National seasonal update PAGE 5
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Demand for higher-end products PAGE 6
JULY, 2017 ISSUE 82
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DAIRY NEWS AUSTRALIA JULY 2017
NEWS // 3
Fair pricing aim of new Code of Practice THE FIRST Dairy Industry Code
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of Practice for milk contracts aims to ensure greater transparency and fairness in milk supply and pricing. The voluntary code of practice was launched by the Australian Dairy Industry Council – the joint body representing farmers and processors – late last month after months of consultation. ADIC said it is anticipated most of the milk fresh produced in Australia will be covered by the Code of Practice, with the vast majority of processors having signed up to it. Although the Code is voluntary, it is designed to set out minimum good practice in terms of dairy contracts and will help ensure that supply agreements and contracts comply with the Unfair Contracts law that came into effect in 2016. The unfair contracts legislation extends existing protections against unfair contracting practices for consumers to small businesses and is a practical step, that when coupled with the dairy industry Code of Practice, will provide dairy farmers with fairer and more transparent contracts. ADIC Interim Chair and WCB director, Terry Richardson, said the Code would address a range of contractual issues which farmer organ-
isations have been trying to address and rectify for years. The code will include the following provisions: ■ A clear price or schedule of prices that will apply to suppliers (based on elements such as volume, quality and composition); ■ There will be no price change retrospectively; ■ An entitlement for farmers to accrue loyalty payments where they have supplied to the end of a contract term, irrespective of whether they stay supplier after their contract expires ■ A 90-day written notice period if a processor decides not to offer farmers on fixed term contracts a further fixed term ■ Ability for farmers to supply additional milk to other processors if the primary processor does not wish to purchase additional milk
The Code will be monitored closely by all parties to ensure its intent is upheld, with a review in one year. “The Code will give farmers, or their representative, the opportunity to have a standard form contract or supply agreement which better reflects a balanced supply chain approach between farmers and processors and not simply an agreement which is a ‘take it or leave it’ approach to a farmer’s milk supply arrangements,” Mr Richardson said. Dairy Connect CEO Shaughn Morgan said that on first-reading the Code appeared to be a good first step on setting out guidelines for commercial arrangements between value chain stakeholders in the dairy industry. “The only caveat from our point of view at this stage is that it would be the application of the Code and how it was interpreted that would
NEWS .......................................................3-11 OPINION ...............................................12-13 MARKETS ........................................... 14-15 MANAGEMENT ................................16-19 ANIMAL HEALTH .......................... 20-23 MACHINERY & PRODUCTS ...................................... 24-26
It’s thumbs up from Fonterra employee Neil Bickerstaffe as the first block of cheddar cheese rolled off the line at Fonterra’s brand new $140 million Stanhope cheese plant. It marks the return of cheddar to the site for the first time since a catastrophic fire destroyed the old cheese plant in December 2014. The new plant will officially open in mid-August. Around the regions, page 10
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be its true test in the marketplace,” he said. Lobby group Farmer Power had no input into development of the Code. It said on initial observation, that because the Code is not mandatory, it is “therefore fairly meaningless”. “If a processor doesn’t comply with the Code, there is little that can be done about it,” the lobby group said. “So the Code is really an indication of what processors might do to improve their practices at some unspecified time in future, if they feel like it. “If this is the industry’s best attempt at rebuilding trust between farmers and processors then it falls well short. “However if the ACCC can use the document as a basis for a introducing a mandatory enforceable code, then it won’t have been a waste of effort.”
DAIRY NEWS AUSTRALIA JULY 2017
4 // NEWS
MG lifts price to remain competitive with rivals money to existing and improved commodity Dedoncker said. CLOSING PRICE MEANS NOTHING retiring suppliers clawed prices reflecting antic“We’ve made signifihas raised its openback from its ill-advised ipated market returns, cant investments in Ausing price by 50c/kg milk UNTIL MONEY IN THE BANK ‘Milk Supply Support together with additional tralia and achieved a solids to $5.20/kg barely Package’, Fonterra supsales that have been connumber of milestones for two weeks after its initial pliers that took money tracted.” our business, including offering of $4.70/kg. TIM AND Bridget Goulding currently milk He also said: “We recour multi-million dollar The co-op has changed under the ‘Support Loans’ more than 100 cows on their property in package will have to repay ognise that in the current cheese plant at Stanhope, its end of season foreStrathmerton, but normally would be milking competitive environment expanded capacity at our cast price from a range of this. about 150 to 160 and had been supplying MG has lost significant we need to maintain our Cobden and Wynyard $5.20-$5.40c/kg to $5.20Fonterra and Bonlac for 20 years. milk supply in the past 12 milk supply and provide plants, and commencing $5.50c/kg. ‘‘In a low input system, it will be possible to our joint venture Supplier anger make an income on (the opening price), but with Beingmate at at the opening the main thing is the carrying of the money Supplier anger at the opening price of Darnum. price of $4.70/kg from the year before,’’ Mrs Goulding said. “This has helped was compounded ‘‘If you were starting afresh, it’s quite a good $4.70/kg was compounded when MG to rebalance our when MG competopening price.’’ competitors subsequently opened at product mix, itors subsequently ‘‘It’s the repayment we’ve got to $5.30/kg or higher. underpinning the opened at $5.30/kg make on that now, it is a loan and price we can pay to or higher. the principal repayments on it start our farmers. MG’s price rise on the 15th of July dairy cheque “To support our was announced eight days months – with estimates improved cash flow for and continue to come out for three Stanhope investment and after Fonterra announced over 20% - and an opensuppliers. years,’’ Mrs Goulding said. its opening price of $5.30/ ing price well below the “Our decision to revise ensure we fully optimise ‘‘We will just gradually increase Bridget Goulding cost of production of its the new plant, we need kg MS, with a forecast our opening price to numbers again, the main thing is the suppliers was seen as the to grow our milk pool, closing range of $5.40$5.20/kg MS is intended ability to deliver on their projections, because it is just that,’’ Mr Goulding said. final straw by others. and we believe that, $5.80/kg MS. to assist in maintain‘‘Having opened at $5.30, it doesn’t leave much room for the market to flatten MG’s rivals have been when combined with When coupled with ing our competitiveness off again.’’ aggressive in their pursuit and support our supplier our additional 40c/kgMS Fonterra’s 40 cents/kgMS ‘‘That is a concern, as in their ACCC submission, Fonterra does not agree with of their suppliers since payment, our opening additional payment, it base.” calls to ban step-downs, they say it would mean opening at a lower or more the opening price was price will enable farmers means Fonterra farmFonterra Australia conservative price,” Mrs Goulding said. announced. to plan ahead ers can expect to receive Managing Director René ‘‘I don’t think we can ever be looking at what our closing price will be again until In a letter to suppliers, Dedoncker said Fonterra and position their $5.70/kg MS, with a foreit’s actually money in our bank, because 55 days out from the end of the season businesses to grow if they cast closing price range of MG CEO Ari Mervis said had taken a responsible and they took the money back off everyone, it’s disgusting.’’ the price was changed $5.80-$6.20/kg MS. view in setting its opening choose.” as MG “have had the The additional payprice and forecast closopportunity to review ment was announced in ing range, which reflects the 2017/18 budget May and will be available Fonterra’s Australian assumptions, which to all current, retired and improved product mix include dairy commodity recommencing suppliers, and the current commodiwho were forced to take a prices, exchange rates ties market. and achieving cost out pay cut at the end of the “This is a responinitiatives, as well as 2015/16 season after Fonsible price in the curachieving milk intake of terra severely and unexrent market. World dairy approximately 2.5 billion pectedly dropped their prices have strengthened, RABOBANK HAS predicted a season, Australia’s national milk April – is expected to be a more litres”. prices. reflecting the strong funfinal farmgate milk price for south- supply has fallen by more than substantial buyer on global markets “The updated FMP has damentals supporting Unlike Murray Goulern export regions to $5.40-$5.80/ 660 million litres, or 8%, compared in the second half of 2017 which also taken into account burn, which reimbursed global dairy markets,” Mr kg MS in its newly-released Global with the same period the previous will help keep the global market balanced. season,” he said. Dairy Quarterly report. “These global factors should “Not surprisingly, more than This farmgate milk price is slightly higher than the previous 80% of that decline has come from continue to keep prices relatively forecast and supported by a bet- Victoria and 50% from northern range-bound through the forecast period,” Mr Harvey said. “While ter-than-expected butter fat price. Victoria alone.” Mr Harvey said milk volume was demand growth for dairy in develRabobank senior dairy analyst Michael Harvey said opening prices an issue confronting most dairy oped markets will remain strong, reducing export surpluses and announced by southern Australian processors. “The national trend has seen countering more sporadic demand dairy processors are in line with milk being prioritised over cheese, growth in developing markets.” Rabobank’s expectations. The report says Australia’s “We expect global markets to skim milk powder/butter and liquid exportable milk surplus had signifremain well balanced through the streams,” he said. Looking globally, the report says icantly contracted over the past 12 2017/18 Australian season, and while global pricing has reached the dairy market continues to move months. In the period from July 2016 to the peak of the cycle, markets are back towards modest year-on-year set to remain well balanced for the milk supply growth in the major April 2017, dairy export volumes from Australia fell 2.1%. export regions. next 12 months.” “Trade in skim milk powder and New Zealand, the world’s largRabobank expects to see a recovery of about 3% in Australian est dairy exporter, has started its butter has been hit hardest due to milk supply in the coming season. new season with expectations of reduced production and product While this represents a “decent” healthy year-on-year production shortages in the local market,” Mr level of supply growth, Mr Harvey growth, due to higher milk prices Harvey said. “As the season winds down and said it only goes part way towards and compared with the weak level the focus shifts to the new selling replacing the supply lost last of production last season. While China – after disappoint- season, inventories are low in Ausseason. “Since the start of the 2016/17 ing import growth for the year to tralia.” MURRAY GOULBURN
Global factors support final price of $5.80/kg
DAIRY NEWS AUSTRALIA JULY 2017
NEWS // 5
Dry start has upside but rain welcome anytime RICK BAYNE
AFTER LAST year’s wet winter, Aus-
tralia’s dairy farmers seem to be appreciating a more lenient start to the season in 2017. But while the drier conditions are helping with some winter pastures and reducing soil damage, some farmers are struggling with their crops and there are concerns brewing about the longterm impact if good spring rains don’t follow. The Bureau of Meteorology’s monthly and seasonal climate outlooks for July to September predict below average rainfall in parts of the southeast and southwest of the country, and warmer-than-average days and nights for much of Australia. Gippsland farmer Brad Missen has endured the driest start to the year in memory. “We’ve had no run-off or significant rainfall event since December,” he said. His milking farm at Denison is on irrigation and is growing good grass. “It’s just about ideal growing conditions on the irrigation land for the time of year,” Mr Missen said. “We’re fortunate in that respect but the flipside is our weir is only 25% full. We’ve had very little in-flows since September. It’s usually at least half full or even close to full this time of year.”
June’s inflows were only about 5-10% of average. “It’s a concern but we’ve still got our biggest rainfall months to come,” Mr Missen said. The farm also has dry land paddocks for fodder reserves. “We were late getting crops in on the dry land because of the late and insignificant rain,” he said. “We need rain reasonably soon to get the crops growing so we can start harvesting in September.” Accelerating Change manager at Murray Dairy, Amy Fay, said a dry June combined with some severe frosts had put some pressure on pasture and crop growth, particularly in areas that did not receive the large rainfall events in April. “Timely rainfall events have occurred this week which have assisted, as has cost effective feed carried over from last season,” Ms Fay said. “If dry conditions continue, preparations for a dry spring will likely be helped by lower water prices and high allocation.” Curdievale farmer and WestVic Dairy chair Simone Renyard said most farmers in Western Victoria seemed pleased with the season. “From what I‘m hearing most people are finding the season quite good and people in my region are feeling optimistic about that side of things,” Mrs Renyard said.
“There seems to be a fair bit of grass in the ground, but there is a bit of concern about the upcoming spring and where that might head.” DairyTAS Executive Officer Mark Smith also said the season was getting a tick from most farmers. “The seasonal conditions have been pretty good,” he said. “We’re probably a bit on the lighter side for rain but farmers would want to be cautious because there will be more rain coming as winter unfolds.” “Most areas are pretty satisfied with the amount of rainfall; bearing in mind last year was too wet.” Mr Smith said it was drier in the east of the state, away from the dairy areas. Dairy SA chair and Fleurieu Peninsula farmer Michael Conner said May and June had been drier than usual in the area. “It’s been a really dry June and cropping areas surrounding dairy have been dry, so the price of grain has gone up.” Some good rain in early July has helped. “We’ve had slow growth and we’re behind where we’d normally be, but not any serious concerns, it’s more the impact on the cropping areas.” “A lot of areas have just had some good rain so I think we’ll be going okay from now on,” he said.
