amBmaNHaTTeN oKuRa maNHaTTeN-eT SJ3 g a 194 98 212 99 1732 246 100 95 98 95 95 101 101 100 98 97 97 CRV

10 DeLIaN LoXLeIGH DeLIaN g a 187 74 182 81 64 36 104 60 113 107 72 102 99 102 75 99 55 GaC

rEd brEEdS TOP 10 Profit - Australian proven

1 RaNDeRSDaVID R DaVID a 252 80 112 87 59 13 VIK

2 PeTeRSLuND PeTeRSLuND 1213 a 213 96 114 98 748 105 108 90 93 92 83 102 99 101 94 105 95 VIK

3 aRBBoNJoV I BoSCoWaN BoN JoVI a 204 83 150 90 112 56 104 65 111 105 71 100 102 102 82 104 70 GaC

4 VRSoLeRo2851 VR SoLeRo a 190 69 170 79 29 10 99 42 VIK

5 BoTaN3829 BoTaNS 3829 a 185 95 117 98 689 95 105 88 101 101 100 94 98 94 VIK

6 aRBPoTSIe GRaZIN PoTSIe a 181 80 145 89 109 50 102 58 98 93 65 98 100 100 83 106 62 GaC

7 aRBBoBDoWN LoDeN BoB a 174 90 178 97 747 162 103 72 110 104 79 98 99 100 96 98 78 GaC

8 aRBFRoSTY meRIBeN PaRK JaCK FRoST a 165 74 128 83 81 34 102 56 103 106 61 101 103 103 77 101 44 GaC

9 oBRoLIN1804 o BRoLIN 1804 a 165 91 81 96 299 51 106 77 101 103 76 104 102 102 89 103 87 VIK

10 aRBLIPPmaN BoSGoWaN LIPPmaN a 163 78 113 89 113 40 103 50 108 109 51 100 99 99 84 102 57 GaC

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ABVs // 21

Bloodlines. They run deep.

Brian Anderson’s grandfather and uncles bred race horses. He and his father, Bill, have always had an interest in breeding dairy cows.

Their pursuit of that interest (“We pushed it a bit more, and a bit more”) has seen Bundalong Hol-steins awarded many acco-lades, including the top Australian Profit Ranking herd in the April release of the ABVs.

Bundalong also bred the number 2 bull in the Australian Profit Ranking – Bundalong Roufector. The bull’s sire, French-bred Roumare, retained his place at number one.

Previously, they were awarded the 2010 Austra-lian Cow of the Year and in 2008 received the Master Breeder award for 20 years of breeding excellence.

The Andersons have been breeding Holsteins on the family’s 170ha prop-erty at Kong-wak, between Korumburra and Won-thaggi, for almost 30 years.

Brian and his wife, Janelle, now operate the stud and Bri-an’s father, Bill, continues to take an active role on the farm.

Bundalong Holsteins currently supplies about 8 to 10 sires to artificial breeding companies annu-ally as well as another 30 to commercial operations.

At the Anderson’s place, stud animals don’t get any special treatment - they’re all working moth-ers – who contribute to the 230-cow herd milked twice daily in a 17 swing-over herringbone dairy. About 90-95% of the herd is reg-istered – non-registered cows are retained if their performance in the dairy warrants it.

The breeding empha-sis is on producing a functional, profitable cow which is “just above medium frame, with plenty of middle, good feet and legs that will produce plenty of good quality

milk, get back in calf and last in the herd”.

“We don’t breed for extreme type, we want functional type,” Mr Anderson said.

“We choose deep pedi-greed cow families, which means type seems to come easier. When you have that depth of pedi-gree, even if one genera-tion lets you down, the next generally comes back.

“We have bred 15 EX cows and traditionally you wouldn’t breed that many with a herd our size but the depth of pedigree assists that.”

Mr Anderson said achieving a high rank-ing in the APR system was important.

“APR is based on payment system, why wouldn’t you run with that? We use bulls high in APR listings – whether Australian bred or imported with conver-sions.”

Bill Anderson started farming in 1971 when he took up 45ha across the road from the Anderson’s current farm.

They shifted to their 130ha farm in 1979, run-

ning 160 milkers, includ-ing some stud Jerseys and a crossbred herd as well as some South Devon cows and calves. The beef cattle are long gone and the herd is pure Holstein. They now lease a further 40ha.

“In 1987 we flushed some of our commercial cows and concentrated on having a high genetic herd but at the time we were focused on milking only,” Mr Anderson said.

“In 1990 we bought Kenron Ted Jennifer 12th, who we thought had a real future as an embryo trans-fer donor - her genetics could be marketed.

“When we bought a yearling heifer for $3000, dad said we’d need to get a return on our investment. That’s when it started and we haven’t stopped since.”

Her cow family had the No. 1 ABV cow in Australia and Mr Anderson said it was typical of future

who: Brian Anderson where: Kongwak, via Korumburra whaT: Top APR herd

Bundalong number one herd

purchases.“We buy in some very

select animals from elite herds but only if they have something to offer our own herd genetics and importantly, the Austra-lian herd as a whole,” he said.

The Andersons have 10 different cow families and are very select in what cows they choose.

“When we purchase an animal, we need to know what we’re going to do with her. Otherwise, it’s dear milk. You don’t want an $8000 cow that’s just a milker. You need to know how you’re going to market her pedigree.

Breeding also enables the Andersons to diversify their income.

Mr Anderson said they constantly try to run the farm profitably and com-fortably. “We don’t sacri-fice pasture management for increased production. We need the right stock-ing rate and for us that’s 2.2 cows/milking hect-are. With that, in a good season, you can make money, in a bad season you can cope.”

The Andersons constructed a simple feedpad, which is only utilised when conditions are too wet to feed in the paddock. The stocking rate has not been increased since it was installed. They feed their own round bale silage and buy some when short.

The cows are run as one herd all year and calving takes place from March-October. They milk all year, which Mr Ander-son said gives them flex-ibility to take leave when it suits.

It also ensures there are recipients for embryo transfer (ET) when required.

“Most embryo flushes are done in maiden heif-

ers,” Mr Anderson said. “If a calf is born in March, then we can flush her the following March. What’s the point flushing then if you can’t implant until October? That’s six months they’ve wasted.

“You can also sell chopper cows sooner if needed, or can milk an extra six weeks if the season is good.”

The Andersons used to perform about five ET programs a year, but have reduced this to three larger programs a year, flushing 20 animals for about 120 embryos.

Aritifical insemination (AI) is conducted at every milking - twice a day during the joining season. “With two in the shed, it’s easy to do it during milking,” Mr Anderson said.

“It all takes a bit of attention to detail but we’ve spread the load like that the last 20 years – I think it’s sustainable.”

sTephen Cooke

Brian Anderson with Donor Perfector-ET EX91 3E, the 2010 Holstein cow of the year.

You don’t want an $8000 cow that’s just a milker. You need to know how you’re going to market her pedigree.

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Heifers on Target offers ways to improve your heifer management that will work across all calving systems and do not rely only on knowing your heifers’ weights.

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22 // mAnAgemenT

The world’s first rotary swing-over dairy enables a single operator to milk 220 cows an hour.

Cobram dairy farmers Joe and Anna Lenssen had the new dairy custom made to suit their ideas.

When searching for a replacement for their 20 aside swing-over dairy, Mr Lenssen said there were a lot of boxes that needed to be ticked.

