Dairy Focus FEBRUARY, 2015
Drought concerns Pages 3-4 mount Primary Industries Minister Nathan Guy (left) and Opuha Irrigation CEO Tony McCormick inspect the dry bed of Lake Opuha.
Phone: 027 255 8501 Scott
PHOTO MICHELLE NELSON
Farming Dairy Focus
COMMENT FROM EDITOR
Snapshot of the worst drought in a decade
Farming mum Chanelle O’Sullivan takes us camping
Richard Pearse talks about his journey
Matt Jones discusses staff management in a tight year
New columnist looks at the benefit of hiring immigrants
DairyNZ talks tight times
Refrigeration regulation changes
Kathmandu’s business model
Editor Email your comments to firstname.lastname@example.org or phone 03 307 7971.
were also worried. Many were forced off their farms, and a lot more must have at the very least contemplated their future on the land. Don’t tell the younger generation to harden up, or how bad you had it. Tell them how you got through, remind them the rain will come and most importantly ask how they are. Sharemilkers in particular will be doing it hard this season, hit by the double whammy of a low payout and drought. And don’t forget the women and children who may well be suffering behind the scenes, sometimes bearing the brunt of despair and frustration. Make the effort to keep in touch with your neighbours – we will all get through this situation better by working together.
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While dairy farmers are keeping an eye on the sky and hoping for rain, those in the arable sector are cracking on with the harvest. Mid Canterbury farmers are reporting good solid yields; not record breaking – but considering the year, they are reasonably happy. This should help alleviate a looming feed crisis as winter approaches. Federated Farmers wants all available straw to be baled this season, and it is cheapest right behind the baler. Rather than waiting for rain, Mid Canterbury Federated Farmers president Willy Leferink says now is the time to do the hard sums; work out how much feed you will need, and where it’s going to come from. One issue pointed out to me this week that was not helpful was older farmers, who negotiated their way through the hard drought years of the 80s, telling their younger counterparts to toughen up. Yes, they did it hard and without a lot of the technology available today – but I’m sure as younger, less experienced farmers at the time, they
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Drought continues on its devastating path
Concerns are mounting, as the long dry spell, tipped to be the worst drought of the decade, continues to ravage a large tract of the South Island’s east coast. Primary Industries Minister Nathan Guy recently declared Canterbury, north and central Otago and Marlborough officially in drought.
He chose the Opuha Dam to announce what is described as a medium-scale event. The dam is set to run out of water in the next few days, for the first time since it was built by Opuha Dam Limited in 1998. Winter snowfalls in the dam’s catchment area were estimated to be about 25 per cent down on
previous years, and the situation was compounded by a dry spring and January rainfalls at a 43year low. The government defines adverse events, which can cover drought, fire, earthquakes, floods and other natural disasters, in three levels – localised, medium and national.
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Farming Dairy Focus
from P3 These are assessed on the basis of community preparedness, and its ability to recover from the event, the magnitude of the event, and the economic and social impacts. The declaration makes $200,000 available for rural support trusts, which provide support and advice to rural people. IrrigationNZ chairperson Nicky Hyslop was at Opuha Dam for the announcement. She said the drought declaration strengthened the argument for government investment in regional storage facilities for alpine water. “We currently only catch 2 per cent of the rain that falls in this country, and the only way to protect communities in dry summers is to store more alpine water,” Mrs Hyslop said. IrrigationNZ CEO Andrew Curtis is right behind her. “New Zealand has
plentiful supply which flows out to sea; we just need to get better at banking water and getting it to the needy places,” he said. “The official declaration of drought shows that extended dry weather has a significant impact in New Zealand despite its high levels of rainfall. It means that farmers and communities need help.” Mr Curtis said the drought would cost the country millions. “It’s time we bit the bullet and had a national conversation around how we manage drought,” he said. “We need to make 2015 the year New Zealand finally learns from drought and gets on with building regional-scale water storage to prevent local distress. There are several projects in the pipeline around the country but they need significant community, business and government
support to proceed. “Water storage and irrigation will allow New Zealand to survive climatic variations like extended dry spells which scientists tell us are on the increase, particularly for those of us living in eastern New Zealand. Drought takes away not only income from farmers; it strips whole communities of water ... water storage is not just about propping up irrigation.” Across the Rangitata River, Mid Canterbury is also feeling the pinch as restrictions tighten on irrigation schemes. However, industry spokespersons are quick to point out that the situation is not as desperate as it is further south. The Rangitata Diversion Race (RDR) was down to 40 per cent restrictions last week and river levels continue to drop. The RDR supplies water to the Mayfield Hinds, Valetta and
Ashburton Lyndhurst schemes. RDR operations manager Neill Stevens said drought conditions were as bad as he had seen since 2003. The Ashburton River has been on total restrictions since January. While farmers anticipate irrigation water supplies to be drying up from now on in, restrictions have hit earlier and harder this season. There are also fears for winterfeed if the long, dry spell continues. Federated Farmers Mid Canterbury chairman Willy Leferink is working on a feed inventory in conjunction with MPI. He anticipates dairy cattle from north and south Canterbury will be wintered over in Mid Canterbury, where irrigation has helped ward off the drought to some extent, however he expressed concerns over a price gouging war developing. “We need to find good alternatives
and work out how we are going to get through this,” Mr Leferink said. The inventory will include grain, straw and silage, as well as assessing the likely yields of maize and brassica crops. Federated Farmers is also working with MPI to ensure adequate supplies of PKE will be available. “We need to know what will be available and work from there to find out what the shortages are, but every day sees a new target – it all depends whether it rains,” Mr Leferink said Concerns have also been raised about the impact of the drought on mental health in rural communities, and rural support trusts have been briefed on strategies to deal with people needing support. “Many rural people can be reluctant to ask for help, but it is important for them to know that support is available,” Mr Guy said.
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Yay, it’s camping season Chanelle O’Sullivan
FACE TO FACE
It’s camping season! Every year I look forward to towing the mighty 1981, orange and brown striped, pop-top caravan through the vast, barren Mackenzie Country, past the masses of colourful lupins and merinos! We are lucky enough to have our own wee spot on the shores of Lake Benmore on the beautiful Haldon Station. When I first met my hubby he was working up there on the 53,000 acres for his third time, where he fell in love with the place and where we still yearn to visit a few times a year. The Mackenzie is not for the faint-hearted and lends itself towards extensive rather than intensive farming systems, though in saying that, in recent years a few dairy farms have
With views like this it’s no wonder Chanelle O’Sullivan looks forward to camping on Haldon Station each year. PHOTO SUPPLIED
popped up closer to the Twizel side! Last year we spent a week over Christmas up there with some good weather, but there have been years when the dams have been let go due to bad weather and we have been flooded out! This year however,
we just got up for the weekend a couple of weeks ago where it was unbearably hot and the ground was crispy to walk on. An eight-week-old, a toddler, myself and hubby crammed inside a 10ft caravan in the rain would have been horrendous so it was bitter-sweet!