DRYING OFF AFTER CYCLONE DEBBIE NORTHERN NEW South Wales and southern Queensland farmers have had to recover from a big wet in autumn. Casino NSW farmer Terry Toohey (pictured above) said conditions were starting to improve. Cyclone Debbie in March and follow up rains in the northern part of NSW caused a lot of devastation to planted pastures and caused many farmers to delay planting. “It’s been a wet start to the autumn-winter period but now the countryside is drying up a
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bit and pastures are starting to come along,” Mr Toohey said. Further down the coast the rain has been patchy and winter feed has been a bit slower because of the lower rainfall. Farmers in the western part of the state have had to cope with extremely dry conditions, with the problems also hitting grain growers who have struggled to plant winter pastures. “It’s important the grain belt gets adequate rain to get their pastures planted; we want them to be profitable too,” Mr Toohey said.
DAIRY NEWS AUSTRALIA JULY 2017
6 // NEWS
China regains appetite for dairy as local production drops CHINA’S APPETITE for dairy commod-
ity imports is starting to revive, but Australia should concentrate on higher-end products to capitalise long-term, according to a visiting Chinese dairy expert. China is looking for imports in coming months due to belowaverage inventories, which will play an important role in keeping global markets in balance, according to Rabobank Shanghai-based senior dairy analyst Sandy Chen, visiting Australia for a series of industry presentations. Mr Chen said Chinese dairy demand will continue to expand, creating long-term trade opportunities for Australia, but much of this will be limited to higher-quality and value-add dairy products. In the short-term, China’s demand for dairy commodities is set to increase in the second half of 2017. “China started 2017 with below-average inventories, and even with slow consumption growth, it will be looking for imports in coming months,” he said. “This will play an important role in keeping global markets in balance and support sustained higher commodity prices, which will help deliver a higher farmgate milk price in Australia in 2017/18. “Australia’s ability to capitalise on this shortterm supply deficit will be hindered by its current milk supply limitations.”
In the medium-term, Mr Chen said, opportunities for Australia’s trade growth into China would lie in higher quality and value-add foods. “Given this outlook, much will hinge on the ability of Australian dairy processors to execute value-add strategies that demonstrate Australia’s food safety, product innovation and category expansion as well as staying on top of new retail formats for improving distribution,” he said. “So while Australia is in a good position to take up these mediumterm growth opportunities, they should not be at the expense of investment in other south-east Asian markets that exhibit stronger growth opportunities, such as Vietnam and Indonesia.” Despite the opportunities, Mr Chen said many challenges would remain and hinder access to the Chinese market. “China remains a market and industry in transition with the country’s dairy consumption fluctuating significantly over the past 15 years, while local production is also still undergoing considerable structural change. “In terms of dairy consumption growth, we have seen this plummet from an annual growth rate of close to 19% for the most part of last decade (2000 to 2008), to just a 2% growth rate since 2012. “And looking out to the medium-term, we are
The Chinese dairy sector has been undergoing significant structural change in recent years as smaller producers have been exiting the industry and there has been the emergence of ‘mega’ farms.
expecting dairy consumption growth to remain in low single digits of around two to 2.5% out to 2022.” Mr Chen said China’s import gap is set to widen over the medium term, with Rabobank forecasting China to have a 24% gap between domestic supply and demand in 2020, up from 20% in 2016. Given China’s relatively slow consumption growth prospects, Mr Chen said much of the gap would be due to the constraints hindering expansion in local production.
“The Chinese dairy sector has been undergoing significant structural change in recent years as smaller producers have been exiting the industry and there has been the emergence of ‘mega’ farms. “For example, in 2008 around 78% of China’s dairy farms had less than 100 cows – with the majority of these farming operations having one to 10 cows. “Nowadays, dairy farms with less than 100 cows make up 50% of total dairy farms, with the
majority of these operations having 50 to 100 cows.” Mr Chen said constraints to China’s dairy production included land and water availability, high costs of production (particularly for feed) and environmental regula-
tions, which were all curtailing investment in the sector. “The cost of production on a Chinese corporate farm (which typically has 8000 to 13,000 cows) is just over US50c/litre, whereas in Australia it is around US30c/litre,” he
said. Equally as important, the Chinese government was becoming more tolerant to dairy imports, Mr Chen said. However, China still had ambitions to maintain self-sufficiency levels of 70%.
AUSTRALIAN FOCUS ON CHEESE COULD REAP DIVIDENDS China’s per capita dairy consumption remains well below that of some of its east Asian neighbours, “such as Japan, Korea and China’s Taiwan”, but there are some dairy product categories exhibiting strong growth opportunities. “For example, annual cheese consumption in Japan is two to four kilograms per person, while it is close to two kilograms per person in Korea and Taiwan,” Mr Chen said. “However, in China, it is currently less than 100 grams per person.” “While this sees China only import around 100,000 tonnes of cheese each year – largely for its food-service sector such as burger chains – Australia supplies nearly a quarter of all China’s cheese import requirements, having seen good trade growth in recent years. “Butter consumption is also growing faster than other dairy categories, but it also represents
a very small component of overall dairy consumption, so, like cheese, there is considerable opportunity for growth.” Other sectors exhibiting strong growth opportunities include yoghurt and ‘premium’ white milk (which has a higher protein content of 3.3% to 3.4%) compared with ‘mainstream or standard’ milk (with a protein content of 2.9% to 3%). Mr Chen said while Australia has been importing fresh pasteurised milk into China, representing five per cent of China’s liquid milk imports, it was facing intense competition from domestically-produced milk. “I see the export of fresh liquid milk into China being a very niche market, given the high air freight costs and increasing local competition. “To remain sustainable exporters supplying that market will to invest in a strong brand presence to warrant a premium retail price.”
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DAIRY NEWS AUSTRALIA JULY 2017
8 // GENERATION NEXT
Bright minds exposed to careers in dairy STUDENTS FROM Monash University in Mel-
bourne are partnering with processors to solve research and development challenges, but also expose them to the career paths in the dairy industry. Now in its third consecutive year, this partnership continues to grow in reach and appeal with a 60% increase in participation from major dairy manufacturers and students. The partnerships have been facilitated by the Gardiner Foundation, and its CEO, Mary Harney, says the Monash Industry Team Initiative (MITI) program motivates students to consider a future career in the dairy industry while strengthening their practical skills. “Our collaboration with Monash provides industry access to young and innovative minds while offering students unique insights into a career path they may have never considered otherwise,” Ms Harney said. “The project has been a major success in bridging the skills gap in the dairy industry with a number of students returning to work full-time at the organisation where they underwent their MITI placement.” Participating manufacturers include Bega Cheese, Burra Foods, Fonterra Australia, Warrnambool Cheese and Butter, and for the first time Lion Dairy and Drinks, Parmalat, DataGene and Victoria’s Department of Economic Development, Jobs, Transport and Resources (DEDJTR). One of the 2017 MITI participants, Amanda Li Chung Lum, who took part in a placement with Fonterra at its Darnum plant, described her involvement as invaluable. “The experience that I have obtained through the MITI program has exceeded my expectations. “Not only did I develop technical skills that are far more advanced than could have been learned in any classroom, but I have built networks in an industry that may otherwise have not been on my radar.”
Fresh ideas food for thought at Burra As part of the 2017 Monash Industry Team Initiative (MITI), students Meghna Lahiri and Prathamesh Dukhande, undertook a business process analysis at Burra Foods, Korrumburra to determine modifications that would improve production performance. The Monash students focused on analysing the archiving processes, electronic data transfer system and food prep mapping methods. The students proposed the use of a document management system, the implementation of a weighbridge and the installation of factory integration. During their placement, Meghna and Prathamesh also identified that the implementation of RF scanners would automate the food prep process and ensure greater efficiency, in terms of planning, packaging, transport and logistics. Analysis of the current electronic inbound and outbound data transfer at Burra Foods was also a focus, particularly in regard to the reduction of manual data entry and best practices for warehouse management.
Meghana Lahiri and Prathamesh Dukhande onsite at Burra Foods, Korumburra.
Meghana Lahiri, Neil Sinsua, Prathamesh Dukhande and Krystel Li Pin Hiung at Burra Foods, Korrumburra.
Young Colac farmer steps up EVERY TIME Sarah Chant steps on to her farm near Colac, she brings a piece of her father Steven with her. Steven passed away a year ago leaving Sarah, now 26, with big boots to fill. However, he did his best to make sure she was ready to take the reins. Sarah started the process of running the farm a year before her father died and a diary he kept continues to show the way. “Dad had cancer for a long time so I’d been gradually stepping up,” Sarah said. “We knew it was terminal so he started keeping a diary for me and jotted down little notes of things I’d need to run the farm. “It wasn’t easy but it was easier knowing that it was going to happen. It wasn’t like I woke up one morning and was in charge of a 250-cow dairy farm.” Losing her father at age 55 might have made Sarah stronger in many ways, but it still hurt. “It was infuriating,” she said. “He was fit and strong, barely drank and quit smoking when I was a little girl because he realised how
bad it was for his health. He had a healthy, active lifestyle and still got cancer.” Sarah grew up on the farm at Warrion, 20 minutes north of Colac and had just returned from Canada when she learned of her father’s illness. “I probably would have travelled for a couple more years but I was always going to come home on the farm,” she said. “I’d wanted to do it since I was a little girl. “I have older brothers but they didn’t want the farm so it went to the youngest daughter. We broke tradition there.” The farm at Warrion, 20 minutes north of Colac, was purchased by Steven’s parents when he was 18. It’s on the northern edge of Western Victoria’s dairying region but irrigation and “amazing soil” make it good dairy country. “I love working with the cattle and rearing calves; I’m a sucker for going back to the calf shed after hours if anyone is sick. I love being outside on the farm. Having lost Dad, it’s a bit of a connection to him.” Sarah’s Mum Roslyn does the
books and Sarah runs the farm business supported by long-time employee Joel Kirkman. “When I was first in charge I was a bit nervous,” Sarah said. “Joel knows the run of the place so when I started making the calls I’d ask if it was the right thing and he’d say `whatever you think Sarah’. I’m getting more comfortable with it now.” From a dairy perspective, Steven’s death couldn’t have been at a worse time. “We got news of the milk price drop the day Dad died,” Sarah said. “I know it was terrible for farmers but it didn’t upset me that much; we had bigger things to deal with.” The Murray Goulburn supplier has weathered the storm. “We’ve coped quite well,” Sarah said. “There was a bit of cost cutting and we’re not spending where we don’t have to, but having such a fantastic season has saved a lot of local farmers who buy in feed. “We cut more hay and silage than ever before with the good spring. If we had the milk price drop and a tough season it would have been a lot worse.”
DAIRY NEWS AUSTRALIA JULY 2017
AROUND THE REGIONS // 9
Data needs to work for your business AUSTRALIAN DAIRY
farmers are in a unique position to influence scientific research, according to a visiting US animal research specialist. Jeffrey Bewley – an Assistant Professor with the University of Kentucky’s Animal and Food Sciences Department – spoke at the recent DairySA Innovation Day, held in Mt Gambier, SA, last onth. More than 200 dairy farmers and service providers on the day heard about the latest developments in precision agriculture technology and its impact on farm decision making. Jeffrey set the tone by challenging farmers to reimagine how they dairy. But he was quick to point out that the term ‘Big
Michael Black from Port MacDonnell, SA and Josh Clarke from Mingbool, SA at the DairySA Innovation Day.
