Dairy News 09 February 2016

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FEBRUARY 9, 2016 ISSUE 350 // www.dairynews.co.nz

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DAIRY NEWS FEBRUARY 9, 2016

NEWS // 3

Good weather casts shadow over 2016-17 PAM TIPA pamelat@ruralnews.co.nz

GLOBAL MILK price recovery could be “slow

Fert prices drop.

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and painful”, with doubts now cast over when the turnaround may come in the next season.

Rabobank analyst Emma Higgins says how quickly the brakes can be applied to global milk production is a key factor needed to lift global dairy prices.

She describes the international dairy markets as “fragile”.

ASB is holding its $4.10/kgMS forecast for this season, but says both this and the next season’s forecast of 6.50/kgMS are under review.

ANZ also says there’s downward pressure on Fonterra’s current forecast ($4.15/kgMS) and the opening forecast for 2016-17.

This follows last week’s GlobalDairyTrade event which saw the price index drop by 7.4%, the third successive fall this year. Whole milk powder was down 10.4% to US$1952/MT. Higgins says European dairy farmers are trying to find the optimum production level following the removal of quotas last year, which could take some time to rebalance.

“Added to that, New Zealand production has been stronger than was initially predicted,” she told Dairy News.

“The additional production remains problematic: most of that milk needs to find a home on the international market or in stores, while demand remains weak.”

Further contributing would be weak market sentiment stemming from the lower oil prices, she says.

“Oil-producing nations contribute to significant volumes of global dairy trade and are hurting from reductions in government incomes as a result of the slump in prices,” she says.

“Not only will low oil prices have an effect upon these countries’ ability to continue purchasing, but many of these buyers are now well stocked anyway.

“Many net oil exporters have taken the opportunity to fill inventory pipelines at the low prices seen in 2015 and therefore these buyers are well stocked at present.

“We expect an improvement in global milk

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Slipping dairy prices continue to mount pressure on the milk payout for this season and next year.

pricing by the end of the year – albeit slow and painful. However, we remain conscious of the volatility in commodity markets and, in particular, the fact that international dairy markets remain fragile.”

ASB, which dropped its forecast for this season from $4.60/kgMS to $4.10/kgMS after the previous event, is holding that forecast at present, but it’s under review. The 2016-17 forecast is also under review.

ASB rural economist Nathan Penny says surprisingly good NZ weather is supporting milk production so far this summer.

“This El Nino is looking like a fizzer. Most parts of the country have had good rain this summer.

Indeed green is the countryside’s summer colour of choice, even in areas like the East Coast where brown is normally the summer vogue,” he says.

The good NZ growing conditions have come

as a surprise, he says. Weather analysts had labelled this El Nino as one of the strongest in recent memory. But instead of the dry summer “slamming the brakes” on NZ production, the slowdown is happening at a more gradual pace.

“In an oversupplied global dairy market, gradual is not fast enough.”

The long term view remains positive.

ANZ rural economist Con Williams points out that GDT prices are down 12% since the start of the year, with cumulative falls of 31% since last October.

“The price action was weak, with the upward sloping curve for WMP now no longer evident.

At this stage it is difficult to see an imminent turnaround in prices and it places pressure on Fonterra’s (already downwardly revised) milk price for 2015-16 and will weigh heavily on the opening milk price forecast for 2016-17.”

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DAIRY NEWS FEBRUARY 9, 2016

4 // NEWS

Shed on wheels has cafés in i RICHARD COSGROVE

THE WHEELS under

Glen Herud’s milking shed are the first indication he isn’t your run-of-the-mill dairy farmer.

In fact, ‘milking shed’ is a bit of a misnomer as it’s actually a mobile milk factory.

At about 15m long x just over 2m wide this innovative milk factory has a towbar at the front, is road legal and can be moved anywhere by tractor.

The self-contained operation takes the milk straight from the cows into a pasteuriser and then into either bottles or 16L milk churns and it’s on its

way to customers an hour after milking.

However unlike most dairy farmers who know they will sell 100% of each day’s milking, when Herud milks his cows he has no guarantee anyone will buy his milk.

Wanting a way into dairying that didn’t incur huge debt, Herud looked for a way to get customers to pay significantly more for their milk. He developed his mobile milk factory also as a way to stay true to his organic principles.

His company, Nature Matters Milk, has developed a business model centred on the mobile milk factory, that lets Cows leave the mobile shed afer milking.

Glen Herud pasteurises the milk and delivers to customers an hour after milking.

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small-scale dairy farmers sell direct to the public and commercial users in their local areas.

This thinkingoutside-the-box earned Herud one of eight Sprout Agritech business accelerator grants in January.

He said you must think about your brand, and the brand must always come first.

And it is in cafes that he has found a place where his brand can stand out.

Realising that some cafes in

Christchurch and Rangiora areas are particular about their coffee and how they want it made, Herud began selling direct to them.

He considers his full cream milk healthier than trim milk because it doesn’t go through standardising and homogenising as does normal milk, which Herud describes as deconstructing the milk and then putting it back together.

As these cafes shifted to Herud’s daily milk delivery, unexpectedly it kicked off a massive debate on social media, and then mainstream media, about the use of trim milk in coffee. As Herud only at this stage supplies full cream milk to

these cafes, he has become the unwitting centre of the debate.

He openly admits to being a crap farmer but a great marketer and it’s in his marketing that his organic milk has stood out.

Reflecting on the issue Herud chuckled and said, “it’s a fun debate to have because obviously we have sorted out world poverty and ISIS has been defeated”. But more significantly Herud and the cafes have used it as a marketing opportunity.

The cafes love the taste of his milk, and since he uses only replaceable containers (churns or glass bottles) they love the lack of waste. The Lyttelton Coffee Co, for instance, no

DAIRY NEWS FEBRUARY 9, 2016

NEWS // 5

n its sights longer uses 12,000 plastic milk containers a year.

Even though the cafes are paying double for their milk, the price of the coffees has stayed the same.

The recent bobby calves debate was another easy marketing win for him, as he keeps the bobby calves and uses older cows as nursing cows.

Whereas a large-scale dairy farmer would view each millilitre of milk drunk by a bobby calf as

lost income, Herud views each millilitre drunk as a marketing cost.

Selling his milk for $4/L and getting $32/kgMS he has found a model that lets his 20 cow herd be financially viable. Saying that dairying needs to attract young farmers into the industry without getting crushed under a mountain of debt he feels that his business model offers a credible alternative.

His online blog shows

his methodology and how his business model works: he says a farmer with 40 cows can have two staff earning $50,000 each, the farmer can earning $75,000 and still retain at least $100,000 profit for the farm.

Herud predicts this model would be attractive to a cropping farmer, for instance, with a model working for up to 200 cows.

These farmers would Cows being milked.

Glen Herud is looking at refining the design of the mobile milk shed.

operate under Nature Matters Milk’s risk management programme with MPI, minimising costs.

Herud has found MPI great to deal with; whilst he feels they probably felt it was a hassle to deal with such a small operation they have been helpful.

He is on a six monthly audit schedule; such was the interest in his factory that MPI’s Tony Rumney flew down to do his first audit.

Everything in the factory is logged and

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his programme has many checks and balances, for instance each teat is wiped and sanitised before milking. The result is his bacteria levels are massively lower than the industry average.

Herud will use the Sprout Agritech grant to refine the mobile milk factory template, refining the design of the factory so that it becomes virtually impossible for the opera-

tor to break the rules.

To describe the scheme as a franchise is doing it a disservice; it appears more of a collective partnership of likeminded farmers.

Next on the plan for Nature Matters Milk and Herud is expansion and more staff, then they will launch butter production, then a trim milk (to appease the trim latte supping café set) and a chocolate milk.

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DAIRY NEWS FEBRUARY 9, 2016

6 // NEWS

Co-op’s review plan ‘underwhelms’ critics SUDESH KISSUN sudeshk@ruralnews.co.nz

AGAINST THE backColin Armer says the proposal is underwhelming.

drop of falling milk payout Fonterra farmers will this

week start discussing a governance review of the co-op.

The first director meetings start on Tuesday; Fonterra chairman John Wilson and other board

members will attend meetings around the country.

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The committee is asking farmers to decide the right model to take Fonterra into the future.

“How do we provide for the roles and responsibilities of our directors, the skills we want to have at the board table, the balance between farmer and independent directors and the processes for bringing them onto the board?

“With representation we need to talk about the role of the Shareholders Council as the cornerstone shareholder, how we can improve farmers’ sense of ownership and pride in our cooperative, and how farmers’ interests can best be communicated back to our board?”

The committee notes that Fonterra has had the same governance and representation structures since it was established nearly 15 years ago.

“A lot has changed since then. Our revenue, assets and shareholders’ equity have all increased considerably. Our international presence has increased with milk pools in Europe and China.

Trading Among Farmers provides farmers with financial flexibility and improved information on our cooperative’s strategy and performance.

“Fonterra’s business strategy has also evolved, and was refreshed in 2013 with updated priorities.”

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Two former Fonterra directors – Greg Gent and Colin Armer - last year led a campaign to revamp the 13-member board.

A motion calling for the board to be reduced to nine elected directors was supported by 54% of farmer votes, but it failed to get the 75% support needed to force a constitutional change.

When approached for comment last week, Armer told Dairy News he had just returned from holiday and didn’t have time to read the booklet. He says the initial reaction from his colleagues was that the proposal was “underwhelming”.

In the booklet, the governance and representation review committee notes that it has spent more than a year benchmarking the co-op’s governance and representation against what was considered world-class at the time and made a series of recommendations to the board.

“Their good work provides a strong platform from which to have a quality conversation about how best to evolve our structure, fine-tune our systems and adapt our skill set to meet the future demands of our cooperative,” it says.

FONTERRA’S GOVERNANCE and representation review committee says the co-op wants be the number one global ingredients supplier.

It is already the largest but wants to be number one among key customers.

Ingredients is the cash engine of our business, underpinning the farmgate milk price and contributing to the dividend, so success here is important for our farmers’ success, it says.

“We are also aiming to be the number one or number two consumer and foodservice business in eight strategic markets – New Zealand, Australia, Sri Lanka, Malaysia, Chile, China, Brazil and Indonesia. Success with these goals means we can grow our value returns which will flow through into the dividend. “ We are an $18.8 billion business today and we are aiming to become a $35 billion business by 2025. As we grow, we need to consider how we keep secure access to milk in other countries, at competitive prices. It is important to have stronger governance and representation to support these goals.”

DAIRY NEWS FEBRUARY 9, 2016

NEWS // 7

Help near at hand as pressure grows on farm ONFARM CASH

income of farmers from all milk production this season will be under $4/kgMS, according to DairyNZ The comments come as Fonterra joined other dairy processors in slashing their forecast payout for the 2015-16 season,

ending May 31.

DairyNZ chief executive Tim Mackle explains that some extra Fonterra payments for this season are shifting forward out of the 2015-16 season into 2016-17; very little was carried over from 2014-15.

“This will have ongoing effects on farmers’

cashflows, their business equity and their ability to keep managing debt,” says Mackle.

“The reduced milk price announcement today means our industry is facing a reduction in dairy revenues by around $800 million. That means $67,000 less in cash rev-

SEEKING SUPPORT DairyNZ is working alongside industry partners to provide a variety of support, building on work carried out over the past two seasons: Tools and resources - rolled out over the next few months these will be practical and targeted to help farmers make tough decisions.

Workshops for farmers - wellbeing workshops will start in mid-February held in partnership with the Ministry for Primary Industries. Rural Support Trusts have also been boosted, with training for regional leaders and extra responders now in place and more coming, thanks to extra

funding from government and industry.

Farmer examples - top farmers will provide a half year reconciliation – what happened, how are they tracking, what changes did they make that they are going to continue with/why, how are they placing themselves for next season.