“It had to be a one man operation, and milk metering had to be incorpo-rated to monitor cow daily production and therefore pick up any abnormali-ties or variabilities that needed check-ing,” he said.

Mr Lenssen said cup efficiency was an obvious downfall in other rotary dairies, while the cost of building, wash-ing and maintaining the plant was also significant.

While milking in the old swing-over dairy, Mr Lenssen realised cup use was efficient and began to envisage an idea of a swing-over rotary.

The couple also recorded 69% con-ception rate after a six-week AI period. “We would have been lucky to record 50% before that,” Mr Lenssen said.

He did not want to install a tradi-tional rotary dairy, saying a 50-unit rotary would take 12 minutes to com-plete a rotation. Most cows would finish milking long before they finished their grain ration, he said.

The 60-stand rotary with 30 clusters means the dairy can be operated easily by one person. Each cow does two laps but the milking clusters are attached for one.

The cow milked on the first lap is teat-sprayed by hand before her second

lap. The cluster is attached to the cow that has just stepped onto the adjoin-ing bale.

At the end of the second lap, the first cow walks off and is replaced by a fresh cow. It’s a simple operation for the milker, which will also prove important when attempting to attract and retain staff. The reduction of a second staff member is also a significant saving.

The design reduces the cost of clus-ters by half. Money is also saved by using less water and detergent to wash the clusters and less energy to run the vacuum pump.

The dairy operates on the same 630 litre hot water system used for the old 20-stand swingover dairy, which required two people and took two hours to milk 240 cows.

Mr Lenssen said the cost of the dairy was also equivalent to that of a tradi-tional 44-head rotary.

“It is perfect for 300-400 cow herds,” Mr Lenssen said. “You could milk 300 cows in 1 ½ hours and 400 in two hours. It is ideal for one person.”

Mr Lenssen designed the Lenssen Gate (a galvanised steel gate operated

who: Joe and Anna Lenssen where: Cobram whaT: Rotary swing-over dairy

Rotary swing-over dairy lifts milk production, calving sTephen Cooke

by compressed air), which ensures cows can enter and exit the platform safely.

It ensures only one cow can enter the platform at a time. The gate slides across the entrance to the platform and allows cows to step on only if it is their turn - every second bale.

If the cow does not enter the plat-form, or she enters incorrectly, the plat-form stops, preventing empty bales on the platform.

Some cows are quite happy to stay past their second rotation, requiring gentle encouragement to leave their bale. When their bale reaches the exit gate, a bottle filled with sand rattles above their heads. The noise tells the cow her time is up.

If she still does not exit the plat-form will automatically stop to allow the operator to manually encourage her off, thus preventing cows staying on the platform for an extra round. Once taught there is usually no prob-lem with this.

When approaching different com-panies to build his design, most said it wouldn’t work or that they didn’t have the technology to develop it. However Global Dairy Solutions (now Pneutech) and project engineer Bob Johnstone agreed to build it.

Mr Johnstone used Siemens soft-ware to develop the program.

Now, 12 months on since it was first used, benefits have been identified and modifications have been made to con-tinually improve the program. These include individual grain feeding based on a seven day production average, and automatically increasing the amount fed for fresh cows and decreasing the

amount for drying off. Animals under a certain age

also receive 120% of the ration.Each cow is teat sprayed

and checked by the one opera-tor which has reduced the cell count dramatically.

Another benefit is the Easy Dairy program which records cow treatments, seven-day average, mating details and pregnancy testing.

“All the information on every cow is at your fingertips during milking, allow-ing you to make treatment or drafting decisions on the spot,” Mr Lenssen said.

“The verbal instructions also tell you when cows are on withholding treat-ments or whether they are fresh.”

The computer is linked to drafting gates for automatic drafting.

Other information can be input during milking if need be, including recording which cows have been treated for mastitis.

The final cost of the dairy was about

$500,000. This did not include the con-crete yard, which was already in place. Mr Lenssen also saved money by install-ing plumbing and concreting himself.

Through improved calving rates and increased production, he is well on the way to paying off his investment.

Production in the old shed, milking 300 cows, was 144,229kg milk solids.

Moving into the new shed in Octo-ber, and milking 330 cows the produc-tion increased to 176,729kg m/s.

This season they are on target to achieve more than 180,000kg m/s with 330 cows. This was achieved using less grain and culling low preforming cows with the information available on Easy Dairy.

Joe Lenssen with his rotary swing-over dairy.

The 60-stand rotary has 30 clusters.

Complete information on each cow is at Joe’s fingertips.One operator can milk 220 cows an hour.


mAnAgemenT // 23

mAny dAiry farmers are faced with the need to fill significant feed gaps at certain times in the season.

Where purchased feed is required, the gen-eral approach is to look for lowest cost feed in terms of cents per mega-joule of energy or grams of protein. Sometimes, the lowest cost feed is also low in energy or protein.

When the energy or protein concentra-tion of the diet is low, so is milk produc-tion. Also, the cow compen-sates by losing con-dition. So diet quality is also important when com-paring feeds.

Typically, cereal grains are the lowest cost con-centrate.

Other forms of concentrate such as canola are added to increase the protein content to the level required. It is also important to address the quality of the forage component of the diet (i.e. pasture, silage, hay or crops).

It isn’t possible to give a recipe for the quality of fodder to buy, as it’s possi-ble to use a range of forage qualities if they are bal-anced in the diet by other high quality feeds. How-ever, some rules of thumb may be helpful. Look for feeds that are:

■ At least 10 megajoules of metabolisable energy (ME) per kilogram dry matter (DM)

■ As high as possible in protein (greater than 14% would be good)

■ As low as possible in fibre (under 60% neu-tral detergent fibre if you can)This rules out silage

and hays made from mature crops with lots of stem.

Hay crops cut at an early stage of maturity and those with lots of leaf compared to stem are best. Legumes tend to

be of higher quality than other hays cut at a simi-lar stage of maturity, but you can get good and bad quality in any silage or hay type. Rule out anything with spoilage.

It is common to fill feed gaps with concen-trates first, then top up the diet with hay and silage.

There is a limit to feeding concentrates. Recent research conducted at DPI Ellinbank identified that dietary problems can arise when more than seven

kilograms per cow per day of cereal grain concentrates is feed in the bail. The cows were average sized Holstein Friesians, so the limit

might be higher for larger cows and lower for smaller cows.

If you are approaching this level of concentrate feeding, be very vigi-lant in looking for signs of diet imbalance. This includes monitoring the milk pickup slips for a sig-nificant drop in milk fat test and checking for loose manure (with lots of undi-gested fibre present and lighter brown in colour than occurs on lush pas-ture).

The impact of diet quality on milk produc-tion was also highlighted by Project 3030 research. Combining the outcomes of this research and what is already known remem-ber the following:

■ The quality of silage and hay will impact on milk production and cow condition. If pur-chasing in hay or silage, do your best to provide your herd with good quality feeds.

■ Concentrates can improve diet quality but there is a limit to what can be fed.

■ Mining body condition may help with cash flow but this will be at the expense of milk pro-duction in the next lac-tation or two (not to mention the impact on reproduction).

■ Considering selling

Tips on feeding through the gapgreg o’Brien

You can get good and bad quality in any silage or hay type. Rule out anything with spoilage.

cull cows early if it is not possible to feed the herd well enough.The research quoted in

this article was supported by Dairy Australia and Department of Environ-

ment and Primary Indus-tries.• Greg O’Brien is a member of the Department of Envi-ronment and Primary Industries team at Ellinbank, Victoria.