Data’ can be a little confusing. “Big Data provides us with a lot of opportunities for the dairy industry,” he said. “However the term ‘Big Data’ itself is a little bit confusing but basically it means using new sources of data - with new ways of analysing
and visualising it - to help us make better business decisions,” he said. “We already have a lot of data on our dairy farms but there are now so many new technologies coming out that are providing fresh sources of information that will enable us to ‘dig in’ more to areas such as animal
health and reproduction,” he added. “There are huge opportunities in every part of the world for using the kind of data that we have available to us. It is the key to changing how we dairy – since we’re working with essentially the same animals and people no matter where we are in the world,” he said. According to Jeff, these technologies should also have the twofold effect of improving the bottom line. However, there is often a gap between what is supposed to happen with technology and what actually happens on farm. Transferring this information into tangible products for use by dairy farmers is challenging and often requires funding
commitment from a third party. Jeff believes Australian dairy producers are in the enviable position of being able to make decisions about what research will be undertaken for the ultimate benefit at the farm level. “You guys are in a unique position with the Dairy Australia program, having the ability to make the decisions about what research gets accomplished, something that we lack in the US. “In the US we sometimes see a gap between what research is being done and the things that can really help at the farm level – I’m envious of the system you have,” he said. Jeff’s final take home message was simple: 1) The key to technology is to use data to make
better decisions 2) The most important thing is not the gadget itself, but how the information is used 3) Be clear about how the integrated data will assist in reaching business and operational goals 4) Avoid using data for data’s sake
“Information by itself is fairly useless,” he said. “We need a plan for how we intend to use the information, so that it meets our goals and makes sense from an economic perspective as well.” • Article reprinted with permission by DairySA.
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DAIRY NEWS AUSTRALIA JULY 2017
10 // AROUND THE REGIONS
Northern Victoria First milk flows at Fonterra’s Stanhope cheese plant THE FIRST block of cheese has rolled
off the line at Fonterra’s new $140 million Stanhope cheese plant. The cheese, made from milk collected from dairy farms in northern Victoria, is destined for the domestic and global markets. Stanhope dairy farmer Rob Schloss says the local community is looking forward to seeing Stanhope cheese on supermarket shelves again. “For the community, I think it’s going to be a big plus to have the cheese plant operating again, and it will put some positivity back into the industry in the north,” Rob said. Fonterra began its $140 million dollar
rebuild and expansion of its Stanhope site in northern Victoria in 2015, after the cheese plant was destroyed by fire in December 2014. Fonterra Australia Managing Director René Dedoncker said the Stanhope cheese plant would help Fonterra meet growing global demand for cheese. “The plant will process millions of litres of milk from across northern Victoria each year to make cheese and whey. Before long we’ll be making mozzarella at Stanhope for the first time, which will soon be topping delicious pizzas in China.” The cheese plant will be officially opened at an event in mid-August.
Western Victoria New Fert$mart courses to be held in August WESTVIC DAIRY, with the support of the Glenelg Hopkins CMA and the Corangamite CMA, is running Fert$mart courses in August. Fert$mart is a science-based national soil and fertiliser program designed to lift both profitability and efficiency of fertiliser use. The 2015-16 Dairy Farm Monitor project identified that the average farm spent 42 cents/kg milk solids on fertiliser. The WestVic Dairy Fert$mart courses include an initial workshop, which looks at the science and economics of soils and fertilisers. The next step is the collection of soil samples from the different zones on the participant’s farm. Once the soil test results have been returned, a qualified farming consultant visits the farm to develop a tailored Fert$mart plan. A second workshop is then held to share learnings from the development of the individual Fert$mart fertiliser plans and address any questions. Soil tests can be as cheap as $60-80 per sample and the results from the tests will help build a fertiliser plan that ensures the fertiliser is going to where it is most
needed. The course will be free to farmers and as an additional incentive to take part in the program, a subsidy of $50 per soil sample will be offered to farmers who complete the program. Agriculture Victoria will be providing information on effluent use. Previous Fert$mart programs that have been conducted throughout Australia usually result in substantial financial benefits. Through regular soil testing and monitoring changes in the soil nutrient levels over time, farmers are able to ensure pasture production is maximised by addressing any soil nutrient deficiencies. However, some of the biggest cost savings have come from identifying paddocks with high fertility that don’t require maintenance fertiliser, resulting in lower fertiliser costs. Each course is funded for 12 farming business so positions are limited. However, more than one person from each farming business is encouraged to attend. To register, contact Peter Gaffy on 0438 345 712 or email email@example.com
Gippsland New silage wrap recycling program A NEW silage plastic recycling program will make it easier and cheaper for local farmers to dispose of silage wrap in an environmentally conscious way. Coordinated by Wellington, East Gippsland and South Gippsland shires, local farmers are encouraged to drop off used silage wrap in bulka bags at the following points: ■■ Kilmany Transfer Station ■■ Yarram Transfer Station ■■ Bairnsdale Landfill
Orbost Transfer Station Koonwarra Transfer Station ■■ Foster Transfer Station Drop-offs can be made from July 17-30 July during normal operating hours. There is a charge of $11 per bulka bag. Silage wrap dropped off for recycling should be shaken clean of silage, gravel and other contaminants before being bundled up and put in bulka bags. Farmers should contact their local council for more details. ■■ ■■
Stanhope dairy farmer Rob Schloss.
Tasmania Learning vital for the next floods THE REVIEW into the 2016 floods
in north west Tasmania was delivered last month and Tasmania Farmers and Graziers Association President, Wayne Johnston, says it is clear that better early warning systems for impending flood events and better communication is required. “While communities were able to pull themselves together after events, we need to ensure that they are able to work effectively with all levels of Government so that we don’t have a repeat of last year’s devastating losses,” Mr Johnston said. “Climate modelling recently undertaken by the CSIRO shows that over the next 15 years we are more likely than not to regularly
experience these types of significant rainfall events. “In other words, flood events are going to be more common than they have been in the past. As a result, as a State we are going to be facing ever-increasing challenges caused by these climatic changes.” Mr Johnston said questions around whether current infrastructure is adequate enough to cope with these events need to be answered quickly. “The review and its recommendations have to receive the upmost priority. We don’t want to be caught short if we face a similar event in the next 12 months.” Mr Johnston said the TFGA
noted a statement in the review that cloud seeding on the day in question had not increased precipitation, and that this had been scientifically verified. “Taking this at face value, and there is no reason why we wouldn’t, it backs the TFGA’s long-held contention that cloud seeding is of no benefit to the state, and indeed has a negative economic impact on many farmers. “As a result of this statement the TFGA will be continuing to advocate strongly to the Minister for Energy Matthew Groom, and Hydro that there should be no further cloud seeding operations undertaken in Tasmania.”
Queensland Farmers must comply with changes to LPA program UNDER CHANGES to the Livestock Production Assurance (LPA) program, dairy farmers in Queensland are required to develop a farm biosecurity plan and undertake a slurry test by June 30, 2018, to maintain their Johnes disease free status. Queensland Dairyfarmers Organisation says dairy farmers may be required to undertake a farm biosecurity plan to comply with LPA requirements to send animals to the meat works from October 1. However, it said the Australian Dairy Farmers is seeking for dairy farmers to be exempt from this requirement given the on farm auditing and biosecurity plan requirements in place for the dairy
industry. The QDO said it is likely that dairy farmers will be exempt from the new LPA requirements but they
expect to have a definite response in August. QDO is working closely with the Queensland Department of Agriculture, Fisheries and Forestry and Dairy Australia to develop a farm biosecurity planning tool for farmers. Workshops for QDO members to develop farm biosecurity plans are expected to
begin in August. At these workshops farmers will develop a farm biosecurity plan for their farm and a slurry test will be taken s part of this plan by a Queensland Department of Agriculture, Fisheries and Forestry staff member within a month of the workshop for those that would like one. These workshops and slurry tests will be free to QDO members and will meet a farmers’ biosecurity requirements and provide direction to farmers on key management practices on farm to undertake to manage biosecurity risks. For further information, contact QDO on (07) 3236 2955.
DAIRY NEWS AUSTRALIA JULY 2017
AROUND THE REGIONS // 11
Western Australia Extra incentive to celebrate Deja Moo at Cowaramup COWARAMUP HAD extra incentive to
celebrate its annual Deja Moo festival on July 8 after it was named the 2017 Legendairy Capital of Western Australia. Although named after the Cowara bird, the town likes to capitalise on its strong dairying history and the `cow’ in its name. This month’s fifth annual festival attracted 3000 people – tripling the town’s population - many dressed in cow onesies. Jill Turton, a member of the Cowaramup Retailers Association, says “cow town” deserves the honour. “We have a strong dairy history which we showcase through our 42 life-size fibreglass cow and calf sculptures installed around the town,” she said. “The cows in the main street are a tourist drawcard but they also recognise our dairy heritage. “We’ve got a very strong and unique community, particularly with retired dairy farmers who continue to live and contribute to the area.” Jill said the local dairy industry continues to evolve. “The dairies have had to become clever about the way they do business.
“We have an ice cream producer where people can see cows being milked, and cheese makers and organic dairies which continue to make an economic contribution to the town.” The Cowaramup Traders Association plans to use its $2500 Legendairy grant to inform the broader community and tourists about dairying by creating a heritage trail of information plaques at the feet of the street cows. Cowaramup is one of eight 2017 Legendairy Capitals from around the country’s dairy regions to receive a Capital grant to invest in a community project. The other Legendairy Capitals are: ■ Poowong (Gippsland) ■ Cohuna (Murray Region) ■ Hannam Vale (New South Wales) ■ Mount Schank (South Australia) ■ Beaudesert (Subtropical Region) ■ Ringarooma (Tasmania) ■ Simpson (Western Victoria) One of the eight communities will be named Australia’s Legendairy Capital 2017 in September, receiving an additional grant to put towards their community initiative.
NSW Woman fined $53,000 for raw milk sales A WOMAN has been fined a total of $28,000 and ordered to pay professional costs of $25,000 after she pleaded guilty to four charges relating to the sale of unpasteurised or ‘raw’ milk. Julia Ruth McKay from Bungonia was fined last month for selling unpasteurised milk and for conducting a food business without a licence. She also pleaded guilty to selling unpasteurised milk that exceeded acceptable microbiological limits for standard plate counts and Listeria. NSW Food Authority CEO Dr Lisa Szabo said Food Authority officers found that Ms McKay was operating a ‘herd sharing’ business whereby a person enters into a contract and purchase shares in a herd or individual cow and consequently receives raw milk produced by that herd. “Claims that this doesn’t constitute the sale of food are false, the operation of a herd share arrangement can constitute food for sale under the Food Act,” Dr Szabo said. “Milk for sale in NSW needs to be licensed with the NSW Food Authority to ensure it is subject to the stringent safety requirements of the Dairy Food Safety
Scheme.” Dr Szabo said statistics show that raw milk is a high food safety risk. “Nationally and internationally raw milk products account for a small proportion of sales but a very large proportion of outbreaks,” she said. “Unpasteurised milk could contain harmful bacteria such as E.coli, Salmonella and Listeria that can result in illness or even death. “This is why we undertake this action, to protect people.” The prosecution resulted from an investigation of Ms McKay by the NSW Food Authority in 2015 where samples of raw milk taken from an animal that was part of her herd share arrangement returned positive for the presence of Listeria. The operation was immediately shut down by the NSW Food Authority and the Prohibition Order remains in place. Dr Szabo said the NSW Food Authority is continuing its work in this area of illegal under the counter sales of raw milk. Those selling raw milk in NSW can be reported to the NSW Food Authority on 1300 552 406.
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DAIRY NEWS AUSTRALIA JULY 2017
12 // OPINION RUMINATING
Not perfect but a good start
MILKING IT... No campers allowed
Strawberries and swimwear
Milk labelling fight
Dairy health risks debunked
The plight of Queensland dairy farmer Shane Paulger will serve as a warning to any farmers considering offering camping to tourists on their farm without council approval. Shane’s story, which featured on A Current Affair late last month, sees the Kenilworth farmer now facing $183,000 unless he complies with council regulations. Shane said he’s been hosting campers safely on the property for 30 years through word of mouth, and only started advertising (with a homemade sign visible from the road) due to the perilous state of milk prices. Shane has labelled the council as ‘money grabbers’ but the council is adamant: farmers are not entitled to special treatment.
Animal welfare group PETA has attracted attention for offering strawberries and dairy-free ‘cream’ served by bikini clad models at this year’s Wimbledon tennis championship in the UK. It’s a trick borrowed from the days of the bikini clad Big M calendar girls of the 70s and 80s, and while PETA claims the stunt did work in getting patrons to try the vegan product, it’s also attracted the ire of some of PETA supporters, who say the move is antifeminist. But is it really surprising that every trick in the book is needed when it comes to spruiking entirely plantbased cream?
