Dairy News 16 October 2012

Tatua tops milk payout table. Page 4

art and calf Kids win big.

Page 13

million litres a day Suppliers lining to join Miraka.

Page 16

october 16, 2012 Issue 278 // www.dairynews.co.nz

global milk supply easing Ripple effect on the payout in New Zealand. PAGE 3

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Dairy News october 16, 2012

news // 3

Global milk supply slows, prices to firm Industry leaders reluctant to tip payout rises SUDESH KISSUN Out with trees, in with milking sheds.

PGs.46-47

Fewer lame cows and lower SCC. PG.50

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DAIRY INDUSTRY leaders are certain about one thing: uncertainty in the global dairy market.

Economists are predicting less milk arriving on the global market next year. But industry leaders are reluctant to say whether the squeeze on supply will lift dairy prices and ultimately drive up farmgate prices at home.

Renewed scarcity stems from extreme feed costs and pockets of unfavourable weather, including a crippling drought in the US. Fonterra chairman Henry van der Heyden agrees milk supply in the US is being affected. But he’s not saying how the payout will fare if supply dips as expected.

“It’s a bit too early to say,” van der Heyden told Dairy News. “There are a lot of scenarios we can think of. Only time will tell. It’s all about supply and demand and how they play out will determine prices.” He believes volatility seen in the dairy market during the last five years will continue.

Tatua chairman Steve Allen agrees it’s hard to take the pulse of dairy prices. While Allen expects prices to firm next year, he says Tatua takes a longterm view. “For us, it’s a good thing to be involved as a food producer in New Zealand long-term.”

One thing standing between New Zealand dairy farmers and a good payout is the strong dollar. In the latest issue of its quarterly ‘Agribiz’ report Westpac says dairy prices are firming and should continue to do so.

The downside is the New Zealand dollar’s strength will “temper” gains in the domestic market, in the short-term at least. “As is often the case, the dollar has followed dairy prices higher,” notes Westpac senior economist, Felix Delbrück.

Westpac continues to forecast a dairy payout of $5.70 for the current season but in 2013/14 and beyond “prospects are firmer,” says Delbrück. “With

Economists say less milk will arrive in the global market next year.

a recovery in global growth and ongoing income growth in emerging markets, particularly China, we expect increased demand to underpin prices.”

Spikes in grain prices, driven by drought in the US and reduced harvests in Europe, have driven the recent lift in markets with Global Dairy Trade prices up about 20% since late July, he notes.

The US national dairy herd is contracting and while US milk supply is still growing – just – it is expected to start contracting before the end of the year. “This means less milk is likely to find its way onto global markets putting upward pressure on prices. Compare this to the last 12 months where a tsunami of milk was being produced in a number of key exporting regions.”

Rabobank senior analyst Hayley Moynihan says it fears that much of the market has been lulled into a false sense of security by the phenomenal growth seasons late in 2011 and early 2012.

Expect the next 12 months to bring a rude awakening, Moynihan says. “The slowdown in milk production growth in export regions will be suf-

ficient to undershoot even the modest growth in consumption that we expect in advanced economies, given the sobering economic outlook in the EU and US.” Moynihan says this will reduce the exportable surplus available from the ‘big seven’ export regions of the world (EU, US, New Zealand, Australia, Argentina and Brazil) in the closing months of 2012 and the first half of 2013, the first such reductions in more than four years.

“With little excess inventory in the market, the equation then becomes simple: any increase in import demand from deficit regions will create supply shortages, with the extent of the shortage fuelling an appetite for imports.”

Factoring in a modest planned increase in imports over the next 12 months from key buying regions, Rabobank expects prices to rise substantially in the international market. This will bring about the demand rationing needed to balance the market and move prices into alignment with rallies already evident in US and EU wholesale pricing.

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4 // news

Tatua tops co-op payout table ANDREW SWALLOW

WAIKATO COOPERATIVE Tatua has again topped the milk payout table, trumping big brother Fonterra’s combined milk price plus dividend figure of $6.40 by $1.10/kg, and Westland’s $6.14/ kg by $1.36/kg.

Tatua chairman Steve Allen told Dairy News it’s humbling to finish so far ahead and attributes the success to “some really good people” at the Morrinsville firm. “It’s been a privilege to work with them.”

Allen says 2011-12 was one of those seasons where a “whole lot of little things came together”.

Demand for Tatua products remained strong and its product mix returns were favourable. Products from a new food plant built in 2010-11 are also selling well.

While Allen says Tatua doesn’t set out every season to beat the other processors in the payout battle, it’s humbling to be on top – again. From the 2010-11 year Tatua paid its suppliers $8.10/kg after a 58c/kgMS retention; Fonterra paid $$7.90/kg including dividend and after a 35c/kgMS retention, and Westland’s all-in payout was $7.80/ kg.

Given the volatile markets and a strong exchange rate during the 2011-12 season, to be able to return $7.50/kgMS

Tatua exports most of its products to Southeast Asia, Japan, China, US, Australia and Indonesia.

Fonterra chairman Henry van der Heyden told Dairy News he’s not content with Fonterra coming second, but congratulated Tatua on its performance.

“I say well done to Tatua…. We have got the silver medal, but it is not as good as a gold.”

Asked why he thought Tatua had done so well, van der Heyden said he’d need to see the co-op’s milk supply curve.

Like other independent processors, Tatua takes 50 million litres of milk/

to its 109 suppliers, and retain 54c/kgMS from it, is very satisfying, he adds.

The retention allows the co-op to invest for the future. “We are 98 years old and have a history of reinvestments…we invest in technology, people and sustainability.”

And while some farmers may be scoping for alternative co-ops to supply, Allen says Tatua’s strategy is to add value to existing farmer milk as opposed to growing milk volume.

With its limited milk supply, New Zealand can only feed a certain portion of the growing global population, so “as a company and as a country, we have to be selective about how we go to the market,” he says.

Tatua chairman Steve Allen says it’s humbling to finish on top of the payout table.

year from Fonterra as permitted under DIRA, giving it a more uniform milk supply throughout the year, he notes.

Fonterra’s $6.40 payout includes a dividend of 32 cents, representing a 7.1% return on the restricted share price of $4.52, leaving a milk price of $6.08/ kgMS.

Non co-ops signal interest from potential suppliers ANDREW SWALLOW

AS LEAST two of New

Zealand’s non-cooperative milk processors have managed to pay their suppliers more than Fonterra’s milk price from last season.

Synlait last week announced its 150 suppliers received an average of $6.22/kgMS in 2011-12, with autumn supply premiums contributing 1c/ kgMS to that, winter milk premiums 3c/kgMS, and colostrums and other special milk payments 4c/ kgMS. Meanwhile Open Country told Dairy News that across all regions and seasons, winter milk excluded, it paid $6.18/ kgMS. Besides having no capital tied up in cooperative shares, OCD suppliers had a cashflow advantage over their cooperative counterparts, points out chairman Laurie Margrain. “We paid for the milk throughout the year considerably

corresponds to, other than earlier, much earlier than to say many of their supanyone else, and we paid pliers produce more milk 10c/kg above the Fonterra milk price.”

OCD’s Awarua (Southland) and Waharoa (Waikato) plants “are essentially full” this season, with spare capacity at Wanganui just enough for peak season overflows.

Despite a “significant” increase in capacity at Awarua and Waharoa for next season, Margrain says Laurie Margrain OCD’s already had more than the national averexpressions of interage. Suppliers are paid a est to supply than it will volume bonus which averhave capacity for. “We’ve ages about 6 cents/kg and noticed a spike in interest amounts to 10c/kg for the over the last six months biggest producers. because of our cashflow While the level of intermodel and I think the TAF est to supply OCD means issue is still divisive [for it will be able to pick and Fonterra shareholders].” choose new suppliers to At present OCD has some extent next season, “over 500” suppliers the terms offered are stanaccording to its website. dard, he stresses. “Our Margrain declined to give offer is absolutely transthe number of cows that

parent.”

OCD has no new sites planned in the immediate future but that remains a possibility down the track, he adds. “Really our focus is on doing what we do better and better, rather than trying to be bigger and bigger.” The aim is to move the product mix higher up the value chain.

Synlait Milk’s been doing that with its second large-scale dryer commissioned last spring at its site at Dunsandel, Canterbury, a specialist unit producing the firm’s first commercial volumes of infant formula.

Chairman Graeme Milne says the firm is looking forward to announcing a profit at its annual meeting, November 16, and is pleased with the level of that profit given the volatilite commodity and currency markets, and the challenges of operating a new plant.

“Securing more milk supply for the coming

season is an important step as we continue to grow our business, so it’s pleasing to be able to offer solid returns like this to our supply partners while also meeting shareholder expectations,” he adds.

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Dairy News october 16, 2012

news // 5

$8.2m payout not a ‘golden parachute’ sudesh kissun sudeshk@ruralnews.co.nz

FONTERRA CHAIRMAN Henry van der

Heyden says the $8.2 million paid out to former chief executive Andrew Ferrier is not a ‘golden parachute’ deal. It is instead related to Ferrier’s performance during his eight-year stint at the co-op.

In its 2011-12 annual results, Fonterra revealed a payment of $8.2m to a former employee and van der Heyden last month confirmed to journalists it was Ferrier’s final payment.

Last week van der Heyden, chief executive Theo Spierings, chairman-elect John Wilson and Fonterra Shareholders Council chairman Ian Brown fronted eight shareholder meetings around the country. Turnout was poor: an average

of 80 farmers at each. The meetings were called to give farmers the big picture of 2011-12 accounts.

Van der Heyden attended three meetings: at Invercargill, Ashburton and Hawera. He told Dairy News Ferrier’s final payment was part of his opening address at each meeting. “I explained in a bit more detail the final payment and made it clear it has nothing to do with a golden parachute. It’s a lot of money but it has been accrued and included short-term and long-term incentives.”

TAF (trading among farmers) and Horizons Regional Council’s controversial One Plan also came up for discussion.

Brown conveyed his council’s decision to pass the fifth and final TAF precondition, giving the board a mandate to proceed with the launch of TAF. The fifth TAF precondition was the support of at least

Five dairy farms in Hawke’s Bay are in receivership.

More farms go bust Fonterra is defending a $8.2 final payment to former chief executive Andrew Ferrier.

50% of the Shareholders’ Council.

Van der Heyden says there were no negative comments on TAF. “It seems most farmers have accepted the June 25 vote and want us to get on with it.”

Wilson explained to farmers the board’s decision to reintroduce a resolution seeking constitutional changes and tightening limits on the size of the Fonterra Shareholders Fund.

Van der Heyden says

the board is “not changing one word” in the resolution that narrowly failed to get the 75% vote required.

On One Plan, van der Heyden says farmers raised concerns about how it would impact farming in their regions. Fonterra has accepted an Environment Court decision to uphold strong rules designed to protect the environment and control land use.

However, Federated Farmers has filed an appeal.

According to van der Heyden, the dairy indus-

try needs a coordinated strategy on sustainability. “We’re a little behind the eight ball here but sustainability is on Fonterra’s agenda. We believe the future should be less about debate and more about Fonterra being at the decision table.”

Van der Heyden says decisions on sustainability must be in the interest of New Zealand and Fonterra wants to play a part at the decision-making level. @rural_news facebook.com/ruralnews

council backs TAF plan FONTERRA SHAREHOLDERS Council chairman Ian Brown says a resolution supporting TAF (trading among farmers) garnered 97% support among councillors.

“The council’s support for the preconditions, which are underpinned by 100% farmer ownership and control, signal they have reached the standards set by the council on behalf of our farmer shareholders.”

He says the council had done a robust and independent two-year review to ensure farmers’ interests were paramount in the devising of TAF.

“From the outset the council viewed 100% farmer shareholder ownership and control as a nonnegotiable and that any change to the capital structure had to be an enduring one. To ensure this the council engaged the services of external advisors who worked to review all aspects of TAF from a farmer’s perspective.

“We are confident the protections contained in TAF will preserve 100% farmer shareholder ownership and control and that the TAF model before us will provide the cooperative with stability for years to come.”

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THERE’S INTEREST from overseas and within New

Zealand in five dairy farms and two support blocks in Hawke’s Bay offered for sale by receiver Price Waterhouse Cooper (PWC).

The receiver, Maurice Noon, told Dairy News the offerings result from two separate and unrelated receiverships, one involving four farms and a support block and the other one farm and a support block.

He says given the fact all the farms are in close proximity and the major creditor is the BNZ, it was considered a sensible proposition to market them at the same time.

According to the realtors, PGGW and Bayleys, the farms range in size from 121ha to 524ha and collectively the land area is 3,138ha milking about 4400 cows.

Total milk production for the coming season is estimated at 1.54 million kgMS. The agents say a lot of capital has gone into farm infrastructure including stock water, races and fencing.

The dairy sheds are modern and pasture has been renewed on most of the farms. But receivership is understood to have been caused by overcapitalising and they may have been under-funded from the start.

“We have been working towards bringing them up to a marketable standard over the past year because many of them were recent or incomplete conversions. We have a lower order sharemilker on one and the rest are being managed. The farms are good performing operations, but like all new conversions they do have some growing to do and as such have significant potential,” says Noon.

The farms are being marketed nationally and internationally and tenders close at the end of November.

Noon says the advertising extends to Europe, Asia and China.

“There has been strong domestic interest, and a number of people have contacted us but it’s early stages because the tender was only advertised a week or so ago. I am told there is interest out of Europe,” he says.

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Dairy News october 16, 2012

6 // news

Academic, industry stalwart move on directorship

Aussies push ahead with fresh milk to China RICK BAYNE

AUSTRALIAN MILK vendors are pushing ANDREW SWALLOW

SCIENTIST AND indus-

try commentator Jacqueline Rowarth has joined former Shareholders Council chair Blue Read in announcing their candidacy for Fonterra’s board.

Both took the bold step of going public with their nominations before the Candidate Assessment Process, is complete (see p9).

They’re each seeking one of three board positions are up for election this spring. With Colin Armer retiring, at least one new face will grace the top table when results are announced at the December 17 annual meeting.

John Wilson and Nicola Shadbolt are seeking reelection.

“Science and communication are my skill,” says

Blue Read

Rowarth, whose background is a first class honours degree in agricultural science at Massey, followed by a doctorate in soil science. She’s since worked at AgResearch, Lincoln University, Unitec, the University of Melbourne, and Massey, and is currently Professor of Agribusiness at University of Waikato. She qualifies as a candidate through a farm partnership shareholding.

She has a string of awards to her name, including an NZOM for

services to agricultural science, and has held several board positions, including a current one on the board of AGMARDT. She says University of Waikato is supporting her application and, should she be successful, would ensure she’s able to give the Fonterra position the commitment it deserves.

“As professor of agribusiness at Waikato some of my current commitments are aligned with a role as a Fonterra director anyway.”

Such multi-tasking wouldn’t be unprecedented: Shadbolt is Professor of Farm Management at Massey.

Rowarth says she’s seen a desire from Fonterra shareholders for better communication, both within the company, and externally to government, media, and society in general.

The need for better communication isn’t just domestic, she adds. “A better relationship with

Jacqueline Rowarth

government and society in general will have benefits in overseas markets. The goal is to enable all New Zealanders to become supporters of dairying.”

If elected, she doesn’t see herself becoming the board’s mouthpiece: that would remain the chairman’s role, though she says she’d front if required or when appropriate.

Rather, she’d offer insight into how best to communicate, how issues might play in the media, and how Fonterra should handle

them.

On science, she says innovation on-farm and within Fonterra requires scientific understanding at board-level. “I can assist with making sure that the research dollars we have enable progress: better and more effective science on farm and in the factory.”

Nominations for board seats closed September 28 and a list of candidates will be released October 23 on completion of the candidate assessment process.

ahead with plans to export fresh milk to China and Asian markets to counteract low prices in local supermarkets. The plan is practical, achievable and likely to result in better farmgate returns, they say Dairy farmers, vendors and industry groups around the country are exploring ways to make exports happen on a large commercial scale.

While there are obstacles, they say it will become a reality and a profitable one for farmers.

Amalgamated Milk Vendors Association (AMVA) is working with Dairy Connect and NSW dairy farmers to investigate the best way to export bulk fresh milk to China and Asian markets.

AMVA business development manager Steve Waller says the concept holds great promise.

“Yes, it is possible. It has been done on a small scale and we are exploring the best way to make it happen on a larger scale. We can get it there in a plane... achievable as long as you make sure the milk doesn’t freeze.”

Nick Viropoulos, general manager of Nick’s Food-Milk-More, has been working on sending fresh milk to China for the past three years and is confident it will happen and will succeed.

Viropoulos has taken sample products to major Chinese markets which are enthusiastic.

“We have met with high-end retail supermarkets. They want fresh milk, are happy with the price and are open to taking dairy product out of Australia,” he says.

Viropoulos says he could get milk quicker to Shanghai than from Victoria to Sydney.

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news // 7

Blunt tool on inflation risks heavy bruising pam tipa pamelat@ruralnews.co.nz

NEW TOOLS to enable the Reserve Bank to manage inflation must be considered but there’s no free lunch, says New Zealand Institute of Economic Research (NZIER) deputy chief executive John Ballingall.

The Reserve Bank’s only tool against inflation now is to raise interest rates – “a blunt instrument”, he says.

Our high interest rates are one factor inflating the New Zealand dollar, hurting farmgate returns.