Look for feed as high as possible in fibre.

www.incitecpivotfertilisers.com.auIncitec Pivot Fertilisers is Australia’s reliable leader in soil and plant nutrition, investing locally in agronomic solutions to help Australian farmers remain globally competitive.

Incitec Pivot Fertilisers is a business of Incitec Pivot Limited ABN 42 004 080 264™ Trademark of Incitec Pivot Limited.

IPF0

124

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24 // mAnAgemenT

Mixed pasture trials boost milk solids

A Three-yeAr experi-ment with mixed pastures could have big implications for future management of environmental impacts.

Results showed cows

in the trials fed on mixed pasture excrete half the amount of nitrogen (N) in their urine compared to cows on standard pasture, the recent DairyNZ Farm-ers Forum in Whangarei heard from senior scientist Sharon Woodward.

DairyNZ senior scientist Sharon Woodward says urine nitrogen loss was halved and summer/autumn milk solids increased with mixed pasture versus standard pasture.

Milk solids production was also boosted 15-20% in late summer and autumn when cows grazed mixed pastures.

“The big thing for the future is that feeding mixed pastures has had a major impact on reduc-ing urinary N losses from the cows,” Mrs Wood-ward said. “This has impli-cations for greenhouse gas emissions and nitrate leaching.”

In the experiment both the standard and mixed pastures were sown with perennial ryegrass and white clover. The mixed pastures were also sown with prairie grass, lucerne, chicory and plantain.

All pastures were set up three years ago on the Scott Research Farm in Hamilton, NZ and all received the same treat-ment for maintenance fer-tiliser, urea application, grazing and cutting for silage.

Mrs Woodward says over the three years the total cumulative dry matter yields were the same for both pasture types. In the summer/autumn there were advan-tages in feed availability from the mixed pastures, but these were lost in winter.

Indoor and outdoor trials were used to assess milk production and nitro-gen partitioning. “When you feed cows indoors in metabolism stalls you can measure the intake of each cow and also collect all the urine and faeces,” Mrs Woodward says.

“The cows were fed either mixed or standard pasture. The cows on the mixed pasture ate less but they did produce more milk, and of course that meant more milk solids, not only because of the increase in volume but because we didn’t get a change in the milk fat con-centration, but we got an increase in the milk pro-tein concentration.

“But the key reason for using the metabolism stalls was to look at nitrogen par-titioning within the cow. This was important from an environmental perspec-tive because we get a feel-ing of what’s happening in terms of greenhouse gas – that’s your nitrous oxide

and ammonia emissions and what’s going to happen in terms of nitrate leach-ing.”

Cows on the mixed pas-ture partitioned about 23% of their daily nitro-gen intake into the milk, about 39% went into the faeces and 29% went into the urine. Cows on stan-dard diets put a lot less nitrogen (15%) into the milk and much more (43%) into their urine. “And it’s that urine that’s a big prob-lem from an environmen-tal perspective.

“The key point here was the cows fed the mixed diet were excreting only half the amount of nitrogen in the urine than the cows on the standard diet.”

In her summing up Mrs Woodward said the biggest finding of the study was that feeding mixed pas-tures had a major impact on reducing urinary N losses. This was achieved with no loss of milk pro-duction and a 15-20% boost in late summer/autumn. She asked farm-ers to consider what put-ting a portion of their farm into mixed pasture might mean for their profitability and their ability to reduce nitrogen losses on-farm.

The work was funded by DairyNZ and the Minis-try of Business, Innovation and Employment.

Mrs Woodward later said an application had been made for funding for a much bigger programme of work over the next six years investigating use of various forage species to reduce nitrate leaching. If successful, one aspect will be more indoor work con-trolling the composition of mixed diet to try to pin-point which species might have the major effects on production and reducing N loss.

They would also look at the on-farm situation – in the trials so far cows were fed a 100% mixed diet but it was unlikely on-farm that all paddocks would be sown in mixed pas-ture, which also takes a few years to get established.

So mixed pastures were not the “silver bullet” to reduce nitrogen leaching, but increasing pasture spe-cies diversity could cer-tainly provide part of the solution, she believes.

pAm TipA

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mAnAgemenT // 25

Low planting lifts water qualityThe BeneFiTs of keeping stock out of waterways with fenc-ing can be boosted by a planted margin, which will help improve water qual-ity.

Long dense grass, flax, sedges and rushes serve as a filter to help remove sed-iment, bacteria and nutri-ents (mostly phosphorus) from surface runoff. The planting shades narrow waterways (less than 2m) and improves the habitat for fish.

There are a number of locations where low plant-ing will be most effec-tive at improving water quality, such as along drains and small lowland streams that feed into main rivers; areas with sig-nificant runoff; and beside waterways strip grazed in autumn and winter.

Other ideal locations

are beside vegetated drains in areas with poor soil drainage or pugging and moderate slopes, and where paddocks are cul-tivated.

In general, the steeper and longer the slope feed-ing into the waterway, or the more poorly drained the soil, the wider the planted area needs to be.

For gently rolling land, a margin width of 1-3m per 100m of slope feeding into the waterway is ideal. In areas with steeper slopes or poorly draining soils, a grassy margin of 10-15m per 100m of adjacent slope is recommended. Getting plants in the ground Here are some simple reminders to help get plants off to a good start:

■ Plant on an overcast, wet or windless day (if you can)

■ Handle plants carefully to avoid root damage

■ Set plants out to check for correct spacing

■ Dig a good size hole and loosen the soil

■ Set the plant in the hole and fill three quar-ters full. Give the plant a gentle lift to set the roots in a natural posi-tion and continue fill-ing with soil, firming as you go

■ Stake plants to help find them again at

weeding time. ■ Weed growth (espe-

cially gorse, broom and blackberry) can be a problem in low plant-ing areas, so it’s impor-tant to manage it from the outset.

• This article is adapted from the fourth in a series of nine DairyNZ Farmfacts on managing waterways on farms. They can be viewed at www.dairynz.co.nz in the Farmfacts – environment section.

There are several specific locations where planting can have the greatest benefit on water quality.

■ Along drains and small lowland streams that feed into main rivers

■ Areas with significant runoff ■ Beside waterways that are strip grazed in autumn

and winter ■ Beside vegetated drains in areas with poor soil

drainage or pugging and moderate slopes ■ Where paddocks are cultivated.

ideAl loCATions

In general, the steeper and longer the slope feeding into the waterway, or the more poorly drained the soil, the wider the planted area needs to be.

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PAL0846_DN_260x187_v02.indd 1 3/05/13 9:51 AM


26 // mAnAgemenT

dederAng FArmer Scott McKillop runs 340 Holsteins on his family’s 500ha operation in the Kiewa Valley of north-east Victoria.

A fourth generation farmer, Mr McKillop com-bines his family farming heritage with an agricul-tural science degree from the University of Mel-bourne and 15 years of off-farm work experience in livestock management and pasture agronomy to his operation.

Over the past 10 years, Mr McKillop and his wife, Belinda, have converted a beef operation into a dry-land dairy enterprise and purchased a neighbour-ing farm.

Another farmer ran the dairy farm for seven years while Mr McKillop was working elsewhere before he opted to return to the farm full-time in 2009.

“While we still run 100 Hereford cows and calves, my father milked cows here 40 years ago, so I knew the farm had good potential for dairying,” he said.