NSW dairy industry lobby group Dairy Connect says it will ramp up its truth in labelling advocacy as part of it ongoing its fight against plant-based drinks and vegetable emulsions being branded as ‘milks’. It follows a decision by the European Court of Justice on June 15 blocking manufacturers in the EU from labelling their processed plant liquids as ‘milks’ (although almond and coconut drinks were exempted from the ruling). CEO Shaughn Morgan said Dairy Connect will lobby Food Standards Australia and New Zealand and relevant Ministers and politicans in the coming months. It will also set up an online petition on the topic. Don’t forget to have your say. Removing the word milk from these substitutes will have a massive impact.
The push towards nondairy ‘milk’ substitutes and other products, all in the name of better health, has been dealt a blow, with a new independent study finding no links between dairy and milk and allcause mortality, coronary heart disease or cardiovascular disease. The European Journal of Epidemiology conducted a large-scale review of 29 previously published studies, by scientists in the UK, Denmark and the Netherlands, looking at the diets of 938,465 participants over the last 35 years, 93,158 of whom had died. Their health was unaffected by dairy intake, whether high or low fat. So while diet may still be considered one of the most important factors in determining good health, the science is clear there’s no need to give up the cheddar.
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THE NEW Dairy Industry Code of Practice has its critics, but it’s a good start to address problems that were spiralling out of control. The voluntary code for milk contracts aims to ensure greater transparency and fairness in milk supply and pricing. The code has been signed by the majority of milk processors, and covers most milk supplied through the country. Some, including Farmer Power, say it’s not worth the paper it’s written on as it’s a voluntary code. We disagree. The code is an acknowledgement by processors of certain standards (some would say bleedingly obvious standards, and we agree with that too) that must be upheld. Under the code, processors must supply a clearer price, which farmers have wanting for many years. They must act more professionally in offering written contracts if not offering farmers on fixed term contracts a further fixed term. No more of the ‘see how she goes’ approach, which was ridiculous with the amount of money at stake. Farmers also have the ability to sell excess milk if their processor does not want it, giving farmers more control. The code is also aligned with unfair contracts legislation and has been developed in partnership with the Australian Competition and Consumer Commission and the Small Business Ombudsman, giving it further weight. The application of the code by processors over the next 12 months will be critical. There has been much talk of transparency over the past 12 months. If processors treat the code in any way than in the spirit in which it is intended, the goodwill extended by farmers would be damaged irreparably. Relationships between farmers and processors are at their lowest ebb; worse than many senior executives and middle management even realise (although brutally honest discussions with their field staff would help shed some light). Applying this code to all future contract negotiations must be an absolute priority.
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DAIRY NEWS AUSTRALIA JULY 2017
OPINION // 13
Fonterra milk price claims misleading OPINION JOHN McQUEEN MOST MILK supply companies have announced their opening milk prices for 2017-18. While there will always be some variances in the opening prices for different companies this price generally reinforces the relative strength of market price improvement. Further reinforced by Dairy Australia in their recent Situation and Outlook report, the improved outlook for 2017-18 offers sustainably better returns with indicative prices for the year approaching $6/ kg milk solids. Bega and Warrnambool both stated their opening price of $5.50/kg MS. Over the years both companies have been very consistent with their prices reflecting the world market, and
their farmer suppliers have been paid accordingly. We can be confident that the opening prices of both Bega and Warrnambool reflect the steady upward improvements we have seen in world market prices over the past 6 months. We have also seen the release of Fonterra’s opening price for the coming year at $5.30/kg MS, which is Fonterra’s true interpretation of the market price and reinforces the variances in opening prices between companies. Earlier this year, Fonterra announced it was going to pay an additional 40 cents/kg MS to all its suppliers for the 2017-18 year to account for the step-down and claw back it applied to its suppliers in 2015/16. While most Fonterra suppliers welcomed this news, there has always
been concern that the 40 cents compensation payment would be marketed as part of their price for the 2017-18 year. In a recent meeting with Fonterra, ADF was assured the 40 cents would be defined as a payment on top of their market price for 2017-18 and not actually part of the price. ADF was concerned that this compensation payment if marketed as part of their opening price to farmers, could be used to give Fonterra a perceived unfair advantage over all other companies. We believe that companies who did the right thing by their suppliers for the 2015-16 year should not be accused of lagging behind Fonterra’s price for 2017-18. The announcement of the additional 40 cents as compensation was for the major step downs
and clawbacks Fonterra applied to their suppliers during May 2016. So, it was with considerable disappointment that we saw Fonterra’s announcement of their opening price and the supporting media release from Bonlac Supply Company. In their communications, they portrayed their opening price to incorporate the 40 cents to make the price $5.70 /kg MS, which makes them look like they are 20 cents/kg MS ahead of the compe-
tition. Not only is this unfair to other companies which are above the Fonterra announced $5.30 opening market price, but it is also misleading to all their suppliers. It is a fact that the 40 cents/kg MS to be paid to all Fonterra suppliers this year is a compensation payment for 2015-16 – and should not, at any time, be characterised as part of the market price for 2017-18. This past year, ADF and our state member
organisations have worked in collaboration with companies to develop a Code of Practice on Contractual Arrangements. Most of the dairy companies participated in the development of the Code and agreed that one of the most important elements of the Code was the need for greater transparency in pricing for farmers. By monitoring the application of the Code with farmers, we will be able to assess whether companies are conform-
ing to the transparency principals outlined within the Code of Practice. There is a real danger that Fonterra’s current characterisation of the 40 cents/kg MS being added to their market price for the year will give the wrong signal to all farmers and other companies that transparency only goes a small way. It is important that all dairy companies remain fair and transparent in their pricing. The inconsistencies have indicated Fonterra and BSC are not being completely transparent with their suppliers. These types of contradictions are nothing but misleading at a time when the dairy industry has committed to rebuilding trust along the supply chain. • John McQueen is the interim CEO of Australian Dairy Farmers.
Activist RSPCA needs to stay off farms welfare group ran against several agricultural industries, including the live export and caged egg industries. “The situation we have at the moment is that the RSPCA is confused about the role they want to play – do they want to be regulators or do they want to be activists? They can’t be both,” he said. “It is absolute hypocrisy to attack legal industries and actively campaign to shut down industries that aren’t cruel by the RSPCA’s own standards.” VFF Livestock President Leonard Vallance, appearing alongside Mr Ahmed before the inquiry, said the livestock industries paid $7 million through the research body Meat and Livestock Australia to investigate the best animal health and welfare practices. “Australia is the only country where producers pay directly to an industry funded body to get animal welfare outcomes and it’s something that makes our farmers proud,” he said. “But animals that are reared for productive purposes will always have different lives to animals that sit on a couch and watch television with you. “Too many RSPCA inspectors don’t understand the difference between domestic and productive animals and it leads to unfair and inaccurate allegations against farmers who are doing the right thing.”
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THE RSPCA cannot regulate the farm sector while it continues to lobby against the very industries it wants to police. The Victorian Farmers Federation told a parliamentary inquiry into the animal welfare group last month that the undisputed authority to regulate commercial farming zones needed to stay with the State Government through Agriculture Victoria, while the RSPCA should stick to watching over household pets. Appearing before the committee, VFF Egg Group Vice President Brian Ahmed said the Victorian agriculture sector applied voluntary quality assurance programs, but farmers weren’t being given due credit for maintaining an outstanding level of animal welfare. “It is in a farmer’s best interest to ensure we have strict animal welfare practices in place, because we’re trying to run businesses and our livelihoods depend on it,” Mr Ahmed said. “We get a lot of pleasure out of producing food and feeding people, but our jobs are complicated when the RSPCA is constantly walking onto our farms, judging our processes and accusing us of being cruel when we’re following certified animal welfare guidelines.” Mr Ahmed said the strained relationship between farmers and the RSPCA stemmed from campaigns the animal
DAIRY NEWS AUSTRALIA JULY 2017
14 // MARKETS
New Amazon purchase changes everything It has completely restructured many over bid by US-based on-line retailer traditional retail business models, and Amazon for the small, upmarket US cleaned some out. It started with books way back grocery chain Whole Foods Market sent the food retail world into a lather. in 1995 and three years later moved There was shock and awe around into music, destroying several the globe. Share prices of every major famous chains along the way. When it grocery retailer took a dive, and in expanded into household goods it spelt some cases, for US groups closer to the demise for a few tired and lazy department stores. the direct impact of Threatened bricksthat deal, those share and-mortar retail prices are still falling. businesses quickly What’s the exciteresponded with online ment all about? options, and for many Amazon, the company that’s all they did, responsible for the bigchanging little else. gest shake up (or “disThose that learnt ruption” in today’s and flourished in the jargon) in the retail FRESH AGENDA Amazon age have done world, made it clear it STEVE SPENCER so by excelling in perwants to roll that sucsonalisation and qualcess into food. It is taking over arguably the best ity of the retail experience. We’ll come and most innovative grocery chain to back to this point. Amazon has spawned many smaller emerge in the past decade. A larger move into food was a no- versions and copycats, while meeting brainer. Amazon has been delivering the technical needs of online retailers groceries to satisfy on-line orders in has developed a massive market for IT certain cities for a decade but it has and logistics providers. Some not so only made a small impression on the small. China’s Ali Baba adopted a simigrocery landscape. In the US retail market alone, lar model but has quickly overtaken Amazon is engaged in categories that Amazon in total sales, naturally selling make up 70% of all retail spending. into a much bigger market. Food is a Food is the only large sector – 17% of key part of its offering, which is workavailable retail spending – that it hasn’t ing well because of the underdevelopcreated a major impact. Now it has ment of grocery outlets. Amazon will bring skills and capital made its first move – one of several – to the Whole Foods business, but will to get serious in that space. Nothing to fear for established gro- also learn a lot from a premium grocery cery chains? Plenty! Will the width of retailer that successfully took “natural” the Pacific Ocean be enough to keep and “organic” to the mass market and Australia immune from this attack? No. defines “local”. Whole Foods excels at the sensual Amazon showed the world what could be possible with online retail. food buying experience, helping shop-
IN JUNE, an announcement of a take-
A chain like Whole Foods has engaged with affluent segments of the market and given them plenty of reasons to pay more for food items.
pers enjoy the emotion and belief in good things and giving them justification to part with a lot more cash. It has clearly been the most groundbreaking grocery chain on the planet in the past decade. There are many possible synergies in the purchase - in managing supply chains, branding and reaching discerning and affluent consumers. But will it mean anything in this country? We’ve seen a lot of small-time efforts and heard very big promises when it comes to online retail. On-line grocery has struggled to gain traction in this country for the past decade, disappointing suppliers. The problem is that the players have been so appallingly bad at it. The top end of the market will continue to evolve and on-line may be a key part of that. A chain like Whole Foods has engaged with affluent segments of the market and given them plenty of reasons to pay more for food items.
Suppliers of dairy, fresh produce and other prepared foods – mostly small brands – have enjoyed the ride. Amazon can make that a much larger business, going wider than premium foods, reaching more households. It can do the same here, because it doesn’t approach online trade as a diversification to an existing traditional model. That top-end of the market may be regarded as niche, but it is still a valuable premium component of any grocery business, which is sadly missing in this marketplace. Innovation to compel consumers to pay more for that sensual food-buying experience, which I mentioned earlier, hasn’t been encouraged or rewarded by our grocery players. The much bigger, immediate fear which is blighting the vision of most established grocery chains in the western world is the spread of the agile German discounters and their acceptance by value-seeking shoppers. That jargon I mentioned earlier
would also have chains like Aldi and Lidl labelled “disruptors”, but the major difference with these groups is a low-cost model and store rollout plans that have gone past the pain threshold after decades of steady growth. The compulsion for consumers to save money won’t go away. The drift to Aldi gained momentum as household savings rates grew post-GFC. Those that shopped there liked that other sensual joy of saving cash on basics … and stayed. Major grocery chains do the easy thing – match them on price. Just as happened in other tired segments of retail, the undifferentiated “rump” in the middle of the grocery market (i.e. our big two chains) will continue to be reactive and, in the long term, suffer. This latest development is just another sign that the middle ground is an uncomfortable place – it’s time to choose a side. • Steve Spencer is a Director with www. freshagenda.com.au
Commodity Milk Value holds ground THE COMMODITY
Milk Value (CMV) held its ground in June, as spot prices for most commodity groups lifted but were countered as the Australian dollar strengthened against the US dollar. Butter continued as the big mover in product prices, lifting more than US$300/t to almost US$5,800/t as shortages kept prices at dizzy heights. Spot prices for cheddar lifted US$225/t, Skim milk powder (SMP) lifted US$150/t but whole milk powder (WMP) shed almost US$300/t to US$3,050/t as the like-
lihood of a cracking season ahead in New Zealand will bring more product supply. Based on these movements in major commodity prices over April, the commodity milk value went up … and fell back, ending the month unchanged at $5.95/kgms. Looking ahead, downside risks outweigh the upside for the CMV with more product available in the second half of the year from Europe and NZ, but timing of the expected weaken butter-
fat prices is unclear as prices remain way ahead of fundamental logic. The Australian dollar isn’t
helping - trending higher as June finished, once again more closely tracking iron ore prices rather
than reflecting hopes the US dollar will power on. About the Commodity Milk Value
Freshagenda’s approach to assessing milk price outlooks recognises there are two components of milk prices paid by manufacturers in southern Australia – a commodity value of milk, which reflects the returns from the global market for dairy products, and an additional value captured on top of base commodity returns. The commodity milk value (CMV) measurement and outlook is based on spot prices and Freshagenda’s forecast fundamental value of major commodity prod-
ucts (cheese, butter, whole and skim milk powder), based on our rolling outlook for the global dairy trade balance. Projected product values are converted into a value of milk at farmgate using the industry’s product mix, deducting conversion costs, and converting to Australian dollars per kilogram of milksolids. Between 2011/12 and 2015/16 the CMV has averaged over 80% of final farmgate returns – ranging between 70% and 95% of the final average price paid by manufacturers in southern Australia.