The high kiwi was a major factor influencing Fonterra’s drop in milk payout, chief executive Theo Spierings has said recently.

Ballingall says any changes to Reserve Bank tools must be carefully considered, away from rhetoric by politicians, and it must not be a knee-jerk reaction. And at present we still have other options to address the high dollar – such as lowering interest rates.

“I think the piece missing from the debate so far… not surprisingly given the very heavy rhetoric… is we need an analysis of costs and benefits to judge whether or not giving the Reserve Bank more macroprudential tools is a sensible policy approach,” he told Dairy News.

“The Reserve Bank is in a difficult position: it is trying to control inflation, output and stability in the exchange rate all by using one tool… and that’s very difficult to do.”

NZ First leader Winston Peters has a bill returning to Parliament this week, backed by Labour, which looks at giving the Reserve Bank more tools. But Ballingall says the Reserve Bank was already looking at this before Peters’ bill was put forward and it’s still under consideration.

And a recent NZIER report said it would be better to look at more tools for the Reserve Bank than run the risk of a future government succumbing to the clamour

to “do something about the high exchange rate and end up doing something silly”.

Ballingall says macroprudential tools don’t sound exciting. But they are ways in which the Reserve Bank can take some heat out of the economy at times, instead of raising interest rates.

“These are tools you can use to manage credit growth and stop bubbles from emerging in the economy…. If you can do that without using interest rates it gives you a bit more flexibility. It gives the Reserve Bank a few more tools in its armoury to deal with changes in the economic cycles.”

Ballingall says equating an expanded role for the Reserve Bank purely with printing money is “a very narrow view of what some of the discussion has been around”.

The one tool the Reserve Bank has now – raising interest rates – is “a fairly blunt one” and involves “hitting everyone over the head with an interest rate increase every time house prices go up”.

Ballingall says there’s “no mad rush” – there are other options available now to address the high New Zealand dollar.

Unlike Japan, the UK or US, who have 0% interest rates, we can still cut rates.

“We have 2.5% of interest rates to play with…and can use our fiscal policy to reduce some of the pressure on resources…. We are in a completely different economic situation from some of those bigger economies and that’s partly because we have made smart decisions in the past, and haven’t had knee-jerk reactions.”

Ballingall says anything structural that affects the currency will have ripple effects through the economy – “there’s no free lunch”. But he says looking at the high dollar is still a good discussion to be had because exporters have been “doing it tough”.

“Farmers have been fortunate that the growing conditions have been so good they have had

enough volume growth to offset the tougher prices.”

But Ballingall says it pays to cautiously weigh up the options. “We understand it is a very tough environment, but

we don’t want to make it tougher for ourselves in five, 10 years down the track all for very little impact right now.”

John Ballingall

@rural_news facebook.com/ruralnews

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Dairy News october 16, 2012

news // 9

Candidates advised to shun media andrew swallow andrews@ruralnews.co.nz

CANDIDATES IN the

Fonterra Shareholder Council and director elections have been advised not to talk to the media.

Following recent articles quoting candidates, chief returning officer Warwick Lampp, of electionz.com, sent e-mails to both groups recommending they “politely decline any request from the media.”

While he acknowledged section 7 of the election code of conduct (see panel) permits candidates to engage in media interviews where a journalist makes the first move, to avoid confusion

he advised them not to.

“This includes providing them with your profile and photo,” he wrote.

Lampp last week told

same debate… There’s no difference in the approach taken from any other year. My advice to them is if they engage with the

There’s no difference in the approach taken from any other year. My advice to them is if they engage with the media, they do so at their peril.”

Dairy News the e-mail was not a response to increased interest in the election owing to ongoing contentious issues, such as TAF (trading among farmers), former chief executive Andrew Ferrier’s payout or Fonterra’s ranking in the payout tables.

“Every year there’s the

media, they do so at their peril.”

Board candidate assessment profile (CAP) interviews took place October 3-5, with all candidates told to make themselves available for those dates, and an announcement of the candidate list following completion of that

process had been expected October 15.

However, last week it emerged announcement of the list has been delayed to October 23, owing to a number of candidates having overseas commitments which delayed completion of the candidate assessment process.

Shareholder Council candidate meetings are not held unless specifically requested, in which case Fonterra’s area manager will organise one with Lampp chairing/facilitating the meeting.

Fonterra has now confirmed its annual meeting will be held December 17, in Hamilton, at a venue yet to be announced. @rural_news facebook.com/ruralnews

in brief Merger brings benefits DAIRYNZ SAYS the merger of the agriculture and horticulture industry training organisations this month has real benefits for the dairy industry.

AgITO and Horticulture ITO have been merged to form the Primary Industry Training Organisation (Primary ITO). DairyNZ strategy and investment leader for people and business, Dr Mark Paine says the merger will benefit the dairy industry and continue to ensure the supply of skilled and capable people.

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7.1 Use or solicit any form of advertising; (notwithstanding the foregoing, candidates may notify shareholders of any private meetings for shareholders with the candidate/ candidates provided such notification will contain no more information about the candidates than their names, contact details and details of the meeting venue, date and time.)

7.2 Make any statements that undermine the integrity of the election process;

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7.3 Carry out or participate in any action, or make any statement, that might cause harm or loss to Fonterra; 7.4 Carry out or participate in any action, or make any statement, that might bring Fonterra, or any officer, employee or shareholder of Fonterra into disrepute; 7.5 E except as expressly permitted by the Fonterra board of directors and the Shareholders’ Council, use any property or resources of Fonterra for campaign

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purposes. This includes using images of premises, logos, brands and other intellectual property; 7.6 Misrepresent or mislead voters as to his/her qualifications, position or experience; 7.7 Misrepresent or mislead voters as to the qualifications, position or experience of other candidates; 7.8 Offer or imply any inducement to any supplying shareholder in exchange for that shareholder’s vote.

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mackenzie out FOLLOWING WIDESPREAD speculation he would stand for Fonterra’s board, former Federated Farmers Dairy chairman and Bay of Plenty farmer Lachlan Mackenzie has ruled himself out.

“I was asked to [stand], by several [people], and when you’re asked by the calibre of people who were asking me you have to give these things due consideration, which I did, but I’ve decided not to.”

He says a key reason is he believes the governance culture of the cooperative would have to change for him to enjoy being a director. “And you have to enjoy life, don’t you!”

Mackenzie believes the development and imminent roll-out of TAF (trading among farmers) has shifted Fonterra from a cooperative focussed on delivering the best for its producer shareholders, to a company focussed on delivering to investors.

He admits if he had another cooperative to supply in his area, he’d “certainly have to be talking to them very seriously.”

“But I will never supply a non-cooperative because you end up getting screwed.”

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news // 11

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Five ward seats in contest IN OCTOBER PAM TIPA

ELECTIONS WILL be held in five of the Fonterra Shareholders Council wards – the areas where more than one candidate has been nominated. No election is required in the other nine wards as only one candidate was nominated.

The formal declaration of these candidates as shareholders’ councillors will be made in conjunction with the results of the elections at the 2012 annual meeting in December.

In Ward 8, Hamilton, the sitting member Neil McLean is being challenged for this seat by Graham Barlow and Grant Coombes.

McLean is a founding member of the Shareholders Council and chair of the council’s performance committee and budget team and is a member of the council’s leadership team. He has served as a member of the council’s governance and ethics committee.

Barlow was born and raised on the 67ha Gordonton farm where he now calves 360 Jersey cows and supplies Fonterra with winter milk.

Involved in computer programming since school, he is the developer of a farming website and farming apps for smartphones.

Grant Coombes is a Tirau dairy farmer. He was contacted by the Dairy News but no information was readily available on his background.

In Ward 9, the Morrinsville ward, the seat is being contested by Sharon Martin and Malcolm Piggott.

Piggott with his wife Rosalie started in dairy farming in 1993 and were the 2003 Waikato Sharemilker of the Year.

LIC liaison farmers for five years, the couple bought their own farm in Morrinsville in 2008. Piggott was involved in the sharemilkers section of Federated Farmers for 12 years and was national chairman in 2008.

A former midwife, Sharon Martin, with husband Graeme were winners of the 2007 SourceNZ Dairy Business of the Year Supreme Award as well as winning the low input farming section and the northern North Island award that year with their Morrinsville farm.

Ward 17, Eastern Bay of Plenty, is being contested

by Gerard van Beek and Robin Barkla.

Gerard Van Beek is the ward member on the Rangitaiki Community Board and a second-generation dairy farmer who began work as a lab technician in 1982 for the Rangitaiki Plains Dairy Company.

Starting out as sharemilkers, he and his wife Tilly now own an 80ha property, and both are run on a moderate input model, using maize silage and off-farm grazing. He has retained his interest in milk components, leading to a Kellogg Rural Leaders project on the subject.

Robin Barkla was Federated Farmers dairy vicepresident in 2011. His family have farmed in Te Teko in the Bay of Plenty for 40 years. He now farms on 150ha with another 80ha leased and runs 750 dairy cows. Originally trained in forestry he is also in partnership developing 850ha in trees.

Ward 23, which is Egmont Plains, is being contested by sitting member Shona Glentworth, John Murphy and

Rob Poole.

Glentworth was elected in 2007. She is a member of the cooperative development committee and the governance and representative team and has served as a member of the performance committee. Voting gets She attended the Kel- underway next logg Rural Leadership month.

Programme in 1989, completed the Institute of Zealand Ltd, a 1050 cow Directors’ company direc- dairy operation. Poole has tors’ course in 2007 and in completed the Fonterra governance development 2008 completed the Fonterra governance develop- programme, including the NZ Institute of Directors ment programme. course.

Rob Poole owns and John Murphy is runs two dairy farms in president of the Taranaki Taranaki, in partnership Property Investors’ with his wife. He is a director of Fresh Milk New Association.

E S O O H C U O 2 Y R & ION 1 O OPT E C N A N FI

two-way battle AD HENDRIKS, who farms near Geraldine, South Canterbury, and Greg Kirkwood, Maniototo, will contest the Shareholders Council seat for Ward 32, Southern Canterbury, which includes most of Otago.

Dairy News understands Hendriks has two dairy farms in the region, having moved to the South Island in the late 1990s.

Kirkwood, who with wife Kylie won the Otago Sharemilker of the Year title in 2008, now farms three dairy units in the Maniototo as part of an equity partnership.

When a meeting to discuss potential problems over TAF (trading among farmers) was held in Ashburton last year, he was a loan voice saying there was a process in place and the Shareholders Council and board should be allowed to get on with it.

The seat is being vacated by Winchester, South Canterbury, farmer and Nuffield Scholar, Desiree Reid, who is not seeking re-election.

She declines to comment on her reasons for not seeking re-election.

no election in 9 wards WITH ONLY one nomination each received for nine of the Shareholders’ Council wards, no election will be held in these wards.

The councillors-elect are: Ward 2 Whangarei, Alex Wright; Ward 4 Southern Northland, Tracey Bryan; Ward 5 South Auckland, Bill Millar; Ward 11 Western Bay of Plenty, Murray Linton; Ward 14 Te Awamutu, Kevin Ferris; Ward 20 Northern Taranaki, Kevin Turnbull; Ward 26 Hawke’s Bay, Sandra Cordell; Ward 29 Tasman-Marlborough, Evan Baigent; Ward 35 Western Southland, Vaughan Templeton.

All successful candidates take office at the close of the 2012 annual meeting. The successful

candidates in Ward 4 (Southern Northland) and Ward 9 (Morrinsville) will hold office until the date on which the vacating councillor was required to retire by rotation – 2014 for Ward 4 and 2013 for Ward 9.

Voter packs containing candidate profiles will be mailed to eligible shareholders on Monday November 26, 2012. Shareholders can vote by internet, fax or post, using the single transferable vote system.

The voting period is from Monday, November 26 until 10.30am on Saturday, December 15, 2012 with the results being announced at the annual meeting.

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Dairy News october 16, 2012

12 // news Mike Joy, Massey University, Kevin Hackwell, Forest & Bird and MaryAnne McLeod, BoP Regional Council at the Water NZ Conference.

‘Stop the blame game’ sudesh kissun sudeshk@ruralnews.co.nz

THE CULTURE of blaming farmers for poor water qual-

ity is naïve, says Bay of Plenty Regional Council chief executive Mary-Anne McLeod.

Mcleod told the WaterNZ conference in Rotorua this month that the limits to our ability to tackle degraded waterways and sustainably manage and farm the catchments have little to do with the science or technology.

“We can and will find the solutions,” she says.

But politics, the relationships and the myths we hold about other sectors and groups will stand in the way.

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“The biggest challenge lies with those who do the talking – people like me, our councillors, politicians, farmers, environmental lobbyists and interested citizens. We often use the phrase ‘working together’. But to reach a united vision for our waterways – one strong enough to bind the community together – we need to shift how we collaborate to a whole new level.”

Mcleod believes land use change or land management change has to be part of the solution. But a culture of blaming the farmers will not work and is naïve, she adds.

“We desperately need a shift in that sector but we need to acknowledge what farming also brings to this country in economic gain, innovation and livelihoods.

“The challenge for the country is how we take the innovation that sector has put into developing products, marketing and increasing productivity and use it to ensure farming in future is sustainable economically and environmentally.”

Mcleod took part in a panel discussion on the ‘state of our waterways’ on the final day of the three-day conference. About 100 people attended.

While Mcleod spoke against laying all the blame on farmers, another panellist, Massey Unversity senior lecturer Mike Joy, thought otherwise.

According to Joy, the declines in water quality have accelerated over the last twenty years and there is little indication of any action to halt the deterioration. Over the last few decades while many European countries halted declines and some even achieved improvements in water quality, New Zealand went the other way with unconstrained intensification of farming, he says.

“The response from central and local government has been almost totally ‘hands-off’ apart from some attempt to control dairy shed waste. This non-interventionist approach has led to the declines across all our ecosystems now becoming obvious by New Zealand’s slide toward the bottom of global environmental performance comparisons.”

Joy points out that between 1990 and 2002 the number of dairy cows in the South Island increased six-fold, with an obvious massive impact on the quality of lowland streams.

During the same period the number of cows in the Waikato River catchment increased by 37% and over that period nitrogen levels in the Waikato River increased by 40% and phosphorus by 25%.

“The response by the regulators to these obvious impacts has been virtually nonexistent during this time; not a single South Island council successfully introduced rules to control livestock access to such streams or to limit the intensification.”

The only exceptions have been Waikato Regional Council’s limiting farm intensity by a cap on nitrogen use to protect Lake Taupo, and Horizons Regional Council’s attempts to implement its One Plan designed to protect the Manawatu River from further degradation.

“In both these cases attempts have been made to limit intensification to protect freshwater quality and both met considerable opposition from the dairy industry,” Joy says. @rural_news

facebook.com/ruralnews

in brief Ditch extremist views

BREAKING NEWS MANAGEMENT STORIES MACHINERY REVIEWS COMPETITIONS MARKETS & TRENDS AND MUCH MORE...

www.dairynews.co.nz

ENVIRONMENT MINISTER Amy Adams has called for sector groups to ditch their extremist views on freshwater management. She told the Water NZ conference in Rotorua that all parties to the water debate must seek win-win solutions. Adams says the debate on environmental issues, such as water management, ignore the values and outcomes most of us would share.

“The legacy of water management has increasingly been one of contentious, divisive and litigious approaches where there must be a winner and a loser,” she says. “We must recognise both the economic potential of water use and agricultural production and find solutions that protect both,” Adams says.

Dairy News october 16, 2012

news // 13

Kids win big in art competition THREE CALVES named Scooby-

Lucky winners 5-7 years:

Ryan Sheppard and Scooby Doo,Huntly

8-10 years:

Jake Lumsden and Mischief, Huntly

11-13 years:

Nathan Waugh and Jess, Ohinewai

Best school: to be announced at a special school assembly this term

Ryan Sheppard, ‘Scooby Doo’.

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“This feeder has been very popular this season so I look forward to delivering the prize to the winner and their farming family - and making

their next calving season a bit easier,” Grant says.

Children were asked to enter the competition with artwork of their calf, as part of LIC’s support and sponsorship of Calf Club events which focuses around the www.calfclub.co.nz website.

DNBT1012

Doo, Mischief and Jess are in for a treat after their owners were last week announced as winners in LIC’s annual art competition for rural children.

Ryan Sheppard, Jake Lumsden (both from Huntly), and Nathan Waugh (Ohinewai) have each won a calf care hamper from the farmer cooperative for the artwork they submitted of their calves.

But it doesn’t stop there, as voting now moves online for the public to determine the ultimate champion who will also receive a large mobile calf feeder from Stallion Plastics Ltd. Voting starts 9am Monday October 22 for one week at www.calfclub.co.nz.

LIC communications manager Clare Bayly says it received many high quality entries from children all over the country, so selecting the winners wasn’t easy.

“We have been overwhelmed with the number of entries this year, and also the quality. The creativity from the children has just been amazing.

“With canvas, glitter, paint, pastels, crayon, paint, photography, corrugated iron and even one of Mum’s dinner plates, we had a huge range and the effort that has gone into the works of art is nothing short of spectacular, and shows how much they love their calves.

“They relish the opportunity to create them in an art form after putting so much time and effort into choosing and training them for their school’s Calf Club.”

LIC staff helped choose the winners, with all artwork on display in their head office just outside Hamilton.

“It wasn’t easy but we thoroughly enjoyed it, and we have been very proud to display the artwork for everyone to see,” Bayly says.