To kick-start the operation, Mr McKillop bought a rotary dairy in Swan Hill, dismantled it and moved it 400km to Dederang.

In 2009, he also embarked on a major pas-ture renovation program, using herbicides to con-trol bent grass and other

weeds, applying lime and fertiliser to address acid-ity and plant nutrition needs and resowing the perennial pastures before buying 300 cows later that year.

Mr McKillop’s pasture management knowledge was fast tracked during his previous five years as an agronomist with Smyth Seeds, a specialist wholesaler and distribu-tor of pasture seeds based in Benalla.

It was during his days at Smyth Seeds that he first heard about a new tetraploid perennial rye-grass variety called Halo AR37 bred by Agricom.

“Five years ago, I saw some of the trials compar-ing Halo AR37 with other varieties and it stacked up pretty well, and I’ve grown it ever since,” he said.

He said the addition of the novel endophyte, AR37, gave Halo better pest resistance and more persistence in dry con-ditions, particularly last summer which was one of the hottest and driest in years.

“After sowing Halo in autumn, I cut it once in spring to reduce any seed heads and keep the plants green and leafy,” he said.

“This also means an extra one or two grazings of Halo in summer, com-pared with Italian rye-grass, and I also find Halo provides higher qual-ity, lower fibre feed in

late spring and summer when the annual pastures and Italian ryegrasses are starting to deteriorate.”

Since 2009, Mr McK-illop has grown as much pasture as possible, capi-talising on good seasonal conditions to produce annual and perennial vari-eties including chicory, brassicas, and Italian and perennial ryegrass.

“I’ve grown a lot of Choice chicory in the last three years and it’s a great herb for providing rap-idly digestible feed during spring, summer and autumn,” he said.

“Chicory is a short to medium term perennial which is best suited to our rising country because it doesn’t like wet feet.

“After two or three years, the chicory is over-sown with ryegrass, while our perennial pastures are sown on our heavier soils.

“My target is to grow as much feed as possible, even though our cows still receive about 1.8 tonnes of grain per head each year.”

It’s a philosophy that paid dividends last year, when Mr McKillop added another 32 cows to his herd to make the most of plentiful grass and feed.

“This made a huge dif-

who: Scott and Belinda McKillop where: Dederang whaT: Pasture improvement

Pasture improvement builds bottom line

ference to our bottom line when milk prices were at their highest,” he said.

“By matching our stocking rates to the avail-able feed, we can respond quickly and take up the opportunities.

“It’s all about finding the sweet spot for your operation.”

A member of a dairy business discussion group, Mr McKillop has a keen understanding of the key drivers of his farm business and ensuring its viability for the long term.

He enjoys talking with other dairy farmer mem-bers of the network to share their knowledge and experience.

He said dairy farmers were putting a lot more pressure on their peren-nial pastures these days, grazing them more inten-sively, applying fertil-iser and cutting them for silage.

“Under current sys-tems, we can’t expect our perennial pastures to last five or six years, particu-larly in warmer regions like north-east Victoria.

“If we get three or four years out of a perennial ryegrass, I think we’re doing well.

“When resowing, I like to choose the right cul-tivars for our situation, and make sure I do the job properly, without scrimp-ing on sowing rates or inputs.”

Mr McKillop is adapt-ing his plans for the coming winter season fol-lowing the tough summer.

“Fortunately, I believe we will be able to carry our cows through till June or July on our silage stores from 2012 and 2011,” he said.

“These reserves include 1800 wet tonnes of pit silage and 1000 bales of hay.”

Scott McKillop


AnimAl heAlTh // 27

Knowing your cows pays off

who: Andrew Schulz where: Glenfyne via Colac whaT: Animal health

riCk BAyne

Andrew sChulz’s philosophy about dairy farming is pretty simple and can be summed up in three words: “Know your cows”.

The Glenfyne dairy farmer knows his cows and the results show.

“It’s a lot of common sense really,” Mr Schulz said. “Animal health is one of the biggest issues on a farm. You can argue all you like but having a good herd is how a farm makes money.

“You’ve got to know your cows to have a good herd.”

Mr Schulz was recently named Dairy Austra-lia Employee of the Year at the Great South West Dairy Awards in recogni-tion of his four years as farm manager on Bryan and Jo Dickson’s farm at Glenfyne in south-west Victoria. In that time he has helped the farm to double production, improve its bulk milk cell count, reproduction rates and overall animal health.

Knowing his cows pays off in many ways. Recently Mr Schulz noticed one cow wasn’t in her usual spot at milking time.

“She’s usually in the first two or three rows but she was in the last run. I checked her and found mastitis. That’s how well you have to know your cows.”

That case of mastitis was the first one detected this year after calving in the 375-strong herd, a big improvement over pre-

vious years where 10-15 problems were detected.

The healthy cows are reflected in the BMCC where the farm is rated in the top 10% and continu-ing to move up the list, high in-calf rates and solid average production rates of 8500 litres and 640kg milk solids.

“We’re happy with those figures,” Mr Schulz said.

The herd has grown from about 250 cows when Mr Schulz started four years ago. “When I started we were doing 1.4 million litres – this year we’ll give 2.9 million a real scare,” he said.

“We broke 11,000 litres a day last year and at the moment we’re up about 10-15% on last year.

“That’s due to culling heavier, feeding better and having better cows.”

The farm has 70 Jer-seys with the remainder Holsteins and crossbreds. “I prefer Jerseys for ease of handling and because they’re easy to get in calf. We’re building up the Jersey numbers with about 30 heifers a year and hope to have a half and half herd.”

Mr Schulz, 46, grew up around calves on his parent’s dairy farm near Echuca in northern Victo-ria. “Dad taught me a lot about cows and the impor-tance of keeping them healthy,” he said.

He later worked as a shift supervisor at an abat-toir before returning to the farm after his father died in 2003.

However, successive droughts left him wanting

to get out, even if selling was tough, and he moved south in 2009.

“It’s a very differ-ent way of farming down here,” he said. “I looked at how green it was and thought `heaven’.”

The 216ha farm with 145ha milking area includes a top area and steep declines to the Cur-dies River. Over recent years it has been exten-sively re-sown with rye-grass. The farm employs about 2 1/2 staff, including Mr Schulz’s wife Beth and workers rotating from the Dicksons’ other farm.

“We’ve got good feed and so we could push up the numbers,” he said. “We cut about 400 rolls of silage last year and brought in 150 tonnes or lucerne silage and 115 tonne of vetch, which is a bit more than usual because it has been dry.”

The farm also has a feed pad which is used virtually daily except for spring. “We let them eat as much lucerne silage after each milking,” he said.

Herd testing and heav-ing culling have been key ingredients of the farm’s success.

“I don’t know why everyone doesn’t herd test,” he said. “We bring in 50 or 60 heifers a year and have to make room. To get a good herd of cows you have to be a bit ruthless. I have sold very good cows because they have got mastitis three times.”

Mr Schulz takes care to prevent disease and places high importance on hygiene.

He is a strong advo-cate of Teatseal, lathering the cows with iodine when they come in the dairy after calving, and using gloves when handling the cows.

“There are little things you’ve got to do, like not letting them run down

the laneway when they’re drying off.

“Hygiene has a big part in it. We take our time and make sure we do it right.”

The farm has an excel-lent reproduction record. In the first nine weeks last year 75% were in calf.

“We only use A.I.” he

said. “The herd is better because we get rid of the low-fertile cows and use the best A.I.