Trained professionals - about 400 rural professionals have been trained to recognise and help farmers under pressure.

“We’ve seen a real pickup in their confidence to refer people on to support available because of that increased knowledge and understanding from the workshops,” says Mackle.

enue for the average farm producing 150,000kgMS.” Fonterra is now forecasting a milk payout of $4.15/kgMS – 45c lower than its last forecast; it equates to a cash payout of $4.50-$4.55 after retentions.

Westland’s revised forecast payout is $4.15$4.45/kgMS; Open Country Dairy will pay its suppliers $4.00-$4.30/ kgMS. ASB has also trimmed its forecast payout by 50c to $4.10/kgMS; but economist Nathan Penny believes dairy prices will move higher over 2016.

“And with this in mind, we stick with our $6.50/kgMS 2016-17 forecast,” he says.

According to Mackle, hard calls will need to be made. However, dairy farmers are extremely resourceful and have been taking significant action to manage the last two seasons, he adds.

“Farmers’ ‘let’s stick together and look out for each other’ attitude will continue to come to the

DairyNZ chief executive Tim Mackle.

fore. And as always the industry will be doing its best to provide support, building on what has already been done.

“A positive note is that production and homegrown feed supply this summer is good. El Nino has not been as severe so far as some predicted.

Some reasonable rain in December and January has bolstered pasture and crop growth,” he says.

Milk production across the country to the end of December was down 2.6% on last season. Lower North Island (including Taranaki) and the Waikato had the largest declines this season so far, dropping 9% and 5% respectively.

“The issues creating the soft prices are supply related: Europe is well ahead on production in the last three months. It looks like we could start the 2016-17 season with

less than break-even milk prices. On the bright side, a lower NZ dollar will provide some support to milk payments and should keep fuel prices and onfarm inflation in check. But the breakeven milk price for the average NZ farmer is still $5.40/kg/MS so they will be getting $1.50 less than that this season.

“Global conditions are challenging and continuing to impact prices for dairy. Those factors are completely outside the control of the individual farmer. That’s the hard thing for them. Most will have done all they can to reduce their farm costs.

“This strengthens our resolve as an industry to help farmers through yet another difficult year.

We’ll be doing all we can to help them focus on tight and skilled pasture management.

“Pasture is still the cheapest feed to produce

and our ability to grow pasture year-round is our competitive advantage as a country. We will be working with farmers to get the best out of their farming system and change it if they need to,” says Mackle.

He says DairyNZ and its partners have the tools, resources and expertise to deliver that advice and support, some of which will be focussed on the wellbeing of our farmers.

“It’s positive that dairy companies are signalling new forecasts now in January so farmers can make important decisions early like adjusting their stocking rates, drying off and preparing for the 2016-17 season.

“Farmers will be working extremely hard in their businesses and that can affect health and wellbeing. Many will have to pick up extra work on their farms. Some will be looking for off-farm income.”

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DAIRY NEWS FEBRUARY 9, 2016

8 // NEWS

Fonterra sees potential for butter sales in Iran FONTERRA IS looking at more

business in Iran following the recent lifting of UN sanctions.

The Ministry of Foreign Affairs confirmed it has started updating its regulations and removing the UN sanctions, which it expects to complete next month.

Fonterra managing director global ingredients, Kelvin Wickham says Iran is a valuable trading partner and a key butter market for Fonterra.

“The removal of the UN sanctions and our Government’s unwinding of restrictions will improve the outlook for us in Iran.”

With a population of nearly 80 million and long-standing customer relationships in Iran, Fonterra expected continued growth in the market.

“Our customers in Iran are growing, and we’re seeing them make significant investments in infrastructure and capacity to meet

demand,” says Wickham.

“We have skilled people in the region who understand the opportunities and potential of doing business in Iran, and who welcome more normalised trade relations.”

The UN Security Council recently endorsed a deal to end years of economic sanctions against Iran in return for curbs on its nuclear programme.

Sanctions are unlikely to be removed until next year, as the deal requires approval by the US Congress.

Nuclear inspectors must also confirm Iran is complying.

While the Iranian and US presidents have been promoting the accord, hardliners in Tehran and Washington have spoken out strongly against it.

However, many European companies have already shown interest in re-establishing business in Iran, Germany sending its economy

Kelvin Wickham

minister Sigmar Gabriel on the first top level government visit to Tehran in 13 years, with a delegation of business figures.

President Hassan Rouhani was accompanied on his official visit to Paris, the first by an Iranian president

since 1999, by ministers and business leaders who announced deals including a joint venture between carmakers PSA Peugeot Citroen and Iran Khodro and plans for Iran to buy 118 Airbus passenger planes to update its aging fleet.

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The joint venture sees Beingmate take a 51% stake in Australia’s premier paediatric powder plant at Darnum, Fonterra retaining a 49% stake and controlling operations at the plant.

The Darnum joint venture is a key component of Fonterra’s partnership with Beingmate to create an integrated global supply chain from the farmgate direct to China consumers, using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia and Europe.

Fonterra last year also paid out $755 million for a 18.8% stake in Shenzen-listed Beingmate Baby & Child Food.

Last August, Fonterra and Beingmate said they intended to form a global partnership to help meet China’s growing demand for infant formula.

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DAIRY NEWS FEBRUARY 9, 2016

NEWS // 9

Oz competition watchdog takes retailer to task MADELEINE BRENNAN

THE AUSTRALIAN

Competition and Consumer Commission (ACCC) has begun action against Woolworths, alleging the supermarket giant abused its bargaining position when seeking payments from Tier B suppliers as part of a strategy to reduce its profit shortfall in December 2014.

It is not yet known whether any dairy companies were targeted because, according to the Statement of Claim lodged by the ACCC, Woolworths had no accurate written record of which suppliers were approached, which suppliers agreed to make payments, how much money they contributed or on what basis the suppliers agreed to make the payment.

Fonterra and other Australian dairy companies supply Woolworths.

targeted Tier B supplier.”

It is not yet known whether any dairy companies were targeted because, according to the Statement of Claim lodged by the ACCC, Woolworths had no accurate written record of which suppliers were approached, which suppliers agreed to make payments, how much money they contributed or on what basis the suppliers agreed to make the payment.

The allegations claim Woolworths sought about $60.2 million payments from the suppliers, expecting that while many suppliers would refuse to make a payment, some suppliers would agree. Woolworths ultimately captured about $18.1 million from these suppliers, according to the ACCC. ACCC chairman Rod Sims said the ‘Mind the Gap’ payments were “unconscionable in all the circumstances”.

A common concern

international industry practice to engage regularly with suppliers over product and category performance.

“Woolworths believes in working cooperatively with suppliers.

“Woolworths was the first major supermarket to

Woolworths is facing heat from Australian Competition watchdog, ACCC.

agree to sign the Grocery Code of Conduct and is currently implementing the Code across its business.”

Woolworths has until February 15 to submit its defence, with mediation between the parties to start in July.

“We believe our conduct was consistent with Australian and international industry practice.”

– Woolworths The ACCC alleges that Woolworths management approved a scheme in which Woolworths sought to obtain payments from a group of 821 ‘Tier B’ suppliers – broadly defined as a group of non-market leaders in their category – to its supermarket business.

“Woolworths’ category managers and buyers contacted a large number of the Tier B suppliers and asked for ‘Mind the Gap’ payments from those suppliers for amounts (ranging) from $4291 to $1.4 million, to “support” Woolworths. Not agreeing to a payment would be seen as not “supporting” Woolworths,” the ACCC said in a statement.

“The ACCC alleges that Woolworths did not have a pre-existing contractual entitlement to seek the payments, and either knew it did not have or was indifferent to whether it had a legitimate basis for requesting a ‘Mind the Gap’ payment from every

raised by suppliers relates to arbitrary claims for payments outside of trading terms by major supermarket retailers.

It is difficult for suppliers to plan and budget for the operation of their businesses if they are subject to such ad hoc requests.

The ACCC is seeking injunctions, including an order requiring the full refund of the amounts paid by suppliers under the ‘Mind the Gap’ scheme, a pecuniary penalty, a declaration, and costs.

The proceedings follow broader investigations by the ACCC into allegations that supermarket suppliers were being treated inappropriately by the major supermarket chains.

In a statement, Woolworths said it had been fully cooperating with the ACCC during the course of the investigation.

“We believe our conduct was consistent with Australian and

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DAIRY NEWS FEBRUARY 9, 2016

10 // NEWS

Hidden aphids wreak havoc in beets EVER WONDERED

why your fodder beet has gone yellow?

Ravensdown agronomist, Chris Lowe, has been looking for the cause and found it in the aphids that transport the beet western yellow virus (BWYV).

“I have lost count of the number of enquires I have had recently about

these symptoms; most people put it down to nutrient deficiencies,” says Lowe.

A common response, he says, is to apply a large amount of nitrogen and potassium fertiliser.

“Fact is the beet below is not suffering from a nutrient deficiency at all.

We tissue test many beet

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paddocks for nutrients through our research laboratory and most come back fine.”

Lowe says that since seeing signs of infection last year Ravensdown has asked AgResearch for help.

The cause of many yellowing paddocks is now confirmed as BWYV. This

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is transmitted by aphids, the biggest culprit being the green peach aphid (Myzus persicae).

Green peach aphid are often found on the underside of the leaves where they lays eggs in the winter. In spring they hatch and produce stem mothers that give birth to female aphids. These then fly to the summer hosts, like fodder beet, where they suck the plant sap and transmit the virus.

“The virus persists in the aphids for more than 50 days, while the aphid only needs to feed from the plant for five minutes to transmit the disease to the plant.”

BWYV is hard to control because of its wide host range and persistent aphid transmission, the minimum inoculation feeding period being 10 minutes.

Lowe says foliar insecticides can help but they have to be timed right.

“This year I was finding aphids underneath leaves about the middle of

November. A good indication of whether your beet crop has aphids is the presence of ladybirds as they are a natural predator and where possible I would advise using an insecticide that does not kill your friends.”

Globally the resistance to insecticides is huge, Ravensdown says. The best defence against it is correct crop rotation and sowing insecticide treated seed.

Fodder beet seed is generally coated to allow precision sowing.

The company’s coating Combi Coat contains a fungicide and insecticide to reduce risks of virus infection.

Lowe urges taking all practicable means to reduce the risk of aphids infecting the fodder beet plants with BYDV. “Starting with the correct paddock choice, with no-host species prior to fodder beet, and using insecticide treated seed will put the odds in your favour.”

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MEGAN HEALE has topped the people’s and judges’ choice to win first prize in our ‘Show Us Your Rural Summer’ photographic competition.

Fighting off stiff competition in a high quality field of entries, Megan’s photograph ‘Taking a Stroll’ (seen here) wins first prize overall. Second place went to Louise Lahmert and third place to Kevin Shakespeare.

Congratulations to all three winners. They will each receive a high-quality Weber Q Range BBQ, the biggest and flashest model obviously going to our first place getter, Megan Heale.

Thanks to Mitre 10 for supporting this competition and supplying the barbecues and thanks to all the readers who took time to share their summer photographs with us. Separating a winner from such a strong field was not easy!

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The third test is the decider.

As the heat of summer kicks in and feed starts drying up, this is the time you need to make decisions.

You need to decide which cows you direct your feed to and which cows to cull.

You need to decide which cows you’re going to dry off early.

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And you need to decide if and when you treat for mastitis as the Somatic Cell

Count rises with the lower volumes.