“Now we’re asking everyone else out there to help us choose the ultimate champion and vote for their favourite online from Monday 22 October.”

Stallion Plastics Ltd, based in Palmerston North, donated the ultimate champion’s prize – a large mobile calf feeder valued at $3900.

Chief executive Grant Allen knows how much fun Calf Club is for children and rural schools, but they require support from the family too, he said.

“These events are so important to rural communities and farming families. They encourage our kids to take care of an animal, and develop a bond with it through lots of time and commitment. And part of that is support from their schools and parents to provide help and encouragement where needed so they can keep it up with their calf until the big day.

“It may not always seem like the

Dairy News october 16, 2012

14 // news

Safety star rating has farm potential HOW MANY safety stars

does your farm rate?

A new system announced by the Government earlier this month means businesses of all types, and employers, will be able to apply for a rating that will help them demonstrate their record to prospective employees, staff, and customers.

Ministers Judith Collins (ACC) and Kate Wilkinson (Labour) say it will also encourage more effective workplace health, safety and injury prevention.

“This will show evidence of a safe working environment for current and prospective employees, and will be an advantage for businesses when tendering for work,” says Collins.

Star ratings will be available to all employers and self-employed people who want to join, and will use existing compliance data and online training programmes to make it easy to apply for a rating. It will be voluntary and is being developed by ACC and the Ministry of Business, Innovation and Employment.

DairyNZ says the system seems to have potential as a tool for dairy farmers, but is not a silver bullet to on-farm safety. “We need deeper system changes in workplace practices and culture on dairy farms to really make a difference,” Greg Murrow, the levy-body’s human capability policy manager told Dairy News.

DairyNZ person-

A new safety rating at workplace is not a silver bullet to on-farm safety, says DairyNZ.

nel are meeting ACC and MBI later this month to review the existing ‘Agriculture sector action plan for health and safety’ and Murrow expects the star safety rating initiative to be on the agenda then.

“We know stress and fatigue are key contributing

factors to accidents on farms and DairyNZ is investing in this area, working with AgResearch, Dairy Women’s Network, New Zealand Institute for Rural Health and Lincoln University in developing practical solutions,” Murrow adds.

Health Pitstops offering free health checks at a wide range of dairy industry events – SIDE, Dairy Business Conference, SMASH, DairyNZ Farmers’ Forum – are one of the more farmer-visible parts of that work, Murrow points out.

Cheap carbon price prompts conversions THE AVAILABILITY of cheap overseas carbon credits has prompted Landcorp to fast-track its conversion of former forestry land at Broadlands near Taupo into dairy farms.

Landcorp chief executive Chris Kelly says about 1000ha is involved -- land lying fallow since the felling of pine trees.

The land is owned by a private company, Wairakei Pastoral, and is managed by Landcorp.

Five dairy farms operate there as part of the development but the newly converted land will now be ‘bolted on’ to these existing farms.

“The landowners were going to head down the off-setting route, but the move to convert the land has been hastened by ability of the landowners to purchase the cheap foreign carbon units,” Kelly says. “These are selling for about $3/tonne, a far cry from the $25/tonne they were selling for earlier this year.”

An extra 2500 cows will be grazed on the newly converted land. Kelly says the advantage with this is that no new dairy sheds will need to be built as the existing infrastructure can cope with the extra cows.

It’s expected 12 months will elapse before the first cows can graze on the property.

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Dairy News october 16, 2012

16 // news

Miraka hits a million litres a day peter burke

MIRAKA, THE 2011-commissioned Maori dairy factory near Taupo, has just passed a notable processing milestone – 1 million L/day from its own suppliers.

In its first few months last year its peak was 600,000 L/day.

Chief executive Richard Wyeth told Dairy News this was a great milestone for Miraka, due to the good season and 43 new suppliers. Miraka now has 90 suppliers and a waiting list.

“We have considerably more milk coming in… earlier so we are 12% up on budget for August and we are slightly up for September…. There was plenty of grass around [last year] so the cows were in good condition. A lot calved

early so they have come into milk earlier so we have seen real growth in the August milk budget.”

Miraka is still buying DIRA milk to ensure it has the capacity to take extra milk from existing suppliers developing their farms and increasing production.

This is all part of their growth strategy.

“There was talk when they were reviewing the dairy industry restructuring last year that we would only have three years of DIRA milk left. While the talks have stalled I believe we can only rely on that milk for three years,” Wyeth says.

TAF has prompted some Fonterra suppliers to switch to Miraka, but Wyeth does not see many making the change. He says for some, the exit strategy from Fonterra can be sticky and it

Miraka says growth is firmly on the agenda.

may make it harder for Miraka to recruit Fonterra suppliers.

However he is more confident about recruiting farmers who are converting to dairying in the region.

“They don’t need to buy shares to supply Miraka so it’s an opportunity for them to get into dairy farming without a large capital outlay.”

Combined with the good milk flow, Miraka is said to be achieving good sales.

This time last year they had shipped just 50 tonnes of whole milk powder (WPM) but so far this year 3000 tonnes. Much of this has gone to Vietnam to Miraka’s cornerstone shareholder Vinamilk, the largest dairy company in Vietnam. Ship-

ments of WMP have also gone to South America, Asia and China.

Growth is now firmly on the agenda.

The present plant is set up to produce WMP but Wyeth says it can produce some skim milk powder.

“But until we put in an AMF plant our cream is still going to Tatua Dairy Company.

“Obviously there is some demand for us to grow and to take the additional milk we would look at other products outside of just WMP over the next five or so years.

The thing about WMP is it gets your foot in the door to the dairy industry so it provides a good baseline commodity.

Now that we are in there, we are looking at other opportunities to add further value to the milk solids we are collecting.”

As part of this growth strategy, Miraka recently began organising its own shipping.

It bought the company that was storing and loading its containers at the Port of Tauranga.

Wyeth says this is a natural progression that will save costs and build the business. “It was always part of the plan but we didn’t want to do that in year one because it would take our focus off the core business which was getting the drier going and making good product.”

Retaining whanau-based culture AS MIRAKA sets out on a path of

Miraka is now processing 1 million litres a day at its Taupo plant.

growth one of the challenges it faces is retaining the whanau-based culture and strong relationships with customers, staff and suppliers.

Chief executive Richard Wyeth, just home from Vietnam and talks with Vinamilk, says the company is pleased with the quality of Miraka’s product and the relationship. “[We seek to] make sure that relationship stays strong so when we start to grow the business they are aware of what we are doing. The key thing for me with our strategy is that we partner with good people in those countries which have distribution and the ability to build brands.

“That allows us to focus on making good quality dairy products while they focus on distributing and mar-

keting those dairy products in that country. It’s a big challenge for a small New Zealand company to go into a market and try and build a brand.

That’s the strategy we’ve got and that’s where Vinamilk has been a very good partner for us,” he says.

The other challenge is closer to home, ensuring suppliers and staff feel part of a ‘whanau business’.

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Open letter from the Chairman of LIC I am the Chairman of LIC, a loyal LIC shareholder, dairy farmer and the owner of heifer calves sired by a bull called Matrix which has subsequently been identified as having a previously unknown genetic defect.

This naturally occurring genetic defect, which results in heifers that do not milk, has been widely reported in the media in recent weeks.

During this period LIC has continued to develop our understanding of the impact of the defect at an individual farmer level and discuss this with the people affected.

As a farmer owned cooperative, the LIC Board and Shareholder Council recognise our responsibility to ensure that our shareholders and the dairy industry in general understand the thinking behind the policy not to pay compensation for animals affected by a genetic defect, which was unknown at the time the semen was sold. I have written personally to all LIC shareholders and now wish to share the rationale with the wider dairy industry.

In the discussions we have had with farmers, we have heard several key themes:

‘ This is all about the money. LIC is a farmer owned cooperative and should just compensate farmers for the value of the heifers’ No genetics company in the world can guarantee or provide assurance against previously unknown genetic defects. This particular defect had never been seen before anywhere in the world, we were unaware of it when the semen was sold, and the problem did not become apparent until heifer progeny calved but did not produce milk. LIC Directors do not believe that exposing the cooperative to claims of this nature is a step that should be taken.

‘LIC took too long to communicate with farmers’ The first indication of an issue came in spring 2011 when we got reports of some heifers not milking. We immediately began an investigation which, in March 2012, revealed a previously unknown genetic defect. Once we knew what the problem was, we immediately wrote to all farmers who had used the bull so they could avoid further unnecessary investment in any affected heifers. Yes, some offspring of Matrix were hairy but farmers know that coat variation occurs with all breeds.

The frustration with this issue is that, as farmers, we know that in any year we may have calves born which do not survive. These losses could be due to a genetic defect but the fact that they are immediately apparent, and avoid any rearing costs, minimises their impact and makes the incidence a fact of life/farming. The difference in this case is that the problem was not revealed until the animals had been reared.

‘LIC didn’t do enough for farmers’ Compensation was not offered because, like genetics companies around the world, we cannot guarantee what we cannot control. What we did was – we investigated the reports received, identified the mode of transmission, discovered the cause of the defect, developed a DNA genotyping test, notified farmers, collected tissue samples, DNA tested large numbers of samples (at no cost to farmers), advised farmers to remove affected stock, and returned every cent earned from the bull to the farmers who used it (through a credit for all Matrix semen and insemination fees). We continue to work with farmers to ensure that affected animals are removed from their herds.

It’s worth noting that even a few years ago, discovering this genetic defect and developing a test would have taken years, instead of months.

In summary I speak for the entire LIC team - the Board, the Shareholder Council, management and staff – when I say that we understand, share and regret the frustration this issue has caused our farmer shareholders. As a cooperative we have spent more than 60 years leading some of the most evolutionary changes to the dairy industry and delivering a breeding service to our farmers. We take immense pride in the role our genetics have played, and will continue to play, in the national herd.

I hope that this letter explains why we cannot provide what some are asking for. If you would like to know more about the defect – how it happened and what we’ve done about it – there is an extensive set of answers to farmer questions on the homepage of the LIC website www.lic.co.nz.

Best wishes productive Bestt w Be issh hees fo fforr a p pr rod oduc ucti tiive v season,

Murray M urra K King ing Chairman

Dairy News october 16, 2012

18 // news

Get the margin right ANDREW SWALLOW

DON’T LET your con-

Maize contractors have been told not to cultivate too close to waterways.

tractor cultivate too close to waterways on your property or you could be in hot water with the regional council.

“If a contractor fails to observe the right distance both he and the

farmer can be liable for enforcement action,” warns Ross Wightman, a monitoring manager with Waikato Regional Council. The “right” distance in Waikato is at least two metres, but in parts of Bay of Plenty it’s at least 3m.

Wightman says WRC has received “quite a few” reports of contrac-

tors failing to meet the 2m requirement this season.

“The rule is aimed at preventing sediment and nutrients in the soil from getting into waterways, as this can affect water quality and the health of aquatic organisms.”

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“Farmers need to be aware of this issue and ensure contractors are following the two metre rule,” he stresses. WRC has written to agricultural contractors in the region reminding them of the rule.

Bay of Plenty Regional Council told Dairy News cultivation up to waterways is a permitted activity in most areas but for identified risk areas the minimum buffer is 3m, rising to 10m with increasing slope of land, as specified in its land and water plan.

Federated Farmers’ maize growers committee chairman Colin MacKinnon says sadly the riparian requirements can mean a noticeable reduction in production area.

“I had land in North Waikato which was quite low lying with a drain every 40m, so you’d have to take that [buffer] off from both sides. You’re never going to work right to the edge but you are

going to lose 5-6% of what you would normally crop in those situations.”

On such flat land and with invasive species such as coy carp and catfish in such drains, he questions the need for the buffers.

But Wightman says the rules apply to all waterways, and many drains are more like streams, with “a lot of important biota.”

Where buffers are found to be inadequate a formal warning is likely, and in the case of repeat offences, possibly infringements.

For farmers whose land has already been cultivated too close this year, there’s little that can be done in mitigation, he says.

“Plan to set the crop back a bit further next year and definitely have a word with your contractor.”

The 2m buffer is measured horizontally from in line with the water’s edge, so 2m measured down a ditch bank won’t be enough, he adds.

The rule does not apply to direct drilling as the soil surface isn’t disturbed.

in brief Fonterra finalist in Oz FONTERRA AUSTRALIA is one of four finalists in the export category of the National Australia Bank Agribusiness Awards for Excellence, run by Monash University, Gippsland. The pro vice-chancellor of Monash, Professor Helen Bartlett, says this year’s finalists are distinguished by resilience, responsiveness and creativity.

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Dairy News october 16, 2012

world // 21

Costs gobble co-op’s profits AUSTRALIAN LARGEST dairy processor

Murray Goulburn has increased its revenue and milk intake but has seen its after-tax profit slashed by 60% due to a series of large one-off costs.

The co-op’s underlying net profit after tax for the year ended June 30, 2012 was A$37.7 million, an increase of 1.1%, but the reported statutory net profit after tax was A$14.5 million, a 60.17% fall from A$36.3 million the previous year.

Managing director Gary Helou says the drop in profit was due to a series of one-off expenses, including redundancies in a cost saving scheme. MG has achieved A$50 million in savings, which will be delivered in the 201213 milk price, as part of an overall A$100 million cost cutting scheme.

The cooperative declared a full-year dividend of 12% on ordinary shares and a 1-for-10 bonus share issue.

Its milk intake grew by 3.9% to 2.94 billion L, with supply from northern Victoria and southern Riverina increasing 13%.

Total revenue increased by 3.5%t to A$2.4 billion, including A$1.2 billion from export sales.

Sales revenue was up 3.5% and export sales volume up 4%. Total product sales for MG’s retail and food service products reached A$830 million, up 10%.

Total ingredients sales revenue was A$1.3 billion and MG grew its value-add powders category by 51%.

Net sales revenue was at its highest level since the year ending June 2008.

The domestic market accounted for 51% of sales revenue, while 77% of exports went to Asia. Production output for the year was 740,000 tonnes, 7.1% higher than the previous year.

Helou described the result as a solid performance in a challenging year while a change occurred against a backdrop of falling dairy commodity prices and a high Australian dollar. “We delivered a final weightedaverage farmgate milk price of A$5.44/kgMS – third-highest on record – while [making] changes across the business.”

The 12% dividend on ordinary shares represented A$27.4 million in payments to MG businesses, A$1.2 million higher than 2010-11. Based on average production and shareholding, the dividend adds the equivalent of A$0.13/kgMS and takes MG’s total payments to supplier/shareholders to A$5.57 kgMS for 2011-12.

Helou says the 1 for 10 bonus share issue reflected the growing value of the cooperative and recognised the loyalty of dairy farmers who had supported Murray Goulburn through some diffi-

cult seasons.

“Based on our operation excellence and innovation we are excited about the cooperative’s growth prospects,” he said.

MG’s total assets increased from A$1,530,134,000 to A$1,632,228,000 offset by

an increase in liabilities resulting in a slight fall in total equity.

The financial report shows Helou was paid A$1.48 million from October 2011, including 15.3% that was performance related. His predecessor, Stephen O’Rourke, who resigned on July 31, 2011,

Gary Helou

got A$2.95 million the previous year and A$253,000 in the 2012 financial year.

Payments to executive officers totalled A$4.3 million, a reduction from A$5.1 million the previous year. Remuneration to non-executive directors dipped from A$1,045,814 to A$913,959.

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“We will now be pressing ahead with a number of briefings up and down the country so dairy farmers and processors can see the many beneficial terms of this code translated into beneficial terms in milk supply contracts.”

Industry leaders agreed to the voluntary code at the end of August following months of talks with processors and farmers’ representatives and in the wake of protests against retailers and processors over low farmgate prices.

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Dairy News october 16, 2012

22 // world

Flood-prone farmers, councils seeking compo THE AUSTRALIAN common-

wealth and the states risk a big compensation bill for farms, tourism and infrastructure if they pursue a 3200GL water recovery target under the Murray-Darling Basin Plan, according to the Australian Dairy Industry Council (ADIC).

The Murray-Darling Basin Authority (MDBA) released modeling earlier this month that focuses on the likely outcomes should 2800GL and 3200GL be returned to the river system, after key constraints in the system – namely limitations on the amount of water that can be released from various water sources, including river channels – have been relaxed.

ADIC president Chris Griffin says the 3200GL scenario involved more frequently flooding thousands of hectares of farmland, as well as caravan parks, access roads, prime tourism attractions such as the Tocumwal beaches, and South Australia’s holiday ‘shacks’ on the Murray River.

“The impacts are clearly identified in reports by the SA Government, and the Goulburn Broken and NSW Murray

joanne grainger

EXPORTERS, AND especially farmers, are watch-

Murray Darling river.

Catchment Management Authorities,” Griffin says.

“The inescapable fact is that the commonwealth and the states will face a hefty bill to buy flood easements on affected properties, and compensate caravan park owners and businesses in tourist towns like Tocumwal. And that is even before they get the repair bill for fixing access roads and low-lying bridges after each flood has passed through.”

ADIC Basin response taskforce chair Daryl Hoey says there are

smarter ways to achieve healthier rivers and wetlands than just stripping ever larger volumes of water out of irrigation communities.

“We know there is widespread political support for a 2100GL cap on water buybacks and infrastructure savings, plus at least 650GL in offsets such as environmental works and improved river operations.

“This formula will deliver similar or better environmental outcomes – including protecting the lower lakes, Coorong and Murray

mouth – than just taking 2750GL or 3200GL of water away from irrigators.