DAIRY NEWS AUSTRALIA JULY 2017
MARKETS // 15
Renewed cheese focus will help farmgate prices xport demand remains str
AFTER TWO tough sea-
Significant increases in cheese production capacity are coming on line, both from Fonterra’s recommissoned Stanhope plant (pictured), and from upgrades to Warnambool Cheese and Butter’s Allansford cheese plant.
sons, a number of factors suggest that the 2017/18 mayonly be a more cents/litre in eason season 2011/12 a few incremental change in milk production (year-on-year) promising one. Higher Euro cents/ m ending,opening attention is anow prices and more balanced internaProfit margi 2012/13 milk prices as farmtional market, as well as US, and in N er strategies for the coming the support of affordthe final pay ome domestically-focused able input prices suggest an improved outlook for has been cut negotiated contracts incorGLOBALimpacT IMPACT dairy farmers. gLobaL to NZ$6.45wer prices and reduced ‘tier LAURIE WALKER However, downside JohN DropperT $5.04). s are undermining risk remains andfarmer Dairy Australiastability. believes thatFor Australian processors are Effective e and supply any recovery in milk proseeking to maintain ongoing rebalancing Shifts in private label contracts and promers induction export-oriented in 2017/18 will be export market relationships slow produc in the order ofto cessor rationalisation have seen milk ower pricemodest, outlook relative at the expense of servicing 2-3%. demand, and t season not only adds to the companies adjust their intake requirelower-margin segments of the A significant factor mately see a ments and pricing to meetmarket. the changof doing business, is that manybut farmseems busiAustralian domestic nesses will be looking to to watch on ing demands of a highly pressured retail ct the positive medium term repair their balance sheets rate at which Lower contract prices and Asia-driven dairy demand marketplace. Nonetheless, in the The fall in milk proand rebuild equity, rather slows in res a lack has of alternative opportunishort run, there are duction been felt the supply than ramping up producsimply less cows with and less flows. 2012 milk production in the US those in south-east Asia and the Middle impact of th in Victoria challenges (down ties present in a market ustralia’stion. indicative outlook most farms than before, which 9% in year-to-date), and As shown by the 2017 limited manufacturing capacity. Despite is up around 4% on 2011 for the year to East maintain consistently higher eco- on consume rn farm National gate milk prices – especially northern Victo- places an upper limit on Dairy Farmer these challenges, n the recent Dairy 2012:hasSit- ria any growth indomesAustralian April (leap year adjusted), whilst early nomic growth rates that support China’s econ (down 17.7% in year-the underlying Survey, confidence milk production. been badly tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Austra d Outlookalsoreport, is shaken, for an to-date). Australia’s exports are Faced with lower milk The largest decrease and trust in the supply Demand the March ita dairy consumption and aprocessors growing ice rangechain of $4.05-$4.40/kg likely to be further ori- 2012 quota year up ever, the surge in supply has outpaced volumes, have finished occurred in Victoria, remains an issue. entedon towards niche, highyear. New Zealand demand growth in the market. forced toof make hard 2.3% 263 dairy farm Moreover, another ucts remain the previous population providingbeen a degree cerull year average price range where value products such as choices about product licenses were cancelled, constraint to production This situation has seen the scales tinue to gro 4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish infant formula or fresh mix and markets to serwith the largest number growth is that there are season up 10% In the seasons the 2008 this siders thesimply wider market pic- of cancellations milk, and cheese, at theon last year - a huge tip in favour of buyers in dairy mar- large emerg vice. coming following fewer dairy farms expenseinfluence of powders and In some cases, this has market the north of the and subsequent andthe fewer dairy cows than from given 95% of NZ milk kets, with commodity prices retreat- with changes financial crisis comummarises many factors butterfat. state. The total number of meant closing factories before. Argentina is also enjoy- ing steadily over recent months. Butter urbanisation moditydairy price recovery, farmers in is exported. key theme of the current sit- Victorian While international farms now altogether, and ceasing The total number of solid export-oriented have seenlines. solidFor ing ng that ofregistered re-balancing in the prices for production dairy fats are growth, but a sig- prices are down some 30% from their with global p certain product sits at 3899, comparedregions to dairy farms in performing extremely with-an inter- nificant 4141 farmssupply as of June 30th processors supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domesti global growth (see chart) with y chain. Australia in 2015/16, as national presence, this has well, the large over2016 (there were also 21 reported in Dairy AustraTWO DIFFICULT seasons of tight number of dairy cull cows going through ofEU this additional milk from leav- lost more than 20%. Farm gate prices growing po higher-cost competitors in thein Northons of Australia focused on new hang of SMP stockalso meant some cases much applications). lia’s InFocus 2016 publicacashflows has seen extensive culling of saleyards, which has served to reduce piles meansAmerica. that the total consu choosing between domes- ing have subsequently beendairy reduced in capita South However, it is imporHemisphere amongst those expanddrinking milk, many tion was 6102. farmers ern the Australian herd by perhaps an dairy cows. returns from this processtic or export markets. tant to note that not all This was informed by extra 40,000 cattle since the beginning Culling rates were already elevated Despite wider economic uncer- most exporting regions. The average market is cu alancing market in the form ing output as their margins increased. ing stream are generally Australian dairy of this can be attributed estimates from the varearly in the 2015/16 season, however the of the 2015/16 Season. to be a seller farm gate price milk France dairy demand has remained resilient This season, favourable weather coniation ofious supply contracts below that of cheese. imports of cheese, infant tainty, directly to the events of state dairy safety Over for time, theinAustralian monthly numbers shotbasic up immediately Significant increases formula and butter, 2016 and the fall in industry will overcome in April, and remained elevated through-dropped ance will ult example, 12%adjust fromto32 Euro these countries like China and for ditions have further enhanced milk as importing d access authorities. to ‘tier one’ supply. April in cheese production mainly from New Zeafarmgate milk prices. According to these out the first few months of the 2016/17 constraints. Some 241 of these can- land have all increased. At capacity are also undersame authorities, as of Since October 2016, monthly cull Season. the same time, Australian stood to be coming on cellations were ‘bulk canApril 2017, there were While it is difficult to estimate cow numbers have eased, suggesting exports of the same prod- line, both from Fonterra’s 5810 farms across Austra- cellations’, processed in exactly how many cows have been improved sentiment and a desire to ucts have either remained recommissioned StanAugust 2016. These were lia, representing a 4.8% culled, data from the National Livestock rebuild herds, even as cull cow prices hope plant, and also from fairly stable or grown. decline in total dairy farm effectively an automatic Reporting Service shows the monthly remain well above historical averages. upgrades to WarrnamThis points to Austrabiennial cancellation of numbers. lian processors seeking to bool Cheese and Butter’s licenses for farms that The effects of the Allansford cheese plant. had ceased production for maintain ongoing export events in April 2016 have This increased capacbeen clear cut in terms of at least 6 months prior to market relationships at ity, at a time when other the expense of servicing their delisting. This sugAustralian milk producASEAN-Australia-New Lian DairY, lower-margin segments of processors are rationalisthat many of the tion, which is forecast to (AANZFTA). ne exporters to Zealand FTAgests ing operations and ceasthe Australian domestic Victorian dairy farmfall around 6-8% for the “Protectionist re the biggest ing production of some market. ers thatsentiexited the indusentire 2016/17 season, lines also underscores the Given the importance try had made the decision compared toment the 2015/16 over agricultural a free trade intensity of competition of long-term business well before the stepseason. goods is rife down. and grow(FTA) signed relationships to Australia’s for supply that we are This would lead to ing across sowith post- trade in high-value mar- likely to see this season. e two counaustraLian FooD In keeping total milk production of the globe, This competitive preskets such as Japan and deregulation trends, litres, in this context it is pleasonth. around 8.95 billion company Freedom Foods sure should also help to much of Southeast Asia, remaining dairy farms compared to 9.5 billion Australiawill hascontinue managed l, signed litres afterof milking Group Ltd is to build a lift farmgate prices for it is understandable that to increase in 2015/16. suppliers able or willing processors would seek to to forge in size, while the share of s of negotia-Dairy Australia’s new milk processing plant Milkan agreement t us to capitalise on it. protect their business in production attributed to Production report for May g with Malaysia that has ws a liberalised to cash in on growing Au these markets where pos- • Laurie Walker is industry very large farms (more had national production with some sensirrangement demand in Asia. analyst with Dairy sible. than 1000 cows) will down by 7.6%dealt in year-toAustralia. Looking forward, increase. terms. tive agricultural issues ian liquiddate milk The plant, to be built in
40,000 cows culled from national herd
alaysia FTA benefits dairy Freedom
and allows higher value
Foods pl targets A
not effectively covered by AANZFTA,” says Fraser.
southeast Australia, will be the first Australian green-
DAIRY NEWS AUSTRALIA JULY 2017
16 // MANAGEMENT The Prosser’s dairy complex at Harden.
Horror season tests resilience at Harden GORDON COLLIE
A HORROR season has severely
tested the resilience of the last surviving family dairy in the Harden district in southern inland NSW. Brothers Darren and Wayne Prosser are still living with the legacy of 2016 on their diversified cropping and dairy property which was saturated from March to September. “Our average rainfall is about 26 inches, but last year it never let up, the worst I’ve ever seen and I’m in my 50s,” Darren said. Animal heath suffered and the brothers were forced to cull about a third of their cows with lameness and mastitis issues.
Darren Prosser in the feed mill.
Darren and Wayne Prosser WHERE:
“The milking herd has recovered to about 260 cows but it will take some time to get back around the 300 mark where we would like it,” Darren said. “Our milk production also took a
The Prossers feed onto conveyor matting along a fenceline.
hit and we have been sitting around 26 litres when we should be averaging 28 to 30 litres.” “We operate the dairy and dryland cropping as separate enterprises, but they have complimented each other over the years.” Darren is focused on the dairy and Wayne on cropping the property of about 800 hectares with another 720 ha of leased country. They use the land area for cash crops and to grow grain and hay for the cows which are fed a total mixed ration and confined on an area of about 8 hectares around the 50 stand rotary diary which was built in 1999. “We used to graze pastures, but the dairy is at one end of the property and the cows were having to walk too far,” Darren said. Their feeding program is based on a mix of home grown pasture hay and bought in lucerne hay and a grain ration, mostly wheat, processed through a ripper mill. The daily diet comprises about 14 kilos of mixed hay, 10 kilos of grain and 4 kilos of dairy pellets. Canola meal is used for protein and an energy supplement Megalac which comprises about 85 percent palm oil with almost 10 percent calcium which
protects the fat from breaking down in the rumen, passing through to the lower gut for digestion. About two kilos is fed in the dairy at each milking and the rest of the ration is fed twice a day onto a strip of conveyor belt matting along a fence line. “While this reduces feed wastage, the ultimate would be a covered feed pad, but it comes back to the cost,” Darren said. After their horror experience last season, the brothers are costing the building of self composting free access housing with a central feed alley. “It would improve milk production and cow comfort, but it’s a question of economics. We’d need to get some upward price signals.” They are being paid around 46 cents a litre for their milk which is supplied to Riverina Fresh at Wagga Wagga. The local processor was sold last year by Fonterra to an investment company, the Blue River Group. Their father Ron started carting his own milk in the early 1980s and the brothers have continued the tradition, now using a 27,500 litre tanker they acquired from Fonterra. They mostly rely on a roster of local retirees to make milk deliveries every second day. Darren said the family had an option
to switch their supply to Murray Goulburn for processing in Sydney, but decided against the move. The brothers make use of their land area to finish dairy beef, keeping every calf born on the property. They can be rearing up to 50 calves in peak season through a purposebuilt shed with a self flushing flooring system which is used for about the first 10 days. Steers are usually finished on oats and sold at about two years old. “Last year we averaged about $1800 for them,” Darren said. Heifers coming into the milking herd are fed a springer mix which includes wheat, canola and additives. “We find much improved early milking performance if they are introduced to a feed ration. Production peaks earlier and holds up longer into the lactation.” A dairy stud is no longer operational but a big percentage of the herd is still pedigreed with a strong Canadian influence. The herd is natural mated with five or six new bulls introduced each year and young bulls used over the heifers. “We have in the past used Angus bulls, but at the moment we are just using Holsteins,” Darren said.