How you make those decisions is up to you. But how you get to them, well, that’s where we can help. With LIC’s Herd Testing service we provide you with up-to-date, detailed information on your production and udder health so that when it comes to making decisions, they’re informed decisions.

herd testing can help you, talk to your FSM or call us on 0800 264 632 and we’ll

DAIRY NEWS FEBRUARY 9, 2016

12 // NEWS

Traders backs TPP THE BUSINESS community

strongly supports the Trans Pacific Partnership (TPP) and welcomes the signing of TPP in Auckland, says New Zealand International Business Forum (NZIBF) chair Malcolm Bailey.

Last week 28 business organisations including NZIBF signed an open letter of support for TPP to Prime Minister John Key. “These organisations represent the majority of NZ businesses,” Bailey says. “The letter reflects their belief that NZ business and the country as a whole have a lot to gain from TPP.” Bailey, who is also chair of the Dairy Companies Association of NZ, says TPP represents 36% of global GDP, 40% of exports and 800 million consumers. TPP covers all major export sectors of NZ. “TPP will have positive market access outcomes for meat, horticulture, kiwifruit, wine, dairy, forest products,

seafood and manufactured angi is protected. NZ has little goods including medical tech- to fear from investment disnologies and agricultural putes and everything to gain equipment. Busifrom more protecness as a whole tion for our outward will benefit from investments.” improved rules for BusinessNZ chief trade and investexecutive Kirk Hope ment, in services says there is wideas well as goods. spread support for The cost of doing TPP among business. business will be “Business underreduced signifi- Stephen Jacobi stands that being cantly.” part of TPP will Bailey says TPP requires no enable more competitiveness, significant change to be made higher exports, higher value in domestic policies. jobs, and new technology and “The most significant practices. change – the extension of copy“NZ companies will gain right term – while imposing more opportunities for profcosts across the economy also itable trade and NZers’ wealth has benefits for the creative will grow. sector,” says Bailey.

“No trade agreement is per“NZ’s sovereignty is upheld fect, but the Trans Pacific Partby TPP because a number of nership has achieved enormous safeguards, checks and bal- gains for NZ without the need ances in the agreement mean for significant policy change.” that the Government can conHope says the business and tinue to regulate in the national export groups supporting the interest. The Treaty of Wait- TPP recognise that interna-

tional trade is essential for NZ’s success.

Organisations calling for support for the TPP include BusinessNZ, ExportNZ, NZ International Business Forum, Federated Farmers, EMA, the Auckland, Wellington and Christchurch Chambers of Commerce, American Chamber of Commerce in NZ, Dairy Companies’ Association, Meat Industry Association, Beef + Lamb NZ, Food & Grocery Council, Horticulture NZ, Horticulture Export Authority, Forest Owners Association, NZ Winegrowers, NZ-US Council, NZ Shippers Council, Port Company CEO Group, ManufacturingNZ, Medical Technology Association, NZ Health IT, Otago Southland Employers, ASEAN NZ Business Council, Japan NZ Business Council, Canada NZ Business Council and Latin America NZ Business Association. @dairy_news

Farmers welcome deal signing FARMERS HAVE welcomed

last week’s signing of the Trans Pacific Partnership (TPP) agreement in Auckland.

Federated Farmers president Dr William Rolleston says the agreement may not have delivered everything the sector desired, but the scale and its importance to New Zealand is undoubtedly profound.

“As a founding member, the signing of the latest TPP agreement introduces another chapter in our proud history as a trading nation,” he says.

“For the primary sector, the TPP offers diverse opportunities not only for agriculture but for future generations of NZers and their prosperity. “You only have to look at the current state of dairy prices to realise the vital importance of opening up new export markets and ensuring

a level playing field for NZ exporters.”

A bipartisan political approach to free trade and deregulation over recent decades has delivered significant benefit to all NZers.

Rolleston says as a small agricultural nation with a domestic market the size of Sydney we rely on access to overseas markets.

A rules-based trading system which TPP delivers is vital to avoid us being the victims of a trade war we could never win.”

Federated Farmers is asking Andrew Little and others in the Labour opposition to maintain an open mind on the deal which is supported by past Labour leaders and trade negotiators and by many of NZ’s largest industries including agriculture.

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DAIRY NEWS FEBRUARY 9, 2016

NEWS // 13

Rare native plant fenced for saving EFFORTS ARE under-

way to save a rare native plant on Northland’s Hikurangi flood plain.

The Fonterra and Department of Conservation (DOC) Living Water partnership is working with farmers on the project.

The floodplain is home to one third of the known population of the heartleaved kohuhu or Pittosporum obcordatum. The species is listed as nationally vulnerable and only around 2000 kohuhu plants exist nationwide.

Living Water is a 10-year partnership between Fonterra and DOC which is working with farmers, iwi, conservation groups, schools and other agencies to improve the health of five key catchments in significant dairying regions.

Living Water recently funded an ecological study that identified 146 of the rare plants in the Hikurangi catchment.

Ninety kohuhu plants were found on Fonterra farmers Steve and Amber Brown’s property. They’ve protected the kohuhu by fencing off the area.

Steve Brown says as a steward of the land he

understands the importance of working to preserve land for future generations and the support he has received from Living Water helps him do this.

“When we discovered this plant on the farm and learned there was so little of it left we knew we had to do something to look after it. I’d already worked with the Living Water team to build a wetland on my farm, so it was good to have their support for this.”

Fonterra general manager responsible dairying Emma Parsons says the Browns’ efforts demonstrate Living Water’s value.

“The work Steve and Amber have done on their farm highlights the small things people can do to make a big difference to the overall future of our nation’s environment.”

DOC director of operations, northern North Island Whangarei, Sue Reed-Thomas, says the Hikurangi flood plain was once wetland covered in native bush. But now only a few small pockets of native vegetation remain on the floodplain.

“It’s essential we pro-

tect what is left. We thank the Browns for fencing the native bush remnant on their farm that includes a precious patch of kohuhu plants.

“Living Water is work-

ing to protect and enhance the remaining wetland and forest areas on the Hikurangi flood plain; planting new stretches of native flax and grasses on the banks of waterways.”

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THE DEMAND conditions in China will not turn

around very soon, says a senior Treasury official.

Tim Ng, director of economic systems, told Dairy News that other major dairy suppliers in the world will continue to produce more and that will put the lid on dairy prices. He says there is no way that there will be a return to the high dairy prices of a few years ago.

Oil and grain prices and the situation in Europe will all put a dampener on things, Ng says. The main story is about China and the headwinds affecting consumption there. While changes are occurring it’s hard to see anything positive emerging.

Because China has such huge buying power it has the ability to act strategically and buy in large quantities of product and in doing so can use that to swing global prices.

The result of all this will be that the farmgate milk price to farmers is unlikely to increase for the next two years, says Ng. This will lead to restructuring within the dairy industry and in rural communities heavily dependent on dairying. – Peter Burke

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DAIRY NEWS FEBRUARY 9, 2016

14 // NEWS

Soldier’s widow telling how to stare down a challenge RICHARD COSGROVE

A SOCIAL worker talk-

Sally Becker wants young farmers to break down the walls and challenge themselves.

ing to young farmers isn’t what you would call a traditional event at a young farmers conference, but Sally Blackler isn’t your average social worker.

She works on the front lines with some of New Zealand’s most at-risk citizens for the Christchurch City Mission. Every day she deals with situations that would have most people heading out the door.

She isn’t one to back away from a challenge either; in 2012 she walked 1000km from Auckland to

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Christchurch in 39 days.

The walk partly was a fundraiser but was also in memory of her late husband, army sergeant Nathan Blackler who had done the walk in 2004 to raise $65,000 for the child cancer foundation.

Unbeknown to Nathan he had done the walk with a tumour in his chest, discovered three months later; he died on March 23 2007 aged 33.

The Tasman Young Farmers approached Blackler to lead one of 12 workshops at the inaugural Tasman Young farmer’s three-day conference starting February 26.

Nearly half the Tasman young farmers members – a region which includes Canterbury, Nelson Marlborough, and the entire West Coast – have taken a weekend off and signed up to attend the conference; Blackler’s is the most popular with 75 of the 90 attending signing up to her ‘Pushing the Boundaries’ workshop.

Blacker will be giving young farmers the tools, strategies and behaviours

to change and move forward. She will teach them the meaning of her acronym FARMER: focus, achievement, resilience, motivation, enthusiasm, respect for yourself and others.

She will also challenge the attendees to come up with their own words for the acronym, and will look at motivation, goal setting, self-esteem and self-belief.

Farmers have traditionally been seen as silent sufferers and the suicide levels amongst farmers are higher than any other industry.

The situation is now more pertinent as young farmers joining the industry face an arduous time with low dairy prices, drought in many areas and high debt levels.

The young farmers have identified that farmers in the 18-25 year age bracket struggle to get off the farm and develop themselves so are working with the likes of Blackler to help members see a future in farming.

Not wanting cost as a barrier the conference

has been funded largely by sponsors, principally ANZ Bank, which has kept the attendance fees down to $75 for members for the entire weekend including staying at Rydges Hotel.

After an initial survey of members whittled 30 possible topics down to 12 workshops, an attendee can chose four of these hour-long events to attend.

The other topics are managing staff, diversification and business expansion, succession planning, climbing the ladder, how to start a business, healthy farming, mental wellbeing, feed budgeting and nutrition, pressures of auctions, tenders and purchasing, rural banking, rural technology and employment law.

The Sunday session will be questions and answers with industry leaders Rod Quin, chief executive of Westland Milk Products; Traci Houpapa, chair of Landcorp; Dr William Rolleston, Federated Farmers; and Phil Smith, Beef + Lamb NZ director.

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gives a push to the disease. henua much earlier than normal due to “The conditions will vary from farm lots of rain and high temperatures. to farm and will depend on how indiSpeaking at a DairyNZ discus- vidual farmers have managed their sion group in the region, grazing and how much Horowhenua veterinardead matter they have ian Keith Christensen around,” says Chrissays spore counts in the tensen. “In general you area are the highest seen feel the air is rotting at this time of year for sevas you drive around. eral years.

Sometimes it’s very He says the region had tropical and so the a dry summer and then spore counts across the suddenly a lot of rain and district are high.” heat. Once the rain hit, the He says many dry matter on the ground people spray their Keith Christensen was ideal for spores to paddocks to ward off grow.

FE but this year in Facial eczema is caused by the toxin Horowhenua it has caught many farmsporidesmin, produced by the fungus ers unawares and the best way of dealing Pithomyces chartarum which grows rap- with it is to put zinc in the water lines. idly in warm wet pastures mainly from This reactive approach is cost effecJanuary to April, although FE has been tive because it allows farmers to wait known to occur in May. until there is a problem before they use The sporidesmin damages the liver zinc. And the zinc can stay in the shed of an animal and makes them sensitive for use next year. to light, causing severe inflammation on Another option is to put stock onto a parts of the skin especially around ears, crop where there is not the same risk of eyes and udder. Soil temperature also spore build-up.

DAIRY NEWS FEBRUARY 9, 2016

16 // WORLD

Bid to halt Oz farms sale RICHARD MEREDITH

THE IMPENIDNG sale

of New Plymouth Council’s corporate dairy farm in Australia is still generating controversy.

A Tasmanian-based business woman Jan Cameron was in Canberra last week lobbying to stop the sale of Van Diemens Land (VDL) Company to Chinese entrepreneur Lu Xianfeng.

Taranaki Investment Management Ltd, a council subsidiary, has sold the business comprising 30,000 cows covering 20,000ha over 25 farms on the far north-west coast of Tasmania, to Lu’s Moon Lake Investments for A$280 million, A$30 million more than the failed TasFoods bid in which Cameron was an investor.

The sale is subject to a decision of the Foreign Investment Review Board, which was expected at the end of January. At the 11th hour Cameron (pictured) has launched a new proposal through which she plans to underwrite a ‘locally-owned’ bid that will match the Moon Lake offer.

