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Dairy Focus JANUARY, 2016

THE YEAR THAT WAS Pages 3-14

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COMMENT FROM EDITOR Well, put quite simply, 2015 was one hell of a year – and not one any of us in the dairy sector want to replicate again. Between falling prices, drought, questions over governance and cow rustlers, dairy farmers have had just about everything possible thrown at Nadine RURAL them in 2015. Porter REPORTER But if you’re reading this I’m Tweet us @farmjourno guessing you’ve survived. And you will continue to survive. industry. Sharemilkers need to be In all the doom and gloom there protected in 2016 and I believe we were some glorious gains made. Just will keep everyone in for the long think at how much you’ve squeezed haul. your budgets by – and how many Be proud of yourselves and what efficiencies you’ve made! you achieved in 2015. That in itself is worthy of It may not be applause. reflected in your The Kiwi farmer bank balance but has and always will when you feel be a resilient stock, Be proud of demoralised, just able to adapt, to remember everyone yourselves change to meet the is in the same boat. current conditions and what you The current and although it was volatility is not achieved in painful, almost all your making and of you are hanging 2015 will not last. in there because To those that you know that you stood up for your are the best milk industry – the producers in the Andrew Hoggards, world. And that hasn’t changed even if the the Willy Leferinks and the Chris Lewises, I salute you. value of it has momentarily. Your leadership and nonWith the Trans Pacific Partnership, negotiatble optimism has gently and all companies hyper aware of South East Asian opportunities, there encouraged. So let’s tilt our hat at 2015, and looks to be some excellent prospects batten down for this year, knowing for the future. This year will more than likely be a that we’re smart, we’re efficient and there’s nothing now that will faze us. tough one again. And we will need to All the best for the New Year. look after our young students of the

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TOP FARMING STUFF-UPS CONTACTS We appreciate your feedback. Editor Email your comments to nadine.p@theguardian.co.nz or phone 03 307 7957.

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THE YEAR THAT WAS - JANUARY

Minister sees dry conditions Primary Industries Minister Nathan Guy visited Chris Allen’s Mid Canterbury farm to talk about a looming drought in the district. Mr Guy met with Federated Farmers’ leaders, farmers, and Rural Support Trust representatives from Mid and South Canterbury to see first-hand how dry parts of the province had become. Federated Farmers national president William Rolleston told the minister that farmers were used to dealing

with dry summers, but in 2015 the “big dry” had hit much earlier, and irrigation schemes were running short of water. In South Canterbury the Opuha Lake had only enough water to support irrigation for about another month and other schemes were operating on 50 per cent restrictions. Farmers emphasised the importance of investing in alpine water storage facilities to the minister, and reliability of water supply to their businesses.

Ashburton Mayor Angus McKay, Opuha Water Partnership chairman Tom Lambie and Primary Industries Minister Nathan Guy discuss the dry conditions in Canterbury and the need for water storage.

Dead cows found to have suffered liver damage Liver damage was revealed as causing the death of a large number of dairy cattle which had been wintered over on swede crops in Southland, but questions remained as to the nature of the toxin responsible. Industry body DairyNZ completed an analysis of the blood and autopsy samples it collected from cows in varying states of ill-

health after grazing on swedes. DairyNZ Southland/South Otago regional team leader Richard Kyte said the findings indicated that the cows experienced liver damage. “The findings appear to be consistent with known liver damage associated with cows grazing brassica forage crops, except the visible signs

of illness seemed to be more severe. “While the study did not allow comparison between swede varieties, the findings indicate that cows experienced liver damage after grazing swede varieties other than the HT (herbicide tolerant) variety, regardless of whether there were visible signs of illness.”

FORECAST PAY-OUT DOWN BY 60 CENTS Synlait Milk followed its competitors, revising down its forecast milk pay-out by 60 cents a kilogram, to $4.40 for the season. The milk processing company also announced a corresponding decrease in advance rates paid to farmers. Synlait chairman Graeme Milne said the revision was the result of several factors at play in the global market, which caused continued downward pressure on milk prices. “Low commodity prices are persisting as the global market struggles with the current over supply of milk products,” he said. “We remain confident in previous guidance around our FY2015 performance, although there is no doubt that the world continues to be a volatile place,” Mr Milne said.

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THE YEAR THAT WAS - FEBRUARY Primary Industries Minister Nathan Guy discusses irrigation woes in the dry bed of Lake Opuha, with Opuha Irrigation CEO Tony McCormick in February.

Canterbury drought While Mid Canterbury farmers had managed the dry summer well, conditions started to bite by February. Mid Canterbury Rural Support Trust member and dryland farmer Peter Reveley said the drought conditions were getting “slightly worse” but that most dryland farmers were coping well. Dairy grazers and sheep farmers were focused on ensuring they had feed for their capital stock and that they had access to stock water, which was “becoming a bit of a problem”. Many had either already reduced stock levels or were actively doing so – the foothills were practically devoid of young cattle – in preparation for possibly limited stock feed

options. Mr Reveley welcomed the drought package announced in February by Primary Industries Minister Nathan Guy and said the $200,000 for rural support trusts would be put to good use. The Mid Canterbury trust had lockeddown the specialists it needed and it planned a meeting for dryland farmers and the wider farming community at Mt Somers later in February. Ashburton Mayor Angus McKay said the declaration would unlock assistance but that enduring the drought would be a long haul. The dry might affect the quality of winter feed but there would be much more demand for supply. Feed supplies needed for July and August might be leaner than hoped.

Feed inventory to help farmers A nationwide audit was under way to estimate how much stock feed would be available to carry-over livestock in the large tract of the South Island’s east coast under siege from drought. Federated Farmers’ Mid Canterbury chairman Willy Leferink, who was co-ordinating the local effort, said work on the feed inventory was well under way, and it was likely South Canterbury cattle would be trucked into the district to winter over. “We are really lucky to have a lot of irrigation in Mid Canterbury, so the situation here is not as desperate as it is in South Canterbury. “There is a good chance dairy cattle from South Canterbury will be wintered here. “That’s another issue we have to deal with.” Mr Leferink said Southland,

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which had not been affected by drought conditions, was another option. “Once you’ve put cattle on a truck it doesn’t matter where they go really. “It depends on where the feed is and who’s got the money to pay for it. It will depend on who’s got the deepest wallet.” He hoped the impending feed shortages would not spiral into a price gouging war, with the high demand pushing prices up. “I sincerely hope it doesn’t come to that. “We need to find good alternatives and work out how we are going to feed the cows to get through this period. “We have to make sure that PKE (palm kernel extruder) supplies keep coming and we have sufficient on hand to get through the winter,” Mr Leferink said.