If you are going to give camping a shot, my essentials list would include bug repellent or a citronella candle (keeping in mind the very serious fire bans though), baby wipes, hand sanitiser, sunscreen and a heavy, cosy jacket as you really just can’t predict what the
weather will throw at you. Now, long drops on a 35°C day … enough said. I only camped for the first time after meeting my husband as my family was more inclined to stay in baches near beaches (I will get dad camping one day) so the whole no shower, glacial-fed lakes and constantly deflating airbed didn’t capture my heart the first time round. But soon after that I got comfortable with the idea and now I can’t wait for it each year. So with grimy, dust-covered clothes, dirty feet, frizzy hair and fridge items swimming around in a chilly bin full of warm melted ice water – squeezing the pop-top closed signifies the coming of a hot shower, loads of washing, and the miserable task of unpacking. Did I mention the first blast of beautiful air-conditioning for the trip home! In regards to the melted chilly bin – If anyone has any brand recommendations I would love to take them on board. Until we meet again Haldon!
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Farming Dairy Focus
Dairy awards success helped by michelle nelson
Just two years ago Richard Pearse was named as farm manager of the year in the prestigious New Zealand Dairy Industry Awards. It was the first time the then 30-year-old had entered the awards, since launching his dairy farming career in 2000 – but it wasn’t all about the $10,700 prize package. “We wanted to get our name out there, and just participating in the competition is a great way of advertising,” Richard said. “The big push was to just enter and to improve our reputation – winning the award was never on the cards. But we did win and it was a very humbling experience. We were up against some very good contestants.” Richard and his partner Susan Geddes have spent the past three seasons contract milking 955 cows for Graham and Jane Thomas near Hinds. This year Richard is back on board with the awards, helping out as team leader of the farm manager category for
Mid Canterbury dairy farmers Richard Pearse and Susan Geddes attribute a successful entry in the 2013 New Zealand Dairy Industry PHOTOS ASHBURTON GUARDIAN Awards with fast tracking their career.
the Canterbury/North Otago region. “I mostly stepped up for the experience, you get a lot from it and it’s great to be able to return a favour.”
Come June, Richard and Susan are heading north to take up a 50/50 sharemilking job milking 1050 cows just south of Rangiora. In a climate where
sharemilkers’ jobs are as “scarce as hens’ teeth”, Richard attributes the couple’s rise through the ranks to their success in the national Dairy Industry Awards.
“The awards were a major factor in enabling us to get this job,” he said. “We wanted to get a really good base – entering the awards was an excellent
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couple rise through ranks
Richard Pearse at work.
opportunity to get all our policies and procedures in place.” The process of compiling their entry also enabled the couple to define their financial
goals and personal aspirations. Included in the process was a two-hour presentation focused on Richard and Susan’s business, and while this might seem an
intimidating prospect, Richard said their first draft took four hours to present. “It doesn’t take long to fill in two hours,” he said. While some potential
candidates for the Dairy Industry Awards might have shied away from entering in a season besieged by drought and low payouts, Richard takes an opposing point of view. “In a year like this, entering the awards forces you to look at your cost structure and evaluate how your business is operating. “You have to question your decisions and come up with other ways of doing things – and this is a really good season to be doing that. “I think this year’s entrants will get a lot out of the awards because it’s going to be a more difficult year. “The feedback provided by the judges, who are all at the top of their game, will be invaluable to less experienced farmers – participants can also call the judges and talk to them personally. “That’s a lot of free advice on offer. “Judges are not looking for the perfect farmer or cows, they are looking for people who are trying to work outside the box to come up with new ideas.
“It’s all about the challenges you face and how you deal with them.” Richard’s role has included following up on entries, organising judges, helping set up, making sure everyone knows what is going on “It takes up a bit of time, but after entering the competition it makes you appreciate all the effort that goes into organising these awards. “But it’s another opportunity for networking – we are continually dealing with the top 20 per cent of people in the industry,” Richard said. In the Canterbury/North Otago region, judging for the Dairy Trainee of the Year category finals took place earlier this month. This week judges will be out and about visiting entrants in the Sharemilker/Equity Farmer of the Year and the Farm Manager of the year sections. The regional winners will be announced at a gala event at the Wigram Airforce Museum on March 25.
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Farming Dairy Focus
Finding good staff when money is tight With a leading bank further cutting its forecast payout for Fonterra’s shareholder farmers over this season, how can we help stem the impact of this potentially billion dollar hit to our economy within our own farming operation? While we expect a recovery at the end of the 20152016 season, falling dairy commodity prices and dry weather can really start haemorrhaging our wallets in the immediate future. Why not look to your farm’s biggest asset to help lessen the blow? It’s more important than ever to employ the right staff, train them well and reward them accordingly. It makes good economic sense to put your efforts into finding quality permanent staff and investigate other sources to get temporary personnel to fill the gap. When you have top staff on your farm you can save ample time by avoiding the usual pitfalls inherent in the DIY recruitment process. A big plus is that having the best and most experienced team sees your productivity
skyrocket which helps to hedge your risk when milk prices have diminished. Did you know that Agstaff offer a variety of options for staff employment? With permanent solutions that carry a six-month guarantee, to a temp contract that allows the farmer to employ a person for the busy period at a flat rate finder’s fee (paid on a weekly basis), we can help you to cut operational costs overall. This also lessens the hassle on your end, managing subpar farm workers and sorting legal employment matters that you really don’t need. When you no longer require the staff member they simply call us and we finish that assignment and move them on to another contract
position. It’s a stress-free solution for dairy farm owners and managers as there is no obligation or employment law issues involved for you – yes Agstaff carry all of the risk here! At the end of last year it was estimated that farmer incomes would shrink by a staggering $6 billion from the previous season’s record high payout of $8.40/kgMS. Since February 2014 dairy
commodity prices at global auctions have dropped from heady heights by more than half. The once buoyant Chinese market came to a halt in order run down stocks while European and US producers boosted production. It also didn’t help matters when the European Union banned dairy commodity sales to Russia, flooding additional product onto the global market.
With a reasonably robust New Zealand dollar, we think there will be a more subdued dairy price recovery. We also foresee a tough campaign from international competitors supplying the market, which will both affect future payouts. While the next 18 months may challenge farmers’ cashflow, we anticipate the global milk supply to put the brakes on in response to a drop in prices, in return we should see a welcome spike in prices in the second half of the year. Action steps you can take right now include seeking expert advice on your recruitment of new staff using a fully customised solution. Agstaff can actually save you money by finding you high calibre personnel to drive more productivity and profitability on your farm. Need a game plan? If times are tight and rain and cashflow are scarce, we can help - phone the good buggers at 0800AGSTAFF today! Advertising feature
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Farming Dairy Focus
Is it wise for farmers to hire migrants? If you’re finding it hard to source suitable, reliable workers in the dairy sector, sourcing staffoverseas doesn’t need to be a burden, in fact it can be a great solution to local labour shortages. This is often a problem faced by many farmers all around New Zealand and, in particular, Mid Canterbury. Farming is hard work, it involves a lot of physical labour and long hours, so you want to make sure that you have enough staff in the first place, and that they are up for the challenge - and up for early morning milking! Unfortunately finding suitable candidates for this can be a struggle so more and more farmers are looking overseas for their workers. This has been most beneficial for farmers and workers alike. Not only is the farm owner getting personnel that are often difficult to source locally, they are also finding that migrants in particular have a real passion for farming, don’t mind the hard graft and are keen to learn as much as possible.
A lot of the time employees from other countries already have a skillset in farming and want to expand on their experience by working on larger farms. By having someone coming into the farm already with some key abilities and understanding can save you a lot of time and headaches down the track. Farming is a skilled job and it is important that we can fill these vacancies with a talented workforce, so where there is a shortage it makes sense to look outside of New Zealand for a hand on your farm. There is also an indirect benefit of learning a new culture when it comes to employing workers from overseas.
