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Fonterra pumps $10.6 billion into the economy Pages 4-5

september 27, 2011 Issue 255

new kid on the block

striving for better milk

Page 32

Page 37

Passion for AB

Giving mastitis the kick

mission over “I leave behind a great team and culture.” – Andrew Ferrier PAGEs 3-4


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Dairy News // september 27, 2011



No need for outside capital – Ferrier SUDESH KISSUN

Farmers deliver lactose-free fresh milk.

Page 19

Lifting nutrient efficiency on farm.

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Passing the baton.

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News........................................................... 3-20 Opinion..................................................... 22-23 Agribusiness............................................24-25 Management.......................................... 26-30 Animal Health.......................................... 31-36 Milk Quality ............................................ 37-44 Machinery & Products.......................... 45-50

FONTERRA FORMER chief executive Andrew Ferrier says the co-op does not need outside capital to grow its business. Strong profitability allows the co-op to pay farmers a dividend and retain “a sizeable amount” of capital for growth, he says. Ferrier, who stepped down last week, rubbished suggestions the co-op will be forced to open its share register to outside investors for growth capital. The co-op last week announced a record result for the 2010-11 year, pumping $10.6 billion into the economy. Ferrier says the lift in profit will allow Fonterra to retain capital while paying a good dividend. “The solution to capital for growth is retained earnings,” he told Dairy News. Increased milk production will also raise capital. Farmers need one share for every

“It’s perfect for the co-op: we keep 100% control and ownership in the hands of farmers and we generate enough capital on our own to invest.” kgMS supplied to Fonterra. The co-op’s board and Ferrier three years ago tried unsuccessfully to partially float the shares to raise funds. Shareholders soundly rejected the proposal. Ferrier now believes the co-op should not look outside for capital. “It’s rubbish that we will have to look to outside investors. TAF, which protects our capital and with additional capital from retained earnings, would give us a comfortable solution. “It’s perfect for the co-op: we

Andrew Ferrier and Henry van der Heyden face a hostile media conference after the Sanlu scandal broke in 2008.

keep 100% control and ownership in the hands of farmers and we generate enough capital on our own to invest.” Ferrier believes Fonterra is in a good position to grow its value added business. “A strong balance sheet gives us the ability to pursue investment opportunities when they come up.” The annual results show that

‘Sanlu was a stressful time’ THE SANLU scandal that rocked Fonterra in 2008 was the toughest time for Andrew Ferrier during his eight-year stint in the top job. Leading Fonterra through the New Zealand media reaction to Sanlu was a challenge, he says. And he believes the New Zealand media unfairly laid the blame on Fonterra.

“We had our people in China facing difficult times, they did the right thing all the way through a crisis that impacted the entire industry. Yet many members of the media somehow put the blame on Fonterra instead of where it belonged, on the criminals operating in the China supply chain. “For me it had two effects: it

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was incredibly stressful; and it made me very proud I was out there batting for my teammates and sitting there and taking all the heat and defending what our people did.” The highlight for Ferrier has been the succession plan bringing Dutch dairy executive Theo Spierings to the chief executive role. Spierings starts work this

“ I wouldn’t farm

without it

in 2010-11 the co-op retained 35c/share or $487 million. Fonterra farmers also bought $250m of extra shares to match increased milk production. In 2009-10 it retained $438m. Fonterra has used retentions to reduce debt. Its debt gearing ratio was 38.5% at July 31 this year compared with 43.6% at July 31 last year.

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week. Ferrier told the Fonterra board 18 months ago about his intention to retire in late 2011. Ferrier, who owns homes on Waiheke Island and in Auckland city, plans to spend time between here and his native Canada. He is eyeing investments including equity partnerships in the dairy industry.

“ With a stack of maize silage on hand I control the season, instead of the season controlling me. I wouldn’t farm without it.” Mark Henderson Dairy Farmer, Taranaki

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Dairy News // september 27, 2011

news/fonterra annual results

Team spirit pays off SUDESH KISSUN


executive Andrew Ferrier credits the co-op’s record financial result to “world class people working as a team”. While international dairy prices boosted earnings, Fonterra’s team grew the value-added business and kept its balance sheet strong, Ferrier says. He likens the co-op to Graham Henry’s Al Blacks. “Graham Henry brings in the right players, getting a team that will ultimately win the world cup,” he told Dairy News. “There

is no individual world cup for dairying but I can tell you we are winning in dairying just like the All Blacks traditionally win at rugby.” Ferrier, who last Friday left Fonterra after an eight-year stint, says the co-op performed strongly across all sectors. It was an excellent year for milk prices, he says. Although the exchange rate had soared during the end of the 2010-11 financial year, Fonterra’s hedging policy means it was not impacted as hard it could have been. The profitability of its ingredients business continued to grow. Also contributing to the re-

cord result is good capital management and a strong gearing ratio. “All these things took work and it was the team culture that made it possible.” Ferrier says it feels great to leave at a time when the co-op is in good shape. He is confident it will flourish under its new chief executive Theo Spierings, who started work Monday. “So I can say its mission accomplished. It feels good. I’m sure the business will keep getting better and better.” Ferrier recalls joining Fonterra two years after the merger of rivals Kiwi Dairy and New Zealand Dairy Group to form the

Former Fonterra chief executive Andrew Ferrier.

giant co-op. Compared to today’s Fonterra, it was like night and day, he says. “Today Fonterra is one entity, cohesive and everyone following the same values... in a cooperative spirit with integrity and honesty. We’ve been challenging boundaries and making it happen.” But eight years ago things were different. “Three different businesses were still coming together with an enormous amount of mistrust. We had people associated with Dairy Group, Kiwi and Dairy Board and nobody was at that stage ready to be part of one Fonterra.”

Record river of cash for farmers NEIL KEATING


prices, good work by Fonterra’s overseas businesses and the co-op’s sturdy hedging of the high Kiwi dollar has secured farmers their highest-ever payout: $7.60/kgMS (less retentions) and 65 cents/share distributable profit for the 2010-11 milk season. The payout (before retentions) is $1.55 ahead of the prior period’s $6.70 and exceeds the previous record of $7.90 in 2008. The cash payout (milk price plus dividend) of $7.90 is also a record – $1.53 higher than the prior period’s $6.37.  Rural New Zealand will benefit hugely from the $10.6 billion river of cash flowing to farmers, says chairman Sir Henry van der Heyden. (This

sum is $2.4 billion more than in 2010 and $1.5 billion more than Fonterra’s previous best year in 2008.) “That money

Henry van der Heyden

flows back into the local economy as farmers reinvest in their businesses and buy more farm supplies and equipment. An independent report last December by the

New Zealand Institute of Economic Research (NZIER) found the [payout] benefits… extend well beyond farmers, as they spend about 50 cents of every dollar earned on locally produced goods and services.” The farmgate reflects the recent strength of world dairy markets, van der Heyden says. Prices in some categories reached or neared historical highs during the year. And Fonterra’s hedging shielded farmers from the worst of a stronger New Zealand dollar. “We also benefited from record milk production, as some of the best autumn conditions in recent years offset poor weather in many regions earlier in the season.” The 30c/share divi-

dend equates to 69% of adjusted distributable profit, in the co-op’s stated range of 65-75% of profit after one-off items and other factors. Net profit rose 13% after tax, to $771 million ($685 m) even after paying farmer shareholders 29% more for the milk they supplied, says former chief executive Andrew Ferrier. “Although the business was impacted by higher dairy ingredient prices and a fragile global economy, our underlying profitability showed solid growth over last year due to improvements within our ingredients businesses and the strength of our consumer brands.” Normalised earnings from sales of standard and premium ingredients were 36% higher than the previous year, an

encouraging result in the face of a much higher farmgate milk price, Ferrier says. Earnings growth reflected higher efficiencies in manufacturing and supply, a refined product mix and growth in higher-margin premium ingredients sales. Consumer business sales hit a new record of $6.1 billion. A standout here is Asia/Africa and the Middle East, where normalised earnings rose 12%, Ferrier says. “High quality nutritional and foodservice solutions [are leveraging] our power brands Anchor, Anlene and Anmum.” Australia/New Zealand earnings fell 17% to $252 m ($303 m) because of “fiercely compressed margins.” Earnings were unchanged in key Latin American markets ($119 m).

Forecast payout for the current 2012 season and 2012 financial year is a farmgate milk price of $6.75/kgMS and

distributable profit in a range 40-50 cents/share, reflecting a “softening of global commodity prices since early 2011.”

record results for co-op • 13% higher after-tax profit: $771 million. • 19% higher revenue: $19.9 billion – a record. • Dividend rises to 30 cents/share, a 3 cents/share (11% up on last year’s 27 cents/share). • Strongest-ever balance sheet: borrowing ratio of 41.8% (44.9%). • Record collection of 1346 million kgMS raw milk in the 2011 season (5% up on the prior season). • Dairy exports for the year totalled 2.1 million tonnes, another record.


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Dairy News // september 27, 2011


fonterra annual results/news

‘A great result for all Kiwis’ FONTERRA SHAREHOLDERS Council

chairman Simon Couper says Fonterra’s record final payout for 2010-11 is a great result all New Zealanders will benefit from. The record payout has been driven by record revenues equating 10 times the forecast total economic activity of $1.15bn for the 2011 Rugby World Cup, Couper says. “This is a great result for Fonterra farmers and New Zealand as a whole.” He says the $1.30 increase in the annual payout equates to at least $300 flowing through to every New Zealander’s pocket. “It is a heartening result for shareholders especially, given the struggles of the past couple of years when many

farmers have faced the impact of drought conditions and are recovering from volatile markets. “The payout presents an opportunity for farmers to reduce the high debt they carry and put money back into their

businesses. With 50 cents from every dollar a famer earns going back into the local economy the extra payout is great news for our communities.” However, Couper says there are still areas the council believes require

more attention from the board. The rise in corporate costs and the fall in normalised earnings in the Australia–New Zealand business segment is something the Shareholders’ Council will be keeping an eye on, he says.

“We will be watching the board’s strategy to overcome the issues in these areas with great interest.” Despite this Couper says the results show the cooperative is in a strong position to continue

Brands business suffers A MILK price freeze in New Zealand affected Fon-

terra’s consumer business earnings. The Australia and New Zealand (ANZ) business revenue increased 14.6% to $4.4 billion, but gross profit fell 13.5% to $333 million. Trading was hit by various factors in Australia and New Zealand, the coop says. “New Zealand operations experienced a decline in volumes resulting from price increases that reflected the cost of higher commodity prices. In February 2011, Fonterra Brands froze the price at which it sells liquid milk to retailers, absorbing cost increases until January 2012.” Ice cream maker Tip Top, a division of ANZ, grew sales strongly but product losses during the Christchurch earthquake cost $3 million.

Crafar soap opera continues PETER BURKE

THE LATEST episode in the Crafar farm

drama has a new star in the form of Sir Michael Fay of Fay Richwhite fame. Fay, who once presided over the sale of strategic New Zealand assets, now seeks to save the Crafar farms from falling into foreign ownership. Fay is fronting the deal, but Taupo chartered accountant Steve Bignell is the negotiator. He advises several central North Island Maori trusts. He is noted for helping transform the Waipapa Trust which recently won the Ahuwheuna Trophy for the best Maori sheep and beef farm and the previous year won the same award for the best Maori dairy farm. Bignell told Dairy News the back-up offer of $171.5 million for the 16 Crafar farms – averaging at least $28,500/ha is a “realistic price”.


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over a quarter of New Zealand’s exports. We are proud it is doing what it was set up to do.” “With a more stable capital base and solid returns we can continue to build on success.”

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Consumers in Australia and New Zealand remained cautious in their food shopping looking for value and price ‘knockdowns’. Sales in Australia of higher margin products such as cheese, butter and yoghurt helped the business The ANZ segment includes a division collecting milk from Australian farmers and making ingredients mostly for export. This division did well, exceeding the previous year’s earnings because of ingredients prices. Fonterra holds the largest market share in dairy consumer business in Australia and New Zealand and “given its primary exposure to mature markets and the particularly difficult conditions this year, ANZ has done well relative to some of its peers in Australia and New Zealand”.

Involved in the bid are Sir Michael Fay, the Tiroa E and Te Hape B trusts and four other central North Island farmers. About 40% of the bid is from iwi interests. Each party has nominated particular farms they would buy if the bid were accepted by the receiver KordaMentha. Fay says the bidders don’t suffer the complication of Steve Bignell needing Overseas Investment Office (OIO) approval. “We’d like to be on the farms before Christmas to get them up to full production for the season starting mid 2012.” Fay says he believes New Zealand must keep its competitive advantage in exports and

competing on a global scale and deliver growth, innovation and economic benefit to New Zealand. “Fonterra is one of the important backbones of the New Zealand economy, representing

that advantage is in what we do with our land. “To me that means we must retain New Zealand ownership of our productive land.” Hardie Peni, chairman of the Tiroa E and Te Hape B trusts, is one iwi investor whose trust farms south of Te Kuiti. He sees the Crafar farms, located five minutes from their farms, as complementary to their current operation.   “I want two of the farms in the Crafar portfolio to sit alongside our farms. A successful transaction will create more opportunities to develop primary industry skills and employment for iwi members,” says Peni.  Meanwhile Brendon Gibson, KordaMentha, says the offer by the Fay consortium is well below that of Pengxin International. “As we’ve said previously, we’ve accepted an offer from Pengxin International Group Ltd which is by far the best we’ve received following a comprehensive sales campaign. We continue to await the response from the OIO which we hope will be successful.”

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TAF tipped to be fiery topic ANDREW SWALLOW

JUDGING BY feedback

TAF debate instigators have received from across the country, this will be a hot topic this week at Fonterra’s farmer business update meetings.

Eddie Glass

“I would be very surprised if it isn’t, very surprised,” Methven dairy farmer Eddie Glass says. “Our information is that there’s dramatic concern everywhere other than in Waikato and Northland and that’s where the respective chairs (board and shareholders council) are domiciled.” Glass believes Fonterra is putting the cart before the horse in seeking legislative change to allow the initiative to go ahead when the detail, as the board and sharehold-

ers council keep saying, is still to be resolved. “They keep saying TAF is only a draft and assuring us they’ll consult again once it is defined but I’m concerned that consultation may be too late and after the horse has already bolted.” In the meantime, if the detail really is still to be defined, lobbying for legislative change to accommodate TAF is a waste of the cooperative’s resources, and risks burning up political capital, particularly given the other milk related issues on Parliament’s agenda. “Having another [shareholder] vote before the legislation would be of immense help to us,” Glass says. He and fellow Canterbury shareholders who have concerns over TAF called their own meeting late last week, open to all shareholders, to hear the opinion of cooperative law specialist David Stock on the proposal. Stock told Dairy News he did not want to discuss what he would be saying at the meeting prior to the event for fear of “preempting the discussion”. Glass had previously explained that the legal advice he’s received is that under the Companies Act, TAF’s proposed unit

trust structure – which would sell units to outside investors in return for rights to dividends but not ownership or votes – would embody rights which could allow it to intervene in the affairs of Fonterra.

“Once they’ve got a toe in the door it becomes a field day for barristers. That’s what’s happened overseas,” Glass last week reiterated to Dairy News. Last week’s meeting in Ashburton was also

to gauge support for a second shareholder-wide vote on TAF, rather than just the Shareholders Council ratification of the proposal once finalised, as is currently planned. Council chairman

Simon Couper’s recent statements stressing the council will not let TAF pass without being confident shareholder control is maintained were welcome, but as they did not rule out the transfer of share title to a custodian,

they didn’t go far enough, says Glass. “It all helps but I would want it to be a bit stronger. I want them to advocate for a vote when the animal is defined and they’ve stopped short of that.”