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THE YEAR THAT WAS - MARCH MILK SCARE The threat of 1080 contamination of New Zealand produced infant formula in March was one more blow dairy farmers did not need, said industry leader Willy Leferink. With a low dairy pay-out anticipated and an ongoing drought, farmers were already facing a pretty tough year, he said. “We had an inkling of hope that things were getting better but there’s no hope now.” Dairy farmers were anxiously watching the reaction of international markets to the contamination threat but initial indications were that the industry’s major market, China remained supportive, Mr Leferink said. “I think they’re starting to appreciate us not hiding this but right now we just have to wear the pain.” A threat of contamination struck at the heart of the dairy industry, but it also struck at the heart of the community when the health of children was placed at risk, he said.

Businesses starting to feel pinch The double whammy of a drought and a lower than forecast dairy pay-out was leaving some Mid Canterbury businesses feeling the pinch by March. Dairy giant Fonterra slashed its forecast pay-out to $4.70 per kilogram of milksolids for the season in December.

Coupled with February’s declaration that Mid Canterbury was officially in a drought, dairy farmers had been conservative when it came to opening their wallets. With much of the region’s economy reliant on the agricultural sector, the reduced spending had a flow-on effect

to local businesses. Plucks Engineering Ltd managing director Neil Pluck said business had been quieter in recent times. “We started to see that last year, from December onwards really,” he said. “It’s quieter across the board.”

Lower order sharemilkers hit hardest

Federated Farmers Mid Canterbury sharemilker spokesperson Will Grayling said the idea of negotiating a floor price was worth looking at for contract milkers.

Lower order sharemilkers would be hit hardest by plummeting farmgate milk prices, and employers were urged to take steps to mitigate the impact of what was shaping up to be a very tough season. Sharemilkers received a negotiated percentage of the milk cheque. For those in the lower order category this typically sat in the 20-25 per cent range, leaving them exposed because of fixed costs associated with operating their business. Grow Mid Canterbury CEO Rob Brawley was in favour of a floor price, negotiated between employers and sharemilkers,

creating a pay-out buffer in the face of the $4.70 per kilogram of milksolids offered by both Fonterra and Synlait this season. “It’s a really good idea because it’s the sharemilkers, particularly those who have recently taken it up, who are the most vulnerable. They won’t have the same equity in their balance sheets at this point, and their costs will probably be higher,” Mr Brawley said. Federated Farmers Mid Canterbury sharemilker spokesperson and Seafield dairy farmer Will Grayling said the idea of negotiating a floor price would be worth looking at.

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THE YEAR THAT WAS - APRIL

Synlait posts a loss Synlait Milk posted a $6.4 million net loss after tax for the first six months to the end of January The result included after tax unrealised foreign exchange losses of $6.8 million. The underlying after tax financial performance of $0.4 million for the period was lower than expected and primarily due to delays in the shipment of infant formula and nutraceutical products.

A one-off benefit of $7.5 million in the first half of the 2014 financial year, combined with increased depreciation and interest costs from the commissioning of three growth initiatives projects last year, were the primary reasons for a $11.7 million variation between the underlying FY15 interim result of $0.4 million and the 2014 interim result of $12.1 million net profit. “We are expecting a much stronger

performance in the second half of FY15, associated with increased sales of our higher margin infant and nutraceutical products,” Synlait chairman Graeme Milne said. Despite an expectation that current market volatility will continue, Synlait was confident that sufficient committed contracts are in place to achieve a forecast net profit after tax result of $10 million to $15 million for FY15.

Significant cashflow challenges ahead Bank balances for most dairy farmers were expected to be heading south in April, producing some short-term but significant cashflow management challenges, according to an industry spokesman. DairyNZ chief executive Tim Mackle said the 2015-16 season would still probably end up being a break-even year for most farmers, but cashflow would be a major issue, resulting in increased term debt in the sector and less spending in the regions. “Farmers are used to having seasonal cashflow that drops into the red but then pops back into the black at some stage during the summer period,” Mr Mackle said. “However, our current forecasts indicate that many farmers won’t be in credit for the entire 12 months of next season unless costs are reduced, income is higher than predicted or some of their overdraft is put into their term debt.” A second series of nationwide farmer events in DairyNZ’s Tactics for Tight Times campaign got under way in April with the focus on giving farmers the wake-up call to assess their own situation given the low forecasts. DairyNZ chief executive Tim Mackle said cashflow was becoming a major issue on farm.

FONTERRA ANNOUNCES ANOTHER DEDUCTION IN PAY-OUT Fonterra pulled back its milk pay-out forecast by another 20c per kilogram of milksolids, dropping the season’s price to $4.50kg/MS. Combined with the estimated dividend range of 20-30 cents per share, the co-operative’s farmer suppliers were set to receive $4.70$4.80kg/MS.

AND WESTLAND FOLLOWS SUIT Westland Milk, the country’s second biggest milk co-operative, revised its pay-out to $4.90 to $5.10 per kilogram of milksolids after hoping to paying its farmer suppliers $5 to $5.40kg/MS. The company cited falling international milk prices for the cutbacks. Chief executive Rod Quin said the $5.20 pay-out seemed possible before the recent auctions, as buyers looked to New Zealand to secure supply ahead of the dry conditions during January and February. “However, customer sentiment has now changed significantly,” Mr Quin said. Skim milk powder out of Europe is being offered at $US2100 to $US2200 per metric tonne which, for larger global buyers, was very attractive and well below offers from New Zealand of $2600 to $2800/MT and the dairy auction itself, which had seen prices of $2300 to $2400/ MT.”