Your new employee may have a different way of looking at things and can introduce to a whole new culture to your workforce that you would have never otherwise experienced. It has been said that adding an international team to the mix can introduce new processes to your operations and therefore improve productivity. Are there any inherent challenges regarding work visas? It is important when hiring workers from overseas that you do so through the correct channels. It is essential that any overseas employees working on your farm have a valid visa in place. There are
many visas available that can achieve this purpose, such as a working holiday visa, essential skills work visa or even a partnership visa. The main differences between the visas are that the working holiday visa and partner visas are less restrictive than that of the work visa and is open to allow the person to work for anyone in New Zealand. You should make sure that your employee has a current valid visa by asking to look at their visa (which is displayed in their passport), or if they are on a working holiday visa ask to see proof of this. The Government is very serious about this matter and it is an offence that carries a
high penalty if you are caught with workers without a valid visa. By opening up your horizons and looking across the globe you can see that there isn’t the shortage of workers that we all think. There is, however, a chance to get highly skilled workers who can contribute not only to the productivity of your farm but they inject a refreshing level of enthusiasm to learn. Why not add an extra cultural dimension to your workforce? Heartland Immigration can help provide sound advice to employers and employees. Immigration advisers take on the application from beginning to end, saving you time and potential hassles. There are various hurdles to jump over, however, we can provide assistance with anything you need help with to make this process easier. Have a query about hiring migrants? Phone Nils today on 0800 INZ VISA for expert immigration advice. Advertising feature
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The importance of heifer nutrition BY DAIRY BUSINESS CENTRE (NZ) LIMITED As we progress through the season, we are giving farmers a timely reminder to start planning their strategy for heifer nutrition, as failure to give this enough thought can lead to poor production and subsequent losses of young animals in your herd. The primary factor contributing to poor production is not reaching targeted live weight gains for the period from birth up to first calving. Heifers, like calves, should be thought of as the future of your dairy herd. After calving, we spend much care and effort ensuring the animals take to the milk, then supply them with feed and good shelter to enable them to grow rapidly into heifers. This care and attention needs to be maintained once they become heifers, as at this time of the season we want to see healthy, well grown heifers that are reaching good weights in order to be ready for mating when they are 14 months old. When heifers are well grown the chance of competition in the herd is less, the risk of health issues during mating are low and she will produce
future generations of big calves. There is nothing holding the animal back to provide above average production in her first lactation. Making sure the heifers achieve these goals lies in the care and nutrition we provide the animals, making sure there is always feed there to fill up on, enough energy to grow and enough protein to provide the building blocks for her body to grow. Following on from this is
making sure the animal is looked after, has regular health checks and checking that her weight gain is meeting targets. Although heifers are not cows, their nutritional requirements are similar in that they need energy, protein and minerals. This means we need to make sure the animals are having enough fill to keep the rumen full and do not loose body condition and/or weight. These are indicators that can be observed during the season and should be monitored monthly. Also, make sure heifers and calves have adlib access to minerals through a lick and have enough supplements when their base feed is insufficient (e.g. through drought or rainy periods) and always have enough fibre available, either through the pasture or through supplementation of hay or straw. Farmers also need to monitor their heifers, even if they are grazing off, as having small animals for mating is a lost opportunity. To achieve target growth rates we need to be constantly weighing heifers to know the feed is working and by weighing regularly we can identify animals that are under performing and preferentially feed them. If the entire group is
not achieving targets then this could indicate other limiting factors (minerals, worm burden or poor feed quality) and with this knowledge we can identify and eliminate the problem No matter who is responsible for the task of actually feeding your livestock, you as the farmer will be incurring any losses from lack of nutrition planning as your future herds will be undergrown, won’t perform in their first or second lactation, and future offspring from undergrown animals are usually small, which will just repeat the cycle. If the animals are reaching targeted weights then both the grazier and owner have peace of mind the system is working. Plan your feeding strategy well, weigh regularly and consult a nutritionist to talk about the different responses expected from your particular herd. For more information on calf and heifer nutrition either talk to your nutritional advisor or contact the Ruminant Nutrition Consultancy team at Dairy Business Centre (NZ) Limited on 03 308 0094, email email@example.com. Advertising feature
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When a handshake simply won’t do Often over the years in law, we have come across clients who have had problems between parties where one leases to another on a handshake across the fence and an agreement of "x" amount of dollars per acre/hectare. Sometimes even the GST isn't considered. We are firmly of the view that one must always have a written document when leasing farmland. It is enforceable in a court of law when it is in writing, but difficult to do so if not. A common lease between the parties is drawn up to reflect each different situation. Some basic requirements are a definition of the land, perhaps a map or google diagram showing the perimeter or boundaries. The term must be put in eg two years, and any rights of renewal should be discussed at the beginning. The rental must be determined and indeed a right of renewal may have a review of the rental at such time. A review will normally allow a market rate or a CPI adjustment which can be on renewal or can be yearly or
otherwise. The method of payment of rent should be monthly, quarterly, bi-annually. There is a required penalty interest in the event of the rent being overdue. If penalty interest is not determined at the beginning then the only way it can ever be enforced is through a court-determined penalty interest which of course is costly to ascertain long term and may be lower than a penalty rate in a lease. Remember to add in the minimum of top dressing quantity of fertiliser or lime etc. One may rely on a good farmer to put the required amount but in hard times this might not be the case and so it is important to put in an absolute amount eg 250kg per hectare.
Public liability insurance is essential. With the fires in Canterbury (of late), Public Risk Insurance is a must for that and other accidents which may occur. Otherwise, it is essential to put the permitted use of land as crop/stock/dairy grazing/ dairy farming etc otherwise the lessee may farm pigs, rabbits and fitches. Many farmers would prefer there be no subleasing or right of assignment. These common law rights would be abrogated by having a specific provision in the lease that disallows any assignment or subletting. It controls the people who actually come on the farm i.e. the first lessee and no more.