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Co-op tells how milk price works FONTERRA HAS published information showing that changes in the milk price it pays farmers each season are driven by the impact of global commodity prices. Fonterra’s farmgate milk price manual sets out the way it calculates the amount paid to farmers for milk supplied in New Zealand. And its farmgate milk price statement for the season ending May 31, 2011 details how the 2011 farmgate milk price is determined. The 2011 farmgate milk price of $7.60/kgMS was based on revenue of $9.51/kgMS, less cash and capital costs totaling $1.91/kgMS. The 2011 farmgate milk price is $1.50 higher than the previous 2010 season’s $6.10/kgMS. This is driven by an increase of $1.56 in net revenue, offset slightly by an increase of 6 cents in costs. “These figures demonstrate what Fonterra has been saying all along – that the price New Zealand farmers are paid for milk, which in turn flows into retail dairy prices, reflects global prices for dairy commodities,” says Fonterra’s chief financial officer Jonathan Mason. The 2011 milksolids payment to farmers of $7.60/ kgMS equates to about 66 cents per litre of liquid milk.  Over the past two seasons, net revenues have increased $2.96, or 45%, but in the same period costs have increased by 8 cents or 4% -- roughly in line with inflation.

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‘Ownership key to TAF’

Couper returns unopposed FONTERRA SHAREHOLDERS Council

chairman Simon Couper says it’s a privilege to serve on the council for another term. Couper is one of the eight councillors returning unopposed.

“I’m pleased to have returned unopposed,” he told Dairy News. The council has come under fire from some farmers over its handling of TAF (trading among farmers). Couper, who represents

Simon Couper

southern Northland, says 100% farmer control and ownership is not negotiable. Couper and his councillors will chair farmer shareholders’ meetings around the country this week. Other councillors

returned unopposed are Dirk Sieling (Coromandel), Graham Hallett (Te Aroha), Grant Wills (Matamata), Phil Butler (Taupo), Philip Palmer (Wairarapa) and Lloyd McCallum (eastern Southland).


FONTERRA SHAREHOLDERS Council Rotorua member Greg Mitchell says 100% ownership and control of the co-op is non-negotiable. While supporting TAF (trading among farmers), Mitchell says a rigorous review process ensures it passes the ownership and control test. “I believe in the structure of TAF and believe it will bring good results to our co-op,” he told Dairy News. Mitchell, who is seeking re-election, faces a challenge from former Federated Farmers Dairy chairman Lachlan McKenzie, who says he was approached by several farmers concerned about TAF. Mitchell, who farms 450 cows on 156 ha at Atiamuri, was elected to the council in 2009. He says his commitment to Fonterra and the dairy industry has been growing. “As a councillor I feel a strong sense of obligation to shareholders with particular regard to TAF. Last year I asked farmers to vote for TAF and I am determined to ensure continued 100% famer ownership and control is at its heart.” Mitchell lists sustainability as another major issue facing farmers. “It is important we as farmers all get involved. While it’s crucial we Greg Mitchell farm sustainably we must also maintain the competitive advantage of our pasture based farming systems.” The Rotorua ward is one of five council seats contested this year. Eight councillors are returning unopposed. The other wards facing elections are central Taranaki, northern Manawatu and Hawke’s Bay, where it is a six-way battle between Keith Riley, Ivan Knauf, Simon Hunt, Sandra Cordell, Eliot Cooper and Lisa Lyons. In central Taranaki Robert Poole, Deborah Clough and Noel Caskey are contesting. Northern Manawatu ward candidates are Lance Gillespie and Ellen Bartlett. In Central Canterbury Frank Peters takes on Charles Whitehead. Voting takes place between October 20 and November 15. Results will be announced later that day. All new councillors take office on November 17 at Fonterra’s annual meeting at Whangarei.


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‘Redemption risk keeps co-op on toes’ REDEMPTION RISK:

two dangerous words if you believe the rhetoric from Fonterra. But what is redemption risk and what function does it play in cooperatives? Redemption comes from the cooperative principle of voluntary and open membership. This principle has been set in place to ensure individuals and businesses wishing to transact with a cooperative are able to do so if they are prepared to put in the required investment. But equally, if we choose to stop interacting with a cooperative, we are able to have our investment returned under the rules in that co-op’s

cooperatively minded board should look on the risk of redemption as the flame under them to keep them agile and member focused. Redemption is the ultimate form of control for members. This is all well and good in theory, but does the principle stack up in reality? In 2008 Fonterra suffered a major redemption crisis and this is one of the most persistent arguments for the TAF (trading amongst farmers) proposal. At the end of that season, Fonterra members were capitalising on the significant change in share price by cashing in any excess shares caused by the nationwide drought or by going to a capital-free competitor for one or

Caroline Gilbert

constitution. Redemption is the favoured method worldwide for managing member capital. In an investor-owned firm, shares only benefit their owners either through dividend payments or by increases in the share price. Cooperatives, on the other hand, primarily support their members through guaranteed access and maximised return for products. This means redemption from a cooperative is not driven solely by lack of profit, but rather by dissatisfaction with the co-op. Essentially, when members ask for their investment to be refunded they are not just withdrawing capital, they are withdrawing support and product. This is why redemption is so important to a cooperative. When members start redeeming their membership, they are sending a strong message that the board’s decisions are no longer meeting their needs as members. A strong

more seasons. Like most New Zealand businesses, Fonterra was struggling to access debt to fund this due to the global financial crisis. This put enormous strain on the balance sheet and would have been unbelievably stressful. On the face of it, much of this situation appears to be the result of circumstance, but look a little deeper any you will see that the board had set themselves up for this fall. Over the previous eight years, Fonterra had taken no retentions, choosing instead to pay everything out to members. This meant a sudden need for capital had to be met entirely by debt during the crisis. At the time, the board was also incentivising management to grow ‘total shareholder returns’, of which the share price was a major component. On top of this, Fonterra was not discussing with members the non-financial benefits of belonging to a cooperative, which could be

argued was because, less than 12 months earlier, the board had proposed a partial listing. So when investor-owned competitors came knocking, the promise of accessing tied-up capital was all that was needed to win some farmers over.

“Redeption is the ultimate form of control for members.” Things have now improved due to more cooperatively focused governance. Fonterra has begun taking retentions and this has strengthened

the financial position. The share price is now more stable. Changes to the constitution allow farmers to hold shares well above their produc-

tion, milk price penalties for production above the season opening shareholding have been introduced, and capacity adjustment all work to discourage gaming of shares. And most importantly Fonterra is beginning to talk the

cooperative talk to its members. All these changes have been driven by redemption risk. • Caroline Gilbert is a Fonterra shareholder from Taranaki and an associate member of the New Zealand Co-op Association.


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Dairy News // september 27, 2011


‘Retailers hiking milk prices’ JAMES RITCHIE

PARLIAMENT’S COMMERCE select committee

has begun an inquiry into milk prices. The Dairy

ers are concerned about the price of milk. But we believe this to be a proxy for widespread anger over the rapid rise in food prices across the board over the past five years, which is particularly hitting low income families.

124%, cheese 60.3%, and flavoured yoghurt 27.7%). Many non-dairy items have increased by at least 40%. A false understanding of the drivers of milk prices must not put at risk the benefits the coopera-

“The principal drivers of domestic prices are beyond the farm gate. The evidence suggests it is the wholesalers and retail margins on milk that are inflated.”

James Ritchie

Workers Union, representing 7000 workers in dairy processing, has a keen interest in this issue. Clearly, New Zealand-

Among rising food prices fresh milk is not the main culprit. In the five years to June 2011 the price of fresh milk has moved much less dramatically (20.7%) than other dairy items (e.g. salted butter increased

tive dairy model brings to farmers, the provincial workforce and rural communities. The DWU does not believe that the price farmer shareholders receive for their milk is too high. The principal

drivers of domestic prices are beyond the farm gate. The evidence suggests it is the wholesale and retail margins on milk that are inflated. Consumer New Zealand has found this margin is about 70% on the cheapest milk. The margin is much higher, of course, on more expensive, branded milk as the amount farmers receive per litre is the same. Despite this evidence, we still see an intense focus by Fonterra’s competitors on the farm gate price. This agitation has nothing to do with the price domestic consumers pay for fresh milk. Rather it appears to be an ideological and commercial attack on Fonterra’s cooperative structure and its better





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performance by independent processors finding it difficult to match Fonterra’s payout. The DWU has no doubt the cooperative basis of the New Zealand dairy industry has been and remains the single most important foundation of this country’s success as a dairy exporter. If the industry were to become the domain of private investors, then patterns seen all too often overseas would be replicated here. The price paid to farmers would be driven down with profits flowing offshore to investors who would take control this profitable industry. We unreservedly support a requirement that Fonterra sell milk at a fair and transparent price to processors producing products for the domestic market. But it is ridiculously self-defeating for the Government to oblige Fonterra to sell raw milk to producers that use that milk to compete with this country’s coopera-

tives on export markets, remitting their profits to overseas investors at the expense of Kiwi farmers, provincial businesses and communities, and the country as a whole. One aspect largely left out of the milk price debate is a complex range of factors relating to the financialisation of food. These global factors are much more complicated than simply export markets’ demand for New Zealand’s milk products. The UN’s Dr Olivier De Schutter, in a damning analysis of the impact of the financialisation of food markets, examines and eventually rejects as insufficient, demand and supply arguments that attempt to explain the full extent of the increases and volatility of food prices. On the price of dairy products, he noted: “Nor, as Wahi (2009) observes is it likely a group of people suddenly developed a taste for consuming vast quantities of dairy products, driving its price up

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157% between 2006 and November 2007, only to lose [that taste] starting from July 2008, allowing prices to start falling again.” Returning to the central focus of the select committee inquiry, there is no doubt milk is just one item of rapidly rising food prices putting pressure on low income families. New Zealanders support the dairy industry through infrastructure development, investment in biosecurity, trade policy and environmental protection measures, and we believe this support deserves a price discount. Domestic consumers should not pay a global price for dairy products. Fonterra’s current freeze on milk prices is a step forward; what is now required is a commitment to a long term pricing structure fairer to all our people. • James Ritchie is the National Secretary of the Dairy Workers Union Te Runanga Wai U.

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Dairy News // september 27, 2011



‘No need for Eight after three DairyNZ seats milk probe’ INTEREST IS high in the upcom-

A PARLIAMENTARY commerce select committee

inquiry into milk prices is premature given the work being done by Government agencies, says Federated Farmers The Feds recommends the inquiry finds New Zealanders are not paying too much for milk relative to other countries and that our market is operating effectively. Federated Farmers Dairy chairperson Willy Leferink says MAF, the Ministry of Economic Development and the Treasury are doing work that could vitally inform any future select committee. “This work was started some months before the commerce select committee decided to look into milk and will continue well after this committee reports,” he says. “For the benefit of discussion, we’re including our recently lodged submission on the MAF-led review of the Raw Milk Regulations with this release. “I guess it is a general election year, but Rugby World Cup visitors must be looking at this inquiry with a degree of amusement.” There is huge interest in the price of milk, Leferink points out: the public is concerned about retail prices, independent processors about raw milk prices. “However, our submission shows milk isn’t some smoking gun. Despite public concern, the retail price of milk has not increased more than many other foods, and many non-food items in the consumer price index.” He says the Commerce Commission has also considered this question and found such an inquiry “was not warranted”. “The commission also noted, ‘it is questionable whether Fonterra has scope to exercise substantial market power in relation to the supply of raw milk to other processors. The [Raw Milk] Regulations provide an access regime for raw milk and are designed to counter Fonterra’s market power.’ Leferink points out nothing is stopping other processors from entering the consumer milk market. “While we do not agree this inquiry is necessary, it gives us a chance to put some facts across from farmers’ perspective. New Zealanders are not paying too much for milk relative to other countries and our market is operating effectively.”

in brief Fonterra director retires

AN APPOINTED director of Fonterra board, John Ballard is retiring. He will step down at the coop’s annual meeting on November 17 in Whangarei. Ballard has been an appointed director since 2006 and chairman Henry van der Heyden says he has made a valued contribution to the cooperative over the past five years. “In particular, John’s experience and insights on the consumer businesses have been a real asset around the Board table,” he says. Ballard served on the appointments, remuneration and development committee and the health and safety committee. The board is now identifying a replacement director.

Reducing erosion

OVER 290 hectares of erosion prone farm land have benefitted from plantings in the Upper Whanganui River catchment in the past year, the bulk of this in the Ohura and Waikaka catchments. With funding from Horizons Regional Council and the Whanganui River Enhancement Charitable Trust (WRET), landowners from around the Ohura River have created farm plans offering solutions to reduce erosion, through tree planting and land retirement.

ing DairyNZ director elections. Eight nominations have been received for three member-elected positions. DairyNZ chairman John Luxton and two directors – Michael Spaans and Kevin Ferris – are retiring by rotation and standing for re-election.

The five candidates for the DairyNZ board are Greg Maughan, Marton; Ben Allomes, Woodville; Mary Cooper, Palmerston North; Gary Stokes, Hamilton; and Denis Aitken, Outram. All dairy farmers who pay a milksolids levy are eligible to vote. The election will be by inter-

net, fax and postal voting. Voter packs, with information about the candidates, will be sent on October 4 to members of DairyNZ. Votes will be weighted by annual milksolids production for the 2010-11 season. Election results will be announced November 2 at DairyNZ’s annual meeting at Hamilton.

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Dairy News // september 27, 2011


Canterbury leads, will others follow? ANDREW SWALLOW

DAIRY CATTLE in a waterway, under any circumstance, will be an offence from June 2012 in Canterbury under its new Natural Resources Regional Plan (NRRP). The move, and a reminder of the impending regulation put out by the council earlier this month, hasn’t gone down well with Federated Farmers which fears copycat action in other regions. “We are a bit disappointed,” Dairy chairman Willy Leferink told Dairy News. “We know what is in the NRRP. The comments are unnecessary and a reminder of what ECan used to be.” Farmers are already committed to cleaning up the environment and singling out dairy and pig farmers – pigs are subject to the same regulation – is unnecessary, he says. “If our counterparts in the urban areas would do the same we would win the big game!” Leferink is concerned the new rules may see accidental breaches lead to prosecution.

“From the dairy side of things we Lambie says. “We are recommending are totally committed to getting cows now is a good time for farmers to reout of streams and we want to get view their practices and check their away from regional councils policing farms to ensure they will be fully us.” compliant with the new rules. Audited self management plans “All stock farmers should be such as Fonterra’s ‘Every Farmer, thinking about how to reduce the imEvery Year’ are a betpact their animals have ter way, he believes. If on waterways. In parcouncils must reguticular farmers managlate, it is imperative ing intensively farmed the farmers living in stock – which the the community are NRRP defines as dairy part of the discussion cattle and farmed pigs leading to the regula– should be working tion. on plans to exclude “We have no probtheir stock from waterlems as long as the ways by the June 2012 rules are not draconideadline. Willy Leferink an, easy to understand “Lower intensity and do not drive us farmers who take on out of business. The way Southland extra stock for mob-grazing over the interacts with farmers in the Waituna winter need to be extra vigilant to encatchment (Rural News, September sure they will be able to comply with 20) is despicable.” the new rules.” ECan’s reminder about the imStock are already excluded from pending NRRP regulation came from waterways under Canterbury’s commissioner Tom Lambie. NRRP if there are significant adverse “Farmed pigs and dairy cattle will effects such as heavy pugging of the be prohibited from entering natu- bed or banks, visible discoloration of ral waterways from June next year,” water, an increase in bacteria or any

obvious evidence of faecal matter in the water. The NRRP was made operative in June this year after several years of community consultation, including at least 1000 submissions considered by two hearing committees. Lambie says besides temporary

or permanent fencing, installing new stock watering systems may be necessary. “The new stock exclusion rules are strong and it is Environment Canterbury’s responsibility to check they are adhered to. Our preference is to work with farmers.”

Tougher rules looming IN WAIKATO an upcoming review of the regional plan will examine what extra measures may be necessary to protect water quality in the region, Waikato Regional Council told Dairy News. “Currently, our stock exclusion rules are designed to manage effects of stock in water rather than banning stock outright from waterways. Under a permitted activity rule stock can be in waterways provided the effects on things like clarity are within certain limits. “However, in priority-one water bodies (bodies listed in our regional plan we’re particularly keen to protect) stock can only be in wa-

ter if the farmer has resource consent, and these would be subject to strict conditions if they were to be granted.” Variation 6 to the regional plan proposes water takes for existing milk cooling and dairy shed washdown require a controlled activity resource consent. Taranaki Regional Council is also reviewing regulations on stock in or near waterways. Director resource management Fred McLay says currently it applies the provisions of the Resource Management Act to prevent adverse effects on the environment from stock in or near waterways.