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THE YEAR THAT WAS - MAY

Reserve Bank Governor worried The Reserve Bank Governor said in May the prospect of future cuts to dairy prices was worrying for Mid Canterbury’s economy. Prices at Fonterra’s GlobalDairyTrade auction fell to a five-year low early on in the month, dropping by 3.2 per cent to an average of $NZ3328 a tonne. That drop, and the prospect of further decreases, was

expected to have a significant impact on the district’s economy as dairy farmers began to feel the pinch. Reserve Bank Governor Graeme Wheeler was in Ashburton for an economic overview at a luncheon hosted by Grow Mid Canterbury. In an interview with the Ashburton Guardian after the event he spoke about the impact of falling dairy

prices on Mid Canterbury’s economy. Mr Wheeler said falling dairy prices represented a $6 billion hit to dairy farmer incomes, and the effects of that drop were starting to be felt in the district. “It will have an impact, and much will depend on to what extent farmers try to smooth their spending,” he said. He believed most farmers would

HINDS YOUNG FARMER WINS DAIRY TRAINEE OF THE YEAR Hinds Young Farmer James Davidson’s competitive spirit won out again, this time in the Dairy Industry Awards, where he earned the Dairy Trainee of the Year title in May. The 26-year-old won $19,500 in prizes and is currently working on the Darfield, Canterbury, farm owned by Warren and Annemieke Thomas, milking 1400 cows. Mr Davidson holds a Bachelor of Commerce in Farm Management and plans to go contract milking. “We warmed to his presentation and he was very confident in himself,” Mrs Halford, a Hawke’s Bay farmer, says. “The video James prepared for judging was fantastic and illustrated the variety of knowledge and skills required

to manage a dairy farm. It really showed his passion for dairying and the variety that it offers.” In 2014 Mr Davidson performed well at the Young Farmer Contest at Lincoln, winning the agrisports challenge. Justin and Melissa Slattery were named Sharemilker/ Equity Farmers of the Year and James Foote became the Farm Manager of the Year. Right - Hinds Young Farmer James Davidson took out the Dairy Trainee of the Year title at the Dairy Industry Awards in May.

“sharpen their pencils” and manage costs as best they could, but it did represent a “big hit”. He was also concerned about the impact of further low pay-outs in the future. “The worry is that if that continues for a long period, say if we had another year of a pay-out of around $4.50, that would be really quite worrying,” he said.


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THE YEAR THAT WAS - JUNE

Alan Pye bows out of Dairy Holdings Agribusiness entrepreneur Alan Pye sold his share of Dairy Holdings. Mr Pye said he had become disillusioned with the management of the mega dairy farm-owning company he started in 2000. He held a 25 per cent shareholding, and was on the company’s board of directors. Dairy Holdings began as a conglomeration of farms originally owned by Tasman Agriculture and later, Dairy Brand farms. Over the past 15 years the company has expanded, and now owned more than 50 farms in the South Island. Mr Pye was critical of the company’s practice of expansion at the expense of production on the existing farms. He owns other dairy farms in conjunction with his son Leighton, which produce up to 25 per cent more milk per hectare, at a lower cost, he said. “We had two farms separated

NUTRIENT CAPS BIGGEST LIMITING FACTOR ON PRODUCTION

property came up they buy it up, convert it and stock it cheaply, rather than concentrating on lifting the production on the properties they already own by improving the genetic makeup of the herds,” he said. Mr Pye settled with the company last spring, before the global milk price crashed. “I’m pleased to be out of it,” he said. In addition to his own dairy and arable farming interests in New Zealand, Mr Pye, whose fortunes began with a bag of spuds and a “row of noughts” in the Temuka district, has interests in the Central Plains Water scheme. He also owns major vegetable growing and processing companies in South Australia and Tasmania in conjunction with his son Mark. According to the National Business Review Rich List Mr Pye was worth $200 million last year.

News filtered through of farming mogul Alan Pye quitting Dairy Holdings in a bitter split.

by a shingle road – one produced 1100kg (of milksolids) per hectare, and 1600kg per hectare on our one. The costs per kilo per hectare were a lot less, because of the extra milk produced,” he said. “They (Dairy Holdings) had a policy of keeping all the heifer calves, so when a neighbouring

Nutrient caps on Mid Canterbury farms has the potential to be the biggest limiting factor on production, according to Rabobank manager George Lumsden back in June. Speaking at the Federated Farmers Nutrient Management Seminar, Mr Lumsden said similar regulatory changes in Holland 30 years ago led to a 19 per cent decrease from 1983 in dairying production. In the United States the changes caused major changes. Mr Lumsden said Rabobank was concerned ECan’s nutrient regulations could lead to one sector being locked in or locked out into a lower emission regime. “The implications this could have for equity and land use change in the future are real.” He urged farmers to attend meetings in their areas where regulations were being discussed to “protect their patch before it was too late”.

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THE YEAR THAT WAS - JULY

Big win for Hinds dairy farmer Hinds dairy farmer Matt Bell joined an impressive line-up of Mid Canterbury winners of the Young Farmer Contest when he took the 2015 title in July. In a contest that went down to the wire, Mr Bell snatched the title from Sully Alsop by a mere two points on a countback. “It was pretty tense, Sully and I tied at the end, so it went to a countback on the practical component,” Mr Bell said. It had been a long slog for the Hinds Young Farmers’ Club member, and his second crack at grand final level. He freely

admitted he would never have stood on the winner’s podium without the support of his fiancé Samantha. “Realistically it’s been three years of build-up to this – when I made grand finals the first time it was very much a learning curve, but this time we were there to win and we did it,” he said. “It’s very much a ‘we’ thing – we won the contest, not I won – it’s been a huge team effort. Samantha’s been phenomenal in supporting me for the last three or four years, I’ve no doubt I couldn’t have done it without her.”

Mr Bell said he was “over-run with emotion” in the moments after he realised he had won the contest, but it really hit home when last year’s winner David Kidd bestowed on him the cloak of honour. Mr Bell became the sixth winner of the Young Farmer Contest hailing from Mid Canterbury since 2002 when Tim Porter took the title. John McCaw, followed in 2006 and in 2010 it was Grant McNaughton’s turn. Will Grayling was the 2011 winner, and Michael Lilley took the honours in 2012.

Hinds dairy farmer Matt Bell took out the Young Farmer Contest in a nail-biting finish.

SYNLAIT ANNOUNCES DEAL WITH US MANUFACTURER FOR GRASS-FED COWS Synlait announced a new partnership with a US baby products manufacturer for an infant formula derived from cows exclusively grazed on a pasture and crop based diet. CEO John Penno said grass-fed beef in the US sold at a three-fold premium to standard beef.