“The MDBA should be forced to get serious about finding at least 650GL in offsets first, so we can close the gap to 2750GL without the need for even more buybacks.”

“The priority should be on delivering this win-win outcome first, and we appeal to Mr Burke (Federated Water Minister Tony Burke) to direct the authority to become part of the solution, not the problem.”

Grey appointed to Holstein board NEW SOUTH Wales dairy farmer

Jenny Grey from The Pines Holsteins in Kiama made history when she was appointed this month to Holstein Australia’s board at the annual meeting.

She is the first woman to serve on the Holstein Australia (HA) board in its 98-year history. Grey has been involved in the dairy industry for 25 years and with Holstein Australia at a local, state and

Oz dollar woes mount

Australian dairy industry federal level. and to be competitive on Grey has extended the world market,” she her interest in improvsays. ing the production and “Holstein Australia conformation of the has an important role in family’s herd to showensuring we have correct ing cattle, judging and conformation to enable officiating at shows Jenny Grey her to be a high producthroughout Australia ing, trouble-free cow.” and overseas.

She replaced retiring board “I wish to see our Holstein continue to be the leading breed in the member Michael Perkins, of Calt-

horpe, Tasmania who had served on the board for 12 years.

HA reported a loss of A$83,245 last financial year compared with a profit of $38,075 during the 2010-11 financial year.

The organisation’s largest costs were for full genomic tests and classification costs, due to a larger number of classifiers and the costs associated with classification such as flights and accommodation.

ing the Australian/US exchange rate with frustration, as the high Aussie dollar defies most other domestic economic indicators.

The Australian currency has in recent years been tied to mining’s fortunes, rising in line with such as iron ore and coal prices. But even as the mining boom appears to wane, the dollar remains perched above parity with the greenback. It’s a worry, especially given slowing global demand for commodities, notwithstanding some positive effect from the US drought.

According to banker Suncorp, in a recent update on the Australian dollar, while several economic indicators are signalling that the dollar should be easing, a structural change could be at play.

The dollar once tracked a similar path to the 10-year bond yield, but now the ratio of difference between the two is its greatest in 10 years. The bond yield has dropped to the lowest level since about 2002, while the AUD has not followed. The terms of trade (TOT) have also been dampened by falling iron ore and coal prices in recent months.

Now some commentators are calling the dollar over-valued and farmers hope they are right. The benefits of the high dollar keeping down expenses such as fuel and machinery are outweighed by the downsides of lower prices for farm exports. The National Farmers Federation estimates that for every 1% appreciation in the AUD, the farm sector loses $A210 million.

There is also a risk that the Australian economy could face further drag from the dollar simply because of our own excellent economic track record.

“The AUD no longer trades completely in proportion to the profitability of the resource sector. Nowadays it is also driven by the desires of investors to obtain both safety and yield in a global market that is starved of both,” Suncorp says.

So basically, despite some sectors of the Australian economy being in a low gear, we continue to appear favourable on a global scale, which is inflating the AUD and making it harder to budge from its perch.

• Joanne Grainger is the president of the Queensland Farmers Federation.

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Dairy News october 16, 2012

24 // OPINION Ruminating

EDITORIAL

Leadership drives Miraka success

milking it...

Bl**dy foreigners

No bonus for silver

Lost in translation

ACCORDING TO our sister publication Dairy News Australia, Christine Milne, leader of the Greens in Australia, has come off the long run opposing foreign investment in the Australian dairy industry: “We want to make sure vertical integration from the farm, to the processor to the Chinese consumer does not constitute ‘out sourcing’ and distort markets for land and dairy products.”

Milne’s barrage was sparked by reports the China Investment Corporation is negotiating for a stake in the Van Diemen’s Land Company – the same Van Diemen’s Land Company that is 98% owned by New Zealand interests.

So she’s against foreign ownership of a foreignowned company. Even our resident xenophobe Winston Peters wouldn’t drop a clanger like that.

FONTERRA HAS come out second best in the payout stakes, again.

And sources tell us bonuses of the co-op’s executives are tied to the payout, so missing out on the payout ‘gold medal’ means some executives will be missing out on their bonuses. Sorry guys, there’s no bonus for silver medal.

The payout misfortune cropped up this month at the farmers meetings held

by Fonterra head honchos.

THE NEW Zealand Herald has quoted Fonterra chairman Henry van der Heyden saying “I know it’s lost of money – it is a lot of money” on the $8.2m payout to former chief executive Andrew Ferrier. What he actually said was that ‘it’s lots of money’.

But some Fonterra farmers feel the huge ‘golden handshake’ is money ‘lost’ from their farmgate price.

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Send me a sext WHEN SWISS farmer Christian Oesch was a boy on his family’s hog farm, mobiles were a thing of the future. Now, Oesch tends a herd of dairy cattle and carries a smartphone wherever he goes. Occasionally he gets an SMS from one of his cows.

That is because Oesch, 60, who cares for a herd of 44 Red Holstein and Jersey dairy cows, is helping to test a device that implants sensors in cows to let farmers know when they are on heat. When that is the case, the device sends an SMS to the farmer’s phone. The Swiss do not settle for half measures: the SMS can be in any one of Switzerland’s three main languages: German, French and Italian – plus English or Spanish.

The electronic heat detector is the brainchild of professors at a technical college in the nearby Swiss capital of Bern. It fills a market gap, they say, because dairy cows, under growing stress to produce larger quantities of milk, are showing fewer and fewer signs of heat.

THE MOST successful individuals and companies are modest, unassuming and very ‘people orientated’. One outstanding company in New Zealand that fits these criteria is Miraka, the Maori owned dairy company near Taupo.

Miraka is a brilliant partnership between two major Maori trusts and a large Vietnamese dairy company: Tuaropaki Trust provides the geothermal power to run the plant, Wairarapa Moana the cows and Vinamilk access to market.

Sure there are other Maori trusts involved and a lot more suppliers than just Wairarapa Moana. In fact Miraka is now so highly regarded by dairy farmers in the region that it has a waiting list of suppliers.

What has made Miraka so successful? The obvious answer is leadership. A famous Aussie, Reg Ansett, once said the speed of the boss is the speed of the team.

Miraka chairman, Kingi Smiler is just that – a visionary, leader, entrepreneur and smart businessman. He’s pulled the deal together which hasn’t been easy and he’s recruited top staff to run the business such as chief executive Richard Wyeth. Smiler’s leadership is brilliant.

Miraka ticks all the boxes. In just a year it’s up to full production, its sales to Asia and South America are going well and already there is talk of expansion. It has a smart strategy and having Vinamilk as a partner which can handle distribution is an example of this.

But there are some special things about Miraka that you won’t find anywhere else. For a start their whole operation scores tops for environmental sustainability. They use geothermal power to drive the plant, and their waste is used by a worm farm run by Tuaropaki which also has a major glasshouse operation next door growing tomatoes.

There is no fancy corporate office – just a modest office in Taupo. Miraka is a ‘people or whanau’ company where everyone from those on the factory floor, the truck drivers, office workers, executives, suppliers, customers and the beneficial owners of the trusts all have a sense of ownership of the company. The challenge for Miraka as it grows will be to retain this culture of whanau or intimacy.

In just a year, Miraka has hit the big time and can rightly be proud of its success. It’s another bright star in the New Zealand dairy industry firmament.

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Dairy News october 16, 2012

opinion // 25

Fonterra results mixed at best FINANCIAL REPORTS

are like art: they’re subjective and beauty is in the eye of the beholder, so depending on which way you look at it Fonterra’s annual results for 2012 have been mixed at best.

There are strong signs of growth in the company with milk production and milk exports up, an increase in assets and the company’s capital position has strengthened with a slight reduction in debt gearing of 41.8% to 39.1%.

Debt gearing, in a nutshell, reflects the percent-

would generally be considered a flat figure in accounting terms. But it makes tough reading for farmers who have done the hard work by increasing milk production only to see a reduction in overall revenue.

However it must be noted that offshore commodity prices and the flying kiwi dollar played a large part in the reduction of revenue.

An overall increase in expenses, cost of operations and a large tax credit meant the net profit figure

All these factors are pointing to an extremely tough business environment. age of debt a company has compared to its assets; more about that later.

While these things make the picture look decent for the accountants, the decrease in revenue and a significant reduction in the farmgate milk price to $6.08 from $7.60 in 2011 make the picture far from glamorous for the dairy farmer.

To cut through the jargon I would like to focus on the changes in the following areas: total revenue, net profit, net assets and debt gearing; these are the foundations of any financial report and represent a good overall picture of Fonterra’s performance.

Despite a large increase in milk production total revenue of the group was down to $19,769 million from $19,871m in 2011 -not a huge change and this

came in weak at $624m, down from $771m in 2011.

All these factors are pointing to an extremely tough business environment as opposed to any shortcoming on the part of the Fonterra group. This shows how the tough business environment is impacting every area of global business, even areas as strong as dairy production.

Fonterra’s net assets – what Fonterra owns (assets) less how much it owes (liabilities) – have increased slightly to $6655m from $6541m in 2011. It was a reduction in liabilities as opposed to an increase in assets that helped the bottom increase, nevertheless it is an increase to the overall asset base of Fonterra so a more positive part of the report.

The debt gearing ratio

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is a very important part of any financial report as it is a general term outlining the owner’s equity (or capital) to borrowed funds.

Gearing is a measure of financial leverage, demonstrating the degree to which an organization’s activities are funded by

owner’s funds versus creditors’ funds. A company with high gearing (high leverage) is more vulnerable to downturns in the business cycle because the company must continue to service its debt regardless of how bad sales are.

A greater proportion of equity (lower leverage)

provides a cushion and is seen as a measure of financial strength. With this in mind Fonterra has managed to lower this figure to 39.1% from 41.8% in 2011.

This figure is positive and is about average for New Zealand companies. However considering the size of Fonterra’s asset base it’s

a touch on the high side.

While some debt is necessary for growth the cooperative should be focusing on bringing this ratio down even further.

• Francis Wolfgram, BA (Economic History) has 15 years’ experience in financial markets, primarily in London and Sydney.

Dairy News october 16, 2012

26 // opinion

Co-op membership not an issue of ideology RAMSEY MARGOLIS

BECAUSE THEY are member-owned businesses, cooperatives operate well in the rural sector, bringing farmers and growers together to improve the bottom line of their primary businesses.

So what exactly is a cooperative, and how can it be put to good use in the irrigation sector? This succinct definition of a cooperative describes an irrigation co-op well: A cooperative is an enterprise, freely established, owned and controlled by a group of

persons for the purpose of equitably providing themselves with mutual benefits arising from the activities of the enterprise, and not primarily from investment in it.

As farmers and growers, you join co-ops looking for higher returns on produce or lower commodity prices and lower service costs, and many of you belong to more than one.

Three important principles describe how a cooperative business operates: ■■ The user owner principle – those who own and finance the

Ramsey Margolis

■■

■■

co-op are those who use it; The user control principle – those who use the cooperative are those who control it; The user benefit principle – the purpose of the cooperative is to pro-

vide and distribute benefits to members on the basis of their use.

Co-ops either sell to farmers (irrigation co-ops like Mayfield Hinds and Kerikeri Irrigation, farm supply co-ops like CRT, ATS and Farmlands) or purchase from members (milk, blackcurrants, grain, honey, apples, feijoas, etc).

You use a co-op as your business because on your own you can’t achieve the success you’re looking for; imagine a butter factory on each dairy farm.

Seeking a self-help solution to a business opportunity in which

letter

One Plan scaremongering THE HOSTILE response of farming leaders to the final Environment Court ruling on the One Plan would have more credibility if they backed up their rhetoric with personal examples of what the plan will actually now require them personally to do, by when, in practice, on their own farms – over and above what they are already doing.

As farming ‘leaders’ they will no doubt already be leading by example and have One Plan-type measures in place that they believe genuinely care for the natural environment. Given that the rest of us are so often told by these leaders that “most farmers are already doing

the right thing by the environment”, complying with One Plan should be a bit of a doddle.

Scaremongering of the sort we have seen in recent weeks serves no-one’s interests. Rather, it highlights what the Environment Court concluded after having heard all the evidence – namely that “there is nothing that gives farmers a privileged place in the scheme of things” (para 5-176).

There is a hell of a lot in the Environment Court’s decision, beyond just the detail on the One Plan provisions, for agricultural leaders to think strategically about; time to take a deep breath and

reflect, I would have thought.

And if these leaders want to persist with their criticism of the One Plan and the Environment Court’s ruling they should at least attempt to support their assertions with what it will require of them personally.

The rural media might also do a service to readers by critically questioning some of the claims being made, rather than accepting their rhetoric as gospel – it would go a long way to allaying the fears that have been propagated in the farming community by certain factions.

Bryce Johnson Chief executive Fish & Game NZ

Irrigation co-ops can tap into the $35 million Irrigation Acceleration Fund.

there’s a genuine democratic control of the business, you’re wanting to improve on the return to be had from buying from or selling to someone else’s investor-owned business.

When farmers own their irrigation business, the cost of water will be as close to cost as feasible, allowing you to produce and compete more efficiently.

An investor-owned irrigation business will be looking to maximise profits, necessarily bringing higher charges.

With no investors to feed, co-ops have good ties to local communities. They’re far better equipped to take the long view than investor-owned firms, which tend to want a faster return on their investment.

But as we well know, not all co-ops are created equal: they need capable management and directors as well as active mem-

bers and to plan, and continuously monitor and improve performance, like any business.

It’s often said that co-ops have a harder time raising capital.

Cooperatives Association members show clearly this is nonsense: banks recognise the strengths of cooperatives and are willing to lend to them.

So, being part of a co-op is not an issue of ideology, nor is it old-fashioned. It’s a business decision.

With the promised $35 million Irrigation Acceleration Fund “to support the development of irrigation infrastructure proposals to the investment-ready prospectus stage”, cooperative companies can take advantage of this as much as another business form.

Cooperatives need a prospectus and an investment statement. There’s nothing stipulating this has to be for investorowned firms only, so if

you’re wanting to set up a irrigation cooperative this is worth examining.

Further, the Government has expressed a willingness to consider investing up to $400 million as a minority partner in public-private partnerships to build new irrigation infrastructure.

Would the Government be a good partner in a joint venture with an irrigation cooperative? That’s for you to decide. There’s no good business reason why farmer-owned cooperatives cannot get this funding.

Representing the country’s cooperative and mutual businesses primarily by advocacy and education, the New Zealand Cooperatives Association also assists those looking to start a new cooperative.

Find out more at http:// nz.coop/ • Ramsey Margolis is executive director, New Zealand Cooperatives Association

STaff TraiNiNg iN Milk QualiTy giveS ShareMilker Peace of MiNd Patea sharemilker, Nicholas Trethewey, got so much out of AgITO’s Milk Quality programme when he attended it that he now sends his staff along to the workshops too.

The Milk Quality programme is made up of three workshops. Milk Quality Stage One is aimed at the whole milking team and Stage Two at supervisors, sharemilkers, managers and owners. The third and final workshop, Mastitis Management, is aimed at management level and helps farmers create a mastitis management action plan for their own farm.

The workshops teach the milking team the skills, knowledge and procedures needed to increase the profitability of the farm dairy operation. It has been designed to help attendees’ dairy operations meet the highest standards of milk production.

“I thought it was brilliant,” Nick says. “It was nice to have a refresher of stuff I knew and there were lot of things covered that I hadn’t thought of. Mainly like breaking down different components of the milking machine, if for example you’re having issues with air lines and how to go about fixing them – and how to eliminate grades.

“Now that I have a bigger herd, I can take a step back and know that the job is still being done properly if I’m not there.”

Nick enjoyed the tutors and the workshops.

“The tutors were brilliant – I found them really helpful and easy to deal with.”

Nick is now looking ahead at his future prospects.

“Eventually I want to progress to 50:50 sharemilking and ultimately to farm ownership,” he says of his career goals.

“I recommend Milk Quality for anyone who’s involved in milking cows, it’s well worth while,” he says. “If people are serious about the industry they should train, you learn a lot.”

Nick Trethewey, sharemilker, Patea

“It has helped our cell count improve,” he says.

“That’s part of the reason for taking Mastitis Management as well.”

Nick started a new sharemilking job this season and has two staff in training with AgITO. “Putting staff through the Milk Quality programme gives me peace of mind,” he says.

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There are limited spaces available in Milk Quality Stage one and Two and Mastitis Management courses, running from now until the end of the year. don’t miss out. To enrol or for more information, contact your local agiTo team on 0800 691 111 or visit www.agito.ac.nz

Dairy News october 16, 2012

agribusiness // 29

New feed blender trebles turnaround EFFICIENT, ACCURATE blending

of stock feed mixes is a certainty at International Nutritionals Limited, near Tauranga, thanks to the company’s new automated blender.

The RD1 subsidiary has installed the blender to enable faster delivery of stock feed blends. The company guarantees to deliver the exact ratio of blends.

National logistics manager Dene Sambells says the blender is superior to anything else in New Zealand.

“The blender provides a high-tech approach to mixing and will enable us to deliver product three times as fast as the current blender. We can guarantee mixing the exact

INL’s new blender guarantees mixing the exact ratios required by farmers.

ratios required by customers, and we can include the minerals in the mix and have this on-farm promptly.”

Any restriction on turnaround may be trucks returning from deliveries rather than the blending process.