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SPREADING THE good word: Parliamentary Commissioner for the Environment Jan Wright, DairyNZ chief executive Tim Mackle, the Prime Minister’s science advisor Peter Gluckman, and DairyNZ team leader sustainability Mike Scarsbrook early September listen to discussion at a stakeholder visit at DairyNZ’s Scott Farm, Hamilton. Wright and Gluckman were among the 15 attendees at the second of these visits, designed to show industry outsiders how dairying is addressing risks and opportunities. Visitors included ministerial advisors, representatives of government departments, North and South Island regional councils and environmental NGOs. “It was a great opportunity to show people who’re not familiar with the industry what our strengths and challenges are. We were able to have a good discussion and get their views about meeting the challenges,” says Mackle.

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New dairy player has high hopes SUDESH KISSUN

A COMPANY planning to start a milk powder plant at Tokoroa has high hopes in the dairy industry. Dairyland Products Ltd (DPL) has been granted resource consents by the Waikato Regional Council to process up to 270 million litres of milk into powder and anhydrous milk fat for export. DPL is talking to investors, seeking to raise funds for the project. DPL shareholder Keith Jackson says New Zealand is a producer of quality dairy products. A low cost producer of high standard products makes it an attractive place for investment. “Like many other people, we agree there is a good future for the dairy industry in New Zealand,’ he says. Jackson says WRC’s resource consents allow DPL to approach potential investors here and overseas. A start date for the plant will be announced once funding is secured. “We have to get all our ducks in a row; there are a few more to line up,” he told Dairy News. According to DPL resource consent application, ideally it hopes to start construction of the plant this month and commission it August 2012. It also hopes to secure milk supply from a 50km radius of the factory and get 50 m L of raw milk from Fonterra under the Dairy Industry Restructuring Act (DIRA). Jackson says potential milk suppliers will not be approached until funding is secured. DPL has been praised by WRC for its efficient resource consent applications. It was granted consents within 15 working days of application. WRC regulatory committee chair Lois Livingston says DPL is a great example of what can be achieved when companies work proactively with the regional council. “This shows that quicker decision-making is available under the act for well-organised companies who engage with us before they put in applications to see what they may need to do to get consent,” says Livingston. Two key features of DPL’s application was that the company would offset the plant’s effects on air quality by helping to replace home heating wood burners in Tokoroa with cleaner heat sources. Another environmental mitigation measure in its proposal is use of wastewater from the plant to irrigate farmland “It’s great to see companies like Dairylands making the effort to get their ducks in a row before they make a consent application. Talking to us first means we all save time and that projects aren’t held up unnecessarily. “The council is keen to promote economic development in our region and we want take a partnership approach with industry on this,” Livingston says. According to the Companies Office, DPL’s major shareholder in Cooks Food Group, a food and beverage industry investor. Cooks Food is listed on NZX. Jackson is its chairman.

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Fonterra cheese recall FONTERRA IS recalling several batches of block cheese after a metal fragment was found in a pack. The recall includes 500g, 700g and 1kg blocks of Mainland tasty cheese. No other Mainland products are affected. Fonterra Brands New Zealand marketing and innovation manager Dominic Quin says there have been no reports of anyone being injured or becoming ill.

Dairy News // september 27, 2011



ETS in the slow lane PETER BURKE

THE FUTURE of agriculture’s entry into any emissions trading scheme (ETS) under the National government is heading for the slow lane and maybe even a dead end. The ETS review panel report released by Environment Minister Nick Smith is recommending the Government’s implementation of the scheme, scheduled for 2015, be ‘slowed down’. The review recommends phasing in the ETS for transport, energy and industrial sectors over three years from 2013 instead of the present proposal of it all taking effect in 2013. This and the panel’s view that proposals to bring agriculture into the scheme in 2015 should be ‘slowed down’, is pretty

much in line with what the Government has been hinting for some time. Smith describes as “well considered” the panel’s view to slow down agriculture’s entry into the ETS. “The government needs to consider the advice of the agricultural ETS advisory committee on the practical implementation challenges,” he says. It’s no secret the Government’s reason for holding back on agriculture is based in seeing what our major trading partners are doing on ETS issues and also the mitigating technologies that would be available to deal with emissions. Smith is coy about what heed the Government will take of the 61 recommendations. It is still considering these and the final position on the ETS will probably

come when National announces its climate change policy nearer the election. However it would appear National will see the expert panel’s report as good reason to slow, water down or even scrap agriculture’s entry into the scheme. Fonterra says it is committed to emissions reductions and will continue to work within the business and on-farm to see them achieved. But the group director suppliers and external relations, Kelvin Wickham, says Fonterra remains concerned that applying carbon costs to agriculture in New Zealand, when they are not applied elsewhere in the world, would shift dairy production to far less emissionefficient countries. “The net result would be no reduction in global emissions,” he says.

Wickham says the agriculture sector would worry about farm emissions attracting a carbon cost from 2015, despite the ‘two-for-one’ recommended for the period between 2015 and 2017. “These new costs, that will average over $4000 a farm from 2017, come on top of the $7500 in carbon costs on farm fuel and energy and will impact competitiveness.  Wickham says the current research into

agricultural emissions mitigation is promising but there are no readymade, game-breaking solutions. He says New Zealand farmers are already among the most emissions-efficient in the world. “Fonterra shareholders had already put up 23% of the $43 million being invested in emissions mitigation

research, so were not seeking a free ride,” says Wickham. Green Party leader Russell Norman has hit out at the review panel findings. He says the agriculture sector is responsible for half of New Zealand’s emissions and will take the lesson from this that it pays to lobby government for subsi-

dies, rather than invest to reduce emissions. “It is green-washing to claim we have a meaningful mechanism to reduce carbon emissions, when we do not. The report notes our major trading partners, especially Australia, are moving in a much clearer direction to set a firm price on greenhouse pollution.”

Feds back recommendations FEDERATED FARMERS has come out in support of the review panel’s recommendations. Feds vice president and climate change spokesperson William Rolleston says many of the key points raised by the panel are the same ones they have advocated in relation to the ETS. “Farmers will be extremely pleased Minister Smith has reaffirmed a pledge Government has given to Federated Farmers – that biological emis-

sions will not be included in the ETS, if our trading partners do not follow suit. The Government is to be congratulated for this... and also for recognising that farmers, despite the research investment, lack the practical means to reduce emissions.” Available tools to mitigate emissions are too variable or immature to meet the needs of farmers, he says. Long term solutions are several decades away from commercial deployment.


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Dairy still fetching premium prices ANDREW SWALLOW

WHILE GLOBAL dairy commodity prices continue to drift lower, there are positives in the data, say analysts. Last week Fonterra’s GlobalDairyTrade event, the last before Dairy America product is added to the offering, saw prices down 2.1% overall. However, wholemilk powder was up 1.1% on average and the forward contract is at nearly a 7% premium to the near position. “On average prices are still relatively high,” BNZ economist Doug Steel told Dairy News. “They’re some 21% above the 10 year average.” While the GDT result was “more of the same” and a “continued drift lower” it was quite encouraging it hadn’t dropped more given the pressures on the market, he says. Those include a strong start to the season here, a 2.1% jump in US’ August production year on year – higher than was expected - and high export volumes from both the EU and US. Anhydrous milk fat was the worst performer on the day, down 11.2%

on average with the near position most heavily discounted. “There’s a significant premium for the longer dated contracts, 7-10%.” Low stocks relative to consumption is the reason dairy commodity prices are “by and large holding pretty firm, as are grains too,” despite the supply side pressure and demand concerns due to the financial fears weighing on the US and EU economies. Steel notes the US Department of Agriculture is forecasting a fall in production in 2012 due to higher feed costs. “That’s probably the main reason why the long-term contracts [MarchMay 2012] are at a premium to the short-term.” Wholemilk powder is still That growing premium for attracting premium prices. the long positions, and the fact Fonterra will have been selling product forward, suggests its current forecast for 2011-12 tainty on anything at present.” should be achieved. Rabobank’s Dairy Quarterly reHowever, Steel says given the port, released last week but compiled world financial market worries, he prior to the GDT result, spells out the wouldn’t put “a great degree of cer- uncertainty, and paints a bearish pic-

ture of prices. “As we enter Q4 [October-December] market pricing will be heavily influenced by the size of the... surpluses generated by the EU and US,

the strength of the Southern Hemisphere spring peak, and buying activity by key importers, especially China and Russia. Balancing the market will likely prove challenging without further price falls.” China is expected to resume import buying “with vigour” but while Russia also faces supply shortages its demand is likely to be down on a year previously. “Solid buying” from the Middle East, North Africa, South East Asia and Brazil is expected. “Rabobank expects key importers to soak up almost record volumes of production in Q4... but pushing above the levels set 12 months prior appears to be beyond their capacity. And that, for sellers, is likely to be a problem.” The report says outlook hinges on China’s demand: if it doesn’t materialise as anticipated, the downside looks greater. But poor weather in the Southern Hemisphere, especially New Zealand, could cut forecast surpluses and drive demand from Brazil, where supply has been falling anyway due to high feed prices.

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Farmer processors deliver lactose-free fresh milk THREE YEARS ago,

when Robin and Lois Greer, Southland, commissioned their cheese, milk and yoghurt factory on their farm (Dairying Today, October 2008), they fulfilled a long held ambition to process their own milk. Now, the couple from Tuturau, near Matuara, have also achieved a New Zealand first: lactose-free fresh milk. “You’ve been able to buy a UHT lactose-free milk, but nothing like fresh milk,” Robin told Dairy News. Given the technology to do it has been available for about 15 years and elsewhere in the world such products are well established, he says he was surprised to find no-one doing it here. “For the people who taught us how to do it [in Australia] it’s become a considerable part of their business. They market to an area with a similar population to the South Island and a huge percentage of their product now is lactose-free. That opened our eyes to the potential here.” Greer says 85% of the population is estimated to have some degree of lactose intolerance, though far fewer are aware of it. Skin problems such as eczema are one manifestation; digestive problems – wind, bloat, diarrhoea

Outlook for organics bright THE GREERS are confident of the future for the organic sector and suggest southern North Island producers who won’t have their premium contracts renewed by Fonterra should try to work together to add value to their milk. However, they acknowledge it is easier said than done. “There’s a lot of bureaucracy to go through, that’s for sure,” says Lois. Finding like-minded people to work with is also key, she suggests. “There are two reasons why people go organic: for the premium, to make more money; or because they are passionate about what they do. The ones who are passionate about will stick with it for the long haul. “Most of our milk still goes to Fonterra. There’s no premium [from Fonterra for organic] in Southland and there never has been.”

putting on the lactosefree milk, the wholesale price isn’t a great deal more than their standard Retro Organics fresh

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– are another. Already their lactosefree milk, processed and bottled for retail in their plant under the Retro Organics brand, is on sale in Auckland and Wellington. “We sell cheese right through the country but we didn’t expect we’d ever be trucking fresh milk to the North Island.” They’re also hoping the niche will take off in yoghurt, and now only produce lactose-free lines, so far in two flavours; plain, and honey. “We wanted to change direction a bit with our yoghurt.... When we saw this we thought that’s something we could do and it lines up with being organic as well,” says Lois. Their home farm, at Tuturau, has been organic since 2009. They milk 330 cows through a shed metres from their factory. Milk for processing is piped across, the surplus going to Fonterra. “We’ve got the capacity to process all our own milk here.” While they’re short of that objective now – Greer is coy about revealing exactly how much they are processing – the way the lactose-free sales have taken off “it won’t be many years” before they reach their objective, he says. “It’s certainly gone extremely well.” While he’s not sure what price retailers are


Dairy News //september 27, 2011


Volatility clouds Oz dairy outlook THE GLOBAL economy and weather are causing con-

The supermarket milk price war is also affecting Australian farmer confidence.

cern to Australian dairy farmers. Farmer confidence remains varied in all dairying regions, underpinned by the differences between domestic and export supply markets, says this month’s Dairy Australia’s 2011 Situation and Outlook Update report. Dairy Australia says instability in the world’s major developed economies is raising questions about the likelihood of another financial crisis and the impact it

could have on dairy. Seasonal variation continues in all regions, with southeast Australia the most confident on the back of strong southern opening farmgate prices and favourable operating conditions, says manager strategy and knowledge Joanne Bills. But farmer confidence in NSW and Western Australia, is yet to improve much, as the regions grapple with the supermarket price war, floods and drought. While seasonal conditions have become mostly favourable in the past few months, western Victoria and Gippsland farmers have received too much rain, she says. However the 2011-12 season has started well. Southern opening farmgate prices were 3-5% higher than last year. About 60% of farmers contacted in the survey describe their season as “about where they would like it to be”. Dairy Australia’s forecast range for full year, southern farmgate prices remains at $A5.10- $5.50/kgMS or A39-42 cents/litre, based on the outlook for the international market. However, given softer commodity prices and a stronger Australian dollar since the forecast was made in May, expectations are now at the lower end of the range, says Bills. “While this price outlook is down on final 2010-11 payments, improved seasonal conditions and lowered feed costs should preserve profit margins, making the current season one of consolidation for most dairy farmers.” Analysis by Dairy Australia as part of the Update forecasts a 1.5% increase in 2011-12 national milk production to 9.25 billion litres. Despite a slow start to the season, due to wet weather in Victoria and flood and drought recovery in Queensland and Western Australia, production is expected to gain momentum as the season progresses. China, Asia and the Middle East continue to drive international dairy demand. However, Bills says international dairy commodity prices had softened in recent months on the back of increasing global economic and financial concerns, increasing supplies from New Zealand and Latin America and production growth in the US and EU. Whole milk powder (WMP) prices, as measured by Dairy Australia’s spot commodity price series, have fallen 16% from their peak earlier in the year, while skim milk powder (SMP) and butter spot prices have fallen by 8% and 10% respectively. “While these falls are not [great], prices remain historically high, and after initial falls from their peaks, price movements have been limited, despite improvements in supply,” says Bills.

in brief Bega boss bags award

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THE EXECUTIVE chairman of Australia’s newlylisted dairy processor has won the 2011 Rabobank Leadership Award for outstanding contribution to the food and agribusiness industries. Barry Irvin, who oversaw Bega Cheese Ltd’s listing on the ASX, was last week presented with the award at Rabobank’s annual leadership dinner in Sydney. Irvin was a “one of the business world’s true leaders”, says Rabo’s Australian and New Zealand chief executive officer Thos Gieskes. “Barry has shown extraordinary leadership in a great many aspects of his life, in and outside of business. As such he is a worthy recipient of this award.” Over ten years Bega has grown from a singlesite regional dairy processor in southern NSW with 80 employees and selling only to the domestic market, to sales of $A1 billion a year to 40 countries and a payroll of 1400 people. Bega Cheese in August switched from a cooperative structure to a public company with a market capitalisation of $A240 million.

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Dairy News // september 27, 2011

opinion Ruminating


Time for common sense on ETS

milking it... A persuasive Act

WHEN IT comes to fighting the emissions trading scheme (ETS) farmers have no bigger friend than the ACT Party. An ETS already imposes extra electricity and petrol prices on farmers but from 2015 it will mean paying more for emissions from animals. But for some reason, National and Labour fail to notice. Last week ACT promised to have the ETS suspended until our major trading partners catch up. Farmers like what they hear. Don Brash is hoping this will lead to an avalanche of the traditional National rural votes flowing his way.

Farmers on the edge

FARMERS IN Waikato are sleeping with guns at the ready. This follows the brazen theft of hundreds of litres of milk from vats. Two dairy farmers – one in Matamata, one in Waihi – are said to have recently lost 600 litres of milk. One farmer says rural thefts are increasing, and a lot of farmers were now “sleeping with their guns closer to the bed”. Waikato Federated Farmers president James Houghton says milk thefts do occur, but not to supply the black market. Rather it was stolen to feed calves. “It isn’t a tanker that turns up, but a truck with a tank and pump on the back. They pump away for 20 minutes then drive away.” Farmers are urged to be vigilant.

Getting gear off for animals

AN ANIMAL rights group, known for its opposition to milk and meat products, is getting into more risque publicity – in the interest of animal rights, of course. People for Ethical Treatment of Animals (PETA ) is known for racy ads featuring semi-nude women. Now it hopes to launch a steamy website to promote veganism by mixing porn with images of animals suffering. “We’re hoping to reach a whole new audience, some of whom will be shocked by graphic images they perhaps didn’t anticipate seeing on the PETA triple-X site,” Lindsay Rajt, PETA’s associate director of campaigns, told Reuters. The group applied to launch the site using the soon-to-be-available ‘XXX’ domain approved earlier this year by the group that oversees internet addresses. But though there will be nudity, there won’t be any hard-core porn.