Californian company Munchkin planned to launch its grass-fed branded retail-ready infant formula into the US and China. It would be manufactured by Synlait and would offer farmers a 25c premium above the $5.50kg/MS forecast for next season. “Munchkin are very good at product

development and marketing but this (infant formula) is new to them.” Mr Penno said the demand was based on science from 20 years ago that showed meat and milk fats from grass-fed ruminants was considerably better than fat from ruminants living in barns on artificial diets. “For New

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THE YEAR THAT WAS - AUGUST

Investors continue to eye our land The Overseas Investment Office confirmed an investment manager for a Luxemburg-based investment fund was granted consent to buy land at Mayfield. Dynamic Asset Management Company Limited sought consent to buy about 355 hectares of land at 2247 Tinwald Westerfield Mayfield Road, Mayfield. The purchase price for Mayfield Farm was $10,850,162. It was offered for sale by The Mounds Limited, a whollyowned New Zealand company. According to the office, the fund wanted to convert the property into a dairy farm and to produce high volumes of milk from pasture.

Once converted, Mayfield Farm will milk about 1200 cows through a 64-bale rotary cowshed with full automation. The office was satisfied the proposal, which includes provision for modern infrastructure and an efficient farm management system, would meet sustainability requirements. It also satisfied the criteria of providing a substantial and identifiable benefit to New Zealand in that it would create jobs, increase export receipts and promote development. The asset management company is no stranger to New Zealand dairy purchases. Last year, it spent more than $20 million buying farms in Southland.

CALLS FOR SUSPENSION OF GDT AUCTION Calls for a discussion over the suspension of the Global Dairy Trade auction were growing as dairy farmers tried to recover from the 10th consecutive fall in milk prices. Led by Waikato Federated Farmers’ president Chris Lewis, others including the organisation’s national dairy chairman, Andrew Hoggard, were suggesting Fonterra investigated a suspension. Mr Hoggard said while Federated Farmers did not have an official position on suspension, he had spoken to Fonterra and proposed they seek an independent comment from “people totally removed from New Zealand politics”. Mr Hoggard said his own personal view was that suspension was raised in 2009 in the last global financial crisis when Irish farmers were upset about how the GDT was affecting their incomes. “But they had a bunch of independent reviews and as a result the Irish shut up.” There was an argument that the current GDT auction was driving the speed of volatility faster than farmers had seen before through increased market awareness, he said. “People see it going down so it goes down faster, but the flip side is that if it goes up, it goes up higher.”

Waikato Federated Farmers’ president Chris Lewis was calling for a suspension of the Global Dairy Trade auction.

Mr Hoggard said the auction was run by a Chicago-based firm and he was not sure Fonterra could stop it “even if it wanted too”. Fonterra could stop selling product at the auction and reduce supply and lift prices, but buyers would still know how much milk had been processed, he said.

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THE YEAR THAT WAS - SEPTEMBER

Interest-free loans Fonterra hoped to offset depressed dairy prices by offering interest-free loans of 50 cents for every kilogram of share-backed milksolids produced from June 1 to December 31. The co-operative had $3.85kg/MS on the table, which fell well short of the cost of production for many of its farmer shareholders. Federated Farmers’ Mid Canterbury vice-president and dairy farmer Jessie Chan-Dorman said cash-strapped farmers would jump at the offer. “I imagine there will be a good uptake given that most farmers are in negative cashflow,” Ms Chan-Dorman said. “This is the first time in the history of the co-op that milk prices have been this low relative to the cost of production.” Applications closed on September 25. The loan would be interest-free until May 31, 2017. Farmers could repay all or part of the loan at any time and no security was required over share or other assets. The loan was repayable directly from milk payments and automatic repayments would kick in when the Total Advance Rate Payments exceed $6kg/MS.

Federated Farmers Mid Canterbury vice president Jessie Chan-Dorman (pictured with husband Hayden) thought there would be a good uptake of the Fonterra interest-free loan.

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LOCAL FARMERS BRACING FOR EL NINO Mid Canterbury farmers were bracing themselves for a super el nino which was expected to bring an elevated risk of drought this summer. NIWA scientists warned in September that el nino would continue until November, and had a 90 per cent chance of persisting into the 2015 and 2016 summer. There have been three super el nino events in New Zealand since 1950, in the summers of 1972-73, 1982-83 and 1997-98, resulting in an overall mean rainfall deficit of 20 to 50 per cent. Ashburton Forks farmer Chris Allen farmed his way through the last major el nino event, when the summer had been marked by nor’west winds and sheep had to be sent to graze in Southland. “It’s most frustrating when you have hot nor’westers; as fast as you are putting water on it’s evaporating, but if you don’t put it on you have dry paddocks,” he said. Mr Allen, who was the immediate past chairman of Mid Canterbury Federated Farmers, said Mid Canterbury was better set up now to withstand such conditions, with farms having increased access to irrigation. He doubted there would have hardly been a centre pivot in the district in the 1990s. “All farmers are going to have to do their bit to make sure not only are they managing their own economic situation, but also managing their likely feed demand going into the autumn,” he said.

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Farming Dairy Focus

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THE YEAR THAT WAS - OCTOBER

Farmers urged to cut back on PKE Fonterra was asking farmers to lighten up on palm kernel expeller (PKE) use to “future-proof ” the country’s reputation as a pasture-based milk producer. The imported product was used in the dairy industry as a cheaper alternative to feeding grain and grass-based supplements. However, Fonterra’s director of cooperative affairs, Miles Hurrell, said there was a growing global consumer trend favouring dairy products sourced from pasture-based milk production. “Consumers want to know what is in their food and where it comes from,” he said.

But with the co-operative’s forecast farmgate milk price sitting at $4.50 per kilogram of milksolids this season it was considered a difficult task to convince farmers. And with an el nino weather pattern on Mid Canterbury’s doorstep, Fonterra would have its work cut out to persuade its producers to ditch the cheap supplement. Fonterra has recommended a voluntary guideline of 3kg of palm kernel/per cow/per day but in drought conditions consumption can hit 10kg per day. Federated Farmers’ Mid Canterbury president Willy Leferink said PKE was

affecting the constitution of some of Fonterra’s milk-based products. However, rival milk company Open Country had not reported any similar problems, Mr Leferink said. He said feeding cows was a priority and farmers operating under tight budgets would use the imported product, which was more cost-effective than other supplements. “If New Zealand became totally reliant on palm kernel as a feed source that would be a dangerous issue, but in the end it’s an issue between shareholders and Fonterra – and they need to resolve it,” he said.