DAIRY NEWS AUSTRALIA JULY 2017
MANAGEMENT // 17
Solar panels next step in quest for self-sufficiency RICK BAYNE
of 400 solar panels on Max and Pam Wines’ farm at Ecklin South will bring the farm another step closer to self-sufficiency. Over the past 25 years they’ve made strong headway in that direction, with hundreds of trees in shelter belts and effective re-use of dairy effluent for forage production. Max admits his farming practices didn’t always find favour among local farmers, but the tide turned when they won the Colac, Corangamite and Wannon UDV Branches’ Natural Resource and Sustainability Award at the 2017 Great South West Dairy Awards. Max likes to do things his way and has always kept an eye on the future and sustainability. Leaving hay to get wet in paddocks won’t happen with Max determined to reduce any potential wastage; nor will paddocks that aren’t producing as well as they should be left to stagnate. “I used to get knocked by a lot of people for ripping paddocks up,” he said. “I’d plough paddocks while others would just run a bit of seed on them. We do probably 24 hectares a year out of 120ha where we rip them up and put new crops in. It works.” Their massive tree planting program started in the 1990s and continues to be refined and expanded. “We started planting trees by hand about 20 years ago,” Max said. “The first lot were 10 metres apart but that’s too wide because you can’t get them trimmed properly, so we’re going back to six metres.” They had planted cypress and pine trees but now concentrate on native species. “It’s better for wildlife and the birds; the birds kill the bugs and it’s better for our paddocks,” Max said. “We’re mainly using
Max and Pam Wines WHERE:
Ecklin South WHAT:
Blackwood trees because they don’t grow as high and don’t fall over as much. I like trees but I like them in the right spot for shelter, shade and wind breaks.” The Wines’ preference for avoiding wastage led to the introduction of an effluent recycling system in 1992. This year the irrigation and effluent system will be upgraded to cover about 90% of the 120 hectare farm. “We can apply effluent at different stages over most of that part of the farm,” Max said. The big ticket item this year in the farm’s fight for sustainability will be the installation of 400 solar panels. While the initiative might have environmental benefits, Max doesn’t ignore the long-term financial implications. “We’re trying to cut back the power bills,” he admits. “The current cost of power is bad enough but it’s not going to come down with the closure of Hazelwood power station.” The 98.4 kilowatt system will be used for irrigation, dairy and two houses. They hope to pay back the investment over six-seven years. During the summer irrigation season, power is costing the farm about $5000 per month. “We run at about 16,000 kilowatt hours a month and with the solar system they tell us we should put about 18,000 back in,” Max said. “The new system should cover most of our day costs. We’ll still run at night with normal
power until we can get batteries to pick up the extra load.” The system will be one of the biggest in the region. “I can’t go any bigger because it’s as big as the transformer on the pole will allow,” Max added. Part of the inspiration for developing a sustainable farm has been to leave a legacy for his family and future generations. Kevin and Claire Wines have been sharefarmers on the property for the past seven years so the land is in good hands. They milk 220 cows. “We’re not over-stocked and we don’t buy much in; we get fertiliser, super and electricity and that’s it,” Max said. “We’re fairly self-sufficient.” The farm uses “a reasonable amount” of fertiliser. “We soil test every year and work off that; we’re high in pH because the irrigation water in in limestone but we keep a good watch on it.” Max, who also does contact hay work, has lived by the maxim that the farm has to have enough hay for the next year. “We’ve had 1600 bales undercover,” he said. “I hate to see hay sitting out in the rain and deteriorating. When they feed it out the cows don’t eat it all and it’s left on the paddock. If you can’t afford a shed you don’t deserve to have hay.” “When we put it out of the shed onto the feedpad you’ve got a 5x4 roll of hay and there’s no wastage. The cows eat it all.” Production now comes under Kevin’s control but Max adds that it’s going well. “I think we have a better farm from doing all the sustainability work,” he said. “It was nice to get recognition with the award. We were a bit overwhelmed.” The Great South West Dairy Awards were announced on Wednesday May 17 in Warrnambool. Other winners were:
Peter and Fiona Musson, Macarthur Gardiner Foundation Farm Business Manager of the Year. Isaac and Michelle Johnstone, Grassmere - Dairy Australia Employer of the Year. Jorge Massa, Cooriemungle - Murray Goulburn Employee of the Year. Todd and Madeline Leddin, Toolong - Cowbank Share Farmer of the Year. Andrew Powell, Cooriemungle Warrnambool Cheese and Butter Factory Young Farm Leader of the Year. Jess Fleming, Gorae - WestVic Dairy Farm
Photo of the Year.
Pam and Max Wines
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DAIRY NEWS AUSTRALIA JULY 2017
18 // MANAGEMENT
Is your ‘Plan B’ ready? 7 times a day, then there will be 700 new manure pats in that area each day the first 100 cows are in there. That IT REALLY shouldn’t have been this number is cumulative if the cows stay dry - after all, it was the last week in in the same area, and/or new cows come into that area replacing cows June and it was Gippsland! In fact, the only problem we had that have calved. Given that Countdown advises that as we walked across the designated calving paddock on that day was the “if more than two pats of manure are icy wind which was intent on going present per square metre, it is not through anything in its path rather clean enough for calving cows”, obviously it won’t be too long before parts than around it! of that area will The paddock this trigwas a great choice “If more than two pats exceed ger point. for calving - it was However, close to the house of manure are present our walk had as well as to the per square metre, it is revealed that dairy yards and not clean enough for the location facilities, plus it calving cows” of the water was well drained, trough would with a clean pick make managing this area in sections of pasture. We had just spent an hour discuss- an absolute breeze. Cows could easily ing the strategy for calving this spring, be moved on to the next fresh section as mastitis at calving had been an issue when the current section became too in the last few years - well above the contaminated and they would still have Countdown trigger point of 5 clinical ready access to water. A quick “back of the envelope” calcases per 100 cows in the first 14 days culation suggested that this area plus after calving. Naturally we had previously the neighbouring paddock would likely reviewed the dry-off strategy, and cover off most, if not all of the spring all cows had been dried off with the calving. So, that’s it, all done with the calvupdated protocols and procedures, and now the time had come to review the ing area? Actually, no. “What about Plan B?”, I asked actual calving strategy. If it comes in wet, if the main areas In particular, we were discussing the management of this calving area as the become too dirty, or if a problem arises, first 100 springing cows were due in then “Plan B” will be essential, and it would be much better to plan for it there in a couple of weeks. Surely, if it stayed this dry, prob- now and be ready. A short walk further on revealed lems would be minimal, and the area would cope with the whole spring calv- another area that could easily be held in reserve, and it was only a little furing, wouldn’t it? ther away from the yards and facilities. Well, no, probably not! Why not? Environmental mastitis bacteria will When to call on Plan B? Countdown recommends that if readily contaminate teats if udders are three or more clinical cases of mastiexposed to mud and manure. If a typical cow defaecates about tis have occurred in the last 50 calvROD DYSON
It may be dry, but environmental mastitis bacteria will readily contaminate teats if udders are exposed to manure.
ings, you should move the springers to a new area. If you are calving 50 cows in a week, and the time interval in question is the first 14 days after a cow calves, then three cases in 7 - 10 days would suggest that you take a closer look, do the arithmetic properly, and move the springers to a fresh area if necessary. Watch the calving area closely and if it approaches two manure pats per square metre, consider moving the
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cows. A handy tip here is that if you can walk across the area without having to watch where you place your feet, it is likely to be less than the two pats per square metre, but if you have to watch where you put your feet, it is likely to be above that threshold. If the gateway, the lane, or any regularly used section of the area or access point become heavily contaminated, or turn into a bog hole, then it is time to
move to Plan B, so that freshly calved cows don’t have to traverse those areas. In summary, as we head into July, many of our southern dairy areas are still dry, but that may well not last, and it is not just mud that we have to be aware of as a mastitis risk at calving. Do your planning, and make sure you have “Plan B” up your sleeve! • Rod Dyson is a veterinary surgeon and mastitis advisor with www.dairyfocus. com.au
DAIRY NEWS AUSTRALIA JULY 2017
MANAGEMENT // 19
Dashboard drives cow decisions GIPPSLAND DAIRY
farmer Peta Barlow knows about herd testing – from both sides of the fence. Peta works at Yarram Herd Services and also runs a 130-cow dairy herd at nearby Jack River which is herd tested 12 times a year. The herd is made up of Holsteins, Aussie Red and Jerseys and milks year round with three distinct calving periods in March, May and July. “Being on both sides of the Herd Test system gives me a different perspective on the information available from Herd Test reports and the new DataGene Herd Test DashBoard report,” Peta said. “The Herd Test Dashboard is only relatively new but Yarram Herd Services were involved during its development so I got our herd involved as soon as it was available. “The Herd Test Dashboard gives you a picture of what is happening in the herd and which cows need closer attention. “It’s a free service and gives you more value from the information collected during herd testing.” The Dashboard report covers two pages on the individual herd and is accompanied by two pages which explain the terms, what levels trigger alerts and the action required to deal with alerts identified in the report The first page of the Herd Test DashBoard
Peta Barlow WHERE:
Jack River via Yarram WHAT:
gives a herd overview. It sets out the overall herd cell count, the incidence of chronic and clinical mastitis, as well as the percentage of calving time mastitis in cows and heifers, the risk of acidosis and ketosis, re-calving intervals at 365 and 400 days and the average cow yield. It also includes a herd profile with a breakdown of the herd size, including milking cows, fresh cows, drys, culls, sold cows, unidentified sires and the trends which are showing up between reports. The second page features individual cows which are approaching trigger points for a range of parameters such as individual cell counts mastitis, acidosis, ketosis, re-calving intervals and cow yield and can be used by a farmer to follow up with a vet or nutritionist. “The second page gives me a list of individual cows which are triggering an alert for one or more areas,” Peta said. “The figures for individual cows features on the second page are all
Peta Barlow likes being able to see a whole lot of information on the herd and alerts for individual cows in a single report, the Herd Test Dashboard.
coloured coded according to the severity of the issue, with serious issues shaded red and less serious issues shaded green. “I can look at trends in the herd between herd tests and also watch individual cows who may stay on the alert page from one month to the next. “In the past when I only had the usual herd test data I really only looked at cell counts and individual cow figures. “With the new Herd Test DashBoard I can now see a whole lot of information on the herd – and on individual cows which need monitoring or attention - in one report. It’s a great management tool because it covers health indicators and performance indicators. “If a cow gets flagged on the cows list then I can look at the cow’s individual herd test results in more detail and make a decision based on what is going on with the individ-
ual cow and what action to take.” Peta believes the Herd Test Dashboard report would be an asset in larger herds where a number of people were
involved in herd management, by simplifying the herd test data and giving everyone involved in the herd a snapshot of what was happening and which cows to look for.
“The Herd Test Dashboard is a fantastic resource if you had a number of people dealing with a larger herd,” Peta said. “You can print out
copies for everyone or send the report to your staff via email or to their phones. It helps make sure everyone knows what is happening in the herd and which cows needed attention. “The last two pages can be laminated and left in places like the dairy or staff facilities so people can refer to the descriptions in the report when they need to.” The DataGene Herd Test Dashboard is a free service and can be delivered with herd test reports or whenever requested. It was developed by DataGene with the support of Dairy Australia and the Australian herd recording sector. • Article supplied by DataGene.