Yvonne done roaming

AFTER MONTHS on the run, and avoiding slaughter, Yvonne the cow has been caught. Yvonne is a cause celebre in Germany after going AWOL from her Bavarian farm in May, narrowly avoiding the chop. She breached the electric fence on her farm and took sanctuary in nearby forest. Yvonne became, says a newspaper, “a kind of freedom fighter for the animal loving German republic”. A tabloid offered a reward of 10,000 euros ($17,000) for her safe return. Hunters got the right to shoot her after she was dubbed a ‘security risk’ by police. The Gut Aiderbichl animal sanctuary now owns the wandering bovine, after a farmer’s tip-off that Yvonne had wandered on to her land.

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COMMON SENSE is in danger of breaking out in the Government judging by the comments of the panel reviewing the Emissions Trading Scheme (ETS). The panel of experts led by David Caygill has recommended slowing – or phasing in over time – the ETS requirements for agriculture. They rightly point to a need to get a firm understanding of what our trading partners are doing about it (very little!) and the technologies available to effectively mitigate emissions from the agricultural sector. The panel is spot-on in its reading of the situation, already drawing positive comments from farmers. Not surprisingly the Greens have come out against the recommendations of the review panel. And Labour’s position – outlined in June by Phil Goff to Federated Farmers annual conference – is clear: it wants the ETS to take effect from 2013 instead of the present timetable of 2015. The ETS has for years been a constant bugbear for farmers. There appears to be an urban view that dairy farmers have big gross incomes, so they can pay a bit more and who cares. Most weeks we hear examples of anti-farming attitudes. The latest is Horizons Regional Council’s unwillingness to prosecute Palmerston North City Council for breaches of its resource consent while gaily prosecuting farmers who do the same. Where’s the justice? As yet not revealed by the ETS panel is what the Government itself will do about the report. Will it go along with a phasing-in of the rules for farmers? Or will it take the bull by the horns and – as it affects farming – scrap it altogether? National has yet to announce its climate change policy: that will be interesting. Clearly the words of the review panel will be uppermost in their minds, and at the very least we might expect the Nats to soften the landing of an ETS on the agriculture sector, or maybe they’ll just can the whole idea. We hope common sense will prevail. – Peter Burke

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Dairy News // september 27, 2011



‘Dairy sector dragging the chain’ JOHN LANCASHIRE

A RECENT article in the Dominion Post (August 6) on the New Zealand dairy industry was headlined ‘Fonterra gets a pass mark but there is still a long hard road ahead’. This must have disappointed Fonterrra, given the recent outpouring of good-news stories about dairying from the co-op itself and supporting commentators, including a $4 million PR campaign through DairyNZ funded by dairy farmers .

John Lancashire

In justifying this large expenditure a spokesman for DairyNZ said they could not understand why the sector had such a poor image with many New Zealanders. Their sometimes misleading campaign had been designed to correct that impression. If this lack of understanding is genuine it shows a serious lack of empathy for the obvious damage done to our waterways and lakes by dairy cows. This failure to recognise the cost of the sector’s environmental footprint has been well illustrated by Dr Mike Joy, Massey University. Unfortunately the industry, aided and abetted by much of the rural news media, has taken the position of shooting the messenger rather than confronting the message. From the point of view of the general economic wellbeing of the country these concerns are often diminished or ignored, because criticism of an industry contributing 25% of our GDP is seen as disloyal. But unfortunately the dominance of our primary sector, especially dairying, as the so-called backbone of our economy for 30-40 years has coincided with

a rapid fall in our relative economic performance in the OECD. This is largely because our primary sector businesses show lousy return on investment. In sheep and beef enterprises it varies between 1% and 3% and even on dairy farms the return on all capital employed rarely exceeds 4%. Cash in a bank would provide a better return. The only reason we keep farming is because of the high rate of capital gain on farmland: the recent doubling of dairy land prices between 2004 and 2008 is the main cause of the $30 billion debt now carried by the sector. This is not a sustainable position for a wealthy New Zealand and the banks must take some responsibility for this development. However, the situation is not new and the obvious solution of improving product prices has been suggested many times. But Fonterra remains largely a commodity trader trapped in low and volatile returns. What is needed is a much stronger incentive for farmers to demand a higher payout from the companies, but this will only come about if the return from land inflation is reduced. This could be achieved by a gradually increasing capital gains tax on land, an idea generally welcomed by most commentators, but not by Federated Farmers and some academics. This is not to suggest Fonterra and other New Zealand dairy companies try to become a Nestle, but just diversify sufficiently into added-value products to lift returns to farmers. This would also have the advantage of reducing price fluctuations, as it is generally recognised the price of added-value products is less volatile than commodities. Certainly I have not noticed the price of Kikorangi blue in my local supermarket fluctuating wildly. Unfortunately unless the dairy industry and the country do not seriously consider this dysfunctional situation in the primary sector, then New Zealand must look at alternative forms of investment . The industry has also been slow to seriously confront environmental

issues direct resulting from our current dairying systems. The high-profile ‘clean streams accord’ is really only the ambulance at the bottom of the cliff and does not confront the fundamental problem of an out-of-date production technology. This is based

on the research by McMeekan, Levy and others 50 years ago, which highlighted increased stocking rate and per-hectare production as the key to pasture improvement and financial success. This emphasis on per-animal production, which surely

could be a ‘win–win’ for the dairy industry, has for years been proposed by Dave Clark of DairyNZ in Hamilton to suspicious industry conservatives. Fortunately the message has finally got through so at least the concepts are judged worthy of

research. A trial including reduced stocking rates and partially funded by the dairy industry – soon to start at Lincoln University and other sites at Hamilton, Massey and Telford – has the potential (together with more added-value products) to

transform the sector into an environmentally acceptable real-wealth generator for New Zealand. • John Lancashire, QSM, is the immediate past president of the New Zealand Institute of Agricultural and Horticultural Science


Dairy News // september 27, 2011

agribusiness IRD crackdown on stock tax fiddle LYALL EVANS


reviewing rules on tax valuation of livestock under the herd scheme. This follows an Inland Revenue paper that revealed a loss of $100m tax revenue as a result of the 2007-08 peak in dairy cow values. The IRD’s August paper says it has been too easy for farmers to exit and re-enter the herd scheme, costing the Government a lot of foregone tax. Rural accountants have known for some time that, with the right conditions, livestock farmers could change livestock valuation methods and obtain tax advantages. Such conditions presented themselves in the dairy industry in 2007-08 when livestock prices soared, moving into an unsustainable bubble. Using the rules, taxpayers gave notice to leave the herd scheme and adopt a cost-based valuation method. This allowed them at relatively short notice to obtain a tax free write-up of livestock and a tax deductible write-down in the following years using the cost method – initially to value livestock – and then perhaps re-entering the herd scheme at a greatly reduced herd scheme values. The Government is now moving to prevent similar choices being made. In my discussions with farmers and accountants it is clear most accept the law is flawed and a change is required. Farmers unlike other taxpayers, have choice in the way they value their stock. This reflects the unique nature of

livestock in a farming business which displays the character of both

Lyall Evans

trading stock and plant. For example a ewe is like a machine, producing wool and lambs; similarly dairy cows can be likened to machines that produce milk. In a manufacturing business assets that produce products (as livestock do) would be regarded as plant and on the sale of that asset receipts would be regarded as capital in nature and not taxable. However, ewes and cows can be like inventory in a traditional business. The farmer can buy ewes, add value to them by fattening them for resale, hopefully making a profit in the ordinary course of business. In that case the livestock would be regarded as trading stock and the difference between sale price and costs would be treated as taxable income. Tax legislation embodies this uniqueness by giving farmers the ability to choose between valuing livestock under a cost basis, like other businesses, or to use the ‘herd scheme’. Under the scheme, value changes in livestock valued as ‘herd scheme’ livestock are ignored for tax purposes regardless whether they

go up or down, as is the case with value changes in capital assets. The system has enabled farmers to give notice to move between the different schemes with a two-year notice period required for leaving the herd scheme; in practice it was actually much less. As a result, there were a number of elections to leave the herd scheme in the dairy sector, which coincided with the peak in dairy livestock prices in 2007-08 and gave those taxpayers tax benefits. This is what the IRD is now attempting to stop. The officials’ paper is subject to public comment up to September 30. To resolve the perceived flaws in the herd scheme it proposes making irrevocable any elections to use the herd scheme, thus removing the inherent flexibility in the rules. So as to buttress the legislation and prevent taxpayers organising a change in their business structure to engineer

“In my discussions with farmers and accountants it is clear most accept the law is flawed and a change is required.” an exit from the herd scheme, it also proposes that where a sale of livestock occurs to an associated person, the associated purchaser must use the herd scheme, which would mean the restructuring from a tax perspective would be neutral. The IRD has been

The Government is reviewing tax treatment of livestock.

concerned about taxpayer use of changes in business structures to achieve an exit from the herd scheme where timeframes for valid written elections to exit were not taken by taxpayers. IRD suspects this was happening during the 2008-09 period following the peaking of dairy livestock prices. Such business reconstructions may also have involved tax avoidance practices, a serious issue and improper from a tax point of view. However, there’s no suggestion that elections made in ac-


cordance with legislation involve tax avoidance. The proposed changes to the Income Tax Act mean that reorganising business structures to overcome the new rules will be ineffective. Farmer groups such as Federated Farmers, farm accounting firms such as BDO and the New Zealand Institute of Chartered Accountants are examining the proposed law changes and looking to make submissions likely to result in law changes in the 2012 parliamentary year. No application date

Ask your local INGHAM’S representative about the Pastoral Support Programme and see how, by simply balancing what you already have with the current stage of the production cycle, can impact your bottom line.

for the changes has been indicated in the paper. Whilst agreeing with the general thrust of the proposals, submitters want to ensure there are no unintended and/or negative consequences for taxpayers, as is often the case with corrective legislation. My hope is that the submissions will persuade the IRD to create workable legislation, particularly on sales to associated persons. I can think of legitimate transactions where, say, a farm is sold to a family member who has to stand

financially on their own two feet. It would be unfair if they could not take a tax stance relating to their own circumstances as opposed to being forced to inherit the tax decisions of the vendor family members whose business is likely to be entirely unassociated with that of the purchasing family members. • Lyall Evans is a partner with BDO Gisborne, a member of the BDO New Zealand network of independent Chartered Accounting and Business Advisory member firms.

Dairy News // september 27, 2011



Anchor jugs to auction Milfos backs transtasman ocean event MILKING EQUIPMENT supplier Milfos Interna-

tional is sponsoring the inaugural Bridge 2 Bridge rowing challenge. The four man rowing team will set off from the Sydney Harbour Bridge on October 24 and row the Tasman Sea to finish at the Auckland Harbour Bridge. The challenge will set several ‘firsts’: first team to cross the Tasman unassisted from west to east, and the first to round Cape Reinga and enter the Waitemata Harbour to finish on the east side of the North Island. Milfos are one of two sub-sponsors of Team Gallagher, along with Hamilton-based lead sponsor Gallagher Group. “The appeal of sponsoring this challenge was the goals the team have set themselves, and the sponsoring of such a huge technical challenge. We thought those philosophies aligned with ours, along with the pioneering spirit of our customers” says Milfos managing director, Jamie Mikkelson. Milfos has also launched a ‘Bridge 2 Bridge’ competition as part of the Team Gallagher campaign. Entrants are invited to visit the Milfos Facebook page, ‘like’ the page and guess how many days it will take the team to row the Tasman. “We’ve already had some wonderful entrants, even going down to the number of hours and minutes it will take. It’ll be an interesting time following the team through their video uploads while they’re on the water. Everyone at Milfos will be watching closely. A lot of the staff have entered the competition. “It’s an innovative Kiwi challenge and we urge everyone to get involved and support the team” he says. Check out the competition on the Milfos Facebook page and follow the team as they cross the Tasman.

in brief Canterbury A&P Show WORLD CHAMPION lumberjack, Jason Wynyard, will be competing in the woodchopping section at this year’s Canterbury A&P Show. The show will be held November 9-11 at Canterbury Agricultural Park, Christchurch. Kiwi Wynyard recently won his tenth Stihl Timbersports Series Championship, a record in the history of the competition which attracts the world’s top lumberjack athletes in a competition based on historic logging techniques. He also holds the world record for the standing block at 12.11 seconds. Labelled one of the most physically exhausting lumberjack disciplines, the competitor has to chop through 12-14 inches of vertical white pine, from both sides of the log. Over 100 entries are expected, with competitors competing for over $22,000 in prize money in heats and finals of various classes including underhand, standing, tree plus the popular Jill & Jill and Jack & Jill classes. Organisers of the Canterbury A&P Show expect 7,000 livestock and feature competition entries, comprising more than 3,000 animals.

DAIRY BRAND Anchor is using its 125th birthday to raise funds for Christchurch earthquake victims. As part of the celebrations Anchor is selling a limited range of commemorative half pint jugs on Trade Me. The proceeds will go to the New Zealand Red Cross 2011 Earthquake Appeal. The Anchor Half Pints are offered on

Trade Me until September 30. Anchor, owned by Fonterra, began in 1886 when entrepreneurial Cornish famer Henry Reynolds set up a tiny factory in Pukekura, near Cambridge, aiming to make quality

butter. Needing a marque for his product he is said to have chosen an anchor after seeing one tattooed on the arm of a former sailor who worked on a farm supplying his factory. The

first year of production produced 45kg of export butter from the milk of 400 cows. Anchor milk, butter, cream and spreads have since been a part of people’s everyday lives. Fonterra has just launched the new Anchor Dairy Blends, packaged to match the brand’s milk. Anchor butter packaging will soon be relaunched.


Dairy News // september 27, 2011


Nutritional value of maize silage IN MY last article I

discussed the important factors that should be considered when selecting a maize silage hybrid. These are (in priority order): Hybrid maturity (i.e. days from planting to harvest).

Agronomic strengths that match your growing environment. Seed quality – purchase high quality New Zealand produced seed. Yield – use statistically significant data side-by-side trial data to select the highest yield-

ing hybrid. Nutritional quality should be considered after you have worked through the factors above. In this article I will look specifically at what’s important and what’s not.