Compliance with statutes is necessary. It is standard fare for leases to include the requirement of good husbandry to manage/destroy na sella tussock, nodding thistles, scotch thistles and rabbits where applicable and to get fences, ditches, bridges, stockyards, gates in good repair so a general farm maintenance/repair clause to maintain and repair is an essential part of a lease. Generally there is a limit on stocking. The last thing you want is a farmer overstocking to the point where the grass disappears and the soil is pugged up by overstocking. Some crops may be disallowed. A lease will often include
provision for re-grassing with certain grasses or a certain amount of hay or biomass be left, similar to the amount when the lessee began the lease. If the lessee puts in any fixtures or fittings on the land, these have to be removed before the termination of the lease. There are many other factors that can be included such as who pays the rates or insurance. If it is a company leasing then it is appropriate to have this personally guaranteed by the directors. It is imperative that farmers have a written document reflecting the lease agreement, otherwise it will the lawyers who make the most out of this through the necessity of tidying up and clarifying unwritten intentions later. Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
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DairyNZ addresses price dip, drought Tim Mackle
DairyNZ has launched a campaign to help dairy farmers survive a tough season brought on by a low milk price and drought. More than 70 farmers from around 30 farms nationwide have agreed to share their information and host events as part of the Tactics for Tight Times campaign, which kicks off this week. The campaign is designed to help farmers survive the current season and build their resilience for the future. DairyNZ chief executive Tim Mackle says the fact the Minister for Primary Industries has declared drought conditions on the east coast of the South Island as a medium-scale adverse event, has highlighted the critical
need for extra support for farmers. “The milk price hit a sixyear low in December, and dry conditions have exacerbated the situation, forcing many farmers to make some pretty tough decisions, especially as they look to set themselves up for next season,” he said. “With the double-whammy of a dry summer and low milk price, judgement calls become much more complex as
farmers carefully balance the profitability of keeping cows milking, keeping condition on them and using supplementary feed.” DairyNZ is pulling together research, data and lessons learned from similar seasons to support farmers with their decisions around health and wellbeing; pasture cover; feed; production; stock health; and financial management. The first round of events
on the host farms will be held at the end of February and March, providing farmers with the economic outlook for dairy and cost-effective tactics tailored to their regions. Mr Mackle said the sharing of information is crucial to the Tactics for Tight Times campaign. “Many of our host farms are in very dry areas. Events on those properties will address the specific challenges that
come with those conditions. We’ll provide farmers with as much data as possible from the host farms, both short and long-term, and then back this up with tools, resources and information from experts.” “No two farms are the same and this diversity has been addressed with the selection of host farms which differ in ownership structure, the amount of feed they buy in, topography and size.” He said farmers are already running resilient systems because extreme weather and a fluctuating milk price is part and parcel of being a farmer. “Dairy farmers have learnt lessons from the past. This campaign is about bringing that knowledge into one place, discussing what worked last time and feeding that into plans for the coming season.” Event details, profiles of the Tactics for Tight Times farmers (being completed over the next week) and practical resources can be found at dairynz.co.nz/tactics. Regular updates from the farms will also be added after the first field days.
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Lameness verse profitability I still get asked the question: “How many lame cows is it acceptable to have on a farm?” For many this seems to be an issue. Maybe you need those numbers to gain confidence that what you are doing is good enough. Maybe you need some guidance when you have discussions with your staff, your boss or with the owner. Whatever the reason for that question, I don’t think that anyone can actually answer it, for any attempt to answer it would be based on opinion rather than anything else. In New Zealand the fast majority of lameness originates from laminitis. I know that many people still disagree with me on that one. A much more common belief is that lameness is mainly caused by the physical forces that come on the hooves when the cows are being pushed over rough tracks and in the yard. If that is the case, then the question of how many lame cows is acceptable is easy to answer. It should be ‘none’ because a lame cow would be the result of animal
Lame cows exhibit an arched back; deliberate steps one at a time; and favour one or more legs.
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abuse and animal abuse should not be acceptable at any level. The problem is, however, that there is no evidence to back up the stone bruise theory or whiteline separation from twisting and pushing on concrete. As I asked in a previous article, if you have some evidence, please let me know. So, when I say that most lameness in NZ is laminitisrelated what do I mean? Even though the terminology is technically not correct, when I talk about laminitis I am talking about unhealthy or damaged live tissue in the claw. As I said before, there is no evidence that a stone makes this live tissue unhealthy. It is much more diet and stressrelated. Things like, not enough
fibre, not enough to eat (controlled starvation), not enough water (especially at the cow shed), changing the diet too quickly, not enough resting time, slippery yards; dark, hot cow sheds and the list goes on. Pushing cows on the tracks and in the yard belong in that list as well, because you are stressing a cow when you do that. So, with these thoughts in mind, then the way we combat lameness will be different. We may add fibre to the diet, we may put water troughs near the cow shed,
maybe even some sprinklers on the yard to minimise heat stress, have smaller herds, and have fewer cows and so on. This means the original question is now much more relevant because there has to be a balance. It is easy to stop lameness from happening. Just milk 100 cows and give them lots of hay. You won’t have lame cows but you will not make an income either. So, in other words, there needs to be a balance between stress levels on the cows and profitability. Because of that I would say that if you have no
laminitis in your herd you are not pushing your farm hard enough. I actually have not been on a farm where there is no laminitis, so that is not really the issue. Most farms have too much laminitis because the stress/profit levels are too far out (which reduces profit anyway). Because of all this my answer to the original question of how many lame cows is acceptable comes with a counter question: how much is lameness allowed to cost you?
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Bring it on, says Kirwee South Island Field Days readies for more exhibitors and visitors than ever. Set up for the South Island Agricultural Field Days in March is well under way, with an increase in both exhibitor and visitor numbers expected at the event’s new site in Kirwee. The Field Days in 2015 will take place from March 25-27 on Courtenay Road, Kirwee, on 40 hectares of land purchased by South Island Agricultural Field Days (SIAFD), after it outgrew its previous leased site near Lincoln University, where it has been based for the past 32 years. Field Days have been held near Christchurch every second year since 1951. Organising committee chairman Alastair Robinson says while there is still a lot to do, the event has a good committee, and they are confident everything will get done on time. The new rectangle block at Kirwee is a better shape than the former site in Lincoln and should be easier for exhibitors
to work with. Entry into the event will also be easier and more logical. The previous site was a triangle, which meant exhibitors in the far corners were sometimes overlooked by visitors. SIAFD usually attracts about 25,000 visitors over the three days, although the committee is hoping the larger site and new location will result in even more coming through. “We have registered 450 exhibitors, which is over 150 more than our previous event. We’re hopeful that we’ll have
more people through the gate than previously but time will tell,” Alastair says. “There’s been heaps of positive feedback from exhibitors and they’re all looking forward to the new site. They’re happy with the layout we’ve chosen.” A feature of this year’s Field Days is a half-circle centre-pivot irrigator, which will operate at the front of the site. The irrigator is up and running to ensure a good crop of grass for harvest equipment demonstrations. Think Water Leeston has made a commitment to supply,
install and maintain the irrigator for a period of 20 years and will have a strong presence at the Field Days. Think Water Leeston is a family-owned water services business that has been providing pumping and irrigation equipment and solutions to the Canterbury region for more than 25 years. SIAFD organising committee member Daniel Schat says crops for demonstrations have been drilled and sites allocated. “We have more room and the shape is a lot more conducive to filling up the
space. The half-circle centrepivot irrigator is located at the front, close to the big demonstrating exhibitors,” he says. The increase in exhibitor numbers this year shows the community is continuing to support the Field Days and wants to be a part of it. “It’s only a $15 entry fee so it’s very minimal,” Daniel says. “South Island Field Days are all about checking out that bit of equipment that you’re interested in buying and seeing it working.” About 100 pieces of machinery, including tractors, post drivers, mowers and seed drills, are put through their paces throughout the event. Daniel says the Field Days couldn’t be possible without the huge number of volunteers who help with setting up, running the event on the day, and clean up afterwards. For more information about South Island Field Days contact Nicola Burgess on 03 423 0537, 0275 858 417 or email@example.com. Advertising feature
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Pre-chilling price gouging common Farmers are being exploited on equipment purchases for pre-chilling solutions ahead of the NZCP1 milk cooling regulations coming into force next January. Comparative pricing and dealing with reputable dairy refrigeration providers are absolute musts to prevent unnecessary overspending ahead of the tighter regulations. Waikato farmer Ken Oliver also warns that as well as price gouging farmers across the country are at risk of overcapitalising on gear. “It is about cooling but a lot of people are going to be burnt. Most farmers will be able to use what they have got already provided they put some peripheral stuff on. You should be going to reputable refrigeration people.” Ken’s milk lands in his vat at 7.5°C. The temperature fall of nearly 30°C is all done with heat exchange before any cooling from the vat floor has kicked in. He is already geared up to meet the new NZCP1 regulations. Braiden Paterson, OtagoSouthland Area Sales Manager
for DTS Milk Cooling & Tank Solutions says “Being aware of the many pre-chilling options available and investing wisely is key to managing costs of plant upgrades and refits for dairy farmers over the next season particularly in the low pay-out climate. Farmers need to get their pre-chilling right so that their system complies and
they save money on avoiding temperature grades.” Braiden will be at the Clydevale Dairy Expo, just out of Clinton on 4 March and at the Southland Field Days in Kirwee 25-27 March with Canterbury Area Sales Manager Aaron Keppel to discuss what the regulations will mean for dairy farmers over the next 30 months
leading up to compliance for all dairy operations and the different options available to farmers to successfully upgrade systems at reasonable cost. Ken Oliver’s Rules for getting ready for the new NZCP1 regulations 1. Make use of what you’ve got and don’t overcapitalise.