According to her office, Cameron wants Treasurer Scott Morrison to step in as he did with the mooted sale of the Kidman properties to the Chinese.

Cameron’s media spokesperson declined to comment on the progress of the lobbying blitz, referring Dairy News to an article in The Australian on February 2 in which Cameron is quoted as saying: “The Chinese are under so much pressure to feed their 1.2 billion people, they’re acquiring the land they need to control the agricultural production. They’re doing this for their food security at the cost of our food security...

Once the Chinese buy this land, it will never be resold.’’

The article says Cameron is “claiming the Chinese entrepreneur who has agreed to buy the business for $280 million is a front for the Chinese state”.

Lu, 45, who purchased an 85% stake in Australia’s Kresta Blinds in 2014, made his fortune retailing seafood in China before founding the sunshade manufacturer APLUS. His spokesman told the Australian media Mr Lu was keen to find other opportunities in the island state.

“Our plan is to invest in the property; we believe there is massive potential

The Van Diemens Land farms were sold by New Plymouth Council late last year. Inset: Jan Cameron.

there and so we want to unlock that and we have the capacity to bring in any required capital to do that,” the spokesman said.

Circular Head mayor Daryl Quilliam said: “The fear that Chinese people will come and work on the farm and take Tasmanian jobs is ludicrous. I’m not fearful at all. I think there’ll be more dairies and more local jobs and they’ll look after the land.”

Feelings have been running high on the northwest coast.

“There is community support for Lu’s proposal,” Quilliam says.

“He wants to develop tourism; he’ll spend money developing the dairy property and irrigation systems. He’ll leave some bush and fence off the Tasmanian devil habitat area.

“He’s met with council and we’ve seen some of his plans, which are not publicly available. He’s going to keep the present management.”

According to the Tasmanian The Mercury newspaper the Circular Head Progress Group has warned potential investors not to get involved with Ms Cameron’s proposal saying her potential investment in Australia’s

largest dairy farm would not be welcomed.

“There would be a community backlash against anyone involving themselves with her bid,” said group president John McNab. “Banks and other potential investors have now been warned that to disregard the community’s feelings on this may be at their own peril.”

Quilliam said: “While we’d love to see it Australian owned, Jan Cameron’s track record on environmental issues and at Triabunna has turned many Tasmanians against her.”

Cameron, the founder of the Kathmandu outdoor clothing which she sold in

2006, was earlier involved in a joint bid with Wotif founder Graeme Wood to turn the old Gunns woodchip mill on Tasmania’s east coast into a tourist resort, before the two fell out.

A bevy on independents senators have added their voices to the nationalistic fervour opposing the sale to Mr Lu, in an attempt to put pressure on the Government to intervene.

They include Tasmanian independent senator, Andrew Wilkie, Nick Xenophon (SA), John Madigan (Vic), Jacquie Lambie (Tas) and Glenn Lazarus (Qld). The Greens

Tony & Shona Pedersen,

have referred the proposed VDL sale to a Senate committee.

Tasmanian Greens Senator Peter Whish-Wilson said the committee would seek submissions and details from a range of stakeholders around potential concerns.

“As far as I know the senators haven’t spoken to him (Lu)” Mr Quilliam said. “They certainly haven’t spoken to me.”

Dairy industry bodies, Australian Dairy Farmers and Tasmanian Farmers and Graziers said they considered the sale a commercial issue and did not wish to make further comment.

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DAIRY NEWS FEBRUARY 9, 2016

WORLD // 17

Gloomy outlook all too familiar Demand growth The Australian tends to be less volmarket remains atile than that of a steady outlet DAIRY MARKETS have entered supply; price volatilfor well over half 2016 with an all-too-familiar out- ity is often caused by of the industry’s look. supply overshooting milk.

Internationally, prices remain then falling short of Supermarket depressed, as evidenced by price demand. sales of the major falls for all three GlobalDairyTrade In recent months, dairy categories (GDT) auctions for the calendar growth in global displayed diveryear so far. demand has been rel- John Droppert gent trends over Together with challenging sea- atively small, coming the most recent 12 sonal conditions and stubbornly mostly from price sensitive coun- month period. high input costs this has tight- tries, and has been on a slowing While dairy spreads conened pressure on Australian farm- trend as inventories have built up. tinue to grow strongly, milk and ers’ margins despite the buffering Many Southeast Asian countries cheese sales are steadier, as are effects of a stable domestic market continue to stock up on relatively sales values for yoghurt and dairy and a more favourable exchange affordable dairy products, while the snacks, although volumes continue rate. to shrink.

But while southern At farm level, AusMany Southeast Asian hemisphere exporttralian milk production ers are experiencing countries continue to stock up finished December a noticeable supply on relatively affordable dairy 2015 down 0.2% for response, growth in the products, while the pace of the season to date and northern hemisphere down 4.6% for the exports to the Middle East has persists. month itself.

In particular, Euro- moderated.

A solid start to the pean milk production season was followed continues to rise, seemby slowing growth ingly impervious to global market pace of exports to the Middle East through spring thanks to tighter influences. has moderated. margins and dry conditions in With the northern spring flush Subdued demand from Greater many regions. just around the corner, the global China remains a feature but global December was generally hot and industry is again seeing the pros- exports to Japan have shown their dry, and January offered little relief; pect of stronger prices being strongest growth in years. cooler temperatures and rainfall pushed back.

Demand from Russia, hitherto towards the end of the month may Ongoing supply growth is the the world’s second-largest single provide the reprieve many farmers prominent factor keeping the country dairy market, has plum- have been waiting for. Queensland market depressed, but prices are meted following the embargo on is seeing the impact of further ultimately a function of the supply/ major (western) exporters, now industry exits, and Western Austrademand balance, and dairy demand considered likely to persist as late lia continues to grow, albeit more hasn’t kept pace. as 2018. slowly, as a result of the high prices

JOHN DROPPERT

on offer to many farmers.

Elevated prices for grain and hay, combined with lower milk prices, have reduced the scope and incentive for farmers to draw on alternative feed sources to maintain or grow production.

At the same time, high beef prices have encouraged many to cull underperforming cows. Early action by many brought forward the volume impact.

An average autumn could see volumes prove more resilient later in the season, but even a recovery through this period would be too late to offset volumes lost to a slow spring and summer.

Dairy Australia’s expectation for 2015-16 is an overall decrease in milk production for the season to June.

Lower milk flows have given Australian processors room to move in adjusting their product mix to optimise returns in response to lower commodity prices, avoiding the ‘step down’ many feared earlier in the season.

However, the tectonic pressures of European expansion and sluggish demand from key markets look set to keep any recovery in international markets at bay for some time.

The stability of the domestic market, the trend towards value adding for export and – with more rain – some input cost relief will all prove valuable as the Australian industry ‘plays the long game’ in the months ahead.

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DAIRY NEWS FEBRUARY 9, 2016

18 // WORLD

Sensor has pasture watering itself RESEARCHERS AT

the Tasmanian Institute of Agriculture (TIA) are using sensors and autonomous technology to develop a system that tells you when to irrigate your pasture, then goes ahead

Research and development team leader at the TIA Dairy Centre Dr James Hills with project officer David McLaren.

and does it for you.

The system automatically irrigates pasture and it will apply varying volumes of water to the same paddock, which could save farmers time, water and money.

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The R&D team leader at the TIA Dairy Centre, Dr James Hills, says the aim is an autonomous machine interface that collects information about the pasture, water use, soil and climate then uses crop modelling processes to decide when and where to apply water.

This is all part of a bigger three year project looking at the use of irrigation water in pastures by collecting data on water use, energy use and pasture production from five sites in Tasmania.

The project gets funding from the federal Department of Agriculture and Water Resources as part of its Rural Research and Development for Profit programme, and from Dairy Australia and TIA. From the data collected at the five sites the team will work with farmers to make changes to improve water use efficiency and will continue monitoring the sites to measure the success of these changes.

different topography and soils that are likely to be irrigated.

David McLaren, project officer at the TIA Dairy Centre, is on the ground installing the sensors and data logging equipment at the sites and will oversee the data collected in the field.

“A big part of the project will be to visualise that data, so that when it comes to making management decisions we can quickly know what to do through a visual display of data, and not have to interpret numbers,” McLaren says.

“The devices on site will have an interface that you can connect to from your smartphone or tablet so you can start to look at real-time values of pressure, temperature and energy without being physically on site, which is a real advantage.”

In its third year the project will trial an automation system at one of the sites to see how this type of system could be used to save farmers time

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“To introduce management strategies that increase efficiency we need that baseline data. We need to know the facts and figures for water use to know how to improve on that use.”

Hills says gathering this data is essential to getting the most out of the new irrigation schemes.

“Significant investment in irrigation infrastructure in Tasmania from the federal and state governments provides the opportunity to increase our agricultural productivity, but we need to make sure we are doing it properly and in a way that is going to be sustainable,” Hills says.

“To introduce management strategies that increase efficiency we need that baseline data.

We need to know the facts and figures for water use to know how to improve on that use.”

The five trial sites have been selected to give enough variability across

and effort.

“We are interested in how far we can go using a system with a machine interface as opposed to a human interface,” Hills says.

To do this, the team has linked with the National Centre for Engineering in Agriculture at the University of Southern Queensland, which has developed a control platform called VARIWise.

The VARIWise system has been developed and tested in cotton, but this is the first time it will be applied to a pasture based system.

Installation of the sensor and logging equipment on the five sites was completed in October.

DAIRY NEWS FEBRUARY 9, 2016

WORLD // 19

Price slump not unique to dairy STEVE SPENCER

THE WORLD economy

has veered into difficult and dangerous waters, suggesting 2016 will be a long hard year of slow recovery in prices in global food commodity markets, including dairy.

The perfect storm has struck. Major food and oilseed commodity prices are at low points in the cycle and inventories are high. It’s not just food, of course; oil and other major metal commodities are at prices not seen for a decade.

On the demand side, China, the largest growth economy in the world, has the brakes on.

This year started with little change in OPEC’s production stance, and little hope for collaboration given new tensions between Saudi Arabia and Iran.

The outlook suggests a sustained petroleum glut, unless there is a strong surge in demand, which I’ll come back to later.

This is playing out like a ‘game theory’ case study.

The OPEC cartel started a price war to dominate the global energy market in the third quarter of 2014, signalling their intention to increase production and drive out competing alternative low-cost technologies (such as shale oil) and renewable production using corn and soybeans.

So much for the planet!

This short-term painful price competition was intended to knock out rivals and ensure that a

finite energy resource remains the dominant choice for industry and consumers.

Prices have been driven down to levels not seen since 2004, well below the supposed break-even costs of production of crude oil

of a couple of big buyers from the global market.

Grains and oilseeds markets are well-supplied due to good weather in most major regions – our enemy El Nino tends to be kind to many northern hemisphere producers.

more cash for dining out.

We’ve already seen US food service grow strongly in 2015, soaking up more cheese and milk. The question is whether it can keep that growth rate surging in 2016.

Lower fuel costs can

Falling oil prices ensure low prices for palm oil, used widely as a substitute for dairy ingredients.

for most major exporters.

Historically, there has long been a close correlation between crude oil prices and the prices for major food commodities, including dairy ingredients and feed grains.

On the demand side it makes sense – weak economic activity reduces demand for fuel and can weaken some food markets.

While the trends lines move uncannily together, it doesn’t mean oil is behind the changes in dairy and grain prices.

Dairy prices have slumped low due to excessive supply from abundant grass growth, low feed grain prices and the loss

Low oil prices can be a friend to dairy producers.

Cheap fuel can lower the costs of milk production, reducing equipment and energy costs as well as the cost of fertiliser.

Low crude oil prices also make biofuel production less attractive, potentially ensuring more feed supplies which helps support margins even when dairy prices fall. This has certainly been the case for northern hemisphere suppliers.