For most New Zealand cows grazing high quality pasture, the nutrient that first limits production is energy*. Simply put most NZ cows are underfed and feeding drymatter (energy) will increase production. Maize growers should

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Nutrient first-limiting in milk production

Milk production kg milk/cow/day

Approximate kgMS/cow



Energy (protein in pasture >18%)







Energy (protein in pasture >24%) Energy and protein protein

first select hybrids that produce high drymatter yields. From this group they should choose hybrids that give the highest yield of energy per kgDM; Maize energy yield per hectare = drymatter (DM) yield x energy per kgDM Maize silage provides energy from two sources – the grain and the stover (the green part of the plant). Maize grain contains high levels of energy-rich starch. Starch accounts for 55% of the energy in maize silage and the maize kernel (which contains other high-energy components such as oil) accounts for 75% of the energy in maize silage*. As well as driving total energy content, maize silage starch content drives milk protein percentage and milk returns. For these reasons starch content (measured by laboratory analysis) is the most important nutritional parameter. While starch content varies due to hybrid genetics, there are a number of other factors that can influence it including climatic effects (such as sunshine, heat, and rainfall), crop nutrient status and the time of planting. To ensure that differences in hybrid starch content are due to genetics and not these other factors (or chance), normally 15-20 nutritional samples must be analysed from hybrids planted side-by-side in the same paddock. Myths surrounding nutritional quality There are a number of myths in the marketplace surrounding maize silage quality. Fibre digestibility Some companies claim their hybrids have more digestible fibre in their stover. While differences in fibre digestibility do exist, they are largely due to environmental and seasonal factors rather than hybrid genetics. There are minimal “genetic” differences

(2-3 percentage points) between standard commercial hybrids for fibre digestibility*. Since stover only contains 25% of the energy in maize silage, a hybrid that contains slightly more digestible fibre will not deliver more energy than one that contains more grain. Soft starch In the last couple of years a number of lower yielding hybrids have been promoted on the basis of having softer, more digestible starch. All maize hybrids contain a mix of hard (vitreous) and soft (floury) starch. Kernel hardness has little, if any, effect on the digestibility of starch and therefore the nutritive value of maize at silage harvest time. In fact two independent scientific trials (conducted in Brazil and the USA) have not shown any difference between the milk production of cows fed maize silage made from hard or soft starch hybrids. High energy levels Last season was an absolute cracker that produced very high energy maize silage. The average metabolisable energy content of maize silage submitted to Hill Laboratories Ltd was 11.2 MJME/kgDM. I have seen a number of laboratory analyses for maize silage with energy levels higher than 12 MJME/kgDM. A good feed value from last season doesn’t mean a hybrid will always deliver high quality silage. In conclusion, if an enthusiastic salesman claims his hybrid will deliver more digestible fibre, softer starch or higher energy always ask for the data that proves it….but before you do that make sure the hybrid he is promoting will deliver a high drymatter yield per hectare. * References available on request. • Ian Williams is a Pioneer forage specialist. Contact him at


LessN FieldDays

SAVE money


nitrogen response of urea

Donaghys is holding a national Roadshow of LessN FieldDays to update and educate all in the agricultural industry on the benefits of Donaghys LessN. Dates and locations for the North Island field days are as follows. Thursday 29th 11.00 a.m. Barry and Alison Green Rushala Farms Ltd 1111 Kaiaua Road, MANGATANGI Dairy Supply No. 70447 7.30 p.m. Cock and Bull Cnr Maui Street and Church Road HAMILTON NORTH Friday 30th 11.00 a.m. Angela Fullerton and Glen Clarke 516 State Highway 3,TE AWAMUTU Dairy Supply No. 74254

October Wednesday 5th 11.00 a.m. Clarke and Lisa Pike 195 Pakarau Road, MORRINSVILLE Dairy Supply No. 76876 7.30 p.m. Otorohanga Club Inc. 107 Maniapoto Street, OTOROHANGA

Donaghys LessN – researched in one of New Zealand’s largest ever nitrogen response studies Donaghys LessN® has undergone extensive trials and research to evaluate its performance on New Zealand farms. Since 2007 Donaghys LessN® has been evaluated in 67 trials throughout New Zealand, making the research into LessN one of the largest nitrogen response studies ever conducted in New Zealand Twenty Eight of these trials have been independent trials, conducted by leading Crown Research Institute’s, Universities and private researchers. Research results show the benefits of the addition of LessN to dissolved urea. Donaghys LessN Independent Trial Results


60 50






7.30 p.m. Tokoroa Club Inc. Chambers Street, TOKOROA Tuesday 11th 11.00 a.m. Gill Family Sandstone Farms 547 Lepper Road, INGLEWOOD Dairy Supply No. 26135 7.00 p.m. TET Multi Sports Centre 65 Portia St., STRATFORD Wednesday 12th 11.00 a.m. Andrew Meuli Alpen Rose Farms Ltd Tempsky Road, MATAPU Dairy Supply No. 41916 7.00 p.m. Waverley Racing Club, WAVERLEY Thursday 13th 11.00 a.m. Grant Barber Himatangi Station, 637 SH1 HIMATANGI Dairy Supply No. 26223 7.00 p.m. Pahiatua Fire Brigade Hall Tui Street, PAHIATUA

30 20 10 0 No Urea

Urea @ 40Kg/ha

Urea @ 80Kg/ha

Urea @ 40Kg/ha +LessN

Trial results are an average of 21 trials conducted within New Zealand from Autumn 2007 – Autumn 2011. Average trial length was 24 days. Urea 40kg/ha treatment was only included in 14 trials. Seven trials which showed no nitrogen response have not been included in the above graph.

For lasting benefits to your pasture contact your local Donaghys Territory Manager on 0800 942 006, your rural supplier or visit

Friday 14th 11.00 a.m. South Wairarapa Working Mens Club Main Street South, GREYTOWN Thursday 20th 12.00 noon George and Sue Bruce 231 Walton Road, WALTON Dairy Supply No. 76994

Keep an eye out for the dates, locations and times for the South Island LessN Fielddays happening in late October and November.



Average daily dry matter production of four different N input systems

Thursday 6th 11.00 a.m. Micheal VandenBrook 159 Central Road, ROTORUA Dairy Supply No. OCC 272


Dairy News // september 27, 2011


Lifting nutrient efficiency on farms LIFTING PRODUCTION

Ballance Agri-Nutrients is spearheading a 7 year project to lift efficient use of nutrients.

while reducing impact on the environment is the key aim of a $32 million scheme announced last week to promote more efficient use of fertilisers. Ballance Agri-Nutrients intends to develop and improve products,

and educate farmers in rapid adoption of new technologies. Ballance has secured $9.75 million from MAF’s Primary Growth Partnership fund. The co-op will match this dollar-for-dollar over the next seven years while

also spending a further $12.5 million on normal planned R&D. Head of research and environment Warwick Catto, referring to the co-op’s core business of plant nutrient products and advice, says it will ensure its products are “even more sustainable by improving their nitrogen and phosphorus efficiency”. ‘We will also be working on new biologically based products to improve nutrient and pest management with fewer environmental effects. “Finally, for farmers, seeing is believing so our extension programme will see us working very closely with them, showing them the science and proving the results and the cost benefits.” Catto says the impacts of the scheme will extend beyond the farm gate. “The government is increasingly trying to balance the need to grow the economy with protecting the environment and our international reputation. By solving environmental problems on-farm, we help to achieve these objectives and to secure New Zealand’s long-term competitive position.” Ballance chief executive Larry Bilodeau says the planned spending shows the co-op’s confidence in the scheme’s potential to lift profitable production and reducing environmental impact. “Through more efficient use of agri-nutrients, farmers will be able to produce more with less – a win-win for farmers, the environment and New Zealand as a whole. “Up to 60% of New

Zealand’s primary production depends on the continued use of fertiliser. Fertiliser has enabled the intensification of our farm systems [but] environmental pressure is building. “By reducing reliance on traditional fertilisers and targeting the nutrient losses which have environmental impacts, we are safeguarding the pastoral sector’s productive future. This is one of the most significant investments in sustainable farming research in recent years and will deliver long-term returns for New Zealand. “By 2025 we envisage a pastoral sector operating with a lower chemical load thanks to new biological forms of pest control and we will see yield and economic gains. Nutrient efficiency will be much higher and there will be a reduced impact on our waterways.” Ballance Agro-Sciences general manager Willie Thomson points out rising costs, growing environmental pressure at home and global consumer demand for food produced sustainably are all increasing challenges for farmers. “New Zealand’s global point of difference is our high quality, safe food. To retain this advantage, we need to reduce our environmental footprint and reassure consumers that the food we produce is safe and sustainable. Making bold changes now will enable the sustainability of New Zealand’s primary sector, economically and environmentally.”

Potential to lift yield MAF DIRECTOR-general Wayne McNee says

this latest PGP cash grant shows the huge potential that exists in the primary sector and the strength of the links between various PGP schemes. “PGP is all about investing in visionary business plans that can potentially transform our primary sectors. “This programme focuses on bettering the productivity of New Zealand farmers and reducing environmental footprints. Reducing run-off of nutrients into waterways will enhance the sustainability of our farming systems and our reputation. “Information sharing, particularly on nutrient management, between this programme and other PGP initiatives will greatly enhance the benefits of each.” This latest cash grant increases to $227 million the total PGP spend on nine programmes of research and innovation since 2009. Including industry contributions the total is $493 million.

Dairy News // september 27, 2011



Effluent system makers queue for new course SEMINARS OFFERING

new information on the design and construction of effluent ponds will begin next month for farmers, contractors and the effluent services industry. DairyNZ project manager for effluent Theresa Wilson says the seminars will help farmers work through their storage requirements and the new practice note for effluent pond construction with their contractors. “There’s been debate about the best way to go about constructing and sealing ponds: should they be lined with a synthetic liner or compacted clay? These seminars will help people see the merits of the options available, maintenance requirements and some of the things you need to get right when constructing a pond.” Dates and venues are being finalized; they will be available on the DairyNZ website. Also attracting farmers’ attention is the Massey University fertiliser and lime research centre course on new farm dairy effluent system design and management. The centre got 85 enquiries on the opening

day for registrations. Seventy-five people will this year attend three courses in different locations. Sixty designers are on a waiting list for the next round of training courses. These teach effluent system designers and installers how to design systems that meet effluent design standards and conform to the code of practice. Wilson says the backlog of designers on the waiting list is a good sign that the effluent industry is serious about the new approach to designing systems. “When you’re investing money in this area of your farm, you want to know the people you’re paying to do the job are qualified to design and build a system that works and won’t let you down. It’s good to see the strong demand for further courses.” The course follows industry seminars on the farm dairy effluent design standards and code of practice held April/May by DairyNZ, IrrigationNZ and the New Zealand Milking and Pumping Trade Association (NZMPTA). 400 people attended. Also near completion is a new effluent design

accreditation scheme set up and run by the NZMPTA. The first companies to be accredited will be named in

early 2012. “This level of interest from the effluent companies should give farmers confidence that the ef-

fluent industry is getting the information required to design systems that reduce their environmental footprint,” says Wilson.

in brief REPEATED GRAZING of pasture below 3.5 cm in height in the summer months is likely to contribute to a lack of persistence by ryegrass. Removing cows from paddocks when they are likely to graze below 4 cm height is one way to avoid over-grazing. Forage crops such as turnips have a useful role as the cows can be held off pasture without damaging future pasture yield. Managing surplus pasture is the key. Crops are a useful alternative to silage and hay for managing surplus pasture (normally in the late spring). Some farmers prefer to take paddocks out of the grazing rotation for crop preparation, increasing the stocking rate on the remaining area and allowing pasture quality to be more effectively managed on the rest of the farm. For a farm stocked at three cows/ha, removing 10% of the farm to grow crops will increase feed demand on the remainder by 11% (e.g. from 45kg DM/ha to 50kg DM/ha). What about biennial and perennial forage crops? Chicory and plantain are becoming popular as alternatives to turnips. Like most things there are pros and cons to consider. – DairyNZ

Tuesday, 24th August, 2.56am When it comes to accurately identifying calves, it doesn’t matter whether it’s raining, whether it’s 2.56am, whether it’s the back paddock or whether you’re fast asleep. GeneMark will get it right, every time. GeneMark is the most accurate, convenient and cost-effective way to record your calves’ identities. Take the sample when it suits you, and get ready to take advantage of the improved genetic reports in MINDA to drive your herd’s performance. To find out how GeneMark can save you time, hassle and cost, call 0800 436 362.


Reduce overgrazing


Dairy News // september 27, 2011


Summer crops mitigate risks Planting summer crops like brassica mitigate the risk of summer dry conditions.

THE INTEGRATION of crops into the dairy system changes the risk profile of a farm business. Summer crops to some extent mitigate the risk of summer dry conditions by providing a mass of high

quality feed at a time when pasture growth is likely to be limiting. However, the farm is exposed to other risks as soon as a paddock is sprayed out. These include having crop areas out of production during an unexpected decline in pasture growth resulting in under feeding cows at a critical time (peak milk and mating). Delays, due to weather or contractor scheduling, may result in yield losses or target dates for the establishment of new pasture in the autumn being missed. Poor yields represent the greatest financial risk to the business when growing crops. Some of these risks can be mitigated through good planning and best practice establishment and management. Yield is important regardless of the reasons for growing a crop. Poor crops will have a negative impact on farm profitability. Good practice crop establishment and management are important and short cuts can be costly. Excellent guides, prepared as a result of Sustainable Farming Fund projects, are available: Management Practices for Forage Brassicas, Pioneer’s Maize Silage 2010-11, PGG Wrightsons Brassica guide, DairyNZ Farmfact: Turnips - Growing a high yeilding crop (162) and DairyNZ Farmfact: Chicory establishment and management (1-72). How much crop to grow? The area required for forage crops can be calculated as follows: 100 ha farm milking 300 cows, offering 6 kg DM/cow/day of crop for 40 days. Total crop offered 6 *40*300 = 74 t DM At a crop yield of 10 t DM/ha = 7.4 ha of crop required. The impact of having this crop area out of pasture production should be tested with a feed budget for the period from spraying out the crop area in the spring until the paddock returns to the rotation as new pasture in the autumn. Summer crops have a number of roles on dairy farms; farmers must clearly understand these roles and their priorities then select crops that best meet these priorities. • Reproduced from DairyNZ Tehnical Series September 2011 issue.

Food for thought • Growing summer crops to increase the supply of feed in the system alone is unlikely to increase whole farm profitability. • Reasons other than increasing feed supply, such as renewing pasture, more effective use of effluent areas, managing spring surplus pasture and protecting pasture from overgrazing in the summer may justify growing summer crops on farm. • If pasture renewal is a key reason for growing a summer crop, selection of the right crop to achieve pasture renewal target dates is most important. • Whenever a paddock is sprayed out the farm is exposed to increased risk of a feed deficit until the new crop or pasture is established. • Management practices must ensure the crop has the best chance of success as high yield and utilisation are important, regardless of the reason for growing the crop.

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Dairy News // september 27, 2011


animal health New welfare policy for trucking stock A NEW code of welfare

issued this month lays down recommended best practices for transporting animals. The Animal Welfare (Transport within New Zealand) Code of Welfare 2011 was developed by the National Animal Welfare Advisory Committee (NAWAC). It encourages all those responsible for animals during transport to adopt the highest standards of husbandry, care and handling. The code came into force on September 16. NAWAC deputy chair Hilton Collier says transport can be a time of great stress for animals. It is important it is done well.

“The purpose of this new code of welfare is to encourage everyone involved to minimise the stress placed on animals by adopting the highest standards before and during transport. “The code covers all animals and all forms of transport within New Zealand – air, land and sea. Minimum standards cover stockmanship; planning; equipment design and maintenance; preparing and selecting animals for transport; loading and unloading; and the provision of food, water and rest.” Collier adds that specific requirements for transport in emergencies and emergency humane destruction are also

included. The code was drafted and reviewed by representatives of companies and organisations involved in the commercial transport of animals by road and sea, farmers, veterinarians, animal advocacy groups and

environmental agencies. Agriculture Minister David Carter says animal handlers must become familiar with the relevant codes. He warns failure to meet a minimum standard in a code could lead to legal action.

Keeping animals in transit happy What is the purpose of this code of welfare? Transport can distress animals. The code describes the minimum standards of care and management for transporting animals and to encourages carriers to adopt the highest standards of husbandry, care and


Who does this code apply to? All persons transporting live animals within New Zealand by land, air or sea waters (including to and from the Chatham Islands). Under the Act the ‘owner’ and the ‘person in charge’ of an animal are responsible for meet-

ing the legal obligations for welfare. What animals does this code apply to? All live animals (terrestrial and aquatic) being transported within New Zealand on land, air or water (including to and from the Chatham Islands).

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Dairy News // september 27, 2011

animal health

Better calf care

Matthew Stokes

Australian farmers are raising the bar in calf care with the help of a brix refractometer (right).


ers are continuing to raise the bar in their care of calves through hands-on work with calf rearing experts. Industry body Dairy Australia is rolling out workshops in dairying regions as part of the Healthy Calves Program. It has a strong focus on the first week of life when the calf is most vulnerable. Dairy Australia Healthy Calves project leader Jamie McNeil says the workshops arose from recent farmer surveys of calf rearing practices which found farmers were keen to learn more about best practices and calf management research. “The workshops are designed to help farmers and calf rearers remain abreast of the latest developments in calf rearing and raise awareness of recent changes in animal welfare standards and regulations,” he says.

“The quality of calf rearing is improving all the time, as farmers understand the value of rearing well grown, healthy herd replacements and the importance of selling strong, fit and residue-free calves.”