“It comes back to knowing your cows. If you know them you notice when they’re fidgety and making a lot of milk a couple of days before

they’re in season.“When they’re joining

we feed them oaten hay and an optimiser pellet that is higher in energy and then put sugar in the pellet for more energy. A lot don’t do this because of the cost but it pays you back because they get in

calf. “We also do heat

detecting because it’s important to get them in calf in the first week so you get that extra milk.”

Mr Schulz also enjoys breeding and showing cows, with Jerseys his favorites.

Andrew Schulz will milk 2.9 million litres from 375 cows this year.

In the first nine weeks last year 75% of the herd was in calf.

IN UDDER WORDS...

With many herds drying off large numbers of cows in the coming weeks and months, planning is vital in ensuring a smooth and efficient dry off.

Selection of dry cow products – blanket or selective treatment and which product to use?

• Aim of dry cow therapy is to treat existingsubclinical infections and to prevent new infections in the dry period.

• Broadspectrum,longactingtreatmentsensureadequate antibiotic levels in the udder in the critical pre-calving period, when many new infections start.

• Askyourvetaboutthedrycowtreatmentthathas a label claim to help reduce clinical and subclinical mastitis in the subsequent lactation.

Vaccination programmes – prevent disease, ensure dose programs are followed.

• Cattlevax® 7-in-1 – for protection of cattle againstClostridialdiseasesandLeptospirosis.

• Bovilis® S – to help protect the cow and calf (through colostrum) against Salmonellosis

• Bovilis E (Bovac®) – to help control E.coli scours in young calves ( through colostrum)

• Rotavec Corona – a new vaccine againstcalfscourscausedbyRotavirus,Coronavirus, E. coli and Clostridium perfringens.

Allofthecalfscourvaccinesboost colostral antibodies so colostrum management is vital.

Drenching programme – which drench to use at dry off, are young stock due for a drench?

• Paramax® Pour-On contains Ivermectin andwill treat and control all major gastro-intestinal nematodes (including inhibited Ostertagia), lungwormandexternalparasites(lice,mites,Buffalofliesandcattletick).

• Studies have found that treatment withIvermectin at Drying Off resulted insignificant increases in milk production in the following lactation1 (up to 74 litres over the first 100 days) and also decreased calving to conception intervals as compared to untreated cows.

Coopers® have a team of Territory Sales Managers supported by Technical Service Veterinarians to help you plan your dry-off thisseason.Call1800 885 576 for more information.

1.Walsh,T.A.,Younis,P.JandMorton,J.M.(1995).Theeffectofivermectin treatment of late pregnant dairy cows in south-west Victoria on subsequent milk production and reproductive performance, AustralianVeterinaryJournal,72,210-207. ®RegisteredTrademark.

Planning – the key to dry off success


28 // AnimAl heAlTh

when Tom Paton made the move back to Koroit to take up his fifth farm in 15 years there was a lot of work to be done to get it up to scratch.

“The whole place needed refurbishing,” said

Mr Paton, when we visited him at the end of February. “We started with the pad-docks and are now work-ing on the shed.”

Mr Paton was originally from Koroit where he worked with Murray Goulburn Co-op for 30 years.

He and his partner

Helen Kincaid took up this current farm on June 1 last year. They are currently milking 500 cows on 300ha through a 44-unit rotary. They brought some cows here and bought in others.

Jamie Kelly is the oper-ations manager at the dairy and all three get

involved on the milking.One of the major

improvements in the dairy was to fit rubber matting in the stalls on the plat-form.

Mr Paton said they couldn’t bring heifers onto the platform, and decided to fit WestfaliaSurge Stud-flex matting which took

three hours.“It’s brilliant - you’d

think that they had been on a dozen times, not one kicked,” Mr Paton said. “We couldn’t believe how well it all went.

“Now we are saving a fortune in time and labour through lead feeding on the rotary instead of in the

Dairy matting improves farm flexibility

paddock.“We are bringing on

80 heifers and we are lead feeding 200 cows on the rotary.

“They get the right amount each of all the rations that they need. It only takes 25 to 30 min-utes a day.”

GEA Farm Technolo-gies Australia, distributors of the matting say that Studflex rubber matting is durable, dimensionally stable and cow-friendly.

The rubber compound offers high grip and com-fort, sound absorption, and excellent softness. The cows become calmer and quieter when stand-ing and there are Studflex options for all areas of the

milking shed.Mr Paton said they are

pregnancy testing and prostaglandin injecting on the rotary, when they couldn’t do it before, and the cows are not kicking any more.

“We have always had matting on the floor of the on and off sections of the platform, but I’m kicking myself that I didn’t have it on the stalls at my previ-ous place.”

Mr Paton said they milk all year round with 50% autumn and 50% spring calving.

He reckons they will build up to 600 cows; “All things going well, we’ll purchase more ground next door.”

“We are bringing on 80 heifers and we are lead feeding 200 cows on the rotary.”

Chris dingle

Tom Paton and Helen Kincaid

Operations manager Jamie Kelly

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PAL0947_DN_260x185.indd 1 19/04/13 4:23 PM


AnimAl heAlTh // 29

For A variety of reasons, we are seeing an increase in autumn calving cows in Northern Victoria. Just in the last week or two, I have noticed a real spike in the number of cows with Left Displaced Abomasum (LDA) so I have been up to my armpits in bovine intes-tines.

To be honest, doing LDA surgery is my happy place (which my wife Julie thinks is a sad reflection on my life). It is something I really enjoy doing. It takes a cow who is circling the drain and on her way to either the chopper pens or the knackery and pulls her back from the brink, and into full production.

Also once you are “scrubbed in” to a sur-gery, you can settle in for a chat as you know you have no other place to be for at least the next 30-45 min-utes. As my clients would attest, I really hate a chat! Of course, there are always exceptions, but the vast majority of LDA surger-ies, if done in a clean and timely manner, go very well. I have tried rolling cows, blind toggling them and even running them up and down hills and drench-ing them with coffee grounds to correct their LDA, but in my experience, nothing beats a right-sided pyloropexy.

I shave and prepare the right hand side of the cow, put a local anaesthetic nerve block into her, and the cow stands through the whole procedure (when it goes to plan). By deflating the gas in the LDA when necessary, then either sweeping or pulling the dis-placed abomasum across to the right hand side of the cow, the cow’s diges-tive juices can flow again as she was designed. I try to place two or three sutures into the muscular pyloris (the part of the stomach where the abomasum emp-ties into the intestines) and attach the pyloris firmly to the body wall. This is the “pyloropexy” which will hold the abomasum in place, and allow the cow to return to full production.

Without exaggera-tion, I have done literally thousands of these opera-tions, yet not one is ever the same. Cows who have been very ketotic either secondary to the LDA caus-ing indigestion and hence

a negative energy balance, or cows who have primary ketosis and/or fatty liver disease (which is one of the highest risk factors for developing a LDA) may have very friable omen-tal fat making pulling the abomasum into place a challenging dilemma.

Cows that have devel-oped abomasal ulceration due to the stress of calving, or the pooling of the diges-tive acids in the displaced abomasum, can develop huge adhesions making the task of correcting the LDA almost impossible. Foreign bodies of string, hair, fibre, silage wrap etc (phytobe-zoars) can seriously com-plicate the procedure and may result in the death of the cow.