However, low oil prices have mixed effects on dairy markets.

In the developed EU and US economies, cheap fuel improves household budgets, freeing up a bit

improve economic prospects for countries dependent on fuel imports, lowering overall costs of manufacturing and transport including shipping, and improving the affordability of dairy imports.

On the other hand, there are risks for dairy demand, as low oil prices can harm the economies in some major oil-producing regions which are also large dairy importers, such as those in the Middle East, North Africa (together known as MENA), Russia and Venezuela.

Low oil prices have combined with sanctions to weaken the Russian economy, and have made a

bad financial situation far worse in Venezuela.

The effect in these dairy markets will be uneven and hard to predict, as the dependence on oil, production costs, government food buying activities and the financial states of oil economies vary significantly.

But the developing world including MENA has a number of large dairy buyers that are also oil importers whose economies should benefit from lower fuel and energy costs.

Weak oil prices meanwhile also ensure low prices for palm oil, used widely as a competitor and substitute for dairy ingredients.

So on balance – what does the future hold for oil prices and the global economy?

One important but odd indicator of economic conditions is the Baltic Dry Index of shipping costs. The index has long been a forward indicator of the fortunes of the world economy, and is now the lowest since its inception in 1985.

This largely reflects the slowing of trade in and out of China as it transitions to a consumer-led economy from a trade-driven one. It also reflects the build-up of capacity with the promise that China (and its hunger for twoway trade) would just keep growing.

The index suggests the demand side of the oil market will be sluggish for some time.

So dairy commodities

are not alone as bottomdwellers; most hard and soft commodity prices are at historic lows, for many reasons, including some that are interrelated. The unwinding of this situation is the same for them as it is for dairy.

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DAIRY NEWS FEBRUARY 9, 2016

20 // OPINION RUMINATING

EDITORIAL

Dare we think afresh?

MILKING IT...

Working, not bleating

Better deal for cows

Get that cow off the road!

Milk theft a puzzle

LAST WEEK’S high profile signing of the Trans Pacific Partnership (TPP) agreement sadly showed an ugly side of Auckland.

Protesters blocked streets, delaying commuters and students from reaching work and classes.

Adding to the woes was a strike by bus drivers, the timing raising a few eyebrows.

The TPP has been signed; let’s give it time to prove itself. New Zealand farmers didn’t get everything they wanted but they haven’t stopped work.

UK SUPERMARKET giant Waitrose is banning milk from factory farmed cows as it targets animal welfare.

Waitrose cows must be guaranteed at least 100 days per year outside grazing year for the farmer to qualify as a supplier.

The move arises from a controversial ‘zero grazing’ policy of mega dairies; animal welfare groups claim cows in these milk factories spend all their productive lives inside, often being milked by machine.

INDIA’S PUNJAB state is dealing with a unique problem: stray cows – 160,000 of them.

State authorities are promising relief from stray cows; no stray cows will be roaming Punjab roads after July.

Cow ranches were being built to ensure proper upkeep and assistance to these cows; the Government admits stray cows have been implicated in 242 human road deaths in the past two years. $1.5 million dollars is being spent on the new ranches.

FARMGATE MILK is not fetching big returns so farmers at Mangatainoka in Tararua district are mystified by the recent theft of 1000L of milk.

A farmer appealed for information on a Wairarapa Facebook page for buying and selling. She says the milk was stolen from a vat at the farm where she lives.

Two air compressors were also stolen from sheds nearby and a chainsaw from the garage at to the house. No one was home at the time.

There was no sign anyone had tried to break into the house and a quad with the key in it was not taken.

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ANALYSTS ARE now picking a dairy price recovery by the end of the year. Haven’t they said that for the last three years?

Even their usual cautious optimism is being tempered by words like “fragile” international dairy markets, worries over how bad the situation is in China and the outlook for the global economy.

Even the most optimistic forecasters have a payout with a ‘4’ in front of it for this season in review and are anxiously watching for the next season.

The year will be a tough one and there are no quick-fix solutions.

The usual messages – tough it out, watch costs, make sensible decisions and talk to you banks – still can’t be ignored. But even those only go so far. There’s a point at which you have to ask, is this working and if not where to now?

Individuals will be asking themselves those questions right now. Some will be making tough decisions this year, particularly those who are highly leveraged. Dairy farms are starting to hit the market in some vulnerable areas; lots of farmers and other New Zealanders will be hoping to see those stay in onshore ownership.

The long-term outlook for dairy still remains optimistic but how long the recovery will take is becoming anybody’s guess. And just who will be the winners in that recovery?

Is the dairy sector in New Zealand actually facing a new era?

Will it have to reinvent itself as many industries have had to do over years in the face of increasing globalisation, new products and new technologies?

The US car industry was on its knees and almost facing obliteration after the Global Financial Crisis; last year a resurgent US auto industry was leading that country’s economic recovery.

What are the answers for the New Zealand dairy industry? Hold tight, hold your nerve, wait for recovery? Or is there more to it than that? New systems, new technology, new business models, new strategies, new products?

Has Fonterra taken the right course in its global expansion and promotion of milk pools overseas, or contributed to the current pain of its own shareholders, the New Zealand farmer. Or are these wily strategic moves in this new global game, which we must play or slip into economic oblivion?

Fonterra has kicked off the debate with its “Let’s have the Conversation” on governance and representation. But that conversation needs to go wider, broader and braver.

Do we dare to have it?

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DAIRY NEWS FEBRUARY 9, 2016

OPINION // 21

Sit up, your dinner’s printed ANDREW HOGGARD

ANOTHER FORTNIGHT passes

and we have another lacklustre Global Dairy Trade (GDT) result and Fonterra confirming it has revised its milk price for the current season (201516).

Amidst all the doom and gloom from that, I had an email from a colleague who obviously had plenty time over the summer break to do some serious thinking.

All the so-called experts constantly put the boot into the New Zealand dairy industry because we are supposedly producing only commodity products, and not produce enough of the high end consumer branded products.

The question was posed to me, are these branded consumer products the way of the future or are they going to be a thing of the past? Because not only are 3D printers becoming readily available, but 3D food printers are also arriving on the scene.

Now these 3D food printers aren’t quite yet doing the job of the food replicators in Star Trek; at the moment they just seem to do cake decorations, lollies and a few other things, but one can assume they will develop.

The question is, will they be a short-lived trendy fad or are they here to stay? If they are here to stay what does that mean? From what I can see on YouTube, with a conventional printer you insert cartridges into them.

But instead of ink they contain the ingredients needed; then much like your standard printer you load your document, in this case a recipe in a 3D format, and hit print.

Imagine if this technology was to take off and become a part of every kitchen. How would that change things for food producers?

The consumer would

020-021.indd 21

no longer be going to the supermarket looking for finished manufactured foodstuffs, they would be looking for ingredients and making food items in their kitchen.

When you think about all the various food products containing milk

everything – from animal welfare to sustainability – would get higher.

Of course, we have no way of knowing whether this is going to be a fad or not. I hope they are considering buying one of these printers to put in the staff kitchen at the

Fonterra Research Centre.

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A 3D pizza printer.

Andrew Hoggard

or components of milk, it’s quite a few. So it’s likely that a good number of the recipes for these 3D food printers would require various dairy ingredients.

So should the likes of Fonterra be worried about moving products from its ingredients business into consumer branded products, or instead should they be looking at repackaging those ingredients from half ton bags, or whatever they ship in, into smaller readyto-use packaging for home manufacturing?

If this is the future then, strangely, by not being as fast enough we would be well positioned to take advantage of it.

Another positive is that, because we would be selling a non-traditional product, I dare say there would be big loopholes in the trade protection rules in markets taking up this technology first in Europe and the US. A likely trade-off from all this would be that the customer who could afford a 3D food printer would likely be discerning, so would pay close attention to the history of the ingredients going into their printer. Which means standards for

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DAIRY NEWS FEBRUARY 9, 2016

22 // AGRIBUSINESS

Fert price cuts means more cash in hand sooner GLOBAL FERTILISER

prices are slumping – good news for cash-strapped farmers.

Both the big fertiliser co-ops have cut prices of key fertiliser inputs from January 31.

Ballance and Ravensdown have cut urea prices by $50 to $525/tonne, DAP down $25 per tonne, sulphate of ammonia by $15 and potash by $10; the changes will flow through to

product blends.

Ballance chief executive Mark Wynne says the move follows a global slump in fertiliser prices, driven by strong supply and soft demand.

“There’s plenty of supply in the market at present, with extra production coming on stream and China switching from being an internal consumer of nutrients to an exporter.

On the demand side,

PRICE IS RIGHT Urea price down $50 to $525/tonne DAP down $25/t Ammonium sulphate down $15/t Potash down $10/t.

Brazil and India are both suffering from weakening currencies therefore lowering their fertiliser requirements.”

The co-op has been supporting farmers with cash when it counts throughout the year – paying out rebates early, holding urea prices through spring and cutting prices in December.

“Our foreign exchange approach has helped us to offset the weaker New Zealand dollar. In a tough year like this, these price reductions will be good news for farmers and growers.”

With recent rains in many regions there is a good opportunity for farmers to take advantage of the reduced prices and apply fertiliser now for feed production ahead of

autumn.

Wynne says the price moves will likely flow through to a lower rebate payment than in recent years. “But we’re confident we’ve done the right thing. Our aim is to consistently deliver our farmers and growers a strong return on their investment in our co-operative.”

Ravensdown chief executive Greg Campbell says the price drops will be welcome news for customers.

“For a large dairy farmer in the grip of a payout downturn or a sheep and beef farmer dealing with drought or weaker returns, these price differences could mean thousands of dollars staying in their bank account. This is far more

Fertiliser prices are tumbling due to weak demand and over supply.

useful to our shareholders at this time than a large rebate cheque later in the year.

“We’ve been told consistently by our customers that they would

prefer competitive pricing, money in their pocket, allyear value and a sensible annual rebate.

“Farmers are resilient and adaptable people, but it’s not just up to them to

manage their way through these tough times. We all play our part in the rural sector, challenging the status quo and asking how things can be done better,” says Campbell.

DAIRY NEWS FEBRUARY 9, 2016

AGRIBUSINESS // 23

Farmers shrugging off tree planting THE COST and bene-

fits of planting trees to help mitigate environmental effects of dairy farming need to be shared by us all for such work to succeed, a new study says.

The study, ‘Evaluation of an agri-environmental program for developing woody green infrastructure within pastoral dairy landscapes: a New Zealand case study,’ says Government incentive schemes are ineffective in overcoming barriers to planting such as the higher cost and slow growth of native plants, and the perception of planting being of little direct benefit to farmers’ operations.

The lead author, Lincoln University landscape ecology senior lecturer Dr Wendy McWilliam, says the Government and the dairy industry need to work together to develop and maintain a landscapescaled woody vegetation network on private and public land.

Such networks would build sustainability and resilience into New Zealand dairy farming and lead to a more equitable sharing of the benefits and costs of their primarily public ecosystem services.

The study’s results show few farmers take advantage of Government incentives, largely because they don’t cover enough of the costs.

Many farmers are increasing woody vegeta-

tion, particularly around waterways and wetlands, to provide public ecosystem services, such as water cleansing and nature conservation. However, many are also removing or replanting their shelterbelts and hedges.

In addition, many farmers are not planting due to their perceived lack of sufficient ‘private ecosystem services’ — the benefits the woody vegetation provides to farmers and their farm operations.

The study says a targeted environmental stewardship scheme, including more Government funding, is required to overcome the “considerable barriers to the voluntary retention and restoration of woody vegetation”.

The study found plantings are small, limited to unproductive areas, and many continue to be dominated by exotics and monocultures, even though natives, broadleaf and mixed species plantings are preferred.