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The phasing out of R22 refrigerant Background Up until around the year 2000 R22 refrigerant was the refrigerant of choice for new dairy farm refrigeration systems and there are still hundreds of these systems currently in use in the dairy industry. Unfortunately this refrigerant has been part of a Government phase-out programme for many years it is now almost impossible to purchase this refrigerant from refrigeration wholesalers and while there is occasionally R22 for sale in the market it is being sold at ridiculous prices. Most of this equipment still in service has been retrofitted and will function until the end of its life although there are many of these still running on the redundant R22 refrigerant.
now routinely retrofitting R22 equipment to enable the equipment to continue operation to the end of its life. Much of this equipment will become redundant where upgrading of the refrigeration (or installation of snap-chilling equipment) is required to comply with the new 2018 milk cooling regulations although it will be beneficial for many farms to retain this older equipment and take most of the load off it by installing appropriate snapchilling equipment.
Where to from here if your old equipment is still running on R22? Fortunately it is economic to retrofit your existing plant to these newer alternative refrigerants and we are
While industry recommendation is to change the R22 refrigerant over to new alternatives while the refrigeration unit is working well, we exercise a more
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practical approach where we can lend R22 refrigerant following a leak to restore equipment operation quickly and call back to recover this refrigerant and then retrofit to the new refrigerant on a more planned basis. I will need to upgrade to comply with the new regulations â€“ should I be looking to do anything with my old R22 equipment in the interim? As most of this equipment is nearing the end of its life, it depends on whether
you will be installing snapchilling equipment or whether upgrading the refrigeration on the milk silos will ensure future compliance. Most farms will benefit from snap-chilling going forward and where this is the best option, we recommend only retrofitting the refrigerant in your existing equipment when either upgrading or changing the configuration of the milk silos on the farm or following a leak breakdown where the system refrigerant charge has been lost.
Where you are fortunate enough to be able to comply with the new regulations using only milk silo refrigeration, your best option would be to upgrade the end-of-life R22 refrigeration systems to new equipment before being forced to spend money on the old equipment just to keep it running. Murray Hollings is the owner of Dairycool. Dairycool is a locally-owned and operated firm specialising in dairy farm milk cooling products and services
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Understanding nitrogen reports Dairy farmers in the wider Ashburton region can learn about turning farm nitrogen reports into practical actions at a workshop next month. The workshop, to run on March 9, is a part of a national roadshow organised by Ballance Agri-Nutrients and the Dairy Women’s Network to take the mystery out of farm nitrogen reports. “The aim is to enable farmers to influence farm economics by minimising nitrogen loss and improving nitrogen-use efficiency,” Ballance’s science extension team member Ian Tarbotton, said. “The workshop will be valuable for both farm owners and workers as we discuss how common practices impact nutrients on the farm and in the environment. “Daily activities can make a difference to overall nutrient management, particularly nitrogen, so understanding what can be done on each farm to manage this will help deliver sustainable results for our industry and better business outcomes for each
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farm.” Nitrogen reports are generated through the Sustainable Dairying: Water Accord. Launched in June 2013 by DairyNZ, the accord sets out the dairy industry’s commitment to New Zealand
and improving water quality. Synlait Milk signed up to the accord as a commitment to supporting sustainable dairying in the Canterbury region. One of Synlait’s commitments is to collect
and model nitrogen loss and nutrient conversion efficiencies for each of its suppliers. Synlait environmental adviser Emma Porter has produced a number of reports for the company’s suppliers
and says the workshop is a good opportunity to learn about the potential benefits for farms. “Nutrient reports are more than just numbers – they’re a guide to support nitrogen-loss improvements,” Ms Porter said. “There is a good summary of on-farm nutrient management and an explanation of the five main factors influencing nitrogen levels on offer. Combined with different perspectives from those working in the industry, local dairy farmers stand to benefit a lot from this workshop. “We’re encouraging Synlait suppliers to attend as it aligns strongly with the environment aspect of Lead With Pride, which is our best-practice dairy farming certification programme.” The workshop will take place on March 9 at Hotel Ashburton from 9.30am to 2.30pm. If you would like to attend the event you can register by calling 0800 396748 or by visiting www.dwn. co.nz.
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Aorangi finalists to be put to the test in The second Young Farmer Contest Grand finalist will be determined this weekend, at the Aorangi regional final to be held in Oamaru. “This contest season is shaping up to be very impressive after a fantastic regional final in Queenstown over Waitangi weekend. Every year the calibre of contestants continues to impress,” New Zealand Young Farmers chief executive Terry Copeland said. The eight finalists are contending for a spot at the grand final in Taupo in July, and their share of an impressive prize package worth over $271,000 in products, services and scholarships. “The support from sponsors and the community is invaluable, they are not only supporting the contest but the future of agriculture and together with Young Farmers we are driving the industry forward,” Mr Copeland said. The Aorangi regional final will bring an outstanding group of contenders together for a full-on day of practical, physical and theoretical challenges at the North Otago
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Young Farmer Contest regional final is representing South Canterbury’s Milford/ Clandeboye Young Farmers Club in his fourth crack at the regional finals. Caleb is a graduate consulting officer for DairyNZ based out of Timaru and believes his competitive nature and can-do attitude will help him in the competition. He is an active member of Young Farmers and in his spare time enjoys riding motorbikes, socialising and playing rugby. Thomas Gardner, 23, from the Glenavy/Waimate Young Farmers Club is making his first attempt at the Young Farmer Contest. In his spare time Thomas is involved in equestrian sports, and is a familiar face on the Canterbury show jumping scene. Recently graduated from Lincoln University, Thomas believes his farming experience, hard work and academic nous will help him to victory. Matt Bell, 28, from the Hinds Young Farmers Club represented Aoraki in the 2013 grand final, where he won the agri-skills challenge and came in third place overall.
Matt Bell showing off his skills with the chainsaw.