Willy Leferink

Mid Canty cows culled because of adversity Mid Canterbury’s cull cow kill is up by more than 25 per cent on the back of a low milk pay-out forecast. Statistics released by Beef+Lamb’s economic service estimated last year’s dairy cow slaughter increased by 27 per cent, resulting in the first decrease in the national dairy herd numbers in 24 years.

The increase equates to 253,000 more cattle killed than in 2014. The higher kill numbers reflect two years of sliding milk prices due to a global stockpile of milk products impacting on export demand. Farmers endeavouring to cut on farm costs have trucked barren and low producing animals off to meat processing plants.

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This lessens on farm costs and provides a much-needed cash injection for farmers struggling to make ends meet in the face of a farmgate pay-out $4.65 per kilogram of milksolids. The trend coincides with record beef prices in 2015. In 2013, when the farmgate payout peaked around $8.65kg/MS, Mid

Canterbury was home to 288,000 dairy cattle. In 2015 that number has declined by 77,760 head. Heifers which would normally have been carried over as herd replacements met the same fate with 46,000 more animals culled out of the national herd, Beef+Lamb economist Rob Davidson said.

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THE YEAR THAT WAS - NOVEMBER NEW RULES TO HELP KEEP FILIPINO DAIRY WORKERS New rules for Filipino dairy workers who provided incorrect information on their work visa applications would clear the path to enable them to stay in their jobs, Immigration Minister Michael Woodhouse announced in November. The erroneous details generally involved ramping up work experience and qualifications, and is thought to have caught out about 600 Filipinos working in the dairy industry. Mr Woodhouse said those workers who admitted to providing incorrect information would be issued with further work visas, as long as they were compliant in all other respects and met the essential skills’ requirements. “This approach acknowledges that many of these workers are making a significant contribution to their employers and their communities and are well-settled in New Zealand,” he said. “The changes minimise the disruption that would have been caused by a significant number of workers having their visas declined.” However, Mr Woodhouse reiterated that affected workers were not guaranteed new visa applications would be successful as they may need to meet a labour market test to determine whether there were any New Zealanders available to do their job. Visa applications could also be declined if the workers failed to meet standard health and character requirements.

No bobby calf abuse In the wake of shocking footage emerging from the Waikato of violent abuse towards newborn bobby calves, Mid Canterbury farming leaders were confident the same problem didn’t exist here. Animal welfare organisation Safe uncovered serious animal welfare breaches on some Fonterra farms in the region and called for consumers to ditch New Zealand dairy products. Safe uncovered bobby calf abuse in the North Island and went international with it. However, Mid Canterbury SPCA manager and inspector Leferink who said they did not tolerate abuse. John Keeley said he hasn’t He believed the filmed abuse was due to a experienced many instances of abuse of calves lack of education and rogue farmers who he but “nipped it in the bud” when cases arose. There was one report of a truck driver acting described as being like “repeat drunk drivers”. Although criticism has been levelled at cruelly when loading calves around two years the Ministry of Primary Industries since ago, but Mr Keely dealt with it promptly and the footage emerged, Mr Leferink said Mid another more recent case of calves being left in Canterbury had an excellent relationship with a crate at the gate. the local MPI officer. “But in Mid Canterbury we are lucky. I deal Rural Transport Ashburton general manager with Federated Farmers and they deal with me Jim Crouchley said they transported bobby so we don’t see cruelty in this area (with calves) calves for Anzco and Alliance and were “very to that extent.” particular” about the welfare of those calves That sentiment was backed up by Mid Canterbury Federated Farmers’ president Willy during transport.

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Farming Dairy Focus

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THE YEAR THAT WAS - DECEMBER BANKS STANDING BY FARMERS Banks were continuing to back farmers, according to results of a survey. A Federated Farmers banking survey showed a virtually unchanged level of farmer support for banks over the past three months of low dairy prices, with 80.5 per cent across all industry sectors satisfied with their bank’s performance relating to mortgages compared to 80.7 per cent in August. The federation’s second banking survey was conducted in late November as a follow-up to the inaugural survey which followed Fonterra’s decision to slash its farmgate milk price to $3.85 per kilogram of milksolids, dubbed Black Friday, in August. In the regions, Auckland-Northland recorded the highest levels of confidence in banker support across all industry sectors, up 9 per cent, followed by West Coast-Marlborough (5.1 per cent) and Canterbury (1.10 per cent). However, the confidence of farmers in the East Coast region declined by 5.75 per cent and Otago-Southland by 4.5 per cent.

Rustlers in Mid Canty David and Jill Quigley had cows stolen in Mayfield.

Rustlers stole 36 dairy cows worth $70,000 from a Mid Canterbury farm at the height of the milking season. The kiwi-cross cattle, representing about 5 per cent of the herd, vanished from Jill and David Quigley’s farm near Mayfield within the past two weeks. “They were there one day and gone the next,” Mrs Quigley said. “The first sign something was amiss was the drop in (milk) production figures,” she said. The theft would have required either trucking or walking the animals out, but transport companies have no record of shifting stock from the property and no one has owned up to having acquired an extra three dozen cows. The consensus was the cows were trucked off the property in two separate loads.

Fonterra holds price Fonterra’s decision to hold its farmgate milk price at $4.60 per kilogram of milksolids was good news in December, a Mid Canterbury industry spokesperson says. Combined with the estimated 45-55 cents earnings per share, announced in November, the co-operative’s farmers were up for a total cash pay-out in the $4.95 to $5 range. Federated Farmers’ Mid Canterbury vice-president and dairy section spokesperson Jessie Chan-Dorman said Fonterra’s decision was based on the view Global Dairy Trade prices were likely to improve in the second half of the 2015-16 season. However, DairyNZ estimated the break-even cost of producing a kilogram of milksolids at $5.30, leaving many farmers in the red for the second season running.

Mrs Chan-Dorman was not surprised by Fonterra’s decision to withdraw its farmer support loan scheme from the end of December. The loan of 50c per kg/MS was made available when the forecast milk price was $3.85. Mrs Chan-Dorman said most farmers were now through the tight spring period, when the topup was most needed. However, she reiterated it would still be a tough year for farmers and urged those needing assistance to put their hands up and ask for it. “People need to be keeping an eye on their neighbours, keeping in touch with their rural professionals and looking out for friends and family,” she said. “Try to put worries aside over Christmas and spend time with the people most important to you.”