Aesthetic services (enhancing the look of the farm), and speed and ease of growth, maintenance and low costs are significant factors in plant selection.

Key barriers include insufficient private ecosystem services of woody vegetation, particularly those related to dairy production, relative to other land uses; poor aesthetic

Milk NZ appointment SHANGHAI PENGXIN

has named Tony Nie as the new chief executive of its subsidiary Milk New Zealand Ltd, replacing Gary Romano, who stepped down recently.

Nie joined Milk New Zealand on January 1 2016. Prior to that he was an executive of COSCO (New Zealand) Tony Nie Ltd. He was also a director of United Containers Ltd in New Zealand, and Suva Container Park and United Containers Fiji Ltd in Fiji.

Nie holds a bachelor of economics and an MBA. He is a chartered accountant of ANZICA.

services of some plantings; and low rates of growth and higher maintenance and purchasing costs of native plants.

McWilliam says farmers may also be motivated by stronger evidence in

support of valued ecosystem services, their benefits and drawbacks, and information on how to support ecosystem services through planting design and management through time.

A Lincoln University study says not enough new trees are being planted on farms.

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DAIRY NEWS FEBRUARY 9, 2016

24 // MANAGEMENT

The flying Milnes thrive on the W Living on the isolated West Coast of the South Island has not hindered Federated Farmers national board member Katie Milne from being close to the political action in Wellington. Peter Burke went to her farm to find out why.

KATIE MILNE and her

partner Ian Whitmore run a dairy farm at Rotomanu between Hokitika and Greymouth and have managed to greatly improve their farm and do some fun things as well as allowing Katie to play a role in farmer politics.

Katie and Ian are typical born and bred Coasters who don’t hesitate to tell things as they are.

Milne refers to her ‘righteous anger’ and frustration at people knowing little about farming but telling farmers what to do.

She says many such people don’t know what consequences some of their ideas would have at a practical onfarm level; their ideas won’t solve problems.

“I got involved in the federation, initially in the dairy section, to basically help others understand why farmers do what they do…. These people often thought it was all about

the money and greed and that frustrated me because that was not what it’s all about. Farming is a business and you do your best to make money, but in most cases you also do it because you like the land and animals and like working outdoors. The last thing farmers want to do is to destroy the things they love,” she says.

She has a big commitment with Federated Farmers, and she’s involved in the National Animal Welfare Advisory Committee, is on the council of OSPRI, has a role in Worksafe as part of her Feds role and is involved in TB Free. But she and Whitmore employ a herd manager and her partner works around her days away – sometimes two weeks in Wellington.

“I have been banned from going to Wellington for the first six weeks of calving, although after a month I slip up there a

Katie Milne tending to calves on her West Coast farm.

couple of times,” she says.

They milk 200 high BW Jersey cows on their 100ha effective farm; and they lease a further 60ha where they run up to 80 high BW heifers, some of which they sell. Milk produc-

tion is about 85,000kgMS. Whitmore’s grandfather got the farm in a ballot for WWI servicemen but he died young and his grandmother, helped by his father and uncle, helped run the property.

In 1992, Milne and Whitmore bought the property and set out to improve it. She had a sheep and beef farm background with south Westland roots and admits it was a steep learning curve

to understand the ins and outs of dairying.

“I knew nothing about dairy cows apart from the couple that I’d had to hand milk in school holidays – grumpy old bags that had to be leg-roped – so I had to learn everything. Ian taught me a fair bit but I also learned from farming magazines and dairy board discussion groups,” she says.

A focus for Katie was the cows and she invested a lot of time and effort in seeing whether the Jerseys on the farm were the best and what the alternatives might be. She was interested in the idea of Kiwi cross, but in the end

Katie Milne is a wizard with traditional West Coast food – whitebait.

decided the Jersey was by far the best cow for their farm, not only in terms of production but because its size caused less pugging damage to the pastures with light soils. And the Jerseys have fewer foot problems and suit the farm’s mainly grass based system.

When they took over the farm it was running 145 cows; now it has

DAIRY NEWS FEBRUARY 9, 2016

MANAGEMENT // 25

e West Coast ing. At first he did a few favours for neighbours and the business quickly built up.

“I like good gear, but for a 100ha farm I am over committed,” he says.

Milne jokes, “If he wasn’t into gear we could have had three farms if we’d wanted.”

And there’s more: from the house you can see a large shed with a strangely straight gravel road leading from it. The shed houses an aeroplane and a helicopter which Whitmore flies. This was all part of a plan by the pair to have some off-farm activities to get them away from the milking shed. Diving and skiing have been done and now it’s flying.

His father had flown in the past and at age 45 Whitmore decided to challenge himself and learn to fly.

“I had never sat an exam in my life; I had to sit six exams for the aeroplane. I didn’t know how to study or sit an exam and I didn’t know what an exam paper looked like, but it’s amazing what you can do when you put your mind to it,” he says.

He has flown the fourseat Cessna 177 up to National Fieldays, landed on the snow at Wanaka and been to many other regions. On occasions he has taken Milne to Christchurch to catch a plane

to Wellington. He’s also flown to Christchurch to collect parts for his machines and for a neighbour’s dairy shed.

Recently he learned to fly a helicopter and bought his own machine – a Robinson R 22. He flies about 100 hours a year in the aeroplane, purely for pleasure.

Katie Milne and her partner Ian Whitmore.

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For ten years she has led projects by local farmers to improve the quality of water in nearby beautiful Lake Brunner. One was producing farm plans and identifying hotspots that might be the cause of environmental damage. It was voluntary, each farmer committing to what they would do.

“It was fencing off waterways, putting in culverts and bridges and some quite expensive infrastructure. It involved upgrading some farm effluent, some of it not flash. It was all voluntary. When they reviewed it two years after the end of the project they found that people had done a lot more than they had committed to because they knew what the issues were and what they might be [in future],” she says.

Milne says Fish and Game, the Ministry for the Environment and the farmers themselves were impressed by what they found at the outset. Many native fish species were found in the drains and streams on the farms, surprising many people.

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200-220 and Milne and Whitmore have worked hard to improve the fertility and composition of the soil. A major task was to spread lime to unlock the P in the soil, getting the farm in balance and growing more grass and cow numbers. They used a little PKE for the first time this season but only as a supplement to maintain cow condition.

The soil on the farm is alluvial river silt and very good quality. It is deep and in summer the pasture seldom dries out, but in winter it is prone to pugging, says Whitmore.

“The cows may spend two-three hours on the paddock then they will go to a standoff pad and on an ugly day they will get some supplement which is usually grass silage. This means we look after paddocks so that we can come back in 18-21 days and graze that paddock and it will still have enough grass on it. Soil preservation is the key.”

They aerate the soil using a machine that cuts deep, effectively loosening it up and repairing any damage caused by pugging. They have always done this and are now onto their third machine.

Whitmore loves machines; he runs a contracting business doing silage, baleage, and effluent and fertiliser spread-

1/12/16 10:03 AM

DAIRY NEWS FEBRUARY 9, 2016

26 // MANAGEMENT

Plantain in cow’s diet mitigates environmental impact JANETTE BUSCH

FARMERS RAISING

livestock in New Zealand have traditionally used pastures containing a mixture of perennial ryegrass and white clover. This has served them well over the years but with the more intensive farming practices used currently there is a need to ensure optimum animal health and pasture health for longterm environmental sustainability.

Research by livestock production scientists from the faculty of agriculture and life sciences at Lincoln University was undertaken to investigate whether incorporating deep-rooted forage herbs such as plantain or chicory into the pasture mix would help animal production and sustainability on farms.

“For dairy farmers,

Paul Cheng, Lincoln University.

in particular, it is very important that their heifers, which will be the next year’s milking animals, are in the best physical condition as possible at mating and calving,” said Dr Paul Cheng, the principal investigator.

“New Zealand farmers are aware of the need to reduce any negative environmental impact from livestock farming to as low as possible so we included in the trial an investigation into whether a change in diet would reduce the

excretion of urinary nitrogen, a major contributor to greenhouse gas emissions and nitrate leaching on farms.

“We were delighted to find that the herbage mixtures reduced urinary nitrogen extraction compared with the traditional pasture. This showed the potential for such herbs to mitigate the environmental impact of livestock farming,” said Cheng.

“However, while plantain mixtures supported similar liveweight gains of the heifers compared with traditional pasture, chicory-fed heifers had limited liveweight gains.”

This trial at Lincoln University’s Ashley Dene research farm involved short-term autumn and spring trials using 56 Friesian x Jersey heifers in 2014. The heifers were divided into five dietary treatment groups grazing individual swards:

Feeding cows deep-rooted forage herbs with grass helps the environment, says a Lincoln University study.

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pasture, 50:50 pasture – chicory, and 50:50 pasture – plantain.

Measurements were taken of the forage and animals before and after grazing to record the responses to each of the diets.

A second trial, in 2015, using the same herbs showed that using chicory and plantain in a mixture with perennial ryegrasswhite clover at proportions of 25% and 50% in the diet had the potential for use as a mitigation tool to reduce the environmental impact from dairy heifer-rearing systems in

autumn and spring. Similar to the 2014 trial, liveweight gains of the heifers grazing chicory mixtures were low relative to the other groups.

“While we were pleased with these results we still don’t know what the mechanisms are that determine the lower urinary nitrogen concentration and nitrogen excretion that we observed from dairy heifers grazing pasture containing plantain compared with those grazing perennial ryegrass-white clover pasture,” said Dr Grant Edwards, professor of

dairy production at the university and team leader for this project.

“Further studies are needed where dietary intake can be controlled more accurately to determine the mechanisms leading to the differences in urinary nitrogen excretion,” he said.

Designing and running the trials were Paul (Long) Cheng, Jeffrey McCormick, Grant Edwards, Aimi Hussein, Chris Logan, Omar AlMarashdeh, Miriam Hodge and Hazel Carr from Lincoln University and David Pacheco (AgResearch).

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DAIRY NEWS FEBRUARY 9, 2016

28 // ANIMAL HEALTH

Calf drinking CMR.

Fortified milk lifts calf growth rates in Oz – study One brand can rarely be substituted for another and one brand should be used consistently to avoid IN RECENT times there has been complications due to changes to a difmuch discussion relating to enhanced ferent replacer. nutrition (or accelerated growth proThe protein and fat concentration grammes) in milk-fed calves. One way of the milk replacer contribute to the to achieve this is by feeding fortified overall total solids concentration of milk. This article gives an overview of the fortified milk feed and differences fortified milk feeding and the things in these will result in a difference in to consider before starting. overall total solids for the same mix What is ‘enhanced nutrition’? rate.

Enhanced nutrition systems aim For example, 75g of a 20:20 (20% to increase calf drymatter intake protein, 20% fat) milk replacer added from milk or milk replacer by providto 1L of whole milk (estimated total ing a higher daily volume solids of 12.7%) will result split over more feeds or by in overall total solids of feeding a milk feed that has “High protein and energy allows 18.8%. a higher overall total solids optimal growth rates to be However, if the same component. mix rate is used with a 28:22 achieved without the need to What are the potential (28% protein, 22% fat) milk benefits of pre-weaning feed high volumes of milk.� replacer, the overall total enhanced nutrition? solids will be 19.6%.

Pre-weaning nutrition Additives to milk and thus pre-weaning average daily replacer is added. replacer such as pre-biotics, pro-biotgain (ADG) has lasting effects on Farms with individual feeding sys- ics and coccidiostats can also increase subsequent lactation and reproduc- tems, such as individual pens, locking the overall total solids but their tive performance. head bails or stalls, have an advantage volume of contribution is unknown.