Matt is contract milking on a 700-cow farm in the Rangitata for the Pye Group. In his spare time Matt likes getting out on his motorbike, snowboarding and refereeing rugby. He is passionate about the contest
and is determined to take out top honours this time round. Stafford Adams, 27, of the Glenavy/Waimate Young Farmers Club competed in the 2014 Aorangi Regional Final. Mr Adams manages a dairy
farm and will be moving into contract milking in the coming season. When he is not working Stafford likes to go hunting, fishing, boating and skiing. Stafford enjoys being a member of New Zealand Young Farmers because it allows him to socialise with like-minded people. Bryce Vreugdenhil, 21, from the Milford/Clandeboye Young Farmers Club is making his very first attempt at the ANZ Young Farmer Contest. Bryce is a shepherd at Mt Peel Station which runs 35,000 stock units including sheep, deer, cattle and grazing dairy heifers. When he’s not working the outgoing 21 year old enjoys socialising, playing rugby, and hunting. He also enjoys the challenge of dog trialling and testing his team of dogs against others. Athol New, 29, represents the Pendarves Club in his first attempt at regional final level. Athol is the farm operations manager for a 2,250 cow dairy operation based north of Rakaia he leads a team of 13 people to successfully run this
business. The Lincoln University graduate believes his leadership, management and practical skills will hold him in good stead to win the contest. In his spare time Athol enjoys water skiing, golf, fishing and coaching rugby. Tom Hunt, 29, from the Upper Waitaki Young Farmers Club has competed at regional final level before. The 29-year-old is in his first season of lower order sharemilking. Tom believes that his broad range of experience across most farming practices and competitive nature will help him become the next ANZ Young Farmer Contest Champion. In his spare time he plays rugby and enjoys hunting and fishing as well as socialising. Also in the midst of the action are the future Young Farmers – the AgriKidsNZ and TeenAg competitions will be running alongside the ANZ Young Farmer Contest. Further details and evening Show tickets are available from www.youngfarmercontest.co.nz
AUTUMN MACHINERY SELECTION Here’s a sample of our Used Machinery Stock - give us a call
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TAEGE 2 BALE
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REF:T-3847 Greg Risk (Ashburton)
Dallys O’Neill (Timaru)
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REF:T-3841 Graham Pooke (Timaru)
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Farming Dairy Focus
LIC performance better than expected LIC has recorded a solid performance in the first half of the financial year. In the six months to November 30, 2014, the co-op achieved revenue of $159 million, 17.7 per cent higher than the same period last year. Chairman Murray King said the half-year result was better than expected, and driven by farmers choosing to continue to invest in solutions which improve their productivity and prosperity. “As their co-operative, we provide farmers with solutions that will add value on-farm and deliver a return on their investment. “While we do see a reduced spend in lower payout years, we find that farmers are willing to continue to invest in the solutions that will deliver a high return for their business.” Mr King said the co-op experienced particularly high demand for its short gestation genetics. DNA parentage testing and information and automation technology systems also remain popular.
LIC chairman Murray King.
SUMMARY LIC revenue and other income for the six months to November 30, 2014, was $159 million, 17.7 per cent ahead of the $135.2 million achieved during the same period in 2013. Net profit after tax for the half year was $29.7 million, up $2.7 million from the previous year reflecting the strong first half revenues across most product categories. LIC’s business, particularly artificial breeding (AB), is highly seasonal. Half-year results incorporate the majority of AB revenues but
not a similar proportion of total costs, and are therefore not indicative of the second half, nor the full year, result. No dividend is therefore declared at half year. LIC continues to operate a strong balance sheet with total assets including cash, software, land and buildings and bull teams of $322.6 million. Cashflows from operations continued to strengthen generating $6.6 million, compared to $1.2 million in the half year to November 30, 2013.
A lower year-on-year net profit after tax result is forecast, as part of the expected impact of milk payout and the co-op’s ongoing investment into technology and infrastructure worth more than $20 million. The co-op has reviewed where it can reduce discretionary costs without
impacting service to farmers, Mr King said. As part of its growth strategy, the co-op has announced a number of new developments this financial year, including a joint venture in Brazil, partnerships with Figured and SCR, and the merger of subsidiary business DAL and Protrack.
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A biological approach to dairy farming At a time when we are sitting at a low dairy payout and drought has been declared, it is important to utilise alternatives such as Cow & Calf Formula to ensure each animal is producing what it should and doing so without costing you money and down time. The average South Island dairy farm will run about 800 cows at peak and with 800 cows you would expect to see some of these animals treated with antibiotics at least once during the season. For a long time we have known that there are other options out there, not necessarily to replace traditional medicines but to complement and work with them to encourage a healthy herd. Dairy Care NZ has fostered this opinion in the creation of its product cow and calf formula. “Our vision is to find a balance between the use of pharmaceuticals and organics. We believe we can and I am sure you will find that balance too,” managing director Kuldeep Sharma said.
Using a proprietary blend of high quality aloe vera and manuka honey, the DairyCare NZ has developed a unique New Zealand productCow&Calf Formula that has shown extremely promising results in improving health and production in cows as well as immunity in calves. During August 2013 – May 2014 a scientific trial was undertaken to assess if there was positive effect on the somatic cell count levels on a milking herd when treated with Cow and Calf Formula. The scientific trial at Kahikatea Farm (Paeroa), ran 800 cows over two or three herds. The cows were randomly allocated into either the test group or control group, with the test group cows receiving a 5ml calf and
David Whyte (scientist) Paul and Tania Tarver.
cow formula dosage diluted to 50ml at the bale, along with their normal supplement. While the aim of the test was to determine any positive effect the supplement had on the somatic cell count levels, data analysis showed the yield improving. The analysis showed 30.6 per cent of the control group cows were alerting to low productivity while only 25.7 per cent of the test cows alerted to low production. After recording the average of
morning and evening milking over the lactation, the average produced in a milking by a test group cow was 10.71l and a control group cow was 10.26l. This meant on average per milking a cow treated with the cow and calf formula was producing an additional 440ml or 4.7% more milk. Field trials were also undertaken and produced positive results at a Matamata dairy farm 20 cows each with a somatic cell count greater than 500,000 were treated
with a 100ml dose of cow and calf formula. The result: a 35% per cent reduction in somatic cell count in the treated cows. These results were “extraordinary” to independent researcher David Whyte of Zestos. one hundred per cent of the Kahikatea test group showed a 4.7 per cent increase in milk production and if that doesn’t convince you then who knows what will. Sometimes we need to step into the unknown and give something new a try. I have milked my share of “threetitters” and if wasting one quarter of an udder can be stopped then I am all for it. I like how Kuldeep Sharma sums up what this product is about with this statement “We as a group of people who look after animals have a responsibility to look after them not only humanely but also so that they do not pass any resistance in the food chain. So a biological approach is the middle ground and Cow & Calf Formula helps to achieve that balance.”