“We used to mix about 30 tonnes per hour

but with this automated system we expect to treble our efficiencies and turn a truck around every 20 minutes, so yes... the problem could be truck numbers.”

The Tauriko plant normally runs five days a week but during busy periods the operation runs to match demand. The

blender fills directly into auger, blower and bulk trucks and when the feed arrives on farm it can be fed straight to stock – no further mixing or handling required.

The blender will service Waikato and Bay of Plenty region and the company is considering buying more blenders.

Probiotics help eczema long term – study STUDIES SHOW a probiotic devel-

oped in Fonterra dairy cultures may help children with eczema long term.

The probiotic developed in cultures

by Fonterra Nutrition has been shown to have significant long-term benefits for children suffering the condition that affects about 1 in 5 children in New Zealand. Childhood prevalence rates of eczema can be up to 20.5% in some countries worldwide.

Lactobacillus rhamnosus HN001 was shown in a previous trial to help reduce the occurrence of eczema symptoms in children by almost 50% when they took the probiotic up to two years of age.

Now, a follow-up study published in the international journal Clinical and Experimental Allergy has shown this reduction in symptoms continues to four years old, even though the children stopped taking the probiotic at two years.

Fonterra Nutrition senior research scientist Dr James Dekker says the results indicate Lactobacillus rhamnosus HN001 may be able to modify the immune system early in a child’s development, to deliver long term benefits with no discernable side effects.

“Eczema affects millions of children worldwide, with around half the cases being diagnosed before one-year of age.

The long term benefits shown by Lactobacillus rhamnosus HN001 are encouraging and are relevant in New Zealand which has one of the highest incidence rates of eczema in the world.”

The study was done by the University of Otago’s Wellington asthma research group, with funding from the New Zealand Health Research Council and Fonterra.

Professor Julian Crane, one of the study’s authors, said the latest findings showed that Lactobacillus rhamnosus HN001 has a long-term protective effect and could be an effective solution in reducing the risk of eczema development in children with a family history of allergy.

“This study adds support to the theory that the placement of beneficial bacterial cultures in the diet, through probiotics, may allow more control over infant conditions such as eczema even after supplementation has ceased,” Crane says.

Further research on Lactobacillus rhamnosus HN001, looking into its effect after six years, is due to be released 2013.

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Dairy News october 16, 2012

agribusiness // 31

Line up for Checkpoint IT’S A day-on, day-off working week for New Zealand’s best ever artificial breeding bull Howies Checkpoint. Farmers are lining up to use the ‘oncein-a-lifetime’ bull in the upcoming dairy mating season, but LIC says it has to make sure he doesn’t get worn out.

LIC’s general manager genetics, Peter Gatley, says the KiwiCross bull will mate more than a quarter of a million cows this spring.

“That’s a big workload for any bull but it’s made possible by using our fresh semen technology which delivers 10 times the number of straws as conventional frozen,” Gatley says.

“We are doing our best to ensure that every farmer who signs up for

the KiwiCross team gets a fair share of him.”

Through the spring mating period, Checkpoint will be collected every second morning on LIC’s Newstead bull farm, creating up to 5000 straws of fresh semen to be inseminated into cows all over the country the following morning.

A bull as good as Checkpoint only comes along once in a lifetime, but we have to balance the temptation to overuse him, says Gatley.

“One of the challenges we have is to provide a variety of different bloodlines needed for genetic diversity. It’s been 40 years since the country has had a sire [like Checkpoint].”

The bull has a breeding worth (BW) of 327 (83%

Change of guard at Innovation Waikato WAIKATO INNOVATION Park chief executive

Derek Fairweather is leaving to take on the top role at Dairy SolutioNZ. He will be succeeded by Stuart Gordon.

Fairweather has been nine years at the helm of New Zealand’s only agri-focused technology park.

Dairy SolutioNZ was a brainchild of Fairweather, set up six years ago to take the world’s best farming technologies and practices -many from New Zealand -- to places experiencing food crises.

Dairy SolutioNZ was a subsidiary of Waikato Stuart Gordon Innovation Park (WIP) but the is now a stand-alone. WIP retains 25% ownership, Fairweather owns 25%. And 50% is held in trust awaiting an investor whom Fairweather is tasked with finding and securing.

WIP chairman Michael Spaans says there’s no one is better suited than Fairweather for the challenging role.

Gordon has worked for Dairy SolutioNZ for four years as global development director, promoting New Zealand’s dairy and beef farming techniques to overseas large land owners and governments.

Prior to joining Dairy SolutioNZ, Gordon was chief executive of Livestock Improvement Corporation (LIC) from 1998-2006. He is a chartered accountant with experience in marketing, strategy and farm advising.

He previously worked for Fonterra as financial controller. Gordon owns and runs a 430-cow dairy farm near Hamilton.

reliability), 60 BW ahead of the second placed sire Fairmont Mint Edition, also from LIC. The average BW of the KiwiCross Daughter Proven team is 241 – 20 higher than the Holstein Friesian and Jersey teams.

Gatley says Checkpoint is 9/16 Holstein Friesian

and is strong across all traits. He is a result of an LIC contract mating with a past top bull, Shalendy Amorous, and one of the best cows in New Zealand, the product of the GeneRate embryo programme.

When he was born, DNA analysis identified his elite status, but it was

his daughters who proved just how good he really is when they came into milk in 2011.

“Sometimes an offspring will end up with an extraordinary selection of the best genes, surpassing both parents, and that is what’s happened here,” Gatley says.

Howies Checkpoint, led by farm collection supervisor Cliff Harris.

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Dairy News october 16, 2012

32 // agribusiness

Fonterra to close Oz plant, lay off staff SUDESH KISSUN

FONTERRA IS closing a factory and laying off employees in Australia, saying its 100-year-old plant at Cororooke, southwestern Victoria, is no longer viable. The plant, employing 130 people, will shut next year.

Fonterra Ingredients Australia managing director Simon Bromel says supporting staff is now its top priority.

“We wanted to give our people as much notice as possible, and we are working with all employees and their families to support them as we work through a staged closure process over the next year.

“Where possible, Fonterra is keen to help employees who wish to relocate to other sites to identify suitable roles.

However, it is unlikely we will be able to relocate all employees and there may be redundancies.”

The Cororooke plant makes soft cheeses and cream products. Fonterra says there will be no affect on its farmers in the region. After Cororooke’s closure, all milk from the area will be delivered to Fonterra’s nearby Cobden and Dennington sites.

Bromel says despite closing one plant, the co-op aims to keep growing milk supply in the region to support the planned $20 million

upgrade at these sites.

“To maintain our market positions, compete effectively on world markets and continue to pay a strong milk price to our farmers, we must ensure our manufacturing sites are efficient and capable of handling the growth we anticipate. We have reconfirmed plans to invest $20 million in site upgrades at Cobden and Dennington over the next three years, but we have also had to make the difficult decision to close Cororooke.

“The Cororooke plant is over 100 years old and needs major upgrades to meet changing environmental and production standards. While our

first preference is always to upgrade and maintain our sites, the challenges we face and the barriers to modernising this particular plant mean the most responsible thing to do is close it.

“This has been a tough decision and not one we

have reached lightly. We have explored all alternative options to keep the site open but they were not commercially viable.”

Part of the Cobden expansion includes buying a former National Foods site next to Fonterra’s current factory.

Simon Bromel

“We remain committed to manufacturing in southwest Victoria. We will continue our community sponsorship programme in Cororooke for the 2012-13 year, and we are also keen to engage with the community on potential uses for the site

after production ceases.”

After Cororooke closes Fonterra will have nine factories in Australia, handling about 1.7 billion litres this year. Over the past three years, Fonterra has spent at least $100 million in its factories in Victoria.

anz results ‘not satisfactory’ FONTERRA IS looking at brand consolidation to arrest a decline in its Australian business.

The co-op’s ANZ business, which includes consumer products in Australia and New Zealand, was the worst performer during the 2012 financial year.

Normalised earnings dropped 20% to $204 million.

While earnings in New Zealand were slightly up, Australia suffered as a result of a downturn in consumer spending and aggressive competition. Fonterra also spent more on trade and promotions to maintain its market share in Australia.

Fonterra chief executive Theo Spierings says the result is

“not satisfactory”.

“A plan has been approved by the board to improve our portfolio mix. It has to be aligned with increasing profitability and maximising cashflow.” However, Spierings says a $200m surplus is a good result given the challenging trading conditions in Australia.

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Dairy News october 16, 2012

agribusiness // 33

‘True cheese experience’ design bags award FONTERRA’S KAPITI store in Auckland has reigned

supreme at this year’s Red Awards.

The Red Awards are New Zealand’s premier retail design awards. In its 11th year, the annual awards promote excellence in retail design and recognise the contribution shop designers and suppliers make to the retail industry.

Kapiti store manager Calum Hodgson says the award had been a big deal for the store which moved to Shortland St in Auckland’s CBD a year ago.

“Every Kapiti cheese we sell is inspired by the land, the weather, our animals, and our people here in New Zealand.

We needed to reflect the essence of Kapiti in our store, which is the inspiration behind the creation of this space.”

Behind the design of the store was Studio Gascoigne’s principal architect Mark Gascoigne who wanted to reflect the vintage nature of the brand through the site.

“The Kapiti Store gives customers the true cheese experience and we’re very proud that this community effort has been recognised by the Red Awards,” Gascoigne says.

He said the store’s milk bottle lighting, recycled beer crates and brick walls all complemented the New Zealand

Helping dairy women through stressful times HELPING WOMEN working in the dairy industry manage during stressful seasons will be the focus of a series of workshops across the North and South Islands next month.

While it’s too early to predict the season’s outcome, milk prices are declining and the 2011-12 farmgate milk price, while slightly above forecast, is lower than last year, says the Dairy Women’s Network.

It is hosting a series of spring workshops to equip women with the skills and knowledge to understand the pressure points of the farm business and give them some practical tools to help them manage financially over the next 12 months. The day will also include a discus- Julie Pirie sion about coping under pressure, with attendees sharing ideas for coping with stressful situations and where to go for help.

The Dairy Days workshops will also cover what information banks need if additional finance is being sought, and how to communicate effectively with business partners and farm owners when taking control measures.

Participants will create a personalised action plan to help them identify and manage what they can control when the business is going through tough times.

Workshop facilitator Julie Pirie is a dairy farmer and farm consultant with more than 25 years’ experience. Pirie and husband Brian own a dairy farm and support block at Ngatea in the Hauraki Plains. They purchased their first farm in 1993, and have grown their business from 150 cows to 820.

Pirie says this was done without any financial assistance other than their bank. She says they have been through financial cycles from the early 1980s, and have had to operate their business prudently during the past five years.

“Dairy farming is a business that comes with its own unique stressors such as pressure caused by milk price forecasts, trying weather conditions, long hours, resourcing and the on-farm impact of global economics. Some of these stressors are within our control to manage, others aren’t,” says Pirie.

Manager of the Fonterraowned Kapiti store Calum Hodgson and assistant manager Rachel Callister in the award-winning store in downtown Auckland.

aesthetic the store represents.

Designed to showcase the brand’s speciality cheeses and ice-cream, the store was praised by the judges for building on the Kapiti brand’s history.

The first Kapiti cheese was produced by Ross McCallum in 1984 and the brand has been providing award winning cheeses since.

The Red Awards Nourishment Group Award and Grocery & Convenience Stores Division Award was also given to Kapiti.

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Driving change for th A roadmap to farm profitability Adam Fricker, Managing Editor, Dairy News

It’s easy to pay lip service to the question “How can we help farmers make more money?” and plenty of farm service businesses do.

SealesWinslow, 51 percent owned by Ballance Agri-Nutrients, is putting considerable energy into showing rather than telling.

SealesWinslow Chief Executive Graeme Smith says they are upgrading their business systems and up-skilling staff to increase the profitability of farmers by delivering better nutrition through products, service and advice.

“At the centre of this upskilling we have our own nutritionist Dr Rob Derrick, and consultant James Hague.

They are putting together the econometric models which will help our team work with customers on farm to assess how we can improve their bottom line.”

The computer programme they have developed is focussed clearly on profitability in that it’s all about economic return. It zeroes in on the big levers that will lift a farm’s real economic return, particularly around the variable cost of feed as a key farm input.

“Without doubt, one of the biggest costs in any business is not expenditure,” says James Hague. “It is the failure to generate income economically. The capital gains farmers have always relied on are at real risk. Economics dictate that farms should be worth what they can economically return.”

Smith says the commitment to a better understanding of nutrition extends beyond their own people. SealesWinslow has signed a deal with Lincoln University to work with Dr Grant Edwards to educate graduates and develop

SealesWinslow fe

short courses for consultants. They have also have formed an independent advisory group that includes Lincoln professor Grant Edwards, Synlait’s Dr Eric Kolver, professor Warren McNabb (Riddet Institute, AgResearch, and Massey) and Waikato University professor Jacqueline Rowarth. This group will work in association with the Ballance research and development group led by Warwick Catto, so it’s all linked.

“This aim of SealesWinslow: to make money for farmers, fits with the Ballance goal of helping farmers operate more profitably and sustainably through a complete farm nutrient management approach, from pasture through to effluent,” says Smith. “Advice is the key difference for SealesWinslow in the feed industry. Don’t undervalue the advice aspect of it; there is a need for better advice around nutrition and for industry standards within the feed industry.”

“Operationally we’re also working internally to improve our quality control and measuring our performance within the business. Then we will engage in the market via multiple sales channels, direct to farmer and through merchants. We plan to be a ruminant company with a true national footprint.”

The company will distribute product using Ballance infrastructure and freight where appropriate, increasing efficiency and taking costs out for farmers. Ballance also has a majority stake in information technology company Farmworks, and advanced farm technology tools such as Ag-Hub could potentially be integrated into the service from SealesWinslow, further enhancing their ability to improve the economic return of their farmers’ businesses.

The deserving winner of our ‘Back Black in Buenos Aires’ competition – James Barron – uses SealesWinslow products strategically within his highly efficient and successful sharemilking business.

James and wife Holly are 50/50 share-milkers and the fourth generation to run the Barron family farm in Matamata. Twenty years ago, James’ father Gibson Barron decided to switch

Partnership for profitable farming SealesWinslow has formed an alliance with Daisy’s Agriculture, specialists in dairy business optimisation, to help provide farmers with more routes to profit.

“SealesWinslow is committed to helping farmers achieve profitability. We are not just in the business of selling feed,” says Graeme Smith, CEO of SealesWinslow. “Using the tools and expertise of Daisy’s Agriculture and other strategic alliances we are strengthening our offer and commitment to farmers.”

The alliance has a strong emphasis on improving profitability from farming activity and is creating a range of tools, training packages and practical information to help farmers become more profitable. At the core of the alliance is a document entitled ‘Routes to Profit – A Roadmap to Profitable Milk’.

The report looks at what makes businesses profitable; the technical issues faced on-farm and how improved nutrition and nutrient management offers huge benefits to the profitability of New Zealand farming systems. The report will be available for farmers soon.

SealesWinslow and Daisy’s Agriculture will also be running a series of one day Nutrition Workshops across the country for farmers to refresh and improve their working knowledge of nutrition. “Knowing how to create a balanced diet and what margin is being made is a fundamental part of a profitable farming system,” states James Hague of Daisy’s Agriculture.

“However, if the fundamental structure of the business is not sustainable then extra feeding may not be enough”.

The alliance will therefore be offering a full farm appraisal of the costs and technical aspects of the business.

“Farming, excluding capital gains, has not offered the levels of profitability needed on many farms,” observes Hague.

“For many, grass alone will just not cut it and other routes to profitability will need to be explored.” However, he warns that alternative routes can offer some significant challenges on-farm and farmers will need good products, training and support. “The opportunity to work with the SealesWinslow team to offer high levels of technical on-farm support will be highly beneficial for farmers,” he concludes.

James came to New Zealand three and a half years ago from the UK where he worked in dairy farm research and ran his own farm. He set up his Leeston-based company, Daisy’s Agriculture Ltd, two years ago and consults nationwide. He is on the committee of the New Zealand Association of Rumen Nutritionists (NZARN) formed 18 months ago as a way for our best animal nutritionists to keep up to date with the latest advances in rumen nutrition.

If you want to find out more about workshops, or arrange an appraisal contact SealesWinslow: North Island: 0800 287 325 South Island: 0800 007 766

Improving your profitability We’re changing for the better and investing in the future of dairying.

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he better

eeds support strong, grass-based farm system from farming to real estate, so he set the property up to be easily run by a husband and wife team. Now in their fourth season, the couple has the farm working so sweetly (with production figures climbing from 1,315 kg/ha in their first year, to 1,440 kg/ha in their second and 1,650 kg/ha in last year’s ‘bumper’ season) that they are on the lookout for an additional share-milking job.

“We use three tonnes per hectare of supplements but this only represents 15% of feed, with the other 85% being grass,” says James. “Last year we grew 18.5 tonnes and harvested 15.5 tonnes.” They run a spring rotation planner (grazing down to 1,500 residuals) to maintain solid preChristmas production and ensure the cows are well fed at mating.

The Barrons run 250 to 260 cross-bred cows on 70 effective hectares and implement Dairy NZ’s System 3 (10 to 20% of total feed imported to extend lactation and for dry cows).

They milk twice a day until 20 January, dropping down to once a day until dry off: an approach which fits with the needs of their young family and helps achieve condition score targets.