Many studies have investigated the over group feeding systems in that an The overall estimation of total solids positive effect of increased energy and exact known volume of milk can be concentration is just that – estimaprotein intake during the pre-wean- fed to each calf every day. tion. It is based on the total solids of ing period on days to puberty, days to This is especially important in for- whole milk being 12.7%. conception, calving live weight and tified milk feeding programmes as However, if milk from the first lactation milk production. consumption of large volumes of for- second to eighth milking after calvIt is estimated that for every addi- tified milk in a single feed can result ing are used (transition milk), total tional 0.1kg/day of pre-weaning ADG in diarrhoea and/or abomasal bloat. solids concentration may be higher there is an increase in first lactation If only group feeding is available, (~19%). milk yield of 155kg. there must be careful consideration This will increase the overall total Calves fed on a higher plane of of the frequency of feeding, the calf solids of fortified milk even further. nutrition during this period are able milk replacer used and the mix rate Whole milk from Jersey cows tends to to combat disease challenges better at which it is added to whole milk. be higher in total solids and this needs than calves fed on a lower plane of Regardless of the feeding system, to also be considered before starting a nutrition. ad lib fresh water must be available to fortified milk feed programme.

What is fortified milk? all calves from birth.

Fortified milk has been used Fortified milk is the addition of Feeding of fortified milk to groups successfully in many dairy herds. calf milk replacer to whole milk. of more than 10 calves is strongly dis- The latest research in Australia demThis provides a high energy, high couraged as there will be minimal onstrates important increases in protein feed in a smaller volume control over the volumes consumed growth rates during the pre-weaning than would otherwise be required to by each calf. period compared to calves fed on conachieve a similar nutritional content if Frequency of feeding will also dic- ventional diets. using whole milk or calf milk replacer tate the eventual mix rate of the forThe potential benefits in our Ausalone. tified milk. tralian pasture-based system are High protein and energy allows High volumes of a high total solids also yet to be determined and furoptimal growth rates to be achieved milk feed can increase the risk of ther research is required to assess without the need to feed high volumes abomasal bloat, bacterial overgrowth whether fortified milk feeding proof milk. and diarrhoea. grammes are cost-effective when all Feeding fortified milk can help The volume threshold will depend benefits and costs are considered. overcome the challenges associated on the overall total solids of the forti- It is recommended to discuss fortified with high volume feeding programs fied milk being fed, which will depend milk feeding options with your health which rely on feeding 20-25% body on the above criteria. advisor before starting on a tailored weight in milk volume daily.

Many brands of milk replacer program.

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be fed at 14-19% dry matter, containing more energy and protein than an equivalent volume of whole milk alone.

Considerations before feeding fortified milk Unfortunately there is no ‘one size fits all’ protocol for feeding fortified milk to dairy calves.

Every farm is different and the optimal programme will depend on the farm’s current feeding system, frequency of feeding, protein:fat ratio of the milk replacer utilised, and the nature of the milk to which the milk

DAIRY NEWS FEBRUARY 9, 2016

ANIMAL HEALTH // 29 Balanced trace element formulation

SEAWEED CONCENTRATE ENRICHED

Dairy Australia is urging farmers to spend more money and time in AI and genetics.

Dollar, time in AI will bring better returns replacements sired by AI bulls from the Good Bulls Guide. “Having the right genetics makes all the difference not only in terms of your cow’s health, temperament and milk production outcomes but also the bottom-line profit you can make in your farm business,� says Shaffer. “Don’t fall short with your AI program and give it that extra bit of time as the upfront costs will pay dividends for over the lifetime of the cow.�

Axford says in 2015, for example, AI bred Australian Holsteins produced 25kg of more fat and 23kg more protein than those naturally bred, creating an additional annual production value of about $288 per cow. “The figures are a little lower for AI bred Jerseys, but no less impressive and that means if you have 100 more AI bred Holstein or Jersey cows in your herd, you can expect between $23,400 and $28,800 of extra production value every year,â€? she says. Ă€ 4PVSDF %BJSZ "VTUSBMJB

OSPRI warning for dog owners A RECENT dog poisoning following

an aerial pest control operation in the Taupo region highlights the importance of complying with warning signs and taking steps to protect pets, says OSPRI. OSPRI North Island programme manager Alan Innes says, unfortunately dogs are extremely susceptible to 1080 poisoning from eating baits or scavenging poisoned possums. “However, dog owners have an obligation to follow warning signs and keep their animals safe and under control at all times,� he says.

OSPRI’s TBfree programme aims to eradicate bovine TB. Possums are the main carrier of bovine TB and may spread the disease to livestock in surrounding farmland if they are not effectively controlled.

028-029.indd 29

Strict health and safety guidelines are followed for all pest control operations along with meeting extensive public consultation and notification processes.

These include letters to residents in the operational area, newspaper notifications and warning signs.

Innes says for the operation in question, residents on the boundaries of the area were sent a letter about the operation in October/November last year. “Signs were then put up by the pest control contractor before the operation began on 13/1/2016. It is important that the public adhere to the instructions on these warning signs which will remain in place until carcass monitoring shows that bait and carcass breakdown has been achieved which may take up to six months.’

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time in AI and genetics you will make more money, it is that simple,� says Dairy Australia program manager for genetics and data management Matthew Shaffer.

The statistic was revealed in the Australian Dairy Herd Improvement Report 2015 which analysed the productivity of AI bred Holstein and Jersey cows in the national herd of herd recorded cows.

The total number of Jersey cows in this analysis was 55,633 (35,199 AI bred, 20,434 naturally bred) and the number of Holstein cows was 315,574 (219,303 AI bred and 96,271 naturally bred). The average value of the extra annual production for each AI bred Jersey and Holstein cow was $234 and $288 respectively, making a grand total of over $30 million ($5 million for Jerseys, $28 million for Holsteins) of lost production every year for the naturally bred herd recorded cows.

Dairy Australia’s Matthew Shaffer and Michelle Axford of the Australian Dairy Herd Improvement Scheme (ADHIS) recommend farmers ensure they have enough

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30 // ANIMAL HEALTH

Think ahead in dealing with cow’s heat stress PAM TIPA pamelat@ruralnews.co.nz

HEAT STRESSED cows

eat less with a consequent drop in milk production, says Jenny Weston, president of the dairy cattle branch of the New Zealand Veterinary Association.

When cattle start to become affected by heat stress their heart rate, breathing and body temperature can go up, Weston told Dairy News.

Cattle can acclima-

tise to some extent to increased temperatures but it can take two to seven weeks. But the NZ climate may not be hot enough for long enough to give them the time to acclimatise and they will be struggling during any acclimatisation period.

Weston recommends cooling cows using sprinklers when they are in the collecting yard and fans in the shed if possible.

“Anything like that to help cool them down is recommended,” says

Weston. “Particularly when you bring them together and they are standing close to other cows there is a lot of generated body heat which makes it harder for them to keep cool.

“Obviously shade is a good thing to provide.

Possibly also think about the type of feed the cattle are on.

“A high fibre diet generates a lot more heat through digestion.”

But she says the opportunities to change that

Shade is a good thing to provide cows.

may be limited.

“Think about the timing of milking such as putting cows on once-aday so you are not milking them in the afternoon when it is possibly at its hottest. If you are milking OAD still do it reasonably early in the morning in the cool.”

Heat stress comes down to a mixture of temperature, humidity and the level of solar radiation.

Recent weather has been a problem on all of these accounts, she says.

“All those things are factored in. If there is a breeze it helps. Cows normally lose heat through non-evaporative methods, so the heat just generates off them, but when you’ve got high humidity and high wind that doesn’t work.

They move to sweating and panting to lose heat which means they also lose moisture and need to drink a lot more to stay hydrated.”

So the main responses useful in the NZ environment are the timing of

milking, providing them with sprinklers in the yard and thinking about what type of feed they are getting.

If a cow is definitely heat stressed, wet it down to help it lose heat and provide it with shade if possible, she says.

If a farm does not have shade, obviously that can’t be grown overnight.

“But given the predictions for more abrupt climate change and more extremes farmers should be starting to think about putting in

shade if they don’t have it – planting it now so it will be there in 12-15 years.”

In the long run there may also be the ability to genetically select for cows better able to tolerate heat.

“The Bos indicus types of cattle in South East Asia and to some extent Queensland are better able to tolerate heat but are not strong dairy breeds so we are unlikely to be moving to a totally different type of cow,” says Weston.

Cool cows keep milk flowing THE IMPACTS hot weather

can have on milking herds are well-known and dairy farmers in mainland Australia use shade and evaporative cooling, with supporting herd management strategies, to prevent heat stress.

This keeps their milking cows fully productive and comfortable.

The effects of heat stress on dry cows – those in the last two months of pregnancy - have been less well understood, but recent research has brought to light new findings, says Dr Steve Little, capacity+ag consulting, for Dairy Australia.

“The research clearly shows that if cows suffer heat stress through the dry period it affects the development of their udder and placenta and suppresses their immune system,” Little says.

“Heat stress on dry cows has a dramatic effect on the development of mammary tissue in the udder and that leads to decreased milk production in the following lactation.

Researchers have shown that this

decrease can be up to 5L/day for up to 30 weeks.”

In addition to lost production, heat stress on dry cows also affects placental development leading to smaller, lighter calves being born, and a greater risk of health problems at calving such as mastitis and retained membranes.

When a dry cow experiences heat stress, it increases the body temperature of her foetal calf. This alters the calf’s metabolism and gene expression.

These changes are long-lasting, affecting the calf’s health and performance well beyond birth into adulthood. Calves heat stressed in utero are more susceptible to infection pre-weaning, are less fertile as maiden heifers and go on to have decreased milk production in their first lactation.

“The effects of heat-stress on dry cows are serious and there are negative long-term impacts on the overall productivity of the herd and consequently on business profits,”

Little says.

To minimise the threat of heat stress and its effects on dry cows and their unborn calves, he recommends farmers who dry cows off over the hot months of the year ensure their early dry cows and transition cows have access to adequate shade and cool drinking water at all times.

“As per the milking herd, the aim should be to protect dry cows from direct sunlight, particularly during the hottest part of the day. Four square metres of shade per head at midday is recommended.

“If existing natural shade from trees in paddocks used for dry cows is inadequate, then alternative paddocks should be sought. Portable or permanent shade structures are also options. Longer term, the aim should be to establish more tree belts along dry cow paddocks and springer paddocks.”

Further information can be found at www.coolcows.com.au Source: Dairy Australia

DAIRY NEWS FEBRUARY 9, 2016

MACHINERY & PRODUCTS // 31

Fencers straining to excel at field days THIS WEEK’S South

Island doubles fencing competition at the Southern Field Days will be a two man team event.

New competitors are lining up at the field days as first time entrants for the Friday contest. They include Chris Anderson (36), a farmer/fencer from Wrights Bush, Southland, who runs Anderson Fencing.

“It is our first competition so it will be very interesting and we’re sure we’ll learn a lot,” says Anderson.

He is competing with his right hand man Shannon McCullloch.

Grant Harris, from West Otago Fencing, Tapanui, has entered a team and hopes his daughter Ashleigh will partner with him. Ashleigh has worked in the family fencing business and is trying to get a day off from her current job in Dunedin.

Troy Love, from Gore, who runs Troy Love Contracting, is a part time fencer who also runs a sheep conveyer business; he is partnering with Nick Stanger, from Stanger Fencing, Oamaru. The two have never met before, but Stanger competed last year and was well set up so

Fencing winners from last year’s fielday at Kirwee.

they will have to work on tactics and who does what in the installation process.

Brian Abercrombie and son Andrew, from Millars Flat, are a father/son team.

Brian runs Abercrombie Fencing Services and Andrew has been working in the business for about a year.

Last year’s competitor Nick Terry and his foreman Chris Scurr, from Custom Fencing, Waikouaiti, near Dunedin, are also confirmed.