We know that LDA is often a disease that would indicate a less-than-ideal transition. It is strongly correlated with all of the metabolic diseases that we associate with calving like milk fever and ketosis. Cal-cium is essential for muscle contraction, so a cow that has milk fever will not have normal gut motility or tone and therefore is at a high risk of LDA. Ketosis can lead to a loss of appe-tite and a gut that lacks fill is able to displace more easily.

I strongly believe that, in my area, the issue at present is a lack of effective fibre. Autumn, even more than spring, due to the high use of annual pasture like rye and shaftal clover, is a time of short, extremely lush pasture in the Goul-burn valley and many other regions. A lot of producers will feed straw, as a source of long, effective “scratch factor” fibre during times of extremely lush feed. The problem is the cows will often not eat enough straw, even when fed free choice and ad lib where really lush pasture is on offer.

I liken this to offering a child the choice between chocolate and fried chicken or vegetables and salad. The vegetables and salad will make them healthy, but that chocolate and fried chicken tastes great. Secur-ing (or reserving) some highly palatable cereal hay for this purpose is what I recommend to counteract a shortage of effective fibre.

Problems that lead to reduced feed intake, at any stage of lactation, will also

Incidents of LDA on the rise

aNimaL heaLThrob boNaNNo

increase the risk of a cow developing an LDA. For example I would always recommend checking a cow for LDA post lame-ness if she fails to thrive, even after the lame foot has been treated and seems better. I have seen many cases of LDA in mid and even late lactation cows

which have lost condition and done poorly after being

lame. Unfortunately, often these cows have been dis-placed for a long time by the time they are exam-ined, and they are poor candidates for success-ful (or more accurately economically justifiable) surgery. Many producers simply don’t think to check for a LDA in a cow who is

not “fresh” or being fed high levels of grain.

For this reason, I am certain a proportion of cows that are culled post lameness for poor perfor-mance actually have LDAs that are left undiagnosed because the farmer simply sends his problems away in the back of the truck.

As always, I would rec-ommend discussing this or any other animal health disease with your dairy vet-erinarian.

• Rob Bonanno is a past president of the Australian Cattle Veterinarians Asso-ciation and a director of the Shepparton Veterinary Clinic.

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30 // AnimAl heAlTh

milk Comprises almost 90% water, so it’s not surprising that a cow’s water intake has a major impact on her milk pro-duction. The equation is simple: when you provide enough water, cows drink more, eat more and pro-duce more milk.Increased water intake improves milk produc-tion

It might sound straight-forward, but the amounts

of water involved are sig-nificant. For example, one kilo of dry matter intake utilises up to five litres of water. In fact, cows need at least three litres of water to produce a single litre of milk. This means that high-yielding cows need more than 150 litres of water every day. Satisfying this need is, therefore, a crucial task for every dairy farmer.Make drinking easy and convenient

Cows drink fast – up to 20 litres per minute.

If they can’t, their water intake may fall off and their milk yield could suffer. For example, a 40% reduction in water intake can cut milk production by 25%. Cows like to drink when they eat and just after milking. They also prefer a large, calm drinking surface from which they can drink quickly and without stress. Furthermore, such natural drinking behaviour promotes further eating and even more drinking. And this results in

healthier cows and higher milk yields. There is a cost-efficient way to increase milk output.

A way that is often overlooked: optimising water supply. Cows like to drink at certain times of the day, they are fussy drinkers.Understand your cows’ needs

Water supply prod-ucts should meet your cows’ physiological and social drinking require-ments. Water troughs should provide easy, con-

venient access to water, in feed pads, loose housing and pasture. Cows should be able to drink as much as they want and as quickly as they want without having to wait. The water they drink should be fresh, clean and good-tasting. Water troughs should min-imise microbial growth and hinder dirt pollu-tion. They should be easy to keep clean, so you save valuable time. Durable, well-proven water troughs promote years of reliable, trouble-free operation that

The importance of waterkATrinA lee

you’ll appreciate as much as your cows will.

Hygiene, capacity and accessibility are critical factors when supplying water in a loose-housing environment. Use either UV resistant polyethyl-ene or stainless steel in hygienic, impact-resistant

and durable water troughs, together with high capac-ity water valves. The cow-friendly design of water troughs should provide easy access to promote comfortable and undis-turbed drinking.

• Katrina Lee is solutions manager with DeLaval.

heiFer weighTs were the topic of conversation for farmers at Jock O’Keefe’s farm during the Toolong-Koroit discussion group day at Minjah.

Dairy Australia’s new Heifers on Target program was piloted during the day.

This included using the new app tools for smart-phones or computer to benchmark heifers and calcu-late their daily target weight gain and nutritional needs.

Agribusiness Consulting’s Janet Sloan facilitated the day, with input from Warrnambool Vet Clinic’s Dr Ste-phen Jagoe.

“Heifers are a significant investment on farm and their management has long lasting effects. “At the point of calv-ing it is estimated that a heifer has cost between $1300 to $1500, not including labour costs,” Ms Sloan said.

Farmers at the day discussed their ideal heifer whose traits included:

■ Getting in calf quickly; ■ Calving without problems; ■ Producing well; ■ Getting back in calf (many times) ■ Recouping her rearing costs quickly.

Good heifer management and reaching heifer target weight is vital as it directly impacts on milk production and fertility.

Research shows that the benefit of higher liveweight at first calving is transmitted to the second and third lac-tation.

For every kilogram of live weight, an extra seven litres of milk is produced per year for each heifer. This may seem small but can translate to a huge difference in pro-duction across the herd.

Liveweight is a better measure of when heifers com-mence oestrous activity rather than age. Heifers that are grown well will get in calf more rapidly, and heavier heif-ers will conceive faster the second time round.

Dr Jagoe highlighted that good skeletal growth led to fewer calving problems, and feeding heifers to reach their optimum weight would help achieve this.

Measurement is the best way to take the guesswork out of reaching your target heifer liveweight.

Before Mr O’Keefe started his weighing program three years ago, he used to wean, drench and feed-out until joining and hope for the best.

Now he weighs his heifers regularly and has the infor-mation to correctly balance their diets to achieve his target growth before calving.

“By actually measuring the weights of heifers you can make more informed decisions to keep your heif-er’s growth rate on target. It takes all of the guesswork out of feeding and rearing,” Ms Sloan said.

Farmers who do not regularly weigh their heifers can use other benchmarks to assess their heifer performance and make sure they are on target to achieve desired goals.

More of the free two-hour Heifers on Target sessions are being held in the south west until

June 2013. Contact WestVic Dairy on (03) 5592 2477 or visit website www.dairyaustralia.

com.au/heifersontarget

Heifer weight impacts second, third lactation

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mAChinery & produCTs // 31

workiNg cLoTheschris DiNgLe

AT jusT 27, Brett Craig, of Swan Marsh in Victoria’s Western District, near Colac, has been contracting for over 11 years, which means that he started his business at the age of 16.

As well as the contracting business, he is now sharefarming with 140 Hol-stein, Jersey and Ayrshire cows on an 11 double-up shed on the 116ha property where he grew up and where his par-ents, Lindsay and Eileen, sharefarmed for 42 years.

He milks every morning, but not often at night during the harvest.

Mr Craig ran a Marshall Multispread 825t trailing spreader for seven years and said he had a good run from it, but last June he took deliv-ery of a Landaco Agris-pread Linkage LS2000 manufactured in Wagga Wagga, NSW.