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Ashburton: 25 McNally, Ashburton 7700. Phone (03) 307-2027 Timaru: 81 Hilton Highway, Washdyke 7910. Phone (03) 688-7042 Ashburton: 25 McNally, Ashburton 7700. Phone (03) 307-2027 Timaru: 81 Hilton Highway, Washdyke 7910. Phone (03) 688-7042
Farming Dairy Focus
Dry spell reinforces importance of Andrew Curtis
It was no surprise to finally have the official declaration that the east coast of the South Island is in drought! IrrigationNZ will continue to talk to Ministers, MPs and regional and district council representatives about the need for further national investment in regional water storage. The only way to prevent communities suffering drought in dry summers is through storing alpine water. We do not need to wait for rivers to run dry, for fish to die and for communities to panic. New Zealand has a plentiful supply which flows out to sea; we just need to get better at banking water and getting it to the places that need it. There are several projects in the pipeline around the
country but they need significant community, business and government support to proceed. This drought will cost New Zealanders millions. It’s time we bit the bullet and had a national conversation around how we manage dry spells and get better at storing water. In the meantime, as an irrigator what can you do to minimise your risk of running out of water when we encounter a summer like this? The emphasis needs to be optimisation and efficiency hand in hand with pre-planning and maintenance. The first thing to check is that your equipment is operating optimally so whatever water is pumped is applied as effectively as possible. Keep abreast of what is happening with your water supply and prepare for further water restrictions to ensure domestic and stock water can be maintained and crops managed with restricted supply. Scheduling is key; particularly now irrigators are limited in the water they have through seasonal volumes and
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working as it should - including pressure and sprinkler performance. If you’re running out of water re-nozzling might stretch it out for longer. Alternatively if you operate a number of irrigation systems think about shutting off the
less efficient ones, long laterals in pivot corners for example. That way you can continue to operate more efficient irrigators such as pivots and linear moves for longer. IrrigationNZ has created a check list of options to help you make the right choices
storage and efficiency
during dry spells. The options available are influenced by your irrigation equipment and set up and how farmers react also depends on your particular water restrictions and land use. From surface water river takes there may be a rationing
regime in place that reduces the water take as certain trigger flows are reached. For example 100 l/s to 75 l/s when the first threshold hits then from 75 l/s to 50 l/s with the next. From an irrigation scheme the roster may change from full
flow to reduced flow so your system then has to match it or it could be that the scheme provides full flow but on reduced hours or fewer days. These are all scenarios irrigating farmers need to prepare for and have contingency plans in place.
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Loss of production of the area Depending on irrigation system may be difficult logistically, pivots have varying levels of control for example
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Farming Dairy Focus
Kathmandu – not for the risk averse Kathmandu is a brand well known to most. Most also know that the adventure clothing and accessories retailer does most of its business during three major sales periods each year. These key sales periods are the Christmas, Easter and winter sales. Sales figures from the first of these sales periods, Christmas, were released a few weeks back. The share price subsequently dropped 25 per cent as Kathmandu announced a likely loss for the first half of their financial year. Although the trading update was disappointing, Kathmandu can point to a number of factors that may not reoccur. Firstly, the company was overstocked going into the period, meaning they had to discount more than usual, reducing margins. Furthermore, the very warm weather over Christmas reduced demand for their cold weather apparel. A turnaround could be expected in the second half, as this period usually accounts for 60 per cent of sales, given
A BROKER’S VIEW
two of the three major sales occur during this period. The company did note that they had lower inventory levels heading into the period which should help it maintain margins. Maintaining those margins is going to be the long-term struggle for all retailers, Kathmandu included. The proliferation of online shopping has changed the game somewhat, opening the retail market up to new players and making branding more important than ever for incumbents such as Kathmandu. Generally speaking Kathmandu has good brand recognition which will help protect their market share. The poor sales figures over the Christmas period
illustrate a major risk posed by Kathmandu’s business model. Much of the year-by-year success relies on three periods of heavy sales. The Easter and winter sales and the weather during these periods will dictate the share price in the short term. The volatility of these sales figures correlates strongly with Kathmandu’s share price over the past few years. The share price dropped as low as $1.26 in 2012, before trading
north of $4 in 2013, and 2014. The share price has now dropped back down to around $1.50. The volatility in share price reflects the markets fondness to extrapolate the most recent news into perpetuity. Investors can expect good upside from these levels if Kathmandu can successfully turn their ship around. There is every chance Kathmandu can pull it off given the cyclical nature of
their sales. Kathmandu is not for the risk averse. Written by Grant Davies, Authorised Financial Advisor at Hamilton Hindin Greene Limited. This article represents general information provided by Hamilton Hindin Greene, who may hold an interest in the security. It does not constitute investment advice. Disclosure documents are available by request and free of charge through www.hhg.co.nz.
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Rural Real Estate
Leading the way Kelburn Estate Invest in a piece of land large enough to build a home, with room to spare for a tennis court, a shed to house the boat and other outdoor toys, a pool and entertainment area to enjoy on summer evenings as well as room for the kids to play. All of this and more is available at the Kelburn Estate located off Tarbottons Road in Tinwald. This estate is for those looking to enjoy the freedom of a lifestyle block but with the manageability of being part of an estate. With sections averaging around 4000 square metres you can have the best of worlds, space and a rural feel while taking advantage of the town supply water, sewer connection and fibre optic cable to the boundary. Local man Stuart of Stuart Tarbotton Contractors has developed Kelburn after his father Malcolm created parcels of land that still allow for easy care but with the feel of a rural lifestyle block. This begun with putting in a large pump station and holding tank under the ground with an expansive storage capacity. The tank is approximately six meters deep which took a lot of dewatering and backfilling to achieve, a large job that required concrete above and below. Sewer lines and manholes were constructed, and all pipework from one end to the other was checked by camera
Property Brokers, Hastings McLeod Ltd has lead the way for several years in Dairy Farm Sales. Historically this strength has been specifically in the Mid Canterbury region; however with the addition of established rural sales people in other areas they have a strong presence in North Canterbury, South Canterbury, Selwyn, North Otago and the West Coast. Their reputation as market leaders has lead to them marketing high profile properties such as Ealing Pastures, which sold by Auction in 2014 for $64.9 million. The Property Broker’s team had further success in 2014 when they were awarded REINZ Top Rural Office and Australasian ‘Best Practice’ agency of the year. Property Brokers Rural Team understand that marketing rural property requires very specific skills and knowledge. The Property Brokers teams ensure that they are always at the “Top of the Game” through continued training, networking and research. Advertising feature
to make sure there was no ponding, and tests for water leaks passed with flying colours. After sewer, power and fibre optic were laid, Stuart Tarbotton Contractors completed the roading, channel and kerbing in preparation for the final hot mix. Grass swales with pipe work and structures were constructed to handle storm water requirements in line with ECan requirements. Kelburn is an exclusive community featuring fully serviced sections with plenty of green space giving residents the room to enjoy a great indoor/ outdoor lifestyle. All of the ground work and planning has been done and is ready for your dream home and lifestyle to begin. With all the Tinwald and Ashburton amenities close by, convenience and necessity are close at hand. The Tinwald Golf Course is a gentle meander down the road, framed by the impressive Southern Alps, providing a lifestyle second to none. With the amazing mountain views, green country outlook and serenity, this development is becoming a popular haven with Stage One Kelburn Estate welcomes you home where you can breathe the fresh country air, enjoy the picturesque landscape and still be close to all of your favourite things Advertising feature
Kelburn Sub-Division - Tarbottons Road Ashburton Ashburton 19 King Street
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Rural Real Estate
Drought conditions bring ‘doubleedged sword’ to farm price values by
Drought conditions across Canterbury are having both a positive and negative impact on farm values and sales volumes, according to data out from one of the province’s leading real estate agencies. Bayleys Canterbury director Bill Whalan said that the official declaration of a drought in the region last week confirmed what the real estate sector had been seeing for the past six weeks. “Sales volumes of dairying properties, anecdotally, feel down - with most dairy farmers now reluctant to sell into a market where not only are we suffering from a drought, but the milk solids payout is also declining,” Mr Whalan said. The drought declaration by Primary Industries Minister Nathan Guy comes just weeks after Fonterra announced a farm gate milk price of $4.70 per kilogramme for the next season. “No one really wants to either set a new lower market pricing level or appear to be selling at a less than favourable time unless they absolutely have to. The general rural business reaction to this drought as it has worsened, has been to hunker down and wait until the price signals in the market for dairy product are stronger again and vendors feel that it is again ‘safe’ to put their property on the market. “In other words – they will want to see some physical evidence that the market has regained previous levels before acting – no one wants to be first. Price levels and expectations appear to be down approximately five percent judging from discussions we have had over the past six weeks with valuers active in the dairy industry.” On the other side of the coin, Bayleys Canterbury rural sales specialist Dean Pugh said that while values had slipped for dairy farms, the converse had been noted for cropping and dairying support blocks
Cropping and irrigated land values in Canterbury look set to rise as a result of the drought.