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15

Three steps to preventative hoof trimming Before.

After.

Fred Hoekstra

VEEHOF DAIRY SERVICES

Last month I was talking about the importance of preventative hoof trimming. This month I would like to go through the three steps of preventative hoof trimming, also known as functional hoof trimming. The aim is to have the cow standing correctly on the ground. If the toe is too long the cow will lean back on her heel. The claws also need to be flat to give more stability, especially the inner claw, as once the hoof is trimmed correctly, the weight will be distributed evenly across both claws. Yet many inner claws are concaved and will “fall over�. I often use the analogy of women who walk on high heels. Some of those heels are as thin as my little finger. How come they can still walk in those shoes and not fall over? Because they have the stability in the toe, it is just the same with our cows. The toe needs to be flat for stability, the heel gives height. Therefore we want both claws to be the same height in order to distribute the weight of the cow equally over the two claws. Step one: We start on the inner claw. This is the smallest of the two claws and the closest in shape and size to what we want to achieve. Once we have trimmed the inner claw we use it as an

example for the outer claw to make it the same. The length of the claw is crucial. It needs to be 7.5cm in length. A small cow can be slightly shorter but you would be best to stick with the 7.5cm. Once you have cut the claw at the right length, the thickness of the cut is the thickness of the sole on the toe part of that claw. The toe needs to be 7mm thick but the heel needs to be left as high as possible. The more you take off the heel area on the inner claw the more you will have to take off the outer claw to match the inner claw later. Step two: Once you have finished the inner claw you can do the same on the outer claw - cut the claw to 7.5cm and make the toe 7mm thick. This time you need to trim the whole claw down to the same height as the inner claw. Make sure the claws are flat. If the claw is uneven the cow will feel like she is walking on a rocking horse. Now that the claws are balanced, they will bear the weight evenly across both claws. Step three: All we need to do now is scallop out the inside of the claw, being careful not to go too far forward. And that is what preventative hoof trimming is about. Every cow should be trimmed in this way whether she is lame or not. For lame cows there are another two steps in the process but only after those three steps have been completed. Learning to trim like this really should be done under supervision of a tutor. If you are keen to get better at trimming just give us a call on 0800 833 463 to find out when our next training courses are or visit our website www.veehof. co.nz.


2 16

Farming Dairy Focus

HEALTH AND SAFETY FEATURE

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Keep safe this summer Knowing how to keep your staff safe and reducing risk on farm is an important process and is a part of your responsibility as farm owner or employer. Accidents and injuries on farm significantly affect the farm business, not only in lost time or productivity, but also in the ‘public’ perception of an industry that considers safety as a priority.

SAFER RURAL ROADS

reporting hazards if they feel nothing changes. 5. Talk to other farmers, what hazards and risks have they been working through on farm – do the same hazards and risks exist on your farm?

RU RO R AD AL S

10 steps to improving health and safety on your farm 1. Set out to create a health and safety action plan. Creating an action plan involves describing... 2. Talk to your staff – what areas of your farm business present health and safety concerns to them? 3. Make sure your staff have the necessary resources (notebook/camera etc.) and the opportunity to talk about health and safety on a regular basis – make time to discuss their concerns at a ‘brief ’ weekly meeting. 4. Tell staff about any changes that have taken place – people will stop

Clear the decks

6. Include health and safety checks regularly in the farm walk. 7. Make sure any contractors you appoint to work on farm have a health and safety plan in place for the work they are undertaking.

8. Talk to your local WorkSafe Inspector – what tips can they give you, what are the main concerns they are focusing on? 9. Provide training and supervision for all staff so they can do their job safely.

10. Encourage a safety culture on the farm How do I ensure that contractors are working within the law? • As a principal you have a legal obligation to ensure

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HEALTH AND SAFETY FEATURE

17

Safety’s the key

• • • •

that any contractor working on your farm: Has a Health and Safety Plan in place for the work they are carrying out. Understands where the hazards are on your farm. Has machinery and equipment that is regularly maintained to reduce risk of injury and harm. Is able to carry out the required work in a safe manner.

Meeting the legal requirements for working with contractors does not need to be a time consuming task

• Talk to the contractor. How will they carry out the work? • What precautions or measures are they taking to stay safe? • Do they understand about the hazards on your farm – point them out and keep them updated. • Do they have any concerns about the work? What might go wrong and what will they do? You can use a contractor’s acknowledgement form, to formalise this discussion, but be aware, it won’t replace the need to satisfy yourself that the contractor will work safely on your farm.

SAFER RURAL ROADS

PMR Grain Systems are a Mid Canterbury based company specialising in the supply and installation of grain storage, grain drying and handling solutions. When we design a system for a customer we strive to ensure we meet and surpass all safety requirements. For our larger jobs we can design site specific safety plans to cover the construction and installation phases. As part of our mission to provide well designed, safe and long lasting systems to our clients we give the option to supply and install ladder safety cages on all our silos. The cages, platforms and handrails can be ordered to meet AS/NZ Standards. Our in-house engineers can also design and fabricate hand rails and

platforms to suit a range of diverse applications including seed cleaning equipment, breweries and all manner of on farm or factory sites. We have been fitting a large number of ladder safety cages to existing silos in the last 12 months to help ensure silos at dairy sheds as well as grain storage silos are made safer to climb. The staff at PMR have EWP tickets to comply when working with elevated working platforms as well as completing heights and harness courses. So for all your grain handling and feed delivery needs please give us a call and we can provide a specifically designed system to New Zealand standards implemented by fully trained and certified staff.

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2 18

Farming Dairy Focus

IRRIGATION FEATURE

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How to maintain the irrigation Catastrophic failures of pumps and irrigation equipment during the season can waste a lot of time, restrict pasture growth and create stress. Regular equipment checks and ongoing maintenance is vital in preventing breakdowns and reducing the chance of serious damage. Having a weekly or monthly and annual task list for irrigation maintenance, where you can check tasks off easily, ensures maintenance is kept up-to-date. Below is a summary of some essential maintenance procedures for most irrigation systems. For more detail specific to your system, contact the service provider. If you install a new pump, ensure the supplier provides the specifications and a pump commissioning report. These will serve as benchmarks for future checks.