He first saw the Land-aco spreader at the Farm World Field Days some time ago. “I’ve been drib-bling over it for years,” said Mr Craig. “I could see it would do the job of two machines. You need a belt spreader for lime and gypsum. This belt floor handles super well. The European machines, with gravity fed straight onto the spreading vanes, can’t do the same job. If it’s wet the material doesn’t flow.

“The Landaco is Australian-built and heavier built than anything else. I’ve spread up to 32m, it handles 30m beautifully.”

The Agrispread Linkage LS2000 has an 1800 litre hopper (2000 kg) and Mr Craig went for the optional elec-tronic scales which are Australian-built Elphinstone brand. Another option was stainless steel bolts to avoid corrosion. He is using it for about 90% contract-ing and the rest for his own use. At this stage he has spread about 500 tonnes.

He spread 2000 tonnes altogether last year.

The spreader uses a ground drive system to the cleated PVC conveyor and has twin hydraulic spinners, which have a maximum speed of 950 rpm. Landaco claim that the LS2000 will effectively spread just about any type of material including lime, cow manure, chicken litter, MAP, DAP, dolomite, super and others.

Mr Craig said that calibration of the spreader is made easy through an ‘app’ that Landaco loaded up for him on his mobile phone.

“Every blend is a different weight, so I keep a set of good quality kitchen

scales in the cab.”He said that he inputs

ratio (the speed of the belt), the density of the blend in kg/m3, spread width required and the door height into the spreadsheet, to get the application rate.

“So working off that rough guide I’m able to change the door height to meet the required

application rate. You don’t have to run the spinners at all when you are setting it up.”

The in-cab monitor that came with the spreader gives a digital display of the speed of the spinners.

The spreader is operated with a Valtra T140 tractor, and Mr Craig said there is not much power required; it just needs to handle the weight.

All his 25 contracting customers are dairy farmers and the spreader suits all their required applications. He has been able to set the machine up precisely. “Farmers are paying good money to have it done properly.”

“This is the first thing that I have bought that nothing has gone wrong with, particularly with the electronics

and the way it is assembled,” declared Mr Craig. “I was a bit wary of buying direct instead of through a local dealer, but that has worked out well.”

Spreading is normally from March to January, but it’s been a very dry season

in this district.“We went from being too wet to get

onto the paddocks to no rain at all. It’s very dry at the moment – hardly any rain since October.” So it is a late start this year and Mr Craig was looking at late April to kick off.

Otherwise he has had a good season – the contracting is constant.

Other equipment in the business includes a Lely Tornado baler/wrap-per, Krone mower/conditioner and a Duncan Renovator seed drill that he has had since starting contracting. The Marshall spreader has now been traded on an Amazone power harrow/air seeder combination.

Mr Craig has a philosophy of ‘one thing at a time’ with his contracting, rather than several machines and dif-ferent tractors which would necessi-

tate extra labour. He wants to keep it going as a one-man operation. However he will look at a second tractor to make change-over easier.

who: Brett Craig where: Swan Marsh whaT: Landaco Agrispread Linkage LS2000

Australian-built spreader does job of two machines

Swan Marsh dairy farmer Brett Craig also runs a contracting business.

The spreader is operated with a Valtra T140 tractor.

The Australian-built Landaco has a 1800 litre hopper.

We have the answer! The bale up feeder will save you money. With 5% or less hay loss our feeders pay for themselves.

$2200 incl GST plus delivery

Models available for cows, bulls, yearlings, calves, horses and sheep.

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32 // mAChinery & produCTs

■ Up to 20% capacity increase and up to 5% denser bales for improved productivity

■ New MaxiSweep pick-up performance for improved feeding

■ Variety of crop processing options for tailored crop management

■ Best-in-class SmartFill feed indicator system ensures uniformly dense and well-shaped bales

■ Plunger speed increased to 48 strokes/minute for faster crop throughput

■ Improved knotter shielding and impressive cleaning performance increase bale produc-tivity

■ Colour touchscreen monitor for wide-screen baler management

■ Improved lighting package and operator comfort boosting performance.

Bigger And BeTTer

New balers improve bale density by 5%new hollAnd has launched a new BigBaler range said to be capable of lifting farm capacity 20% and improving bale den-sity by as much as 5%.

Features include the maker’s new MaxiSweep pick-up and enhanced pre-compression chamber

crop flow monitoring. The machines also have New Holland’s CropID system and double knotting tech-nology intended to help professional hay and forage operators improve their baling.

Built at Zedelgem, Bel-gium, it has been engi-

neered “to meet the stringent quality, pro-ductivity and reliability requirements of modern baling businesses”.

The four model range produces bales from 80x70cm to 120x90cm. Crop-to-crop flexibility is said to be impressive.

The BigBaler “promises performance in conven-tional crops and non-tra-ditional crops such as sugar cane and maize stover”.

“Over 200,000 bales, equivalent to 10 seasons output, were produced before even the first pro-duction BigBaler rolled off

the line,” says New Hol-land product specialist Greg Moore.

“The prototype models spent two harvesting sea-sons, and baled about 20,000 bales in New Zea-land in a variety of crop types and conditions and performed exceptionally well.”

Next Generation Big Baler.

The new balers lift farm capacity by 20%.

No more sludge in pondsno joB is too big or too hard for Numedic’s new pond mixer, says company director Peter Reid.

The new mixer has been designed to eliminate the problems of crusting and agitation of dairy effluent ponds, he says. It also meets the challenges of high input farms and large efflu-ent ponds.

Reid said the mixer will break up the thickest crust and mix the con-tents of any shaped effluent pond quickly and efficiently.

“No longer will you be left with a metre or two of sludge at the bottom of your pond that you cannot pump,” he said.

“Superior mixing will let you uti-lise the entire pond, not just the top 70%, enabling you to reclaim back all of your storage pond capacity. No longer will you need multiple mixers on your pond, or mixers that require to be run for long periods of time.”

The mixer is positioned in the centre of the pond on a pontoon. Two opposed mixer blades pointing down-wards draw the effluent towards the mixer and create a swirling motion in the pond. Blade speeds are selected depending on the pond dimensions and thickness of the material that requires mixing. The blade speeds are controlled through a variable speed drive that can also be pro-grammed to rotate at slower speeds

as the pond level reduces which helps prevent liner damage.

The lower unit, incorporating both propellers, rotates through 360o. It can be locked in eight different ‘stir time’ positions for variable lengths of time (see chart). “We have found that time intervals of between 5-8 minutes per position are best,” said Reid.

These stir times can be altered and programmed with the variable speed drive.

After the pond has been mixed in position #1, the lower unit rotates to position #2 where the change in directional flow ensures it begins mixing a new section of the pond.

When the mixer has moved through its eight different stir posi-tions it has mixed all 360o of the pond

leaving no dead or unmixed areas of the pond, irrespective of shape.

The Numedic pond mixer has been operating on a 60 x 20m storage pond since September 2012 where it has been operating well.

Reid said typical responses from farmers are “brilliant” and “performing flawlessly”. He said on one farm, before the Numedic pond mixer was installed the pond had severe crusting with one third of the pond having a 1m thick crust. The rest of the pond had crusting 300-500 mm thick. The mixer broke up the crust in 2.5 hours.

The machine will be supplied with variable speed drives wired up and programmed to suit the buyer’s pond. Contact Australian distributor GEA on (03) 9335 9533

Numedic’s new effluent pond mixer makes short work of crust.

Lely offers a wide range of Dairy products to suit your needs to help with maximising your profi t while respecting the well-being of the animal and the

environment.