“It has long been known newborn calves need good quality colostrum” The workshops, presented by leading dairy vets, also provide an opportunity for farmers to hear from each other about their calf rearing systems and what works for them. Interest in the Healthy Calves workshops held so far in Gippsland, Tasmania and South Australia has been excellent. Participants said the workshops “reinforced best practices” and provided information and practices which could be “easily implemented

AN EARLY MAINTENANCE CHECK Could get your cows back to milking sooner


Endometritis can prevent up to 10% of your herd getting back in calf early. Here’s a plan to make sure it doesn‘t hold you back this season.

and make a big difference to calf health”. Colostrum management is one of the key topics covered in the one day Healthy Calves workshops and as part of this subject, farmers who attend are learning to use a simple tool called a Brix refractometer, a device used in viticulture to measure the sugar content of grapes, but dairy farmers are now using it to rapidly assess the quality of colostrums, he says. “It has long been known newborn calves need good quality colostrum (the first milk produced by a cow after calving) to give them the best start in life. “ The workshop content is based on the practical experience of Australian dairy farmers, animal scientists and vets. Topics covered also include pre-calving care, calf housing, nutrition, disease management and preparation for sale.

Stoking a family passion FOR HALF a century members of one Waitara

family have been responsible for ensuring thousands of Taranaki dairy cows get in calf each year. Three generations of Waitara’s Stokes family have been working as LIC artificial breeding (AB) technicians, and have between them been doing arguably the most important job on farms in the region since the early 1950s. This season is Matthew Stokes’ (19) first as an LIC AB technician. His father Kevin Stokes worked for the Taranaki Livestock Improvement Association from 1997-2004 covering farms in the Motunui area. Matthew didn’t know until he had finished his apprenticeship that his grandfather Jim Stokes was also an AB technician for LIC. “I didn’t know Poppa was an AB technician, as he had finished up before I was born. So when dad told me Poppa had been a tech for 15 years I felt really proud to be carrying on the family tradition. When Poppa started in 1953 he was inseminating cows in the early days of artificial breeding.” Matthew, who until recently worked for two years as a dairy farm assistant in Taranaki, says he has always loved farming – being outside

and doing the hard labour – and is passionate about dairying. “Farmers put their livelihood in the hands of their AB techs because if their cows don’t get in calf, they won’t produce milk and there’s their income gone. So for me making sure everything is done right and that farmers receive the best quality service is the priority.” Matthew, who consistently scored well above average marks during his apprenticeship last year, says being an AB technician is not a job suited to everyone. “You have to love animals and want to be an AB tech. It’s a physical job, seven days a week for three months. But I love meeting new farmers and hearing how they run their farms, as everyone does things differently and it’s great to see how people do things that work well for them. “And one day I want to own my own herd, and believe being able to AI (artificially inseminate) is an important skill. Matthew’s AB season begins in October and goes through to mid November. His run covers dairy farms around Manaia and he expects to be looking after about 1700 cows.

THE METRICURE MAINTENANCE PLAN: For top performance A VISUAL CHECK: For leaks and wear Look for all cows likely to be At Risk of endometritis who will have had: • Assisted calvings • Induced calvings • Dead calves/stillbirths • Twins • Retained foetal membranes.

Dairy News // september 27, 2011


nutrition/animal health

Understand crop’s purpose on farm ROB BRAZENDALE

THE PRACTICE of growing summer crops such as maize and turnips is common on North Island dairy farms. Recently biennial (chicory) and perennial (plantain) crops have become popular. Farmers considering growing a summer crop need to have a clear understanding of the crop’s purpose on their farm. Numerous farm systems studies have found that growing summer crops to increase the supply of feed in the system alone is unlikely to increase whole farm profitability. These studies found that, at typical crop yields achieved by farmers, the increase in utilisable dry matter grown from summer crops was insufficient to cover the costs of growing the crop, replace the dry matter that would have been grown by pasture, and show a profit. This point is simply demonstrated in Table 1 where the relative crop yield (gross yield less the pasture that would have been grown) divided by the costs of growing the crop is calculated. The cost per kgDM can be compared to other feed options such as purchased feed. Reasons other than increasing the supply of feed may justify the place of a summer crop

in a dairy farm system. These include: • Pasture renewal • Reducing over-grazing of pasture • More effective use of effluent • Managing surplus pasture. The incorporation of a crop sequence in the pasture renewal process is likely to improve the pasture renewal outcome. Crops provide an opportunity to break weed and insect cycles. Weeds that are hard to remove, such as summer grasses, are normally sprayed in summer and autumn. Growing crops prior to establishing new pasture has been shown to be beneficial when introducing novel endophyte grasses. If renewing pasture is the primary reason for growing a crop then the choice of crop is most important. The crop type must complement the

pasture renewal process not hinder it. Two things are important when considering the type of summer crop to plant: One is the most effective break in weed and pest cycles. For example, in situations where black beetle is a problem brassica and maize crops, are likely to be most suitable. Where summer grasses such as yellow bristle grass are a problem, multiple sprayings of herbicide are required, and a perennial crop such as chicory is likely to be the best option The second matter is timing. The crop must fit with the target date for new pasture sowing. For areas north of Taupo, the recommended date is March 31 and for the lower North Island about March 20. Work back from this date in planning a crop, allowing time for new pasture preparation and crop

utilisation (for forages). Estimate the date to sow the crop. The date from sowing to when the crop will be fed or harvested gives the number of growing days available for the crop. Match the growing days available to the crop requirements. (Figure 1) It is important the crop choice does not compromise the pasture renewal outcome. While it is tempting to maximise crop yield and extend the crop harvest or utilisation date, the resulting delay in sowing date of new pasture for 1-2t DM/ha gain of crop, risks compromising a 120t DM/ha crop of pasture (15t DM/ha/yr for 8 years). In the case of maize, hybrid choice is important, and shorter maturing varieties are likely to fit the pasture renewal process better despite the compromise in crop yield.

Figure 1 – Timelines required to achieve the target sowing date for new pasture.

The nutrient enrichment of land receiving effluent can be a potential risk because of nutrient leaching and metabolic disorders resulting from excessive potassium (K). Periodically growing crops on these areas will remove excessive K and allow it to be redistributed around the farm by grazing cows. Rob Brazendale is DairyNZ team leader productivity

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• Calf Trailers

Crop yield (kg DM/ha)



Less pasture yield foregone (kg DM/ha)



• Horse Floats & Trucks

Extra yield (kg DM/ha)



Crop costs ($/ha)



New pasture costs ($/ha)



Total costs ($/ha)



Cost/kg DM



Table 1 – Yield and costs of growing maize and turnpis on dairy farms.

B GET UNDER THE HOOD: Using your dipstick

C CLEAN AND SERVICE: Get them up and running

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Dairy News // september 27, 2011


animal health

Do the mating maths AS A result of one mating management decision, the average New Zealand dairy farmer (376 cows) could save as much as $2000 a year, says Greg Hamill, LIC Alpha Product manager. The expense of bringing a bull on farm, along with the drive for tighter calving patterns, improved reproductive performance and removing the hassle of a bulls, are some of the reasons LIC is seeing more dairy farmers extend their mating period with AB (artificial breeding) and avoiding tailing with bulls, he says. “Bulls are expensive. Whether buying or leasing a bull it costs at least $500, probably closer to $600 for every bull used during the mating period – and that’s just the initial outlay.” To buy a bull costs about $1200, to lease one about $600, so even with resale every bull brought onto a farm during the mating period is at least a $500 expense before any other costs are considered, says Hamill. “The average bull eats about 15kg DM a day; at a cost of 22 cents/kg it costs about $150 to feed each bull for seven weeks at a time when feed could be going to cows for milk production. “And the average farmer, if they use bulls for the tail end of mating, need plenty of them. To allow for rotation, on average one bull is needed for every 30 empty cows. And each day, by the third mating the semen quality has decreased, so potentially semen is less likely to result in con-

ception after that third service. “There is also the risk that bulls bought onto the farm could bring disease to the herd, such as venereal diseases, leptospirosis, TB, BVD, neospora, Johne’s disease and EBL.” Hamill says top performing dairy farms achieve a 90% three week submission rate, 60% conception rate and 78% six week in calf rate; however the average dairy farm does not achieve this. Average New Zealand dairy farms are seeing three week submission rates of about 80%, conception rates of about 55% and a six week in calf rate of about 68%. This is one of the greatest issues New Zealand dairy farmers are facing, he says.. “To optimise the six week in calf rate, we need to improve three week submission rates to 90% and achieve a more compact calving. A compact calving results in more days in milk, more milk solids, and more profit, and results in less culls due to empties and more opportunities to cull poor performers. “With a more compact calving spread we can expect to see more cows cycling earlier as they recover sooner, and as best practise sees inductions phased out it is important farmers start thinking about improving calving spreads. “If the average farmer improves the three week submission rate by 10% this equates to about $11,000 in increased milk solid production. He

The use of AB over natural mating improves profit, says LIC.

would also have more replacements and with optimum submission rates calf numbers optimised, enough replacements for discretionary culling.” Discretionary culling provides farmers with the ability to speed up the rate of genetic gain. This is when farmers can see the real benefit of using high generic merit semen, for example DNA Proven, because they have the ability to bring in the best calves, he says. “Increased milk production seen in high BW animals can vary immensely compared to low BW animals.” As another method to help reduce calving spreads Hamill says

farmers are also increasingly choosing to use AB Sires with short gestation BVs to help bring calving for those later cycling cows forward by one to two weeks. “In dollar terms, every cow bought forward by one week is worth between $75 and $100 in extra milk production. A number of farmers are using straight Holstein Friesian to capitalise on the China market but we are not just seeing dairy AB sires with short gestation BVs used, but beef sires with short gestation BVs for those who want to get a premium on the white face market.” By going to AB for the full mating period,

farmers are avoiding some other less obvious costs and risks associated with bringing bulls onto the farm. “Property damage to fencing and paddocks is avoided, as are staff safety risks with working with bulls. AB is a reliable way to get cows in calf, as it is hard for farmers to know how well a bull is performing: for example the quantity and quality of semen is affected by any significant health event and could lead to sub-optimal performance, something not easily identified. ”Even a slight increase in testes temperature can cause major disturbances in semen production.”

No bull about Tb checking BARBARA GILLHAM

SOUTHLAND DAIRY farmers are being advised to be diligent and test their service bulls for bovine tuberculosis (TB) before moving them onto their farms. The chairman of the TBfree Southland committee, Mike O’Brien, says testing service bulls could save herd owners time and money and gives them assurance bulls brought into their herds are TB free. “We must still be mindful that while a majority of TB herd breakdowns are related to TB-infected wild animals, mainly possums, the risk of infection through stock movements still exists.

“It is vital all herd owners remember to assess the threat of TB to their herds to protect their businesses and lifestyles from the affects of the disease.” Farmers are reminded that while there is no charge for stock traders or herd owners to test bulls aged over 12 months intended for mating in the dairy sector, all livestock being moved must be accompanied by a correctly completed Animal Status Declaration form and be indentified with the approved ear tags. Federated Farmers Southland sharemilkers chairperson Donal Kidd says although most farmers and stock agents are thorough when it comes to ensuring testing is done and stock firms won’t move anything without the correct paperwork and ear tags, farm-

ers need to remain vigilant and not become complacent. TBfree New Zealand regional coordinator for Southland Owen Churchman says the TBfree programme has been successful in the region but there is always a risk of breakdowns especially from possums. So farmers need to be sure they know where animals have come from. “There has been a lot of work in Southland to clean up TB outbreaks and its down to virtually nil, but it hasn’t gone away. Farmers must remain vigilant as the risk of infection through stock movements does still exist.” Check the disease status of the animals by calling the Animal health Board. Tel.0800 482 4636


Dairy News // september 27, 2011

animal health

Researchers reaching wider ANIMAL HEALTH and

DeLaval will provide equipment for the new research centre.

welfare will feature strongly in a research centre to be opened late 2012 at Uppsala, Sweden, reports De Laval, which will supply equipment. The Swedish University of Agricultural Sciences’ new Swedish Livestock Research

Centre will offer international and privateenterprise researchers a “unique” environment for testing new animal production technologies. Animal welfare and health, ‘climate-smart’ animal management and sustainable food production will feature strongly.

This will be “Europe’s most modern facility for teaching and research on cows, pigs and poultry,” says DeLaval president and chief executive Joakim Rosengren. “SLU has a long tradition of providing important research on how to improve animal welfare and dairy production; we believe the centre will further enhance the quality of the research done today.” The new centre will use DeLaval voluntary milking (VMS) and a DeLaval automatic milking rotary (AMR) systems, plus other products and systems integral to the company’s ‘smart farming’ (SF) concept. SF is aimed at influencing the future of dairy farming with innovative and integrated decision tools and automation. SF aims to accelerate the transition from milking management to global farm profitability management by harness-

ing decision tools and automation technologies for better quality milk and profits. The DeLaval AMR was developed for better profitability, management, and flexibility. Its main components are teat preparation and attachment, teat-spray modules, two touch screens to operate the system, automatic cup back flush, automatic floor cleaning, and safety systems. The first AMR systems will have up to 90 cow/hour capacity, depending on the number of robots installed. As many as five robots can be attached to the rotary. The system will be fully operational at the new centre in November. “We have a long standing cooperation with DeLaval on numerous research projects,” says Kerstin Svennersten Sjaunja, dean at SLU’s Faculty for Veterinary Medicine and Animal Science.

in brief AHB tagging advice THE ANIMAL Health Board and NAIT have produced an easy-to-follow guide for farmers illustrating the most common scenarios in movement of animals for grazing, sale or slaughter. The advice prepares for the July 1 2012 start-up of mandatory tracing of cattle, pending legislation. The guide to ear tagging requirements is on both organisations’ websites: nz and NAIT chief executive Russell Burnard says the simple matrix will provide farmers with an at-aglance guide to their tagging requirements.

Don’t let BVD undermine your profitability this season

With Kamar, you don t need an advanced degree in interpreting paint scraping to determine if a cow is ready to mate. If the Kamar is red, she s ready. If it s not, neither is she. Simple, the way it should be.


Call your local LIC Customer Relationship Manager to order your Kamars this season.

Red Means Go

Ask your vet to use Gribbles Veterinary Pathology, New Zealand’s leading provider of BVD testing and advice.

Dairy News // september 27, 2011


milk quality New tools to tackle costly disease BARBARA GILLHAM

DAIRYNZ IS launching another generation of tools in the battle to beat mastitis: the SmartSAMM Gap Calculator. Despite control measures being routinely practiced on farms, mastitis remains one of the most costly diseases affecting the dairy industry: annual losses are in the scores of millions of dollars.. A Dairy Insight report 2005-06 estimated it was costing dairy farmers $36.50 per cow or $11,500 for an average 315 cow herd, equating to an estimated $180 million loss to the industry annually. Although that

report was released several years ago, Dr Jane Lacy-Hulbert, a senior scientist with DairyNZ and a member of the steering group that produced the report, says the figures have not changed much although they alter depending on the current payout. Mastitis is caused by bacteria picked up from the environment or infected cows. It is most commonly spread during milking when the bugs from an infected cow can contaminate the liners and milking cluster, enabling it to be passed to the teats of each cow milked by that cluster. Between milkings it gets into the teat canal and mastitis ensues.

DairyNZ’s SAMM Plan (Seasonal Approach to Managing Mastitis) was launched 18 years ago and is a familiar resource for reducing mastitis and controlling milk quality. But as the figures above show, it’s still a big problem. Recognising the need to provide more support to farmers and reduce the impact of mastitis on productivity DairyNZ introduced a new scheme called SmartSAMM to help farmers improve udder health in their herds. Building on the success of the SAMM Plan, SmartSAMM was designed to enable farmers to ‘benchmark’ their herd’s mastitis performance, identify

the ‘gap’ in performance or potential for improvement, and explore options to achieve improvements. It also helps them to select and implement the most appropriate options for their herd and review their progress to their goals. The benefits of minimising mastitis include less cost, reduced stress, reduced grading risk, increased milk sales and better animal welfare. Lacy-Hulbert says many of these benefits lie within the farm gate, but to date there has been no easy method for calculating these benefits for an individual farm business. To overcome this issue DairyNZ has now developed a simple calculator to page 38

Mastitis remains one of the most costly disease affecting the dairy industry.


Dairy News // september 27, 2011

milk quality

New tools to tackle disease from page 37

to help farmers assess the benefits of lifting performance for bulk milk SCC (BMSCC) and mastitis. Called the SmartSAMM Gap Calculator it is now on the DairyNZ website, with different formats available to suit different needs.