Maintenance throughout the season

Before the irrigation season starts At the pump: • Record water meter reading and pump hours • Protect pump shed from birds and vermin, if possible

• Grease pump and motor • Ensure frost drain plugs are reinstated. • At the irrigator: • Grease all moving parts – follow manufacturer’s instructions • Ensure frost drain plugs are reinstated • Check hoses and ropes for damage • Check for animals and nests in hoses and delivery pipes • Check tyre pressure, wheel nuts and wheel shims for pivots • Check drive shaft covers and safety stickers • Check oil levels in gear boxes • Check electronic controls which may need a new battery or re-charging • Border dyke system – clear headraces of weeds by spraying or grazing with sheep • Check and repair damage to sills, gates etc At the end of the irrigation season At the pump: • Repair or replace broken meters and gauges • If the pump is operating more than

• • • • • • • • • • •

5 per cent below specifications, consider taking action to repair. At the irrigator: Remove frost drain plugs Remove any plug-in cords and store them in a covered area off the ground Tie boom irrigators so they can’t rotate; store against a shelter belt Park the pivot in the same direction as the prevailing wind to reduce the contact area of wind on the machine Do not park the pivot in the wheel tracks or down a steep incline Pull K-line alongside a permanent fence, not under trees Do not store irrigators near trees which may break or fall over under the weight of snow Arrange an annual maintenance check by the supplier, for travelling irrigators Check major overhaul needs: usually every 10,000-20,000 hours of operation With border dyke irrigation, review performance and the need to redevelop border strips and levels.

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IRRIGATION FEATURE

system

19

Sprong - resilience and flexibility Originally designed for centre pivot irrigator gateways to allow pivot wheels to pass through a fence line instead of over, dramatically reduces the chance of pivot and fence damage. Sprongs require minimal re-fencing and are fully electrified for livestock control. For control of smaller livestock electric bungi cord can be used in conjunction with Sprongs near the ground. Now available in two sizes, 900mm and 1200mm gives you various options up to 2.4m gateways. Other ways of using the Sprong is for motorbike gateways, a quick way of getting around the farm or for pod irrigation gates. Developed by the Roberts Family, dairy farmers from Culverden, the Sprong Electric Fence Gate is the only product of its type to have been rigorously tested through eight years of development to provide the optimum balance of resilience and flexibility. The Sprong is available through rural retailers or the Beattie team are available for any questions you may have. You deserve the best – do not settle for imitations, ask for the original Sprong Electric Fence Gate by name.

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2 20

Farming Dairy Focus

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right tyre to meet your specific requirements. With strong ties to the Mid Canterbury agricultural community, Neumanns Tyres is a proud traditional supplier to ATS offering preferential pricing and on the farm servicing experience. Outside Mid Canterbury, the network of Tyre General stores offer the same high standards of exceptional service and expertise. On-farm/fleet service means you no longer have to worry about getting that flat tyre from the farm into town to be repaired. Whether it’s your tractor, pivot irrigator or harvester our experienced fleet servicemen will ensure your downtime is kept to a minimum. 24 hours a day, seven days a week… If you require tyres or service, either call us direct on… 03 308 6737 Neumanns Ashburton or 0800 226 324 Tyre General South Island wide. We’re there to help. Great Brands… Great Prices… and the Best Service! We’re your local tyre specialists!

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On the Farm Mobile Service for all your Rural Needs. No job too BIG ce for all your Rural Needs. No job too BIG or SMALL. On the Farm Mobile Service for all your

Farm Mobile Service for all your Rural Needs. No job too BIG or SMALL.


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SOUTHERN FIELD DAYS FEATURE

21

Southern Field Days bigger again with 780 exhibitors The Southern Field Days is a major agricultural event held every two years at Waimumu – 12 kilometres from the Southland town of Gore. On show over three days is the latest in rural technology, equipment and ideas from around the world. All will be on display among 780 exhibitors from all over New Zealand and Australia. Beginning on February 10, the field days are run by previous and current members of the Eastern Southland Young Farmers Clubs. All members are volunteers during the days and work in the agriculture industry. Wherever possible local community groups such as clubs, schools and their parent teacher associations are used to help set up and run the field days – giving them a chance to raise money for their own causes. First held in 1982 with just 60 exhibitors on land

loaned by Ken Bowmar, the Field Days organisation now owns 38 hectares in which

to have a wide myriad of working demonstrations. With over 30,000 attending,

the field days is a great way to attract new business for agricultural businesses as well as being a one-stop shop for farmers. Working demonstrations are a great way to view tractors and implements in a natural environment. Ranging from drills, ploughs, balers and everything in between the field days also feature the Southern Rural Life Farm Invention Awards. The awards provide budding inventors a great platform in which to show their creations. The Southern Field Days is the biggest event on the farming calendar for the South Island, held every second year to alternate with the South Island Field Days at Lincoln, Canterbury. If you are involved in farming, in any way, then this event should be in your diary, so keep February 10th-12th 2016 free.

SOUTHERN FIELD DAYS When: 10-12 February, 2016 Where: Waimumu (12 kms from Gore) How much: Adults $20 Children under 16 and students (with student ID) free Gate opening hours: 9am - 5pm each day

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2 22

Farming Dairy Focus

SOUTHERN FIELD DAYS FEATURE

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EuroAgri showcasing latest Mzuri drills and Bredal spreaders If you’re going to the Southern Field Days this year you must view the best in strip tillage and low disturbance sub-soilers in Mzuri drills and the very latest Bredal variable rate/width fertiliser spreaders at the EuroAgri site. The sole New Zealand importer and reseller of Mzuri drills, EuroAgri are proud to display and demonstrate the best drills for Kiwi conditions. After undertaking much research the sales team visited Worcestershire and met Martin and Samantha Lobe, who founded the Mzuri business, EuroAgri were convinced the drill was ideally suited to farming conditions here. Mzuri products are well known for their reliability and low maintenance costs. Overengineered and with all pins greaseable and mounted in replaceable bushes, the drills promise to be the answer to all farming requirements.