“Feeding meal allows us to achieve our condition score targets, get extra milk at the end of the season and grow more grass. We can fill small feed pinches, keep production up during low growth periods, alter the rotation length at either end of the season and run a higher stocking rate. More stock makes pasture management easier. If pasture has lost quality, it’s easier to correct if you’ve got year-round demand.”

Using meal to fill feed gaps rather than a crop means there is no down time while re-establishing grass. All of James’ pastures are over 15 years old.

Supplements complement pasture management

Gibson started using SealesWinslow supplements about seven years ago in a bid to lift production and streamline his farm management. “He liked that they were local and the fact that they could customise mixes with minerals or other feed to match our requirements. “At the moment we’re using the straight high-starch Rumatain Dairy Pellets. Last year we mixed them 50/50 with wheat bran. When the cows aren’t being limited by gut fill, we’ve added loose palm kernel, cotton seed…We vary our approach through the seasons and SealesWinslow have been happy to work with us on that.”

Pasture management is a key focus for James, who aims to grow as much grass as he can to support production.

Labour-saving advantage

Meal is also a labour-friendly option for the Barrons. James employs a farm assistant during calving but otherwise he is on his own. “With an in-shed system we can feed out during milking. It gets the job done, the cows flow through the shed well and the heifers settle quickly. The feed utilisation is very high; there’s minimal waste. If you’re starting from scratch, an in-shed system needs less capital than a feed pad. The cost of the processed feed needed for an in-shed system is higher but you get that back in results. Our kg/MS per full time labour unit figure is high because we have boosted production via in-shed feeding.”

Good start for young stock

The Barrons also use the Young Stock Block with Rumensin to get minerals into their calves and this is their second season using the 20% Premium Gold calf pellets. “It’s easy to get them to eat more of it and as a result the heifers come into the herd well-grown,” says James. “In their first herd test our heifers were doing nearly 80% of the herd average.”

James also notes that SealesWinslow calf pellets, seem to break down less in the wet than other brands, reducing waste. Other SealesWinslow clients in windy locations have also commented on the product’s robustness, observing that the pellets create little dust which is great for handling and beneficial for stock as younger calves tend not to work the powder.

Competition surprise

The ‘Back Black in Buenos Aires’ competition was the first one James has ever entered, let alone won. “I was sitting at home with the phone on silent when the call came in.

I looked at the number and thought ‘Who could this be?’

It was pretty exciting hearing the news!” Unfortunately, James couldn’t escape from the farm at short notice and Holly is seven months pregnant with their second child, so James’ parents ended up boarding the plane for the eight-day trip to Argentina. “Sounds like they’re having too much of a good time. They won’t want to come back!“ jokes James.

Quality feed contributes to calf rearing success SealesWinslow calf pellets help Ngatea farmers Les and Mark McWatters get the best price at the farm gate.

Les and Mark have been farming on 80 hectares in the central Hauraki Plains for over 50 years, bucking the trend by converting from dairy to drystock in 1972. Their business, Paripari Farm, rears 2,500 calves every year and Mark started using SealesWinslow’s Premium Gold 20% calf pellets about five years ago.

“The calves chose it to be honest,” Mark says. “We gave them a choice of feeds and this was the one they liked.

Because they consume it more readily, they gain weight and go out to the gate more quickly. The earlier they go out, the more they are worth as the price slides from mid-November onwards.”

He gives his calves free access to the meal from day one, combining it with milk and hay until they are out of the shed and onto grass at about three weeks; dropping the milk around five weeks. The farm uses around 250 tonne of meal each season – 100 kilos per calf. With this regime, Mark’s calves reach the target weight of 100 kilos in around 10 to 11 weeks.

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Mark has been impressed with the product’s consistency and quality and with SealesWinslow’s service. “They’ve been especially good when I’ve needed meal in a hurry.

Sometimes you need to wean the calves quickly and you suddenly need a lot more feed than expected. Once I was getting low on meal just before Labour Weekend. I phoned and said if they could get six tonne to me before the weekend it would just get me through. They turned up with 20! It was a huge load off my mind.”

For more information on these and other SealesWinslow products to support calf rearing see www.sealeswinslow.co.nz.

While SealesWinslow is now a substantial player in the feed business, Mark feels they haven’t lost that valuable personal touch. “They are a big company with small company values.

You’re not just a number; they look after you.”

SealesWinslow’s Premium Gold calf range includes a 20% muesli and 16 and 20% pellets. All products in the range containing high levels of grains to supply readily fermentable energy, complementary protein feeds for muscle and frame development along with minerals and vitamins to support health and vitality. The proven coccidiostat Rumensin® has been accurately and evenly incorporated for protection against coccidiosis and to improve feed utilisation. The range also contains Apex™ - a blend of plant extracts which encourages feed intake to improve performance in calves.

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Dairy News october 16, 2012

36 // management

Pasture, feed an essential aspect of mating gareth gillatt

GETTING PASTURE

Phillipa Hedley

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and feed management right after calving was an essential part of a successful mating, Phillipa Hedley, DairyNZ business developer, told farmers at a field day held on Alistair and Lynn Candy’s Northland monitor farm in Okaihau on September 25.

Studies have shown that cows with a body condition score (BCS) less than 4.5 have less chance of getting in calf. Hedley says managing feed to match metabolic needs for cows during this period can be very helpful when keeping cows in the best shape for mating.

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ing round after calving to ensure cows have access to a higher quality pasture when they need it at mating.

The theory behind this is cows eating habits and the way pasture grows says Hedley.

Cows are hardwired to lose one BCS within the first four to six weeks after calving with feed quantity having little impact on the amount of BCS loss over this period. “Any extra feed you offer cows over this time will go straight into the vat.”

Feed quality and quantity become very important coming up to and at mating to ensure cows do not continue to lose weight. “Once you get past 6-8 weeks after calving you run the big risk that cows will keep on producing milk but they will start losing weight if they are not fed enough high quality feed.”

If the feed offered is poor quality this not only reduces the amount of energy eaten per kg dry matter but also how much they can eat. A cow can eat more kg DM of feed that is high quality (12 MJME/kgDM). It is often said that cows need to be on a rising plane of nutrition coming up to mating but it is more about preventing cows having a sudden drop in energy eaten.

Pasture growth is maximised when ryegrass plants are grazed when a tiller has has three leaves or early if there is canopy closure; this can occur in

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rapid growing, nitrogen boosted pastures when the plant has only two tillers due to stem elongation.

Hedley says that going too fast in winter can limit the potential of pasture while going too slow can reduce the amount of ME cows were able to get out of the pasture if the pregraze covers are too long and pasture quality is less.

By monitoring average pasture cover and keeping it in the window of 20002400 from mid spring to winter, pasture growth can be optimised and pregraze cover managed, Monitoring the time cows graze when they hit the ‘target’ residual of consistent and even grazed out pastures will maintain grass quality for future grazings. Spring pasture management is not a sprint. It is easy to get cows to do peak production by leaving high residuals for a couple of rotation. However, this will affect both production and mating if cows are forced at mating to graze lower than previ-

in brief Ballance scholarships STUDENTS LOOKING to fund their agriculture or engineering studies have until October 28 to apply for one of four Ballance Agri-Nutrients scholarships.

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ous grazings. Farmers could do this by monitoring residual growth and cow habits and then using supplements to maintain a rotation and consistent even residuals.“It’s a case of grazing pastures to remove all pasture grown over the winter to have good quality feed to offer the cows as they reach peak intake 8-10 weeks after calving. This is not simple in Northland and pugging must be avoided.

Results from a monitor farm experiment in BOP suggested farmers who managed this would be rewarded with high performing pastures that cows would want to eat, she says.

“You could produce a lot of milk and leave a bit of residual here but then the result is going to be a poorer quality pasture when the cows need it.”

Supplements could be used to provide cows with the necessary energy when things were tight but Hedley recommended against making changes to animals’ diets that result in a sudden drop in energy.

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Dairy News october 16, 2012

38 // management

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Backing local labour Many farms have employed immigrants to solve a labour shortage in recent years – so many, that one in four dairy farm staff are now from overseas, says DairyNZ. Andrew Swallow reports from a Mid Canterbury farm bucking the trend.

WHEN MANY farms are resorting to immigrant labour to solve staffing issues, Mid Canterbury contract milker Shane Edwards is taking a different tack with an all-homegrown policy.

“One of my goals is to employ Kiwis and helm them into the industry by creating a place where they can also have a lifestyle that is fun,” he told a recent DairyNZ discussion group meeting on the farm.

This season the 378ha mostly pivot-irrigated farm is budgeted to carry 1370 cows at peak milk, producing 653,500kgMS for the season. The herd’s been increased 10% in anticipation of extra irrigation coming online.

Six staff, one more than last year, mean a per cow

full time equivalent of 195, down from 238 cows/FTE last year.

“I’ll guarantee if someone else was to run this farm they’d pull a labour unit out and take an extra $40,000 but I’ve got four kids and I like to watch their sport and go hunting and duck shooting. Last year I had 18 days away and [my 2IC] lifted production while I was gone!

You’ve got to give these guys a crack….”

Edwards’ strategy is also to make sure staff aren’t too stretched.

They’re rostered to do 229 days/year and 10.5 hour days, up to a total of 2300 hours. It’s the equivalent of working Monday to Friday year-round in town, he points out.

Wherever possible, rosters – 7/2 and 8/3 from late

July to Feb, then 6/3 the rest of the year – accommodate off-farm activities, such as Young Farmers, or rugby at the nearby Southern club. “They need to get out there and do something,” stresses Edwards.

During calving, crockpots of stew, coffee, noodles and other rations are provided at the shed. “We don’t do sick days and we eat lots.”

The whole team, bar Edwards, is under 21. Current average stay is 2.2 years but Edwards says he’d like to see this up to at least three years. It would be higher but for two staff who’d been with him for six years, both Filipinos, leaving last year.

Three junior staff live in a three bedroom house on the farm, while others have individual accommo-

Shane Edwards

dation.

Edwards says he doesn’t pay “top line” rates, and knows his employees have been approached by other farmers. “All these guys get job offers, and one day

Getting along well JAMES HAS worked for Edwards for just over a year.

“Everyone on the farm is under 21 so we’re a similar age and get along good,” he told Dairy News.

“We go down the pub for a drink, go to Young Farmers.

It’s a lot easier [socially] when there are three of you from the same farm.”

Despite having been there for a year, as far as calving was concerned this year he was one of three “greenhorns” on

the farm, plus two experienced staff and Edwards. “It went really great. I’m glad it’s over but it was enjoyable too.”

Now 19, he admits that at 18, when he left St Bedes College, Christchurch, farming as a career wasn’t on his radar. “I just saw the job in the paper. I thought I’d stay to January but liked it and stayed.”

He’s now on a modern apprenticeship with AgITO with goals to meet every three months.

James’ mate Will, 18, is also working on the farm now, having started pre-calving. “I was scaffolding in Christchurch.”

While he says that was “shorter hours and we didn’t have to work in the rain” he adds he’s really enjoying the dairy farm work, the team spirit and earning more. “I was a temp as a scaffolder…. I’m learning a lot here and we’re all young.” Like all Edwards’ new recruits, he’s done AgITO level 2 and quadbike training.

the time will come when they go… but I just ask them why they are going.

I spend a massive amount of time on my people here, and if you want to do it, it’s very rewarding.”

A previous career in the fishing industry has clearly influenced his approach.

“If you don’t look after people in that industry you end up with an ugly nose and teeth.”

He believes the staffing issues many farms face come down to being short of hands in the first place.

Providing a meal, and making sure everybody has time to eat it, can quickly pay for itself, he adds. “It’s time for everybody to stop, and think, and maybe tell you about that down cow that’s just calved. Save a cow and the meals have paid for themselves already.”

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Dairy News october 16, 2012

40 // management

Law protects lakes but peter burke

FARMERS IN the Lake Taupo catchment are suffering serious social impacts as the result of a

new law which limits the amount of nitrogen their farms can leach. Devised

by Waikato Regional Council, the law – Variation 5 – is now in force, causing uncertainty for

farmers in the catchment.

Farm consultant Geoff Burton, who chaired the BLNZ farm monitor programme to help farmers manage the introduction and operation of Varia-

tion 5, told Dairy News he considers the new law will have significant negative social and economic impact on farmers.

Variation 5 was designed to maintain the Variation 5 aims to help lift the quality of waterways like Lake Taupo.

very high quality of the water in Lake Taupo by first reducing nitrogen leaching into the lake by 20%, then strictly regulating it thereafter. Farming was seen as the main villain. Each farm in the Taupo catchment now has a fixed limit or cap on how much nitrogen it can leach, according to estimates relying on the Overseer nutrient management program.

A system called ‘grandparenting’ was adopted such that each farm’s nitrogen cap was based on its Overseer-estimated highest level of N leaching between 2000 and 2005.

Though some farms have opportunities to increase efficiency and economic performance without increasing N leaching, the cap effectively limits production – and therefore

Geoff Burton

income.

Historically, farms, like any business, will keep ahead of costs by increasing production from existing stock, further realising the business’s potential.

These are not now options for farmers in the Taupo catchment.

Recently the farm monitor group held its last meeting – a time to reflect on the success of the pro-

gramme which had been extended to four years.

The main aim of the group was to assist farmers to mitigate N leaching and to maximise their economic performance under the imposed restrictions.

Burton says the Taupo catchment is particularly unusual because about half the farmable land is owned by Maori trusts and incorporations under

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Dairy News october 16, 2012

management // 41

threatens livelihoods multiple ownership. He says when Variation 5 was first mooted, farmers were slow to grasp its significance, only later realising it would have growing effect on their livelihoods and social conditions.

“It’s particularly bad for some multiple-owned

Maori blocks with a lot of potential for development of their farms which they planned to realise over the next 10 years. They cannot now do that. It’s had a substantial impact on the value of properties and a number of farms have been sold to forest

owners. This is resulting in rural depopulation and significant negative social consequences for some families.”

Burton is critical of the ‘grandparenting’ approach which he labels unfair and particularly harsh on some Maori farms which

had not realised their potential. In one case a Maori trust which had the potential to develop a large scale dairy farm before Variation 5 was even considered, opted instead to run deer and plant some forest. Reasoning included the effect

dairying may have on the lake. “Yet under Variation 5 they get absolutely no credit for their efforts. In my view each farm should have been considered individually.”

The other factor which differentiates the Taupo catchment from other

catchments is the historical involvement of central government. Burton says the Crown substantially encouraged and financed the development of pastureland from the natural scrub and bush cover through settlement and development of Lands

and Survey land. Also, the Crown owned about 28% of catchment land prior to Variation 5. Despite encouragement to use its landholding to reduce the long-term cost to other farmers, it sold most of its land prior to Variation 5 becoming law.

sacrificing few for many GEOFF BURTON says he sees the Variation 5 process as a huge sacrifice by quite a small number of farmers in this catchment for the benefit of a large number of New Zealanders, tourists and the nation as a whole. He also notes that most of the sacrifice is yet to come.

Burton says no one he knows of in the catchment disagrees with the aim of Variation 5 – to maintain the lake water in pristine condition. It is the way it has been done that is the problem, he says. Variation 5 is, and will increasingly be, too tough on many farmers and this is unfair and unnecessary. “My personal view is that the Crown should say that Lake Taupo is very special to the whole of New Zealand and we can’t expect a small number of landowners to meet this cost and we think you should be assisted.” He says assistance could be by partial compensation using the capital from the sale of Landcorp land and/or a tax on lake users.

Variation 5 is seen as precedent setting and other adjacent regional councils such as Wanganui/Manawatu and Bay of Plenty have watched closely what’s happening around Lake Taupo. Criticisms of Variation 5 and Waikato Regional Council were similar to those leveled at other councils – essentially a lack of quality dialogue, practical solutions and a lack of emphasis on economic issues.

Burton says WRC did not seem to understand the personal effects of Variation 5 on farmers as people.

Protect your whole herd

what is Variation 5?

IN 2000, Waikato Regional Council identified farming as the main potential cause of deterioration of water quality in Lake Taupo. As a result, Taupo Lake Care (TLC) was formed to allow farmers to form a ‘common view’ on the issue.

TLC acted as an advocate for catchment landowners and worked with WRC to ensure they understood the ‘farming issues’. It also meant understanding tangata whenua issues and assessing the real economic impacts on landowners in the catchment.

The Lake Taupo Protection Trust, with a budget of $83 million largely from central and local government, was formed to buy nitrogen from landowners who wished to sell and for some assistance with N mitigation research. The purchase of N by the trust is short term, expected to end about 2013 and is of no long-term benefit to most committed farmers in the catchment.

In 2005, Variation 5 was officially notified and following submissions a decision on it was released by WRC in 2007. Following that, aspects of Variation 5 were appealed to the Environment Court and it wasn’t until last year that it officially became operative.

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Dairy News october 16, 2012

42 // management

Adding a sweetener to pasture FIELD DAYS beginning this week are intended to highlight the value of high performance pasture grown and marketed by Germinal Seeds NZ Ltd. The Aber high sugargrass field days will be held on seven dairy and two sheep and beef farms

where the company’s AberHSG (high sugar grass) ryegrass pasture

“Pasture persistence and dry matter yield are key requirements.” – David Kerr has been in the ground for up to nine years.

field day venues ■■ ■■ ■■ ■■

■■ ■■

North Island: Edgecumbe October 18 Tokoroa October 19 Kaponga October 24 Rongotea October 25.