“We are trying to move away from the strict cost of mastitis and that side of things, and move farmers to understanding the value of their gap performance. It’s all about closing the gap between your ‘actual’ performance compared with your target,” says

Lacy-Hulbert. “Farmers will know or have some idea of what their actual performance is now, which they simply enter into the calculator, then they type in what they would like to be getting and the calculator works out the value of that gap or of closing

that gap. “One of the values of the gap calculator is people actually going through the process and filling it in and finding some of those hidden benefits they hadn’t thought about. “Some people don’t like computers so there

is a PDF version consultants and advisors and people in the field can print out and ‘do on the bonnet of the truck’. Then there ‘s an electronic version with three different levels of complexity, so you start at the basic or entry level and just work up

Every cow deserves regular health checks. How about 600 a year? MilkHub monitors every cow, every milking, every day. Our in-line sensors recognize subtle changes in the milk and yield that indicate infection. After every milking the system gives a report ranking the cows from best to worst so you can identify problem cows, alert for testing and draft for treatment. Recording individual cow

they are exactly; they can tailor it to their own circumstances, it’s quite an eye opener.” The SmartSAMM Gap Calculator is available from the DairyNZ website www.dairynz.

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to the intermediate and advanced version. “People will start to see the costs and the gap, and the size of that gap actually grows as more detailed costs are taken into account. It gives them an idea of where

COW 702


in condition.

Jane Lacy-Hulbert

TO REDUCE the impact of mastitis on productivity, DairyNZ has produced a new training tool: SmartSAMM Healthy Udder. Developed in consultation with vets and milk quality advisors, it provides industry agreed ‘good practice’ in a simple, visual, easy-to-follow format. Healthy Udder is all about improving systems and procedures on the farm, and is designed to encourage all members of the ‘farm team’ to use the ‘right’ procedures. SmartSAMM Healthy Udder explains the importance of good udder health for your cows, the farm team and your whole business and can help you prevent, find and treat mastitis. A one page ‘prevent-find-treat’ matrix provides a navigation aid for Healthy Udder as well as a reminder of the SmartSAMM recommended good practices that need to be applied at each stage of lactation, across springers to dry cows. Featuring easy-to-follow systems and containing clear images and graphics printed on waterproof card, this resource has been built for use in the dairy. SmartSAMM Healthy Udder will be distributed to farmers in the next issue of DairyNZ’s Inside Dairy magazine.

Dairy News // september 27, 2011


milk quality

Tests detect changes in milk quality

Australian farmers are also facing the onslaught of mastitis like their New Zealand colleagues.

MASTITIS shows changes not visible on initial inspection. Tests are required to detect subtle changes in the milk. Subclinical cases of mastitis are not usually treated with lactating products.  It is more cost effective to monitor for a few days/weeks and allow the cow to reduce the SCC herself.  This applies to subclinical mastitis found in the colostrum period or following the first 1-2 herd tests. Treat such infections with dry cow antibiotics therapy (DCT) when the cow is dried off at the end of her lactation.  The rapid mastitis test (RMT) measures the presence of somatic cells in milk. Events that increase milk SCC include clinical mastitis, subclinical mastitis, colostrums and involution (drying off process at the end of lactation). The RMT is probably the best cowside tool for screening cows before they go into the bulk tank, to gauge risk of affecting the BMSCC. It can be used to test cows for subclinical mastitis in the colostrum pe-


A common and costly issue for Oz dairy MASTITIS IS also a common and costly problem for Australian dairy farmers, Dairy Australia reports. $A40 million is lost to dairy farmers each year through poor udder health, mastitis being the major cause. Mastitis reduces milk yield and leads to poor quality milk, eroding milk income. In addition, antibiotic therapy used to overcome udder disease adds to dairy farmers’ costs and requires strict monitoring to prevent residue entering the milk ‘Countdown Downunder’ is a Dairy Australia scheme set up to provide farmers with clear, consistent information and resources for monitoring and managing mastitis in their herds. It aims to protect and improve profitability through managing milk quality. ‘Countdown Downunder’ consists of recommendations to assist dairy farmers with profitable control of mastitis. For each period of

the cow’s milking year, ‘Countdown Downunder’ provides a set of guidelines, each with a ‘technote’ summarising the experimental and observational data that underpins it. The scheme is expected to improve udder health, milk quality and dairy farm profitability through resources such as mastitis management guidelines, technotes, web-based resources and customised training. Dairy Australia says mastitis risk has changed much in the past five years: for example, the use of feed pads, stand-off areas and bare paddocks have all increased the exposure of teats to bacteria. In wet weather the risk of mastitis skyrockets. Many old routines don’t work.  In wet or muddy periods there are four key steps: • Wash and dry all teats before cups go on. On wet or muddy days,

every teat must be washed and dried with one paper towel per cow. • Strip cows every day to detect, treat and isolate clinical cases. When cups come off, cover 100% of teat skin on every teat with teat disinfectant. • Keep teats clean for an hour after the cows leave the shed. Set up feeding and other routines so cows don’t lie down soon after milking. If elevated BMCCs or clinical cases persist assess whether you have an underlying problem with teat condition, machine function or other opportunities for bacteria to spread. • Seek professional advice. Cultures are needed to determine the bacteria involved.  At the end of lactation dry cow treatment is your best chance to remove infections and reduce mastitis risk at calving. Talk to your vet about using blanket antibiotic dry cow treatment and teat sealant.

riod. Use with caution in the first 48 hours after calving, as very high numbers of somatic cells in colostrum will cause mild positive reactions. However, infected quarters will still show stronger reactions compared to uninfected quarters. Ideally use on the  third or  fourth day after calving to screen for subclinical mastitis that need monitoring. The conductivity meter (or resistance meter) measures the presence of salt ions in the milk.  Events that increase salt ions in milk include clinical mastitis and subclinical mastitis (some cases).  A relative threshold change in conductivity (resistance) is used to find an infected quarter.  Conductivity (resistance) must be measured and compared across different quarters within a cow, not across different cows. Look for large differences between quarters.  Be wary if all four quarters show a high (or low) result.  Conductivity meters can be used in the colostrum period: use on the third or fourth day to screen for subclinical mastitis. – DairyNZ




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Dairy News // september 27, 2011

milk quality

Milk quality drops when cows face heat stress Heat stress in cows can lead to milk production drop, says Dairy Australia.

HEAT STRESS affects herd milk production and income, but its impact on cow fertility, health and welfare last well beyond

seasonal hot weather and can double a farm’s losses, says Dairy Australia, promoting its Cool Cows programme.

It says most farmers notice falls in milk production when cows get hot. This results in substantial losses in milk

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income, but reduced in-calf rates, low milk protein and fat tests, liveweight loss, higher sometic cell counts, more clinical mastitis cases and other cow health problems further compound the losses. “If you can develop an effective heat stress management programme there are substantial benefits to be gained,” it says. These include higher summer milk production, increased 6-week/100-day in-calf rates, reduced loss of embroyos and increased calf birth weights. “The impacts on cow fertility, health and welfare last well beyond the hot months.” So how does heat affect milk production? Milk production drops

10-25% or more in high heat stress and 40% in extreme circumstances, says Dairy Australia. Milk composition is affected by highto-severe heat stress: milk protein percentage decreases by 0.2-0.4% and milk fat percentage is more variable day-today, and may be severely depressed if ruminal acidosis occurs. Milk quality is also affected. Sediment may increase if cows’ teats are allowed to be contaminated with mud and dung. Risk of udder infection increases, which, if occurs, results in increased somatic cell counts. It also increases risk to cow health. Risk of mastitis and laminitis, and ruminal acidosis and ketosis, also increase.

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Australia, many dairy farmers are looking at ways to use less water. For many this is a result of reduced water availability, for others it is an attempt to maintain water supplies for as long as possible. In 2000, a survey of Australian dairy farmers found the most efficient dairy sheds used no more than 2000 litres/cow/year. At the other end of the scale, the most water used was 38,000 litres/cow/ year – almost 20 times more than the best performers. The average was 9600 litres/cow/year. Dairy Australia says this large variation indicates opportunities to save water and costs on many farms. For example, re-using dairy water offers large benefits, such as recycling yard wash water or plate cooler water. Dairy farmers have identified many strategies to save water. Most water is used for yard washing. Typically larger dairies use about 35,000L daily; smaller herringbone dairies use about 5000L. However water use varies hugely between farms. A survey by DPI Victoria in 2005 found some farms using no more than 1000L per day while others used 100,000L or more for to wash-down. Dairy Australia recommends farmers wash their yards less frequently. “In some situations the frequency of yard washing can be reduced substantially. Periodic hosing is supplemented by using mechanical scrapers to remove most of the dry solids. “The cows need to have good footing on the concrete (dimpled or cobbled pattern). Careful stock handling and use of backing gates will minimise slips and injuries. “In drier times farmers have reported scraping the yard every 1-3 weeks, only giving it a complete clean when rain can soften the built up manure before a complete hose down.”  It also recommends covering drains and scraping most of the drier solids away. Break-up remaining solids, pre-wet yards and then flush remainder with a high flow rate wash.

Dairy News // september 27, 2011


milk quality

Simple changes make big difference SAM PALMER

WITH SO much time spent in the farm dairy, it makes sense to take some time to review and improve working routine and techniques. Both will help reduce fatigue and

involved in the milking process. Improving the milking routine will increase efficiency and can also compensate for faults in the dairy design. The aim of the milking process is: A constant flow of cows into and out of the dairy.

Simple changes to a milking routine can make a big difference, saving time, reducing costs and lessening stress on the body. injury, help you become more attentive, make fewer mistakes and look after the cows better. Simple changes to a milking routine can make a big difference, saving time, reducing costs and lessening stress on the body. Easy fixes include changing your cupping technique on a regular basis to give muscles a chance to recover. Using the same technique over-and-over again can lead to muscle strain and injury. The environment is another key area to look at. Are you making the most of the natural light for your work and do you have comfortable footwear or even rubber matting to help reduce fatigue when standing for long periods? Resources DairyNZ has developed a number of resources to help improve milk harvesting efficiency including DairyNZ’s Milksmart programme. The programme allows a farmer to complete a comprehensive selfassessment of the milk harvesting operation and then compare their performance against other farmers. Milksmart is concerned not only with milking, but with the whole milk harvesting process, from collecting the cows from the paddock and milking, to clean-up and the return of the cows. One of the topics the Milksmart programme covers is ‘milker comfort and routine’. The milking routine is one of the easiest areas to improve on. What is involved in the milking routine? This is the way in which milkers carry out the tasks

Clusters attached to cows as soon as they are in the milking position. To have clusters removed as soon as possible after cows are milked out. Good milking routine in a herringbone dairy Both milkers bring up a batch of cows, say 6-8, to half fill the platform. The rest of the cows should follow in if the backing gate is well controlled. Cupping starts at the exit end Start the second milker cupping according to teat spray nozzle position. If they are four cows apart then the second milker will start four cows away from the first. ‘Bunny-hop’ down the pit, up to about the half-way point – roughly when the head gate can be opened. Teat spray as you go, in batches determined by the teat spray nozzle position. This saves time as it means the head gate can usually be opened earlier. Back track to change slow milkers. Use the backing gate in small bursts from about mid-way down the pit. This will tighten up the cows so they are keen to walk in. Fit cords for the head and backing gate, or a control rod past the half-way point, so they can be opened without walking extra steps. Open the head gate as soon as practical. Avoid getting out of the pit. Do other less important tasks such as platform washing as the milked row of cows is moving out leaving one person to control the head gate and backing gate. Good milking routine in a rotary dairy

Good control of the backing gate is vital; manage it to keep cows coming onto the platform in a steady stream. Keep the platform moving, apart from during emergencies. Continually adjust the platform speed so

fewer than 5% of cows are going round twice (assuming you are not using maximum milk-out times). The person cupping should avoid going out into the yard as it disrupts cow flow.

To page 42


Dairy News // september 27, 2011

milk quality

Simple changes make big difference From page 41

Milking methods Time can be saved and milking made more comfortable by employ-

Two at a time method.

ing an efficient milking method when attaching clusters. Below is a description of different routines.

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Round the circle All new milkers should learn this method because it works well in herringbone and rotary dairies, is easy to learn and less tiring than other methods. There is also less risk of getting kicked as you start cupping the far side rear teat. This involves using the right hand to put the cups on the right hand side row of cows (facing the exit) because it is easier to reach through the back legs. On the left hand side of the platform, use the left hand to put the cups on. For the right hand side pick up the claw with the left hand and reach over the left arm to put on the left back cup (using right hand) at the same time. See diagrams below. In a rotary dairy the direction of rotation determines which hand holds the claw. If the rotary is turning clockwise it is the right hand. With anti-clockwise turning rotaries hold the claw with the left hand. Unfortunately although the method works well in rotaries it does not allow the person to rest by changing hands which the following method allows for. Two at a time This method is slightly quicker than ‘round the circle’ and is a useful alternative on rotaries to ease workload on hands and arms, as it uses the opposite hand to hold the claw. This method may be difficult in some claws, for example if the shutoff button shuts off the vacuum during the final step, or for people with

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smaller hands. To do this when the rotary is going in a clockwise direction pick up the claw in the left hand and take the front two cups in the right hand. Put them on the front left and then the front right teat. See below. For anticlockwiseturning rotaries, simply reverse the process, picking up the claw with the right hand. Cluster removal Careful cluster removal improves cow behaviour at subsequent milkings and the cow is less likely to fidget, making it easier to put on clusters. Clumsy cluster removal can increase the rate of new mastitis infections. The air blast caused by a slipping liner, or by taking the claw off under vacuum, can fire potentially infected milk at the other teats. Follow these steps: The first step is to break the vacuum. Kink the long milk tube or pull the vacuum cut-off valve and wait 1-2 seconds while the claw fills with air at atmospheric pressure. Then rotate the cluster 30-60° to break the seal and assist with cluster removal. Once the cluster is removed the milker should be able to hang it up on a convenient hook or swing it over to another cow. Check teats for damage 30 seconds after the cluster is removed. • Sam Palmer is a DairyNZ developer. This article first appeared in Getting the Basics Right 2011

Dairy News // september 27, 2011


milk quality

Best practice made easy MINIMISING GRADES

and maximising efficiency is now easier for dairy farmers nationwide, thanks to the technical

A good liner, well fitted, will milk a cow out quickly and efficiently website which covers essential best practice for milk harvesting. It offers simple, practical advice to help farmers get the best out of their cows at every milking. Recent research shows more efficient milk harvesting could increase our national milk yield up to 5% per year. It could also

save the average dairy farm thousands of dollars a year in energy, labour and animal health costs. So what are the key steps to focus on? The website covers four in-shed essentials that can make or break an efficient, high quality milk harvesting process: • Liners • Milk filters • Tubing • Teat spraying Together, these basic components have much more impact on milking performance than most farmers realise. So says Skellerup NZ, which began working years ago on the best practice guidelines, says national manager, Perry Davis. “We started with the

areas where farmers most often approach us for trouble-shooting, and worked from there. We soon saw lots of common issues costing farmers time and money, yet relatively easy to fix if you had the right information available.” Milking liners are a great example, Davis says. Old, worn or illfitting liners can waste energy, cause grades and damage cows. They are one of the single biggest factors influencing milk production. They are also one of the most economical things to replace. Yet 50% of dairy farmers don’t change them often enough, expecting them to last nearly twice their actual

Efficient milk harvesting can improve national yield by 5% annually.

lifespan. That’s like expecting the average cow to milk well for 20 years. The very nature and role of milking liners means they are likely to have more impact on milking efficiency, hygiene and cow comfort than any other component of a milking machine, Davis says. “They are the one

part of the machine that comes into constant physical contact with the cow. But because they’re mostly hidden inside the shell, it’s easy to assume they’re working properly even when they’re not.” By the time cups start falling off cows during milking – the first major sign that liners are worn out – the damage could

already have been done, either in wasted energy, milk hygiene, cow health or all three. A good liner, wellfitted, will milk a cow out quickly and efficiently. It doesn’t slip and it leaves the teats looking similar in size and colour to how they looked before milking. “A badly fitting

over-used liner is just the opposite. It could leave milk in the udder, slip off the teat and/or leave noticeable rings at the top of the teat. Permanent teat damage is not only possible, but common. On top of that, any cracks in the rubber are likely to harbour bacteria.”