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Peta works at Yarram Herd Services and also runs a 130-cow dairy herd at nearby Jack River.
DAIRY NEWS AUSTRALIA JULY 2017
20 // ANIMAL HEALTH
Attention to detail rewarded w RICK BAYNE
THE CROLE family at
Simpson in south-west Victoria has made a habit of appearing in Australia’s top 100 milk quality lists, and that’s a habit they want to continue. Wayne and Vickie Crole and sharefarmers Andrew and April Crole have continued to refine their systems to ensure they maintain their good record. “I’ve been here since
Crole family WHERE:
Milk quality award
2011 and we’ve been in it every year since then and my parents received
the award for a few years before that,” Andrew said. The decision last year to start teat sealing heifers has further improved the farm’s performance. “We use teat seal on all our cows when we dry them off and on our heifers prior to calving,” Andrew said. “This is the second year we’ve teat sealed our heifers and it has made a big difference.” The procedure is carried out by Timboon Vet
The Crole family – Andrew, April, Archer, Ayla, Vickie and Wayne.
Group using their tipper crush. “We’ve found this is very successful in reducing mastitis in their first lactation,” Andrew said. The addition of heifer teat sealing followed a bad run of mastitis at the start of calving. “It was causing a bit of trouble and not clearing so we decided to trial the teat seal and it was probably the best thing we ever spent money on,” Andrew said. “Now it’s a ritual every year.” The farm still experiences an occasional case of mastitis but they’re quick to stamp it out. “We always have two people milking in our 40-unit Rotary dairy and always focus on the visual signs of any cases of mastitis,” Andrew said. “It’s much easier to have two in the dairy at all times. You tend to know your cows and can pick up if they show any signs of health issues.” Any cows with mastitis get automatically drafted during milking and are bought back to be milked last to try to eliminate any cross contamination. They also teat spray
once the cups come off the cows. Another factor in the farm’s success is regular maintenance and testing of the 12-year-old dairy. “Our dairy technicians come in every 12 months and service the plant and make sure the vacuum levels and pulsation are all up to scratch,” Andrew said. “That’s one of the main things we do; if we start getting mastitis that’s one of the first things we look at.” They change rubber inflations every six months. The Australian Milk Quality Awards recognise the lowest 5% of farms across Australia based on annual average bulk milk cell count (BMCC). Receiving the annual gold metal plaque for being part of the top 100 is not only a great honour for the Croles, it’s good for their profitability. “It keeps us in the premium milk bracket and so it helps our profitability,” Andrew said. “It’s a nice honour and a good achievement. It’s not something we think about every day but we
DAIRY NEWS AUSTRALIA JULY 2017
ANIMAL HEALTH // 21
d with another gold plaque just try to keep doing what we’re doing and reap the reward at the end. “We’re always trying to keep on top of it.”
Their yearly BMCC average is 70,000 and the healthy herd is recording good production.“The BMCC generally stays
around similar levels,” Andrew said. Production continues to meet their expectations, especially with a
good start to this season. The farm is tracking along the same as last year but still has a few cows to calve and is about
COUNTDOWN MILK QUALITY AWARDS 2017 TOP 100 SUPPLIERS GIPPSLAND Allen SJ
Armstrong DW & CG
Askew DM & IM
Coleman T, JG & MJ
Cuthbertson JH Pty Ltd & Elliot B&T
Foord DJ & MG and Sharefarmer Le Brocq K & S
Harvey Jim & Heather
Kirk Megan & Loader Mathew
Lade RL & B
Locket GJ, MJ & L
McKenzie LH & LA
Moss RP & GM
Olsen RL & Knight NM
Parker Janice M
Pendrick SC & KJ
Reiter AP & Wilmott LM
Stammers WJ & A
Wallace Luke & Melanie
Waltham GV & JL
Billing TJ & VG
Chittick PB & SJ
Farm Prophets Farm Profits
Wenham Russell & Janelle
NEW SOUTH WALES
NORTHERN VICTORIA Beex Operations Pty Ltd
Caldermeade Pastoral Corporation
Country Road Holsteins Pty Ltd
Denhouting KI & TL
Guastella V & D
Helaku Dairies Pty Ltd
Hicks JC & CM and Sharefarmer Hicks TD
Hollingworth GE & BA
Holmes Stephen & Melinda
Jenner Gary & Joy
Jones SG & SJ and Sharefarmer Jones GI & EA
Loxby Brown Swiss
Mitchell BD & KL
Sloper NM & Wells SA
Stephens HJ & S
Williams IR & DP Sharefarmer Broad LA & Moffitt KM
QUEENSLAND Bischoff BE, JC & N
Cooper PJ & JG
Priebbenow DB & LD
RP Hermann & Co
Triple T Farms
Burnlea Enterprises Pty Ltd
Cloverdale Farm Pty Ltd
Fenton RA PA & DR
Goss LC & L
Goss MD & JM
Griffin MD PA & GJ
Hughzee Pty Ltd
Schuuring LR & KA
Willie TA & Son
Zischke DG AL GR & MD SOUTH AUSTRALIA DW & LE Golding & Sons TASMANIA
WESTERN AUSTRALIA Brett Matt & Angela
Fitzpatrick Luke & Vicki
WA College of Agriculture
Foster FJ & BA & CF
WESTERN VICTORIA Ballangeigh Run Pty Ltd
Beasley TJ & CJ
Couch BJ & RM
Curdies River Partnership and Sharefarmer Madcow Dairys Pty Ltd
Duro CA & AL
Elliott HW & BE
Finlayson PA & KM
Fleming JF & MB & Sons
Foote TR & KM
Glenmead Pty Ltd ATF Smith FArm Trust
Grieve RJ, MI & HI
Hallyburton DG & RS
Howard B & D
Kenna JD & AJ Sharefarmer Kenna JW & LI
Kippers Family Trust
McNamata G & J and Sharefarmer McNamara N
Morey RG, TA & R
O’Keefe PG & CJ
Powell Dairy Farms
Rhode IR & JA
Robertson AM & TJ
Scotts Creek Dairies & Vogel A & J
Smart C & A
The Claine Family Trust
Vogel H & S
White J & G
WJ & VL Crole Family Trust and Sharefarmer AR & AD Crole Family Trust
to hit peak production. Last year the peak average was 36 litres per cow and they achieved 212,000kg/ milk solids for the year. Their yearly fat percentage average is 3.75% and yearly protein average 3.24%. They calve from March through to July, with the
bulk from March to May, and have a fairly flat production curve. Wayne and Vicki have been on the farm for 32 years; Andrew and April joined in 2011 and became share-farmers in July 2015. They milk a peak of 325 Friesian-Holsteins on 190 hectares and run young
stock on two 52-hectare out paddocks. With another gold plaque for the gate, they’re happy with the way things are going. “We have no more improvements planned at the moment. We’re pretty happy with the way we’re going,” Andrew said.
DAIRY NEWS AUSTRALIA JULY 2017
22 // ANIMAL HEALTH
Knowing correct cure for disease I RECENTLY attended
the 10th Boehringer Ingelheim Expert Forum on Farm Animal Well-being in Rome. It was an interesting and thought-provoking conference and I came away inspired by the high class of speakers, enthused to promote animal well-being in the dairy industry in Australia.
A global and holistic approach is necessary, one that encompasses the human and animal elements of well-being whilst promoting a positive image of our industry to the consumer. In an era where endless information is at our fingertips, there needs to be transpar-
APIAM ANIMAL HEALTH GEMMA CHUCK
ency between consumer and producer, and animal welfare sits at the forefront of this relationship. One vital aspect of animal welfare is the prompt recognition of disease and the timely administration of the correct medicine for that disease. Amongst some pro-
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ducers, the very real concern of antimicrobial resistance has led to fear and confusion over the usage of all injectable medicines. With the risk of potentially stating the obvious, I thought it would be worthwhile to go ‘back to basics’ and define these injectable products at the
primary level. This will help producers to make informed decisions (in conjunction with their veterinarian), as to which treatment plan would be most suitable for specific diseases on their farm. This article will discuss the terms antimicrobial, antibiotic, antiparasitic, anti-inflammatories and vaccines. Antimicrobials An antimicrobial is an agent that kills or inhibits the growth of a microorganism. They are classed according to their target microorganism and include antibiotics (also known as antibacterials), antifungals, antivirals and antiparasitics. Antifungals and antivirals are not routinely used in the dairy industry. Antibiotics An antibiotic is a type of antimicrobial drug which targets bacteria. They are used in the treatment and prevention of bacterial infections by either killing (bactericidal) or inhibiting the growth of (bacteriostatic) bacteria. They are also classed as being broad-spectrum or narrow-spectrum. Broad-spectrum antibiotics are effective against a wide range of bacteria, whereas narrow spectrum antibiotics target specific types of bacteria. Despite common misconceptions, there are no ‘stronger’ antibiotics; what is important is that the correct antibiotic is used to treat the pathogen present. This can be determined by appropriate diagnostic testing by your veterinarian. Antibiotics are ineffective against viral or fungal infections. In the last century, the overuse of antibiotics has led to the development of resistant pathogenic bacteria in both humans and animals. There is global pressure to reduce antibiotic usage in both human and veterinary medicine in an attempt to slow the rate of developing resistance and reduce the threat to public health. It is important to note that many of the antibiotics used in the treatment of animals are identical to those used to treat infec-
tions in humans. Examples of antibiotics used in the dairy industry include penicillin and oxytetracycline. Antibiotics used in cattle tend to be in an injectable form but some are formulated to be given orally, particularly in calves. Antiparasitics These drugs are also antimicrobials and are effective against internal and external parasites. These parasites include protozoa (such as cryptosporidia), gastrointestinal worms and ectoparasites (such as lice and ticks). They tend to have a narrower range of activity and are usually effective against a limited number of parasites within a particular class. They are used widely in the dairy industry, particularly in youngstock, for the control of worms, coccidiosis, cryptosporidiosis and lice. There are many different formulations of antiparasitic which can be given orally, injected or used topically as a ‘pouron’. Examples of antiparasitics used in the dairy industry include Halocur® (Coopers Animal Health), Baycox® (Bayer) and “drenches” (e.g. Cydectin®, Virbac; Dectomax®, Zoetis; Panacur®, Coopers Animal Health). Anti-inflammatories Anti-inflammatory drugs belong to a group of drugs called analgesics and relieve pain by reducing inflammation. Other analgesics include opioids which act on the central nervous system to block pain. Opioids are not routinely used in the dairy industry. Anti-inflammatories are also known as pain relievers or NSAIDs (non-steroidal antiinflammatory drugs). They are commonly used in adult cattle and youngstock to help alleviate pain and inflammation in elective and emergency procedures. Despite the many names for these drugs and the common prefix (“anti-“) they do not fight bacterial, viral or parasitic infections and development of resistance is not applicable. Research has shown that their use has had a beneficial effect on outTO PAGE 23
DAIRY NEWS AUSTRALIA JULY 2017
ANIMAL HEALTH // 23
Study shows robots calm lactating cows AUTOMATIC MILKING sys-
tems significantly changed cow and human handler relationships, according to the results of a PhD candidate study at the University of Sydney Dairy Research Foundation. According to Ashleigh Wildridge, 25, cows became quieter with a significant reduction in their fear of humans and, as a result, human handlers had to be more assertive. In February 2015, Ashleigh set out to test existing anecdotal evidence that dairy cattle were quieter in Automatic Milking System environments. She says there are around 40 robotic dairy farms in Australia using an average of four single-box robotic milkers and 250 cows and that this number is growing slowly. She investigated four pasturebased and one indoor dairy transitioning from conventional to
Studies conducted by Ashleigh Wildridge has tested anecdotal evidence that dairy cattle milked in robotrs are quieter.
automatic milking in Victoria, Tasmania and New South Wales. Key findings arising from the study included the fact that AMS farmers were able to spend less time physically managing lactating cows and were freed from milking
duties to carry out other valuable on-farm duties. At the outset, Ashleigh randomly selected approximately 70 lactating cows, painting a mark on them for easy identification in later flight distance and handling tests. She then spent three days observing and recording farmer routines. “As the study progressed and the cows transitioned to automatic milking, I noted that farmers had had to become more vocal to get their cows to move,” she said. “I measured ‘flight distance’ of the 70 cows and found that there had been a significant reduction in the distance at which a cow would react in fright to human proximity when cows were being milked in the AMS. “There had been a significant reduction in the animals’ fear of humans. “In a handling test, we drafted
the 70 cows and the farmer put them through a gate one at a time and we observed the fact that the cows had significantly reduced stress responses after they had transitioned to the AMS.” Overall, cows milked automatically appeared to be less fearful of humans compared with when they were previously milked conventionally. Ashleigh’s study was completed last year and formed one of five different projects she has undertaken for her PhD. The University of Sydney Dairy Research Foundation at Camden, south west of Sydney, is a vital guardian of the keys to the future of dairy science, according to its director Professor Yani Garcia. The foundation, he says, is a modest building with the future of dairy research inside in the form of a committed group of hard-working PhD candidates and teachers.