Producing a range of strip tillage drills, Mzuri have drills from three to six metres wide with seed and fertilser options. Coming in mounted or trailed combinations they also produce a range of low

disturbance subsoilers that can have seeder units mounted to them. Mzuri also produce a straw rake that has the option of discs in the front. This machine has a wide

range of uses from creating stale seed beds to pasture renovation. EuroAgri believe that with more farmers looking to create a better soil structure and retaining arable production through the incorporation of straw, Mzuri products are well suited to their needs and they reduce the cost of crop establishment through fuel, and labour savings. Also on display is the latest in Bredal fertiliser spreaders. The F8 spreader is designed for working widths of up to 24 metres and is designed for wedge shape and residual spreading. The variable rate/variable width spreader has been specifically designed with effectiveness and cost benefits in mind and is also available as a trailed edition with a 5700 litre capacity as well as the three-point linkage version. The team at EuroAgri will also be showcasing

Heva cultivation and seeding equipment where they will be focusing on indent deals. Newly appointed Southland sales representative Gavin Fowler will be on hand to take you through all the equipment EuroAgri has to offer and also can book in a time to see you on your farm anywhere in the South Island to demonstrate just how beneficial their Ag Leader guidance and auto steering capacities are on farm. The demonstrator drill is full spec with seed and fertiliser and fully optioned. The machines can be specified to individual customer requirements. So catch up with the EuroAgri team at the Southern Field Days or give them a call! Contact Hamish 0272289430, Matt 0212515389, James 0277827606, Gavin (Southland) 0276698779 or 03 3077445 www.euroagri.co.nz.


www.guardianonline.co.nz

SOUTHERN FIELD DAYS FEATURE

23

Everything irrigation and effluent Accredited in both irrigation and dairy farm effluent design, Rainer ensures all compliance, efficiency and reliability requirements are met in a system designed specifically to suit your needs. In recent times the dairy industry has experienced substantial growth and this has been reflected in the dramatic shift in dairying intensity across the country, further adding to the country’s diverse successes as an agriculture hub. A major requirement of dairying is the correct management of the dairy farm effluent. Local authorities across New Zealand have recognised the shift in dairy intensity and are aware of the potential environmental risks the industry may pose if dairy effluent specifically is not managed correctly. For this reason they are enforcing strict rules and guidelines for the storage and application of dairy effluent. Capitalising on their forty plus years of experience in the industry, Rainer Irrigation

Rainer Vibra Screen installed at New Zealand Super Fund farm in Eiffelton, milking 900 cows with feed pad.

has created a low maintenance, reliable, easy to use solution for processing dairy waste the Rainer Vibra Screen. Following two years of development the Rainer Vibra Screen has taken the fuss out of dairy management by providing a low input, easy way to process and utilise the natural resources contained in dairy effluent. The Vibra Screen and componentry is flexible enough to be retrofitted into most farms existing infrastructure making use of

Solids separated after 3 weeks on 1150 cow farm with extensive feed pad regime in Mayfield.

existing sumps, wedges, tanks and storage systems. The system utilises a stainless steel vibrating screen to separate the solids from liquids, a process proven reliable and effective in many industries for generations. The Vibra Screen’s robust design can handle anything the pumps can throw at it - including feed pad waste. The composition of individual effluent streams will determine the optimum flowrate but with standard milking shed effluent, the

Vibra Screen can process up to 15 L/sec. The lack of moving parts and friction areas provide reliability and low maintenance costs compared to other separator equipment. The combined power requirement for the system is very low in comparison also. The separated waste water can then be recycled for washdown requirements, or stored awaiting further dispersal. The percentage of solids removed limits the need for

additional storage ponds and prolongs the requirement of pond cleaning, further reducing costs. The Vibra Screen removes solids larger than one mm which allows for safe dispersal through existing irrigation infrastructure such as centre pivots thus reducing annoying nozzle blocking issues maintaining application accuracy. This provides a low input, convenient and flexible solution for effluent management. Additional products can be added to further streamline your waste management. VRI or variable rate irrigation is an innovative Zimmatic product, compatible with most pivot brands, that provides ultimate flexibility. This allows you to control how much water or effluent you wish to apply and exactly where you want or don’t want to apply it such as troughs or laneways. When this technology is coupled with a flow meter you can achieve proof of placement and application depth helping to meet local regulatory requirements.


2 24

Farming Dairy Focus

ADVERTISING FEATURE

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Low payout “Best time to invest” What happens when an unsustainable farm dairy needs to be replaced but the need coincides with a low payout season? Wardville farmers Shane and Jacque Ashley were faced with just such a dilemma in the spring of 2014. “It was taking nearly four hours to put 630 cows through the 40 bail rotary built in 1988 which meant that the last cows at each milking were spending as much as eight hours a day off pasture, standing on concrete,” Shane said. “The slow milking time was justifiable when the cows were doing 25 litres a day but production has improved and at 35 litres per cow the old shed was being found out. It had become unsustainable and had to be replaced.” Shane and Jacque farm 236 hectares in Wardville milking 650 Friesian/Jersey and crossbred cows. The herd produces 640 ms per cow and has a Breeding Worth of 160 and Production Worth of 230 putting it in the top 5 percent in the country. The need to contain costs

The Ashley’s new Centrus platform with SmartSPRAY system and tear-drop bail design.

was fundamental to the decision to build a new farm dairy. “The existing yards were integrated with the feedpad, effluent and electricity so we decided to retain them, demolish the old shed and build again on the same site. This meant the demolition of the old and construction of the new had to be completed between seasons. “In a normal year the cows are only out for two months and we needed at least twice that which meant drying off

the cows two months early, on 1 March. “The opportunity cost of drying off early was less because the pay-out was down – we couldn’t afford to do that if it had been $8 kg/ms – so we decided that this was the time to do it.” “We looked at a range of options but decided on a Centrus 54 composite platform from Waikato Milking Systems.” The deck sections of the Centrus 54 are formed in a multi-layer laminated process

The 54-bail Centrus rotary that has improved the Ashley’s productivity by 10 litres/day per cow.

that includes Kevlar, a material used in the construction of aircraft so they are 80% lighter and five times stronger than traditional concrete alternatives. “The weight difference between Centrus platforms and concrete is huge. Concrete on its own weighs around 35 tonnes but by the time you add 30 tonnes of stock, you’re turning 65 tonnes. The Centrus weighs seven tonnes so, fully loaded, you’re looking at 42 tonnes which means it uses less energy to turn it and

less wear and tear. “The deck surface is resistant to chemicals and effluent so it will never pit like concrete and will always look good. “The variable speed platform, milk pump, drive and vacuum pump drive mean it only uses power on demand so it’ll be cheaper to run.” Three months after the first milking, Shane says they are “delighted with the shed – there’s nothing we’d change.”

Profile for Ashburton Guardian

Dairy Focus January 2016  

Dairy Focus January 2016