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Dairy News // september 27, 2011

milk quality

Keep tabs on mastitis SCC IS the somatic cell count or number of

‘body’ cells counted in a sample of milk. Most of these somatic or ‘body’ cells are white blood cells, that move from the blood into the udder after bacteria enter and infect the udder. The SCC can be measured in a number of different ways: • Cow-side, on an individual quarter basis, using a rapid mastitis test (RMT). • Herd test sample, on an individual cow basis, known as the individual cow SCC. • Bulk tank sample, when the tanker empties the vat (per consignment basis) known as the bulk milk SCC or BMCC. Recent developments in milking machine technology have allowed some milking systems to include sophisticated in-line SCC measuring devices.  These should not be confused with technologies that measure changes in milk conductivity, and related measures. The SCC increases when an individual udder or gland becomes infected with bacteria and starts to release somatic cells.  The SCC can rise quickly, and to high numbers. The thresholds at which a gland or cow is considered infected depend on the

age of the cow, the number of quarters affected and the way the milk sample was collected. Typically a cow or heifer is considered infected if: • A cow has an ICCC above 150,000/ ml (herd test sample). • A heifer has an ICCC above 120,000/ ml (herd test sample). • If the SCC is measured on the first foremilk from an infected gland, the SCC threshold for infection is much higher (i.e.

above 500,000/ml). Different thresholds are used for the BMCC. A BMCC of 150,000 per ml or less is considered desirable whereas a BMCC above 350,000 or 400,000/ml will usually attract a financial penalty. Generally the BMCC will be related to the proportion of cows with subclinical mastitis in the herd. Sudden spikes usually indicate new infections, some of which will be undetected clinical cases. – DairyNZ

What do farmers need to know? Use SCC information to monitor chang-

es in mastitis of individual cows or for the whole herd. If the BMCC shows sudden spikes on a day to day basis, strip the herd to find undetected clinical cases. If the BMCC is approaching 300,000/ml, reduce the number of infected cows in the herd. Get help (vet, farm advisor, dairy

company, websites) on ways to find mastitis and reduce the BMCC. If the ICCC of individual cows is above 500,000-1 million/ml, strip to find clinical signs. Only treat cows with clinical mastitis.  It is not cost-effective to treat subclinical mastitis during lactation.

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Dairy News // september 27, 2011


machinery & products Cow beds a hit with 95% of guests NEW WINGFLEX cow beds are said to be proving their worth on two Southland dairy farm where they were installed this year. Wingflex matting, new from Numat, has a 60mm thick winged underside and a natural rubber surface that provide “the perfect amount of softness, while adapting to the body shape of the animal,” Numat says. This cow bedding system, made in Germany, has already lifted milk production on these two farms. The matting’s gentle slope and open ended grooves make cleaning easy, and sealed edges prevent soiling underneath the mat. Paul Westlake uses Wingflex in his new 758-bed wintering barn at Clover Park Dairy near Winton. He says the product, installed one side of

German-made Wingflex cow beds are popular in Southland.

To page 46

So they gave him a new one



later it was still going strong, so they gave him a new one. No, he didn’t get it for his birthday, he was given it by the manufacturer. Bruce Tomlin, of Tauweru, Southern Wairarapa, ten years ago bought a Vogal Spreadmax 400 fertiliser spreader. At National Fieldays in June he mentioned to Daryl Norrish, national sales manager at Paddon, Geraldine (owner of the Vogal brand), that the To page 47

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Dairy News // september 27, 2011

machinery & products

Tackling ATV turf LATEST OFFERING in the farm utility category is a keenly priced Korean from Power Farming Group. At $18,990+GST the Kioti Mechron 2200 UTV is likely to “cause a stir in a price range traditionally the turf of quad bikes,” says sales manager Brett Maber. ATV convenience converges with smalltractor durability and load carrying: a 22hp Daedong diesel engine gives it ample power for moving people, gear and trailers. And there is much less risk on slopes

than with an ATV, Maber points out. It has the widest wheel base in its class, lap belts, ROPS and an inherently low centre of gravity. Mounting and dismounting are easier than on ATVs, says Maber. “For farmers with hip or leg injuries this offers a real alternative in getting around. They can get in and out comfortably, and a hand throttle kit is an option.” Key features reflect ‘tractor tough’ design: ladder-type chassis, welded ROPS, and the same 3-cyl. engine that

powers Kioti’s small tractor range (low revs, good torque). “This is an ATV machine built by a tractor company, not an ATV from a motorcycle manufacturer, and it shows,” says Maber. The CVT transmission also has limited-slip diff in front and a mechanically operated rear differential. 4WD is selected mechanically. Load capacity is 720kg. With three people seated, a pen on the rear tray and a trailer (590kg towing capacity), jobs get done efficiently.

On-road costs are relatively low; add indicators and side mirrors to make the machine a useful farm-to-farm getabout. Suspension is McPherson struts in front, and independent rear arms. Ground clearance is 30cm.

Cow beds a hit with guests

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the barn, is popular with the cows and easy to clean. Fewer than 5% of his cows were reluctant to lie down on the surface, much fewer than expected, he says. “The cows are happy and do what they are supposed to do. Comfort is a big thing.” The matting can be combined with Ergoboard, a flexible brisket board that allows cows to enjoy a natural lying position with their forelegs stretched out. Blair Murdoch, of

Murdoch Southern Farms, Southland, also put in the Wingflex mats this year and immediately noticed a lift in milk production, Numat says. The cows are lying down more and the new mats are easy to clean. ``There are a lot more cows sitting down and they are a lot more comfortable. We had more milk production over June, quite a bit more. They are sitting down longer and sitting straighter because the comfort is in the middle of the mat.’

Numat technical sales manager Tony Judd says the company distributes Wingflex exclusively in New Zealand and Australia and has done so for 12 months. Three farmers who have so far installed the product give it a positive report. Numat sells a range of products for in and around dairies, including entry and exit pads, items for outdoor feedlots, mats for steep underpasses and calf trailers.

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Dairy News // september 27, 2011


machinery & products

Fine, even spread from ‘aggressive’ discs

New fertiliser spreader From page 45

HORIZONTAL ‘MILLING’ of effluent in the

Bergman TSW 3140 spreader makes for an even spread of fine solids, says distributor Webbline. The company’s sales manager Glen Malcolm says his customer Lindsay Harliwich, a West Otago contractor, looking for a new spreader, took special note of the beater and spreader unit, in his opinion the “heart of the machine”. The Bergmann uses two horizontal milling units to spread the effluent onto to aggressive disks, similar to those found on a standard fertiliser spreader. The result is an even spread of product across the paddock, Malcolm says. “This type of spreader is the way of the future as farmers demand a more consistent, even application of the manure, once considered a bothersome byproduct, now realised as a valuable byproduct.” The Bergmann will also spread lime, compost, pond sludge and wintering pad bedding. The machine is available with an optional

spreader had laid about 500 tonnes on his farm, at no expense for maintenance or repairs. Says Norrish, “After finding out his spreader had completed such an exceptional amount of work, spreading everything from lime to urea and even a bit of grass seed, we decided to give him a new one. “This happens to be the 50th anniversary of the brand and a special occasion needed a special machine.” Tomlin was last month presented with his new spreader at Wairarapa Machinery. Tel. 0800 72 33 66

“Will spread anything” says Harliwich Contracting Bergmann operator Kris Donovan, seen beside his new spreader.

controller to govern the floor scraper bars which work on a pressure system, controlling the rate of discharge. This also acts as a safety device, whereby the floor stops moving if the pressure gets too high if a foreign object (e.g. concrete, tyre) gets in the bin. Kris Donovan, Harliwich’s operator, com-

mented a hydraulic lift axle on the Bergmann is a “bonus” when he is operating in slippery conditions. This enables him to take the weight off the front axle of the spreader, transferring more weight onto the drawbar and so increasing traction at the tractor’s rear wheels. The machine’s one-piece tapered bin

is as close as a manure spreader can get to being waterproof, Webbline says. This minimises the leakage when very liquid manure is being carted. The tapered bin also means that once unloading begins, the pressure comes off the sides, allowing for a smoother unloading pattern, and reducing drag, saving

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Dairy News // september 27, 2011

machinery & products

Prompt start to planting VERTICAL TILLAGE, a hallmark of

Great Plains Manufacturing, is most recently presented in the company’s new 5000 Series Turbo-Chisel, reports local distributor Origin Agroup. Tilling down to 28cm, this machine will size and incorporate residue after crops and provide uniform horizontal fracture. It leaves soil level enough in the autumn to ready in a single pass for spring planting. The maker’s 22-inch turbo coulters on 7.5 inch spacing are fitted across the front of the machine and start the process by ‘slicing’ residue to create horizontal soil fractures. Thus it suits maize stubble, says Ori-

gin’s David Donnelly. These turbo coulter blades run on 1.75 inch gang bolts with cast spools, putting the weight ‘in the gang’ to add weight for penetration and to ensure strength and reliability. “The gang bearings are field-proven rubber mounted bearings with cast housings mounted to Great Plains’ heavy-duty 1 x 3 inch ‘C’ shank standards,” Donnelly says. “The coulter bar is also hydraulically adjustable for on-the-go depth control. “The turbo coulters are followed by two rows of parabolic springtrip chisel shanks: the front row is equipped with heavy duty parabolic

spring-trip shanks followed by a second row of medium duty spring–trip parabolic shanks. The front rows of shanks are designed to run 1.5 inch deeper than the chisel shanks on the rear bar.” New chopper wheels are also fit-

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ted to the rear to aggressively smash, dice and level the soil for one-pass follow-up. This means that, working from the front to the back of the machine, the result is a ‘slicing-mixingdicing’ result perfect for starting the organic process – micro-organisms

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Feathered friends enemies of tractors RURAL INSURER FMG

is campaigning to alert farmers to the risk of tractor fires during the bird nesting season. September to November is the worst time, says head of claims Sean Beattie. A starling can build a nest in a tractor engine in one hour or less, he says. Enclosed engine bays are sheltered, cosy spots for a starling to build a nest.  FMG recommends fitting a fire extinguisher

Integrated Packaging (IP) is New Zealand’s leading manufacturer of agricultural silage film and a specialist distributor of high quality crop packaging products.

immediately start breaking down the organic matter into the soil. Located in Salina, Kansas, Great Plains has built seeding and cultivation implements since 1976.

in every tractor. To avoid accelerating the fire, poke the nozzle of the extinguisher into a gap alongside the engine bay and pull trigger, rather than lifting the bonnet.  Here’s what you can do to lessen fire risk:  Stop and pop Check for nests under the bonnet before starting. Birds can build nests during a lunch break so look before every start-up. Pop the bonnet and store the tractor with it lifted.  Birds like

sheltered spaces when nesting; a raised bonnet will deter them. Keep it clean Service and maintain your tractor regularly. Ensure engine components are clear of dust and debris. Put it out Fit your tractor with the appropriate fire extinguisher and get the recommended maintenance and pressure checks done.

Tel. 0800 366 466

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to punctures in almost any pneumatic tyre: that’s the latest from TRS Tyre & Wheel Ltd, promoting its Puncture Proof. This non-toxic, water soluble compound is good for mending wheelbarrow or tractor tyres. And it differs from competing products, the company says. Instead of one product for all it comes in two formulations: Punc-

ture Proof 50 for low speed industrial or farm

use; and Puncture Proof 100 for high speed tyres. The product is

pumped into the tyre, where it remains in liquid form when a tyre is punctured, the puncture proof is forced into the hole and immediately sets to provide a permanent repair. Puncture Proof contains 10% recycled rubber and it is this rubber, in conjunction with the other ingredients that creates a successful repair.

Tel. 0508 899 899

“The marked reduction in calcium/magnesium related metabolic disorders in animals during spring as well as a steady improvement in overall animal health, as a result of a single application of dolomite, are the major reasons for the steady increase in demand for dolomite.” To read more visit or call 0800 436 566

Dairy News // september 27, 2011


machinery & products

Saluting effluent ‘good guy’ TONY HOPKINSON

ONE MAN who believes most dairy farmers work hard and responsibly to get rid of dairy shed and feed pad effluent is Neville Williams, of Williams Engineering Ltd, Mangatarata, just north of Thames. And he says highlighting the ‘good’ farmers will raise the standard for the rest. “Farmers making a great effort should be publicised more – even recognition by plaques or signs on their driveways, so the community learns what they’re doing. “Those farmers letting down the rest of the industry should get all they deserve. But let’s be positive and salute the ones making an effort.” Williams has spent all his life in the Thames region. He was schooled in Morrinsville and did his engineering apprenticeship there, then joined his father at Williams Welders doing pipework and machinery repairs, and making hay barns and dairy sheds, especially the then-new herringbone milking system. The business moved in 1983 to its present factory at the corner of SH25 and SH2. Here Williams started in dairy effluent, first building large tanks for Otto Fitzi. “These were a European concept,

new to New Zealand and ideal for emptying the old system of ponds.” He designed what he believes is the first trac-

Angela Williams

tor mounted pond stirrer, now the template for the industry. In 1991 he produced his first travelling irrigator; now the company makes spreaders, pumps, stirrers, and delivery lines with hydrants. “With our specialist knowledge and experience we concentrated on this side of the business.” Says Williams, “The business has succeeded and grown, not least because of the love and support of my wife Angela who looked after the publicity and the advertising while I did the engineering.” Williams recently sold his business to his son Andrew and plans to go fishing.

Swatting the rules ANDREW WILLIAMS has worked six years in the industry. He bought his family’s business last September and now trades as Williams Engineering (2011) Ltd. “I will be keeping up dad’s high standards and bring out innovations,” he says. “But I’ll also be spending more time understanding the many regulations the effluent disposal industry now faces.” Williams, who trained as an engineer, is studying extramurally at Massey University towards a qualification in designing and managing effluent disposal systems. His recent upgrade to the Williams Green Back Spider low-application travelling irrigator, designed in consultation with Massey, enables it to measure the effluent going on pasture. Long-term he plans more liaison with environmental groups to improve his equipment design and performance. The company exports to US, UK, Australia, Chile, South Africa, Mexico, Uruguay and Ecuador. Tel. 0800 4333 58368

Williams Engineering founder Neville Williams (right) with son Andrew, the new owner.


Dairy News // september 27, 2011

machinery & products

Meteroic rise by Korean

Euro ute’s auto has eight speeds AFTER THE local motoring journalists had driven the new VW Amarok ute, the general feeling was the only thing preventing it seriously threatening the Japanese incumbents in the lucrative local ute market was the lack of an

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automatic gearbox. VW has announced just such a gearbox will be available in the Amarok “from quarter two, 2012”. Not just any old gearbox, but an 8-speed automatic. Why so many gears?

To provide a broader gear ratio spread between 1st and 8th giving better fuel efficiency and quicker engine response. Married to a 132kW / 420Nm Twin Turbo TDI engine and permanent 4WD, the automatic

transmission will greatly increase the Amarok’s appeal and probably sales. Further details on local specifications and pricing will be released closer to the time of the 2012 launch.


HYUNDAI SAYS is delighted at its meteoric rise in approval by drivers of its vehicles. Over the last decade it has topped Auto Express magazine’s ‘10 years of Driver Power’ survey. “No brand has taken such a massive leap over the past decade as Hyundai,” says acting editor Graham Hope. “Its range now is unrecognisable from 2002, and our readers regularly tell us they are pleased and proud to own a Hyundai.” From 300,000 surveys over 10 years of the annual Driver Power survey, Hyundai has gone from one of the poorest performing makers for customer satisfaction to one of the five best.  And it has risen from 28th to 4th place (2011) in best-manufacturer rankings. NZ chief executive Tom Ruddenklau says the result echoes that seen in New Zealand. “Kiwis are proud to have a Hyundai in their driveway and happy to share their experiences.  “We recently launched Hyundai Neighbourhood, an online community on our website, where people can evaluate vehicles and service before buying and talk first-hand to owners – honest reviews, impartial advice and questions.” The Hyundai i30 is rated fourth in the Top 50 cars of the decade, and sent shockwaves through the industry when it was named the most satisfying car in Britain in the 2010 Driver Power survey. In New Zealand the i30 won the 2009 AA Supreme Winner award.  Meanwhile the recently launched Elantra has been named AutoPacific’s Ideal Compact Vehicle, while the i45 is the 2011 International Car of the Year.

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DN Issue 255  

DN Issue 255