These products include:Lely Calm automatic calf feeder - giving peace of mind throughout the rearing

process.Lely Cosmix M mobile automatic concentrate feeder - when grass is not enough.

Lely Compedes rubber fl ooring - best possible traction and animal comfort.

For more information, visit www.lely.com, call (03) 5484 4000 or email [email protected]

A good start

Evolve.

wAlTersCheid hAs developed a modular coupling system allowing various combinations for the different tractors to meet all the diverse demands of the agriculture market.

The Ball Coupling System K80 from Walterscheid sets new standards of safety and convenience when driving drawn implements – like trailers, loader wagons,

manure spreaders, liquid-manure tanks etc. – with high drawbar loads.

Particularly when driving, the overall system – comprising tractor, coupling system and drawn implement – is exposed to severe impacts and jolts.

As a result, driving safety is impaired and the coupling device is subject to extensive wear.

The Walterscheid K80 Coupling System

draws implements without any impacts and play whatsoever – even on difficult terrain and relatively high driving speeds.

The K80 ball at the back of the tractor and the cup on the implement side have a large contact surface: they engage positively, but nonetheless display extreme angular mobility.

Consequently, this

coupling system doesn’t jam, not even at such extreme driving angles as encountered in many applications, eg turning at headlands.

Additional to that, connection and disconnection are also possible at axial and vertical angles of well over 20 degrees.

The K80 System is specifically designed for drawn implements with

high drawbar loads up to 4000kg provided the tractor has corresponding approval.

Different kind of tractor ladders, drawbars, hitches and cups are available for nearly every tractor on the market.

The K80 System is available through the Walterscheid dealer network or contact the company direct on (03) 9580 7300.


mAChinery & produCTs // 33

Eugen Bluem with the Walterscheid K80 coupling system.

Coupling system covers all options

A new range of valves from irrigation company, Netafim, promises increased efficiencies for operators.

The company has launched a new generation of cast iron, chemically-resistant polypropylene and plastic valves available in a range of sizes and configurations for irrigation and industrial markets.

Netafim Valve product manager Peter Sullivan said the new valves, which were replacing the company’s Raphael range, incorporated latest advances in technology to create an extremely efficient valve.

Mr Sullivan said all valves fea-tured lower opening pressures, which would help to reduce energy costs.

“Operating pressures start from just 0.3-0.4 Bar,’’ he said.

“The valves offer high flow range capability and low head loss.’’

Mr Sullivan said an innovative internal body design also provided for extremely fast valve responses.

Other features included ease of

connection, a long neck body to the flange, which aids easy assembly and installation, and the valves can be used with a full range of threaded and Victaulic end connections.

There is also a full range of plas-tic and metal pilots, solenoids and accessories to suit a wide range of configurations.

Netafim’s plastic valves come with a universal flange, allowing easy connection to different flanged tables. Cast iron valves suit standard Table D flanges, but can be supplied in other valve configurations upon request.

“There is capability to self-con-figure the valves to specific require-ments. They can be hard plumbed in copper and stainless steel upon request,’’ Mr Sullivan said.

The new generation of Neta-fim valves are manufactured to ISO 9001 international standards. The cast iron valves are rated to PN16, the plastic valves to PN10 and the poly-propylene valves to PN8.Tel. (03) 8331 6500

New Netafim valves improve efficiency

Netafim Valve product manager Peter Sullivan and chief valve assembly technician Alex Lakous pictured overlooking the company’s new valve assemblies.

Contact your local Reese Agri Aitchison dealer for details, or free phone 1800 140 196Brendan Prentice 0400 540 300 www.reeseagri.com.au

New feature – now with rodent stop

Variable speed gearbox

Strong construction

Available in Tine only, Tine with Disc Coulter, or Single Disc.

Specifi cations 2014C›› Sowing Width 2.1m (6’ 11”) ›› No. Tines 14 ›› No. Disc Coulters 14›› Row Spacing 150 mm

Specifi cations 2018C›› Sowing Width 2.7m (8’ 10”) ›› No. Tines 18›› No. Disc Coulters 18›› Row Spacing 150 mm

Aitchison, now that’sa smart choice

Starting at $16,995.00 INC GST


34 // mAChinery & produCTs

hondA’s Big TRX500 had dropped off our radar recently, with a wave of large capacity imports taking more of the quad limelight.

Blue Wing Honda loaned us a TRX500FPA so we could get reacquainted with the ‘big red’. It remains a great ride and all you need in a large quad for the farm.

The TRX500FPA has a 499cc OHV liquid-cooled single with 92 x 75mm bore and stroke – a strong engine which coped well lugging through slow, tight forest sections of the track we tested it on, and it was equally happy being opened up for a blast home along a surf beach at 60km/h.

You can still order the 500 with a manual gearbox, but we’d opt for the automatic fitted to our test bike, which has a manual mode avail-able should the rider want to hold a gear for steep conditions or while towing. The manual selection is quick and helped with some steep descents, although even left in automatic, the engine breaking on its own would have stopped the big Honda running away on us. Low ratio was only needed once on a very steep section.

The other feature on the FPA model is power steering – an option on the lesser vari-ants of the 500 and one we do not hesitate to recommend. It takes the shock out of the handlebars over rough ground and makes it safer and easier to manoeuvre regardless of the conditions as the bars won’t wrench in your hands like unassisted steering can. Weighing 294kg the TRX500 is not a fatty, but is still a big unit and the power steering certainly makes it more nimble.

Time didn’t allow for a tow test, but we know from pre-vious tests that the TRX500 is fit for the task, especially with the rigid rear axle that maintains ground clear-ance regardless of load.

Bikes with independent rear suspension generally soak up the bumps better than the solid axle with dual-dampener swing arm on the Honda, but it is still a comfortable ride and farmers will want to consider the towing and

maintenance advantages of the sim-pler set up.

Overall comfort and usability on the 500 is excellent. The 861mm seat

height will accommodate most riders well. The independent double wishbone front end is com-pliant, and the single-gate gear selector is, like most of the major controls, intuitive to use.

You can buy cheaper quads, but this is a con-vincing package.Tel: 1300 559 846

Big red still delivers

The Honda TRX500 remains a great ride.

Speed rakes need low poweron displAy at the recent South Island Field Days in New Zealand was the latest Kuhn SR310 and SR312 rakes out of the company’s North Ameri-can stable. Both are from

the Speed Rake 300 series of high capacity carted wheel units.

The SR310 has five wheels aside and can cover 5.3-6.3m; the SR312 with six wheels can cover 6.3-

7.4m. Both models can be closed hydraulically to transport at 2.7m and the wheel lift is also hydrau-lically operated. Both machines need two double acting hydraulic outlets.

Tractor power needed is as low as 20hp with each floating rake wheel being spring suspended on curved rake-wheel arms, to follow the ground con-tour with less ground pres-

Kuhn area sales manager Sarah Govier.

sure, disturbing less soil and producing cleaner hay.

The windrow width can be altered from 0.914m to 1.83m. The rake is easily converted from a base 10 raking wheel model to 12 raking wheels to suit cus-tomer needs.

The product was sup-ported on site by Kuhn’s area sales manager Sarah Govier. She is from Eng-land and has been with the company 11 years mostly at company headquarters in France and the last 18 months in Melbourne. www.kuhn.com.au

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Dairy News Australia May 2013

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Transcript of Dairy News Australia May 2013