which had come into their own because of the drought. “With a drought, surplus feed supplies either grown by dairy farmers or by cropping specialists, become shorter in supply. As such, the price for feed rises. For those dairy farmers who
to that feed, and not have to compete on price in the market to secure it. “With so many more dairy conversions in the last few years of land that had previously been used as dairy support, there is even less of that land available now to
overall financial success of the operation as the milking platform itself. “With vendors perceiving there is a lift in demand for those support properties we are now seeing some of them more seriously considering taking them to the market for
Quite simply, irrigation infrastructure on a property – whether dairy or support block - is highly valued. Modern irrigation technology is even more favoured by buyers
have their own support blocks growing feed crops, and who can move their cows to winter on, they are in a far better position than farming peers who are at the mercy of the market in terms of both feed availability and the price for that winter feed,” Mr Pugh said. “Support land means that a dairy farmer can have more control over the cost of the feed, have exclusive access
support even larger demands for winter feed. “Several farmers I have spoken to who have to pay a premium for winter feed in a drought year are now seriously looking at purchasing their own support blocks,” added Mr Pugh. “Consequently, they are keen to pay just a little more to buy that support land going forward, as it may be just as important to the
sale. “Obviously the bigger the scale of the milking operation, the greater the cost and risk imposed on the operation by a drought… so perhaps the motivation to cap this risk is greater.“ Mr Whalan said the drought conditions had openly highlighted the value of water irrigation access for Canterbury’s rural productive properties.
“Quite simply, irrigation infrastructure on a property – whether dairy or support block - is highly valued. Modern irrigation technology is even more favoured by buyers as it’s the key to water efficiency,” he said. “Water availability which remains unrestricted in a drought is even more highlyvalued and in dry times like we have now, that ability to continue irrigation systems will be brought out – as is land which does not benefit from water rights. Again, it’s that dual-edge sword effect which will have an impact on both land value and sales volumes. “Dairy production is slowing with irrigation restrictions and pastures not growing so fast due to heat or water stress. Daily per-cow milk production will be affected unless considerable amounts of supplement are used now.” continued next page
Farming Dairy Focus
from page 29 Mr Whalan said that fortunately, a high percentage of Canterbury’s dairy operators had recorded bumper winter and spring growing conditions - enabling many dairy farmers to be in a stronger financial position than in many previous droughts. “At the start of the year, many of the farmers we speak regularly with said their balance sheets were ahead of last year’s production forecasts. However that positivity is fast reversing,” he said. “One of the other major impacts of this drought is that cull dairy cows being sent to the meat processing industry for killing, due to dry conditions or for costcutting are creating a log-jam of incoming stock, which is in turn putting pressure on the availability of killing space in the freezing works. “Consequently that ripples through to the sheep and beef sector which is also wanting to kill stock at this time of the year. They are now being forced to feed stock for longer as the killing queues are processed.” Mr Whalan said that while the drought was now
Rural Real Estate
at the forefront of most conversations with both vendors and purchasers, experienced dairy farm buyers the agency was working with were looking through this low payout year as a ‘one off trough’. “Just like last season’s payout was a ‘one off high’,” he said. “Prudent dairy farmers are not basing their investment decisions on the highs or the lows, but rather using a long term average figure to budget on. This is in line with the attitude of the major rural lenders as well who will use a long-term budgeting payout level when assessing credit. “So while Fonterra is budgeting for a farm gate milk price of $4.70 per kilogramme for the next season, the banks actually take a longer-term view of pricing more around $6.30,” Mr Whalan said. “There’s nothing new about the cyclicality of the rural market. Banks and farmers take a more flat-line approach to their revenue forecasts, working instead on longterm rolling averages rather than historical high and low positions which can fluctuate quite markedly over relatively short time frames.”
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A long lasting product
QUALITY BUILT & TOUGH MADE IN THE USA
• Entire Auger Constructed with 12ga Tube • Powder Coat Plus™ • Entire Auger made with Iron Edge™ Flighting • Up to 50% Thicker than Regular Flighting • Overflow Protection • Available in 10” and 13”
S L A E D UMMER
TRAILED LOG SPLITTERS
Hydraulic Scissory Lift
FEED SYSTEMS NOW AVAILABLE THROUGH PMR PMR are pleased to announce that they are now able to supply total dairy feed systems through our supplier GSI into both rotary and herringbone dairy complexes. PMR offer
• Site Consultation
• Installation and Repairs
The range of products include bulk storage silos, hopper bottom silos, roller mills, ﬂex ﬂo coreless augers and grain augers.
Mention this advert and receive
WAKELY ROLLER MILLS From 1.5tph through to 30tph plus.
$1500 OFF *
12 MONTH WARRANTY HEAVY DUTY NZ DESIGNED & MADE
GSI SILOS Flat bottomed or hopper. 5 tonnes to 10,000 tonnes. Can be ﬁtted with stirrers and unload systems. Dairy Feed Systems now available.
CALL NOW: 0800 641 146 ICS FARM MACHINERY 303 Flaxton Road Rangiora E: firstname.lastname@example.org *$1500 including GST off the full retail price. Offer ends 31st March 2015. Conditions apply.
Dairy Feed and Crop Storage Specialists
Dairy Feed and Crop Storage Specialists
03 303 7266 | Web: www.pmr.co.nz Email: email@example.com Mobile: 0274 151 390 Email: firstname.lastname@example.org Mobile: 0275 146 609
GESAPON 20G ™
Peter Morath / hedgehoghouse.com
THE TRUSTED BRAND TO PROTECT YOUR INVESTMENT THIS AUTUMN.
Gesapon 20G is a granular insecticide for the control of grass grub in pasture and newly sown crops such as cereals.
Only Gesapon 20G provides; Gesapon 20G – ask for it by name Available from
and selected independent retailers.
• Large pack size – treats up to 4 hectares • Low environmental impact cardboard pack • The Orion Crop Protection Performance Guarantee
™GESAPON is a Trade Mark of Orion Crop Protection Ltd. Registered pursuant to the ACVM Act 1997, No. P2130. Registrant: Orion Crop Protection Ltd. Approved pursuant to the HSNO Act 1996, No. HSR000175. See www.foodsafety.govt.nz for registration conditions. See www.epa.govt.nz for approval conditions.
Ashburton Guardian, Dairy Focus, February 24, 2015