South Island: Culverden November 5 Methven November 6

■■

Hinds November 7 Tapanui November 8

■■

Mt Linton November 12.

■■

The first field day is on Thursday (October 18) at a high-producing dairy farm

at Edgecumbe and the final one is at Mt Linton Station in Southland on November 12.

Germinal Seeds general manager David Kerr says the field days will enable farmers to hear and see why top farmers are planting more Aber high sugar grass. “Pasture persistence and drymatter yield are key requirements but these farmers are also aware that a pasture’s feed quality has a huge impact on animal performance.”

The company’s exhibition trailer will be at each field day, running from 11am to 1.30pm, and farmers attending will

be in the draw for $1000 of AberHSG seed at each event.

Former AgResearch senior scientist Mike O’Connor is a guest speaker at the Edgecumbe and Tokoroa field days and former rural banking manager and people coach David Todd will speak about goal setting at the Taranaki and Rongotea events.

In the South Island Dr Jock Allison, a former MAF Invermay and AgResearch director, will discuss pasture quality at the Culverden, Methven, Hinds and Tapanui field days.

At Tapanui and Mt Linton Station, AbacusBio science consultant Jude Sise will explain the on-farm carbon emission software Alliance Group Hoofprint and its potential for assessing the

Cartref Jerseys dairy farmer Paul Frecklington has seen the herd produce more milk.

impact of new farm practices such as grazing high sugar grass.

Kerr says the farms for the field days were selected on the basis of high production and the age of AberHSG pasture to demonstrate its persistence. “I think the real

value for those attending our field days is to hear from the farmers themselves about how they are getting an extra litre of milk per cow per day or have lambs averaging more than 400 grams of liveweight gain a day.”

The production lift can

be significant, he said, and is due to a combination of good farm management and high sugar grass being more palatable and more digestible than ryegrass with a low level of soluble carbohydrate. www.highsugargrass. co.nz

signs of life Dramatic images of the first days of trout

sep-Oct issue out now WAYS TO SUBSCRIBE: Freephone: 0800 782 436 Online: www.nzgeographic.co.nz

QA &

With COOPERS Vet Hannah Field BVSc Q: Why are worms such an issue?

A: Put simply, worms are a drain on your calves’ health and growth rates.

In extreme cases, worms can cause severe illness and even death.

Much more commonly, worms decrease feed intake and utilisation efficiency – meaning calves eat less, and grow less with what they do eat. Over time, this can have a very negative impact on the number of calves reaching target weights. Heifers that are under-weight at mating are less likely to be cycling and get in calf. If they do get in calf, they are more likely to be late calvers, and will probably produce less milk.1,2 The other ‘hidden’ cost of worms in your calves is the eggs they are putting out on to pasture. Young stock are the highest contaminators of pasture – leaving your paddocks laden with worm eggs to infect the next stock that graze. This is of most importance where calves are grazing the same paddocks year after year.

Abomasum with severe inflammation due to Ostertagiosis

Q: How do I achieve target calf weights?

Q: What should my dairy heifers weigh?

A: Getting heifers to target weights involves A: The target weights for your growing getting calf rearing, weaning, feeding and animal health right!

heifers should be relative to the weight they will be when mature.

A regular drenching programme is one of the tools that will help you to achieve this.

The key liveweight targets are:

Drench monthly with an effective, shortacting oral combination drench! We recommend using a combination containing levamisole and abamectin for young cattle up until 15-18 months of age.

To ensure heifers grow adequately after weaning, weigh a sample of calves regularly and track growth rates.

Weighing monthly in conjunction with monthly drenches will give you a good idea of how they are doing, as well as allow you to give an accurate dose of drench.

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Heifer calves must grow at around 0.5-0.7kg/day between weaning and mating.

As a rule of thumb, start drenching once calves have been weaned off milk and on pasture for at least three weeks.

WE RECOMMEND NOT DRENCHING CALVES THAT WEIGH LESS THAN 100kg.

• 30% of mature liveweight at 6 months • 60% of mature liveweight at 15 months (mating)

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ACVM Registration No’s: A10249 and A10119. ®Registered trademarks. Schering-Plough Animal Health Limited. Phone: 0800 800 543. CALF-253-2012 CAUTION: Do not use ALLIANCE or CONVERGE in calves less than 100kg liveweight. Do not drench with milk or milk-feeders, or while calves are suckling.

References 1. Cowan, R.T. et al (1974) Relationship of age and liveweight at first calving to subsequent lactation yields of Friesian heifers grazing tropical pastures. Queensland Journal Agriculture and Animal Science 31, 367.

2. Hayes, MacDiarmid, Wickham, Burton (1999) Some effects of liveweight, breed, and

management on the reproductive performance of replacement dairy heifers.

The Proceeding of the Society of the Dairy Cattle Veterinarians of the New Zealand Veterinary Society. 16, 93-103 3. DairyNZ FarmFact 3-22: Recommended liveweights for young stock. August 2006.

Dairy News october 16, 2012

44 // management

Different approach to effluent monitoring SUE EDMONDS

Effluent storage facility is a requirement on farms.

EFFLUENT MANAGEMENT used to be a case of ‘out of sight, out of mind’ for some, particularly for some dairy farmers in Waikato. Effluent’s been seen as a waste product so let’s get rid of it -- fast.

After all, spreading it around is a ‘permitted activity’, and although there were some rules about that, some-

where, a few have taken the approach that ‘ignorance is bliss’. But now farms have got bigger, and dairying occupies land formerly given over to sheep or trees. Now effluent is seen as effective and cheap fertiliser. And water is becoming seen as a precious commodity, to be used carefully and cared for. So spreading effluent when it is pouring with rain and the ground is saturated means it will filter down to the all-important aquifers and pollute them, or run off into streams and drains and do likewise.

To cope with more cows and the risks and benefits of effluent, those in charge have devised rules, a code of practice, and an accreditation system to weed out the snake oil salesmen proffering inadequate and ill-matched storage and spreading systems.

These days storage – such as a sealed pond, clip tank or concrete bunker -- is a requirement, with small amounts of effluent spread over a large area only when it’s going to be useful to grow grass and the soil can take it.

It’s true that putting in storage, of the right size to not break the rules on any of 365 days a year, is no small expense, and probably requires a good relationship with one’s bank. But there are rules for running businesses

Farmers once used to moan that regional councils have set rules and policed them, but not given help to put the right sort and size of system in. in any industry, and farming is no different from any other. They are there for a reason and have to be complied with.

Farmers once used to moan that regional councils have set rules and policed them, but not given help to put the right sort and size of system in. When new farm dairies were built it always seemed that effluent management fell to the bottom of the budget for many, and installed systems were totally inadequate for winter storage.

So this year Waikato Regional Council, with its new approach to being helpful, is adopting a new monitoring system for effluent systems. First they’ve chosen some areas where the soils are most likely to leach into waterways and aquifers, and they’ll be looking at the systems on the most vulnerable properties in these areas, both from above and on the ground. Even if their visit (pre-arranged) is in February, they’ll be looking at infrastructure and capability for what it’s likely to look like in July.

Many of the infringements in the past have been because the infrastructure of systems hasn’t been up to what was expected. So they’ll be looking at the whole system and looking for weak spots. The letter they sent out to all farmers in August advised that if you thought your system mightn’t be up to scratch, you then had a chance to check it over and remedy things before they begin their visits. And they will ring and make a time shortly before they actually arrive to do their on the ground inspection.

However, if they do find potential problems, you’ll be expected to put them right. There are a lot of helpful sources out there these days. You can ask for advice from your supply company, DairyNZ, or by using the services of an accredited system designer (for names look at http:// www.effluentaccreditation.co.nz <http://www.effluentaccreditation.co.nz/> ).

It’s taken a while to get the advisory and ruling ducks all in a row, but now there is masses of wise advice available, and clear rules on what is expected.

Farming may be the backbone of the economy, but it can’t be allowed to pollute at will, and by doing so put at risk our Clean Green image and marketing, and our children’s ability to expect a clean and safe environment, both watery and land based.

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Dairy News october 16, 2012

46 // management A bulldozer clears logs and branches.

Out with stumps, in with milking platforms Landcorp has begun the long job of converting more former forestry land in the central North Island into productive dairy units. Dairy News reporter Peter Burke went to see what’s involved in the conversion.

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excellence. From a distance you can see where the trees are being felled on the hills, but it’s on the flatter rolling country that the action takes place.

Landcorp’s farm business manager at the Wairakei site, Alan Bullick, drove me around the various locations where the

conversion is underway.

The trees are down and what is left is the stumps.

It’s the time when steel tracked vehicles are called to action.

Huge machines pull the stumps, either stacking them in neat windrows or transporting them to holding areas for drying.

convert it to chips.

“The chips are trucked off to the Kinleith paper mill and used in the furnaces where they are mixed with coal dust and gas. After the stumps have been taken away or moved aside, a bulldozer with a root rake on the front rakes the ground

Depending on the time of the year, this can take sixtwelve months. One might have expected to see the stumps burned, but this is not seen as environmentally friendly and there are ways to make money from the stumps.

They are ‘hogfuelled’ or chipped by a huge machine which can take a whole stump at a time and in a matter of minutes

and removes the remaining pieces of logs and branches known as ‘slash’.

This is either buried in pits or pushed into low points in the ground and covered over, the objective being to end up with ground in as mowable a state as possible.

At that point a huge ‘stick rake’ tidies the remaining small pieces of tree into windrows. These

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Dairy News october 16, 2012

management // 47

Alan Bullick with chipped stumps ready to be trucked off to a paper mill.

are then mulched and the land can then be prepared for the sowing of grass. In this case they sow mainly ryegrass and fescue with some clovers and herbs.

The pumice land of the central North Island is not easy for establishing pasture. In the past it’s been hit-and-miss (sowing outside optimum times) but Bullick says this has changed and a lot of work has been done to select the best times to sow the grass seed. Effectively a committee consisting of the agronomist, the dry stock manager, the actual farm manager and Bullick himself are involved.

“We are trying to get as much seed sown in autumn as we can.

Because of the volumes of seed involved, we sometimes sow in September and October. It can take fescue between 12 to 18 months to get it to the stage when we can graze it like a normal pasture with dairy cows and so we have to have lower stocking rates in this period.”

Bullick says they stick to best practice dates for sowing seed for good reason. “For example fescue has a very narrow sowing date in the autumn -- between the middle of February and the middle of March. Once we get outside of that we’ll probably sow a crop or ryegrass or a temporary grass.

With ryegrass it’s got a wider sowing band -- from the end of February right through to the middle of April.”

Other grass species have been tried on the pumice land, for example an extensive trial was done with chicory. But while it grew well for parts of the

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year, the longer colder winters took their toll and they weren’t getting sufficient overall production.

Bullick says they calve early and they weren’t getting the production from the chicory they needed then.

When the land is fully converted it is excellent dairy land, but Bullick says there are lessons to be learned from previous conversions. Taking shortcuts doesn’t work and cash has to be spent at the start to get the land properly prepared – this includes the use of lime and super.

It’s also important not to ‘hard graze’ the pasture in the first year. “We start off in first in the first year by running 1.9 cows per ha.

The next year we step it up to 2.1 and the following year up 2.3. We have been as high as 2.8 but it’s too high and we are not growing the grass given that we are 400m above sea level and have long winters. We are not the Waikato where they run between 3.6 and 4 cows per ha,” he says.

The other challenge with converting forestry to dairying is the immobilisation of nitrogen in the soil.

This is due to the large amount of small sticks and pine cones and other ‘wood’ material that is being broken down within

the soil profile. As a result pastures can become nitrogen deficient and so initially after conversion small and frequent applications of nitrogen are required. Bullick uses the nutrient budgeting tool ‘Overseer’ as a resource.

He says Overseer can model the farm and predict the fate of nutrients in the farming sdstem.

While not being ‘absolute’ especially on conversion projects like this, Overseer helps guide fertiliser strategy.

This latest conversion has been driven by the ETS, the very low carbon price and especially the speed at which the change has occurred. Several hundred hectares of pine tree which were planted about a year ago will now be simply ploughed back into the soil and grass quickly sown to feed cows in about a year.

When the trees were planted a year ago, there was a chance they’d be there for 30 years and be milled as mature pines.

With changes to the ETS a few months ago, the owners were looking at off-setting however, the low carbon credits means it’s now more economic to cut their losses, buy carbon credits and convert to dairying.

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Dairy News october 16, 2012

milking/animal health // 49

No looking back after OAD PETER BURKE

WAIRARAPA ONCEA-DAY (OAD) dairy

farmer Leo Vollebregt is planning to expand his operation six years after going OAD. Vollebregt told this to a recent OAD DairyNZ discussion group on his farm.

Two years ago a similar meeting was held on the property, but Vollebregt says little has changed since then – apart from him planning to run another herd as part of his operation.

He’s been farming in the area for 28 years and now runs only 600 cows

in two mobs – one Fresian (290) and the other Jersey (310).

The two herds are necessary due to the configuration of the farm, but he is now working towards having just one breed – a kiwi-cross but will retain the two mobs. He’s building a herringbone shed on the new farm to cater for the third mob. He plans to run between 450 and 470 cows on the new farm, but says it has the potential to run 600.

His original decision to go OAD milking was sparked during a discussion group with Sean Meyers at Rakia Island Dairies where he saw the

Turner brothers’ operation where they milked 5000 cows once a day.

“We saw their production per hectare and the way they ran it. My herd manager Cory Wildman was with us. He discussed it and saw that it was possible for us to do this with a lower level of staffing to produce the same with better profitability and sustainability.

“In the last two years we’ve made no great changes. We’ve tried to get on top of mastitis and last year was a good year in that regard. This year we are having quite a few more challenges due to the wet spring.

“We are trying our best to fully feed our cows and so show flexibility in grazing management. The cow numbers are much the same as two years ago although this season there is a slight increase on two years ago.”

The challenge with OAD milking is dealing with the initial loss of production of around 14% which Vollebregt says is probably caused by some unsuitable cows and the cows not being used to it.

In his case it took three years to do, considered a good achievement.

He says now he has a good herd of cows used to OAD milking and some slight A restored water tower on the farm.

Leo Vollebregt.

changes to management practices to select cows better suited to OAD. Vollebregt is buoyed on by a good season but says he felt there was room for improvement.

For example he is looking at his irrigation system which uses K-lines. He believes he can achieve better results if he moves these twice rather once a day.

There is no question of Vollebregt moving back to TAD. “I don’t think about it any more; it’s just what we do. I am happy with the profits, we are retaining our staff and so we are quite happy.”

He says while OAD has many benefits he says most of the issues with OAD are the same as TAD – feeding cows well, improving the quality of cows and looking after the soil and pasture. He says

there are still pressure times on an OAD operation and says if there is any spare time, like any farmer, he’ll find something more to do.

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Dairy News october 16, 2012

50 // animal health/milking

Leo Vollebregt is working towards a kiwi-cross herd.

OAD farmer eyes expansion THOSE ATTENDING the discussion group at Leo Vollebregt’s farm had a chance to do a farm walk and see and hear more about the operation. Last year the farm produced 203,652kgMS and is targeting 210,000kgMS for the coming season.

His stocking rate is 3.8/ha and he plans to marginally increase that because of the extra cows in the herd. His farm operates on system 3 with 16% supplements and winter grazing. The wet weather has been a problem and feed has been tight.

As well as working on the farm, Vollebregt

has restored an old water tower and for those willing to go up the steep ladders to the top, it provides an excellent view.

Following the farm tour there were chats and general discussion of OAD. Key points were the need to mitigate the pugging of pastures during winter, accepting that going to OAD will not produce instant results and it’ll take time to gain any production losses.

Farmers felt that the use of teat seal as a means of preventing mastitis was a good idea and a lot of attention had to be paid to this issue.

Colin Holmes

SAFE AND

STRONG

Fewer lame cows and lower SCC – Holmes operations but there is no evidence to support that,” he says.

Holmes also pointed to the potential A FAIR degree of skepticism remains in lower capital cost of OAD. He says TAD the dairy industry about once-a-day milk- farmers will often opt for a rotary shed in ing (OAD), says an expert promoter of the order to manage a larger herd, whereas a OAD farmer can manage the same number concept, Professor Colin Holmes.

Holmes told 35 farmers at a recent of cows with a herringbone which at about DairyNZ OAD discussion group in southern $500,000 is about half the cost.

As pressure increases on land use, Wairarapa that though many twice-a-day farmers (TAD) believe OAD is impossi- prompting more dairy farming on rollble and ridiculous, others see outstanding ing hill country, OAD becomes a genuine option. Cows may have results by OAD farmers to walk further to the and are having second milking shed, but they thoughts.

“OAD is a much only have to do it once Holmes says about half of the farmers at healthier paradigm a day.

A major issue for the event were TAD because the OAD farmers is getting farmers. “It’s a slow intensive farming cows bred specifically wearing-away prosystems are for this purpose. An cess, but I think more attempt has been made and more people are terribly hard on to do this, but Professtarting to hear sensi- people.” sor Holmes says this is ble results from OAD hard given the fact that people and think it’s possible and are looking at it as a serious there’s a relatively small number of OAD herds in the country. He says some of the option.”

Holmes says a survey he recently did bigger OAD farmers have been doing work pointed to some advantages of OAD: fewer on this, but progress is slow.