Ben Haugh, of Ben Haugh Fencing, Geraldine, has two teams of his employees entered.

Well known announcer Craig Wiggins will do a commentary on the event and competitor’s, and will give information on the materials being used in building the fencelines.

The specifications differ a little from normal competition lines: one

fence will be built of two different sets of materials plus a Strainrite irrigator crossing.

This is the first time in fencing competitions that two fenceline types are being used in the same contest -- showing the sponsors’ willingness to work together to represent the depth of the fencing industry and to reflect the quality of their products.

On one end of the fenceline Goldpine strainers will be used in a box stay assembly, with Superposts as intermediate posts on one half of the line. The strainers will be pre-driven because the ground is old fill and unsuitable for post hole borers.

At last year’s competition at Kirwee the ground was also no good for posthole borers because of rocks. The Goldpine product stood up to a real

pounding with posts/ strainers being driven before the competition.

To reflect the southern high country and coastal environments, Australian Waratah products are being used on the other end of the fence line with Ezi pipe end assemblies.

Wiremark 2.5mm wire is being run for the fivewire electrics on the Goldpine roundwood with Strainrite insulators; and on the Waratah end the competition line will revert to Wartahs joi clips.

Three wires of the fivewire fenceline are electric with Strainrite insulators being used.

Stockade is sponsoring its post and batten guns, being adjacent to the demonstration fence over the three days.

There are 10 lines available and the winner’s first prize is an all-expensespaid trip to compete in the national championships competition at National Fieldays (value $2500.00) or $1000 if the trip prize is not taken up.

For further details and a entry form contact Debbie White 09 292 8064 or email: TDWKKC@xtra. co.nz or look at the New Zealand Fencing Competitions website.

Muck speaders well thought out MARK DANIEL markd@ruralnews.co.nz

FARMGARD HAS recently expanded

its already extensive range with the addition of Rolland muck-spreaders.

Based in northwest France, Rolland operates from a 50,000m2 factory and is celebrating 2016 as its 70th anniversary.

Its first product was a wooden manure spreader.

At the recent Grasslandz demonstration the UK export manager Alex Clothier introduced the Rollforce range.

The Rollforce range of heavy-duty machines is aimed at contractors and large scale farmers. Each is identified by numbers on the side of the body, the first two digits referring to body length and the latter to the capacity in cubic metres.

Attention to detail is notable: the metalwork undergoes a process of shotblasting, followed by phosphating and electroplating, before a high quality two-pack top coat is applied. During the

process the material is oven-baked twice ensuring a long service life.

At the front of the machine a wide, A-framed drawbar layout aids strength and stability when combined with the standard vertical spring, or optional hydraulic damping, said to promote a smoother ride. Oversize wheels and tyres also help with stability and more importantly reduce the rolling resistance, making the spreaders easier to pull off-road.

Also up front, the self-contained hydraulics require only a pto drive and electrical connection to the tractor, preventing cross-contamination of hydraulic fluids, and is further enhanced by the DPA system that automatically adjusts the bed speed irrespective of the tractor’s forward speed, to maintain constant application rates.

The front panel of the spreader body allows the operator a view of the load and its progress, and 16mm marine-grade floor chains work with channel-profiled slats to take the load rearwards. www.farmgard.co.nz

DAIRY NEWS FEBRUARY 9, 2016

32 // MACHINERY & PRODUCTS

Auto-drafter looks the weigh to go MARK DANIEL markd@ruralnews.co.nz

AIMED PRIMARILY at

dairy graziers or beef finishers, the Te Pari Classic DR3, auto cattle drafter takes the task of weighing and sorting stock to a new level.

The self-contained unit can be static or mobile,

the latter using removable wheels and drawbar which allows a stockman to turn up, set up and automatically draft cattle fast and safely.

A key design difference is the incorporation of the unit’s loadcells in the top of the frame, keeping them out of the potentially harsh environment and allowing a low floor

height which encourages the stock to move into the unit. Rubber floor lining helps reduce noise and keeps stock calm.

The side of the unit incorporates the control panel for data input and control of the integrated drafting gates which use compressed air, supplied by a stand-off generator, to send cattle to the desired

holding areas.

Attention to design detail means the drafting gates incorporate industrial grade bearings for smooth operation and a long working life.

The side of the drafter allows access for treatment or sampling, keeping the operator protected at all times.

Te Pari’s auto cattle drafter takes weighing and sorting out cattle to a new level.

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Kubota offers a cut above MARK DANIEL markd@ruralnews.co.nz

SOMETIMES KEEPING on the right

side of your missus can make life easy, and the latest offering from Kubota can get the ‘parks and gardens’ quickly under control, freeing time for a spot of fishing Joining its larger brothers in the Kommander stable, the Z122R zero turn mower is equipped with a 42 inch deck, a proven 21.5hp, 4-cyl Kawasaki FR series engine and a professional grade hydrostatic drive system.

Compact dimensions make the Z122R

highly manoeuvrable in tight situations – it can squeeze through gateways.

Heavy duty frame rails support a deck fabricated from 11 gauge steel, the cutting system is twin blade, and it carries a peace-of-mind four-year 300 hour warranty.

For the safety conscious the machine has an integral ROPS frame, large comfortable seat with seatbelt and ergonomically laid out controls for fatigue-free operation.

Accessories such as grass catchers, mulch kits and lighting choices ensure the machine can be tailored to individual requirements. www.kubota.co.nz

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DAIRY NEWS FEBRUARY 9, 2016

MACHINERY & PRODUCTS // 33

Better to bury stones deep MARK DANIEL markd@ruralnews.co.nz

MACHINERY IMPORTER Agri-

line from Gore in Southland has recently been appointed New Zealand distributor for Kirpy Rock Crushers, manufactured

by Layrac in southwest France.

Aimed at bringing marginal, rock bound ground into production for cropping or grassland operations, the manufacturers claim the process is cheaper than rock picking, a process that usually causes more stones rise to the surface.

Crushing rocks or stones to a depth of 400mm means that rocks

will not resurface for many years, if ever. NZ supplied machines have already seen service crushing schist in Central Otago and notoriously hard river stones in Te Anau.

The BPB and BPS ranges are capable of crushing material from 400mm down to 30mm in the case of the former, and 500mm down to 20mm in the case of the latter, both in a single pass.

Machines are said to be made for the task with robot welded frames using high grade steel and protected by Hardox plating in vulnerable areas.

The full-width rotor has replaceable tungstencarbide hammers that act against a hydraulically adjusted anvil with hydro-

pneumatic overload protection. Other key points include twin belt drives and sealed labyrinth style bearings.

Complementing the crushers is the Kirpy Ripper that uses solid legs

to get to working depths of 500mm to pull rocks to the surface ahead of the crusher – extremely useful for opening up pugged or panned areas in all types of paddock. www.agriline.co.nz

Kirpy rock crushers reduce rocks to rubble.

ONE INSTEAD Effluent in a bag WITH EVER tightening regulations on effluent stor-

age, containment – whether in open ponds or purpose built reservoirs – is capital intensive.

An alternative solution from TechniPharm presents a cheaper option.

The Ecobag system, developed by Dutch specialist Wiefferlink Group, consists of a contained bladder-type structure which requires only minimal earthworks in the shape of a sump or earth banks for support, and is tethered by a system of retaining straps and ground anchors.

The company claims various advantages: preservation of nutrients, because the sealed bladder suffers none of the evaporation that occurs from open pond structures; no odours, useful if residential areas are nearby; and no entry of groundwater or rainwater.

The set-up is also said to prevent crust formation, and mixing is done by a self-contained stirrer.

The flexible film construction is said to have strong mechanical properties, resists chemicals and is backed by a five year warranty.

Installation costs can be as low as $37/m3 as against a more likely cost of around $60/m3 for a traditional open pond system.

Available in sizes from 1000-10,000 cubic metres. www.technipharm.co.nz

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DAIRY NEWS FEBRUARY 9, 2016

34 // MACHINERY & PRODUCTS

Tractor series offer 25hp extra power MARK DANIEL markd@ruralnews.co.nz

Birds may set you ablaze

WITH THE new year comes a new

range from the Massey Ferguson Camp – the 7700 series, which will take the place of the award winning 7600 series.

With nine models (140-255hp) the range should have a broad appeal, particularly in a market segment that amounts to 21% of the total, also because the engine power management system offered on all models gives another 25hp boost which pushes outputs to a range of 165-280hp.

Six-cylinder AGCO Power engines of 6.6 or 7.4L use a third generation Ad-Blue system to meet Tier 4 final emission regulations, doing away with the need for any diesel particulate filters.

A choice of transmissions sees the well sorted Dyna-4, Dyn-6 or Dyna-VT options offering 16F/16R, 24F/24R or continuously variable set-up with a maximum speed of 50km/h.

Upgrades over the outgoing

THE RISK of tractor fires caused by birds is very real

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The new MF 7700 Series is a workhorse.

series sees an increase in permissible gross vehicle weights by around 12%, the largest models capable of operating at 14 tonnes, thereby increasing their load capacity; the rear linkage can now carry up to 9950kg, and prove the boss of any

A new in-house designed front axle suspension system gives a smoother ride.

034-035.indd 34

@dairy_news

and totally preventable, yet it continues to plague farmers and contractors on an annual basis.

As we enter a period of tight finances it will be prudent to ensure that plant and machinery is kept in good order to make sure it doesn’t happen to you.

A key culprit is the starling, known to build nests in the dark recesses under a tractor hood or in the nooks behind the work-lights up on the cab roof, providing a ready fuel source easily ignited by hot exhaust pipes or shorting electrical cables.

Addressing this problem, Shoof International, Cambridge, markets Wingo, for applying to areas of tractors or machinery that are favoured by birds as roosting points. The formula contains a vegetable based gel oil with pepper and cinnamon; the birds don’t like the feel of the gel on their claws, the astringency of the pepper triggers an alert reaction, and the scent of the cinnamon serves as a reminder, deterring the birds for up to two years.

The gel is supplied in a standard caulking gun cartridge for applying to favourite spots such as mirror stalks, work lights, hydraulic hoses and along the crest of the tractor’s hood.

The product maker, farmer Tony Overbeek, applies it as necessary, taking extra care to replenish areas that have been cleaned off, for maximum efficacy.

The product has the added advantage of reducing bird droppings that pose a health risk to people and animals and that have a fierce paint stripping action on a vehicles’ tin-work.

The scale of the problem caused by nesting birds is cited by rural insurance specialist FMG, which has had at least 170 claims relating to tractor fires in four years.

The firm’s current ‘Stop and Pop’ campaign encourages customers to look under tractor hoods.

job to hand.

The hydraulics use closed centre load sensing systems throughout the range, which offer flow on demand and outputs of 110, 150 or 190L/min dependant on model.

The operator centre gets a spruce up with new dashboard displays and the choice of ‘essential’ (base) or ‘efficient’ (mid-range) specification. A host of options such as auto-beacon activation, auto air-conditioning, electric deicing and various communication and audio choices mean the tractors can be customised to meet operator requirements.

The cab can be equipped with either standard or new active mechanical suspension systems, the latter allowing more automation and allowing the operator to tweak settings for the best ride to suit conditions or differing terrain.

At the front end, as well as

the option of an integrated front link system with a lift capacity of 4000kg the tractors have an allnew in-house designed and manufactured front axle suspension system, said to give a smoother ride, and more importantly maintenance-free.

They can be specified with the optional SpeedSteer system that reduces the number of turns required at the steering wheel to go from lock to lock, useful for loader work or repetitive headland turns.

The system automatically disengages at speeds above 18 kph.

And, finally, surely a first for tractor manufacturers: the option of a unique key – rather than the traditional one-key-fits-all – so at the end of the day you can lock up your pride and joy securely. www.masseyferguson.com.au

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