Correct cure FROM PAGE 22
come, recovery time and animal welfare. Examples of anti-inflammatories commonly used in dairy cattle include ketoprofen (e.g. Key Injection®, Ceva Animal Health), meloxicam (e.g. Metacam®, Boehringer Ingelheim) and flunixin meglumine (e.g. Flunixon®, Norbrook). Vaccines Vaccines are included in this discussion as they are injectable products and are commonly used on dairy farms. Vaccines work by stimulating the immune system, the natural disease-fighting system of the body. They are derived from a killed or modified part of the disease-causing organism (pathogen) and as a result a specific vaccine is required for a particular disease. Vaccines do not fight bacterial, viral or fungal infections directly (compared to antibiotics). Instead they are used as part of a preventative treatment plan for a given disease. Examples of vaccines used in the dairy industry include Ultravac® 7-in-1 (Zoetis), Pestiguard® (Zoetis) and Bovilis-S® (Coopers Animal Health). All injectable products differ from each other in their route of administration, duration of action and withholding period. They will also have different storage requirements. It is important to always read the label prior to use. • Gemma Chuck is a consultant with Apiam Animal Health.
DAIRY NEWS AUSTRALIA JULY 2017
24 // MACHINERY & PRODUCTS
Delayed delivery and the day of judgement SOME TIME ago, I used
this august newspaper as a platform to subtly complain about the lack of action in translating my Farm World field day machinery purchases to actual shiny steel in my yard. Instant gratification, such things are not. Which is funny, given that when you walk around a field day surrounded by temptation, the physical presence of everything a machinery enthusiast could dream of does convey the exact opposite. Such is life. Anyway; everyone held up their end of the bargain as promised, and sometime later my cultivator conveniently arrived on a Friday night, for a
JOHN DROPPERT Saturday of tillage. The things you look forward to when you work in an office! For those catching up, it’s a 2.8m standard duty, John Berends S tine cultivator. Despite the prolific nature of these machines, there’s not much to be found about them online. Am I the only one that looks?
Even photos are as rare as hen’s teeth (seriously guys, do we need so much pixelation in 2017?). I wanted a machine that can do primary cultivation right through to seedbed preparation. Budget being what it is, speed discs, power harrows, and combinations of machines are all out; it has to be one cheap, versatile machine. We all know what those usually end up doing: nothing well. So I bought this S tine on little more than the salesman’s assurance that ‘of course it will’ do a good job of primary cultivation; despite various suggestions elsewhere that this is a machine for after
the offset discs have done their job. So, readers on a budget: I’m about to exponentially increase the amount of internetsearchable information on the topic. You’re welcome! Did it do a good job? By and large, it did. The first pass was the toughest, and maintaining an adequate speed (over 8km/h) was difficult when I could see the very soul of my old Ford 7700 being blown out its exhaust. If the Ford was a living beast, I think it’d see itself as the hardy mountain pony in The Man From Snowy River. The paddock was scratched up, but not exactly ploughed. With the need to cut
A shiny new 2.8m standard duty, John Berends S tine cultivator on a Ford 7700, ready to go.
across the original pass on the second, I chickened out and hooked up the trusty Deutz. More power, more weight, more comfortable running it hard. Cutting across at 90 degrees on the second pass, and 45 degrees on the third, really made progress. After 3 passes, I had a decent seedbed, and
ing if those hay accumulators are really all they’re cracked up to be… When’s Elmore on? • John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.
the only real issues were trash build up under the machine as it worked. A couple more might have helped, but weekends are always too short. If it’s a relatively small acreage, and you enjoy the tractor work, this machine will do a good job for you. Now it’s parked up for a year, and I’m back on the internet wonder-
In-calf numbers up with Flashmate LAST YEAR, Tasmanian farm-
ers Chris and Suzanna Cowley had a weekend off milking during the AI period for the first time since they’ve been dairy farming. The Cowleys milk 370 Friesian-Jersey crossbreds on 140 hectares at Smithton in northwest Tasmania. “I’d actually never done that before,” Chris said. “We’d been using the Flashmates for a couple of weeks and I felt comfortable that our staff could pick the cows on heat.
“Basically, a cow’s either flashing red for in heat, or green, no heat. It’s just a matter of cutting out the ones that are flashing red so they can be AI’ed.” The Cowleys have previously used Estrus alert patches, and run around 80% in-calf at six weeks. “We’re up on that using the Flashmates, with a preg test showing we’re at 84%. “I’m expecting that number to be higher again after we preg test at 12 weeks too, just like last year.
A Flashmate turns red for a cow in heat or green if not in heat.
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“You do know your cows, but if it’s a heifer that just has a quiet heat, then I reckon we’ve missed them in the past. “This may not have been the year to use the Flashmates again in terms of milk price, but then pregnancy rates are already up, so they’ve more than paid for themselves. “The financial benefits are there, and we’ll certainly use them again. At the end of the day, the benefit to us of using Flashmate is more cows in-calf to AI.”
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MACHINERY & PRODUCTS // 25
Aussie Pumps resistant to corrosion FARMERS ARE being urged to check Nitrogen levels in soils ahead of sowing. One accepted strategy to combat a nitrogen deficiency is topdressing with liquid fertilisers soon after sowing, early in the season to maximise yields. Liquid fertilisers give better coverage than granular and offer the ability to custom brew the mix to maximise yields. However, they need to be handled with the right equipment. One Australian company, Australian Pump Industries, has developed a range of pumps for safe, fast and efficient pumping of liquid urea based fertilisers. “We set out to come up with a product that was resistant to corrosion, had the right elastomers to prevent leaks and that wouldn’t react with the chemical being pumped,” said Aussie Pumps’ Brad Farrugia. “Our poly pumps are endorsed by Incitec Pivot
for use with their Easy N fertiliser,” Brad said. The Aussie Poly Pump range, developed for ag chem applications like this, offer 2” and 3” selfpriming centrifugal engine drive pumps that Brad says are cost effective, efficient and reliable. “Made from a polycarbon material developed in the USA for NASA, 30% glass filled polyester, the pump is virtually corrosion free,” Brad said. The 2” pump will handle up to 835 litres per minute, whilst the big 3” version will handle up to 1010 litres per minute of flow. Both versions are available with petrol, electric or diesel drive. “As applying Nitrogen at the right time is crucial for maximising yields, farmers looking to maximise spraying times are choosing the high flow 3” version for better efficiency. “We even make a hydraulic drive version that can be plugged into
the sprayer’s hydraulic system for fast fill ‘on the go’,” he said. Genuine Honda powered poly pumps are now offered by Aussie Pumps with a four-year engine warranty at no extra charge to clients. Brad said all Aussie electric drive Poly Pumps
are fitted with a ‘Protek’ device, which fits between the pump and the motor. In the event of a seal failure, the Protek system traps the liquid to prevent it entering the motor via the shaft. The Viton or EPDM elastomers are compatible with most liquid fer-
tilisers and chemically resistant stainless steel fasteners are standard, Brad said. • More information at www. aussiepumps.com.au Simone Upton from Tamworth checks out the Aussie Smart Poly pump with Honda power, ideal for transferring liquid fertilizers, preventing ground contamination and chemical wastage.
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DAIRY NEWS AUSTRALIA JULY 2017
26 // MACHINERY & PRODUCTS
New Universal Display for John Deere tractors THE NEW 4640 Universal Display offers better data collection, increased functionality and greater choice for monitoring and managing tractor-driven operations. The new John Deere 4640 Universal Display will give farmers better data collection, increased application functionality, and greater choice for monitoring and managing many tractor-driven field operations. The new 4640 Universal Display enables customers to use the most common and popular John Deere applications, including AutoTrac™, documentation, and Section Control, in a portable display that has the latest internal components, design and user interface. “The new 4640 Universal Display provides a transportable,
easy-to-operate solution for customers with the John Deere Generation 4 operating system,” says John Deere’s John Mishler. “Some enhancements built into the display include more on-screen help and diagnostic information to keep operators running and informed of their display capabilities; simplified Work Setup app with page-by-page navigation; and greater user customisation of run pages.” When it comes to performance, the 4640 Universal Display provides improved documentation for high-speed planting and nutrient applica-
tions, coupled with the latest data syncing functionalities for increased on-board/off-board flexibility. Additional enhancements include the ability to more accurately map and operate Section Control to precisely apply multiple products simultaneously
with individual coverage maps and application points. The display is designed to import new customer and product information without the risk of overwriting existing client/ farm/field and guidance line information. It also has an expanded suite of Precision Ag Core applications, including AutoTrac, Section Control and documentation, as well as wireless data transfer (WDT) with the ‘data sync’ feature for automatic transmission of work documentation to the John Deere
New electric JD feeder WE’VE SEEN hybrid or electrical power when it comes to cars, bikes and buses, so it’s no real surprise to see it in agriculture, first the John Deere SESAM electric tractor, and now a self-propelled diet feeder from Italy. The Supertino Electra 21, which is in the final stages of testing, is a twin-augered, 21 cubic metre mixer wagon/diet feeder that is 100% electric, and powered by a 100Kw(125hp) motor. Besides the “electrification” the machine is remarkably like its dieselengine sibling with the same chassis, hydrostatic transmission and mixer and loader arm gearboxes.
Operations Center. “The time it takes operators to setup and startup the display has been reduced and display navigation has been improved,” John said. “This equates to more uptime for the user, as a quickly learnable display results in reduced training time, more time working, and fewer operator mistakes.” John said cost of operation is lower with the 4640 Display as improved Gen 4 applications such as AutoTrac, Section Control, and documentation increase customer profitability by helping users work more efficiently, reduce overlap and skips, and maximise inputs and field operations. A power button has also been added to the back of the
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The manufacturer claims that a diet feeder is the ideal machine to lend itself to electrification, because most machines of this type are usually based at one location, so are relatively easy to keep charge, if there’s a socket available.
The company cites several benefits to the concept, which include zero emissions, reduced maintenance due to fewer moving parts and significantly reduced running costs. This last point is based on that fact that charging will be a lot
cheaper than the cost of diesel used to run conventional machines. They also suggest that an oftenoverlooked advantage is the significant reduction in operational noise, with the removal of the diesel engine plant, meaning livestock are calmer.
4640 Display so operators can shut the display off or reboot without powering down the tractor. The display is compatible with the Gen 4 Extended Monitor, which increases the number of run pages visible to the operator, giving easier access to more operation information. The precision ag software for the display is available as either one- or five-year subscription durations and in two levels, either AutoTrac only or as Precision Ag Core that includes not only AutoTrac but also documentation and Section Control. This gives customers the flexibility to match the right software subscription level and duration to their needs. The 4640 Universal Display is available to order now.
System from GEA has been released for sale in the U.S. market after being cleared by the FDA for the production of Grade A milk. The Monobox incorporates the same robotic milk module and milk rack as GEA’s DairyProQ automated rotary - just in a box-style configuration. Featuring GEA’s unique in-linereverything technology ensures efficient milking in one quick, uniform procedure. After attachment, each milking Step - Stimulation, teat cleaning, fore-stripping, milk harvest and post-dipping - is done inside the liner. It is claimed that the fast milking process requires cows to spend less time at the milking box and more time eating and resting, while the technology also allows more milking’s per
robot per day. “The efficiency of the milking process is what takes the Monobox to the next level in automation,” says Matt Daley, Senior VP of Sales for Milking at GEA. “The time of flight camera on the milk rack matches the teat-cups to the teats for the fastest unit attachment in the industry. It’s an extremely efficient and proven System giving dairy farmers an automated milking Option unlike anything else on the market.” Monobox is said to offer fast milking for herds of any size, as well as focusing on milk quality. High-tech sensors analyse milk colour, conductivity and temperature, and the backflush process cleans and disinfects the milking unit between each cow. GEA suggests that the Monobox Milking System can be seamlessly integrated into any operation.
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