While many OAD farmers have low lame cows, below-average SCC and less stress on people. Anecdotal evidence sug- SCCs, Holmes says mastitis is still a chalgests staff turnover on OAD farms is lower lenge. He says in both OAD and TAD, cows than on TAD farms because of the differ- are exposed to mastitis by virtue of the milking system. ent workload.

There is some gain to OAD farmers but “OAD is a much healthier paradigm because the intensive farming systems are it’s not all plain sailing. “In the case of OAD terribly hard on people. They are either you don’t see the teat for 24 hours from in the milking pit or something else like when you take the cups off so if there’s feeding out and it’s a challenge for people. anything wrong there’s a longer time for it Some OAD farmers have suggested to flare up into something, so you have to that it may be easier to recruit for their be vigilant.”

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Dairy News october 16, 2012

52 // animal health

Concern over induction limit breaches ANDREW SWALLOW

DAIRY FARMS and vets flouting

limits on inductions risk seeing the practice removed as a tool for all, say industry representatives.

Dairy News has heard reports some farms have called vets and pressured them to either do unplanned inductions, or exceed the 4% limit without pre-agreed dispensation. Figures as high as 15% induced have been mentioned.

New Zealand Veterinary Association resource manager Wayne Ricketts says the association has also heard unconfirmed reports of the 4% limit being exceeded. However, he says if it has been happening the culprits should be caught.

“The MOU [memorandum of understanding] partners have an audit process in place where dairy companies check veterinary records and these are matched with the induction records,” Ricketts

told Dairy News.

“We expect farmers and veterinarians who have not followed the operational plan will be picked up at that point and offered guidance to ensure they are aware of their obligations and are offered support to meet them.”

The MOU is between Federated Farmers, Dairy Companies Association of New Zealand (DCANZ), DairyNZ and the NZVA. Federated Farmers Dairy chairman, Willy Leferink, says he’s seen the numbers and few farms are exceeding the 4% limit.

However, where that is happening without going through the proper channels, it risks playing into the hands of those who would like to see inductions banned outright.

“Overall we’re very pleased with what we’re seeing and hearing. There’s been far better cooperation than we thought. But if we want to keep that 4% those who are

using inductions had better all toe the line or they are going to destroy it for others.”

Ricketts says last year’s calving was “a landmark season” with the national herd rate of inductions falling to 2.9%, “below 3% for the first time.

“So we know the process we have put in place is effective. It has successfully lowered rates of inductions to record lows because it forms conditions farmers must meet as part of dairy company supply agreements and conditions vets must meet under the code of professional conduct for veterinarians.”

Any parties breaching those agreements or conditions are putting their businesses at risk, he points out.

“The risks of this process not being followed are to the individual farmer not meeting supply conditions and to veterinarians who may find they are in breach of the code

of professional conduct.”

One farmer who would be disappointed to lose the option of inductions as a tool is Mid Canterbury contract milker Shane Edwards. “I can’t see the point of killing a cow to save an embryo,” he told a DairyNZ discussion group field day last month.

He stresses he’s really particular about the cows he chooses to induce, and would never allow the same cow to be induced more than once in her lifetime.

However, without inductions as a tool to bring an occasional cow back into the seasonal calving pattern some animals with years of high production ahead of them would be culled, he says.

“They might pick up an infection one year because they calved on a particularly wet, muddy day, and not get in-calf on time. If you can induce that cow she’ll probably be fine for years to come, but without that option she’d be culled.”

There are reports that induction limits are being breached on some farms.

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Dairy News october 16, 2012

animal health // 53

Animal welfare tops the list IT HAS often been said

in recent times that one of the biggest issues facing the dairy industry is the integration of animal welfare protocols into routine practices on farms.

Public opinion has strongly turned in favour of increased welfare standards for all our food produced from animals. In the UK and Europe and increasingly North America, higher levels of animal welfare are being used by retailers to distinguish their products from those of competitors, and in Australia we are already seeing changes to egg and chicken production and pig production driven by concerns for animal welfare.

In some cases, significant premiums are paid for higher welfare standards, but many would question whether the premium is enough to justify the costs.

When I talk to farmers about welfare issues, I find, without exception, dairy farmers are concerned about the welfare of the animals in their care. The challenge facing dairy producers is to constantly strive to improve their welfare standards, which is what the public tells them they want, under price signals that say they are not prepared to pay for it.

Faced with this equation, the dairy veterinarian is the best resource when considering ways you can make changes to your animal management protocols to improve both welfare outcomes and the bottom line.

For example, dehorning of calves is an area where we can make significant strides in pain management in a cost neutral

or even a cash flow beneficial way. Genomic research offers opportunities to breed the horns off dairy cattle once and for all, but until genetically superior cattle carrying the polled gene are commonplace, dehorning at a young age will remain a routine animal management practice on all dairy farms. Recently published papers from Canada and North America have clearly demonstrated the animal welfare benefits of using a long acting antiinflammatory drug, Metacam, when dehorning.

In the first study out of Ontario (Canada) by Heinrich et al, Metacam was used with local anaesthetic and showed there was a marked reduction in the measurable indicators of pain for up to 44 hours post dehorning.

They rested for longer, had lower heart rates and stress hormone levels and showed less behavioural changes associated with pain.

In the study from the University of Iowa by Coetzee et al which used the Metacam without any local anaesthetic, the researchers showed that whilst the signs of acute distress associated with the dehorning were not mitigated, there were long term behavioural, physiological and performance effects. Calves in the trial who were treated with the pain relieving medication gained a significantly higher amount of body weight in the 10 days following dehorning of nearly 0.7kg/day.

Anti-inflammatories have been shown in numerous other studies to reduce side-effects of mastitis (including SCC), reduce culling rates

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Dairy farmers and their veterinarians can get on the front foot with regards to animal welfare concerns and alleviate many of the

following mastitis and improve daily weight gain following castration, lameness and respiratory disease.

By adopting the use of anti-inflammatory drugs as part of the treatment protocols whenever we perform a routine management procedure that may

concerns of consumers regarding routine management practices and animal diseases knowing that despite the low milk prices it can be done in an economically sustainable way.

Talk with your dairy vet about making a non steroidal anti-inflamma-

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• Rob Bonanno is the past president of the Australian Cattle Veterinarians Association and a director of the Shepparton Veterinary Clinic, Victoria.

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Dairy News october 16, 2012

54 // animal health

Bobby calf transport changes Dairy Australia

has developed a detailed information pack to help Australian dairy farmers prepare for upcoming changes to the national standards for transporting bobby calves.

New national standards for transporting livestock, including standards and

guidelines specifically for bobby calves, are expected to be introduced across Australia this year.

It will be a requirement under the new Australian Animal Welfare Standards and Guidelines - Land Transport for livestock owners, operators and receivers to comply with

the new laws which specify requirements for ‘fit to load’, vehicles and facilities, time off water, journey time and more.

The new standards require all those involved in the transportation of livestock including farmers, buyers, agents, saleyard operators, trans-

porters and meat processors to be responsible for the welfare of the animals under their care.

To ensure farmers have the latest information to comply with the new standards relating to bobby calves, Dairy Australia will mail farmers an information tool kit includ-

ing a comprehensive pocket guide, fact sheet and poster supported by detailed information on the Dairy Australia website www.dairyaustralia.com.au Under the new standards, farmers must ensure bobby calves transported for sale or slaughter are:

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At least five days’ old Are fit and healthy ■■ Adequately fed within six hours of pick up Australian Dairy Farmers president, Chris Griffin, welcomed the new standards and said they would bring national consistency to the way bobby calves are transported and ensure positive animal welfare outcomes.

“As dairy farmers, animal welfare is of paramount importance in the way we operate and the new standards will provide ■■ ■■

consistency for our practices across Australia for the first time.”

Griffin said farmers and all those involved in the bobby calf supply chain need to be aware of their obligations under the new standards and follow best practice guidelines for the management of calves.

For full information on the Australian Animal Welfare Standards and Guidelines for Livestock (including cattle) go to www.livestockwelfarestandards.net.au

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SmartSAMM mastitis focus is a new tool to tackle the disease.

Keep a tab on mastitis DAIRY FARMERS have another tool in the bag to tackle mastitis.

DairyNZ’s new SmartSamm mastitis focus report summarises the udder health of the herd over 12 months, using data routinely collected on-farm through herd tests and the recording of dry cow treatments and clinical case details. It was originally developed for the Countdown programme by Dairy Australia. DairyNZ adapted it for New Zealand dairy farmers.

DairyNZ’s SmartSAMM project manager Mark Blackwell says farmers will find the mastitis focus report a useful tool.

“It can generate real gains on farm because the mastitis status of herds is constantly changing. Regular review can alert farmers to emerging issues and help them plan for critical times during lactation,” he says.

“DairyNZ has also developed a range of other resources for farmers to help them with their mastitis management.

These are available on our smartsamm.co.nz website including more information on mastitis focus.”

The report is now available free with CRV Ambreed’s new Insight-Web herd recording program. CRV Ambreed says farmers can regularly monitor and review their status to assist them with planning for critical times during lactation.

The report will show the key management areas to focus on by illustrating where farmers currently sit compared to recommended industry standards on calving, clinical mastitis, spread of infection, the effectiveness of previous dry-off strategies and culling to control mastitis.

CRV Ambreed is now beta-licensed by DairyNZ to provide the SmartSamm report as part of their herd recording offering.

Dairy News october 16, 2012

animal health // 55

Dr Phil Poulton with one of his patients at a Fish Creek farm in Australia.

Oz vet examines downer cow cure An australian vet is conducting a world’s first study into the treatment of downer cows.

Dr Phil Poulton, Tarwin Veterinary Group in South Gippsland, Victoria is completing a master’s degree in the nursing of downer dairy cows.

The comprehensive study, which is funded by Dairy Australia, will look at around 250 recumbent cows and how they respond to differing types of treatment.

Poulton, who is in his second and final year of the part-time research project, said results so far were tending to confirm the prevailing treatment practices. But he says it was important the industry had this research to ensure animals were receiving the most appropriate care.

Poulton will look at around 150 downer cows this year, of which 120

will be assessed for the project. He will study the various ailments afflicting them and then review which treatments are the most effective. He will also look at how best to assess which cows won’t make a recovery.

“It’s important from the animal welfare aspect that we don’t prolong suffering for animals that can’t recover,” he says.

Differences in treatment for each breed of dairy cow are also being looked at, with heavier animals having different needs to lighter animals.

“If you have a 650kg Holstein, it might need different nursing to a young Jersey cow that’s just had her first calf,” he says.

Poulton says farmers should heed Dairy Australia’s recommendations when nursing downer cows. The key rules from Dairy Australia include:

• Provide clean, dry and soft bedding that offers a non-slip surface when the cow tries to stand • Provide a continuous supply of clean water and good feed • Move the cow from side to side every three hours to ensure her weight is not always to one side, flexing and extending the hind limbs each time the cow is moved • Regularly hand strip milk from the udder • Regularly encourage the cow to rise • Never leave cows hanging in lifting devices • Regularly reassess her progress and diagnosis Poulton says it was vital downer cows received swift and appropriate treatment once they were on the ground.

No testing fee for bulls THE ANIMAL Health Board

(AHB) is reminding traders and receiving herdowners that there is no fee for bovine tuberculosis (TB) testing of bulls aged over 12 months that are entering the dairy industry.

Commercial bull lessors should organise a TB test for bulls prior to marketing and leasing them, to provide peace of mind to receiving herdowners, it says.

Dairy farmers seeking assurance that service bulls they are leasing are TB-free should insist on TB tests before accepting them onto their property, or at least ascertain that one has been completed in the past six months.

All cattle moving from a Movement Control Area (MCA) are still legally required to be TB tested within 60 days of movement.

Despite cattle and deer herd infections mainly being traced to possums, stock movement-related TB infections continue to occur.

Protecting rural businesses, farms and lifestyles requires constant vigilance. Bay of Plenty dairy farmer Quintin Watts knows too well the devastation that TB can cause after his herd was infected by introduced stock.

“Don’t be complacent, and don’t think that TB is not out there. Do your checks and you will know you

have done everything you could to prevent it. It is something of which we all need to be aware,” he says.

Bulls must also be accompanied by an Animal Status Declaration (ASD) form. Make sure you send and receive yours and check that the TB disease section is complete; the TB test date of the animal(s) is recorded; and the herd status is supplied.

Herdowners are invited to phone the AHB on 0800 482 4636 for all TB enquiries, such as arranging a free TB test for your bull. Please note all cattle should now be NAIT-compliant. However, it is recommended that AHB ear tags are not removed.

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Dairy News october 16, 2012

56 // hay & silage

Preserving silage better, longer SILAGE IS pickled pas-

ture. When pasture is ensiled, its sugars are converted into lactic acid by bacteria. It is the lactic acid which pickles the pasture, allowing it to be preserved for a lot longer than it would have been if left in the open air.

For good silage preservation, we need a rapid drop in pH to a level where there will be no butyric fermentation, so the silage is stable until it is needed.

Understanding this helps us understand what we must get right to make high quality silage.

Aerobic respiration The first phase takes place while pasture is wilting in the field, and while

heat, an increase in numbers of bacteria, and a loss of nutrients from the pasture.

For good silage preservation, we need a rapid drop in pH to a level where there will be no butyric fermentation, so the silage is stable until it is needed. there is oxygen in the stack. Plant enzymes, and bacteria, use the oxygen to turn sugars and proteins into energy. This produces

Sugars and proteins are lost from the silage when left too long in the field or not covered in the stack.

They are not available for cows to eat later on, and the loss of sugars can have a big bearing on how well the silage preserves.

Compaction and quick covering of the silage to remove oxygen is a key to minimising respiration losses.

An American trial showed that immediate sealing of a silage stack caused all oxygen to be used up after five hours. A similar stack left unsealed for 48 hours took 90 hours before all oxygen was used. The potential

When pasture is ensiled its sugars are converted into lactic acid by bacteria.

respiration losses are huge.

Lactic fermentation Once all the oxygen has been used up, anaerobic lactic bacteria (which only function when there is no oxygen around) begin to multiply in numbers.

As they do so, they turn sugars into lactic acid, which results in a drop in silage pH. A low pH preserves

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Acids such as formic and sulphuric acid are added to lower pH in the silage, without relying on lactic acid bacteria to do it.

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are added to increase production of lactic acid in the silage, so that the pH drops quickly to a stable level.

Soluble sugars, such as molasses, increase the amount of sugar available for lactic acid bacteria to turn into lactic acid.

Additives can help when making silage from pasture

which is not ideal (e.g. less than 25% DM, low soluble sugar content), but they will not make up for poor quality pasture, or poor harvesting or compaction techniques.

Proven bacterial inoculants can also be used with good quality pasture to reduce losses and improve feed quality.

the silage, by preventing butyric fermentation.

If butyric fermentation is prevented, the pH will stay low.

The silage will be stable and well preserved. The pH needed for stable silage changes with DM% (water content) of the pasture.

■■ Very low DM pasture (<15%) is unlikely to reach a pH low enough to become stable.

■■ As DM% increases, the pH needed for silage to become stable also increases. For 2535% DM pasture, a stable pH is 4.3 – 4.6 , but for 35-45% DM pasture a stable pH will be 4.6 – 5.0.

Butyric fermentation If the pH is not low enough for the silage to become stable, then butyric fermentation will occur. Butyric fermentation results in the breakdown of nutrients in the silage, and a drop in the

palatability of the silage for cows.

Butyric fermentation is caused by other anaerobic bacteria (Clostridia), which live in higher pH conditions than the lactic acid bacteria.

They turn lactic acid into acetic and butyric acid, to get energy. They also get energy by breaking down protein into ammonia.

The reduction in lactic acid and increase in ammonia during butyric fermentation causes the pH of the silage to rise again. This makes the stack more suited to further butyric fermentation.

The only way to prevent butyric fermentation is to avoid soil being harvested with your crop, wilt pasture to about 30% drymatter which is also important to prevent seepage and have a silage pH which is low enough to stop Clostridia functioning.

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Dairy News october 16, 2012

hay & silage // 57

Right placing will save money save money through reduced spoilage, fuel use and travelling time. Ideally, store feed as close as possible to where you will be using it, says DairyNZ. A good design will help to reduce spoilage from rodents, surface or rainwater, and prevent water pollution by capturing toxic leachate and run-off. Placement should also take the food safety minimum distances into account.

Site selection: Silage storage facilities should be sited on land that is: ■■ Easily accessible (e.g. close to the feed pad if you have one) and relatively flat.

■■ At least 45m from any farm dairy.

■■ At least 50m from waterways, open drains or dams, and the catchment areas of bores. But site them further away if the land is steep, soils are coarse textured, or ground water may enter sensitive waterways. Site them well away from gullies or other places where run-off catchment water can flow into the storage area not prone to flooding or that has a high water table away from any sub-surface drains.

Silage leachate should never enter waterways as it is highly toxic to aquatic life.

Construction: The walls and floor of a silage bunker must be capable of withstanding the hard knocks of tractors and other machinery as well as resisting corrosion from leachate. Concrete with a water/cement ratio less than 0.4:1 should be used. A concrete floor should be 125mm thick and reinforced to support 20 MPa if vehicles are used on it.

The silage bunker floor should be watertight and extend out beyond the bunker walls. Construct a nib wall along the sides. This will keep fresh water out and leachate in. Slope the floor 1m:50m towards a drainage channel laid across the front of the bunker.

For bunkers cut into the side of a hill, an impermeable surface is still essential. Concrete is best, but compacted clay may be suitable. Check with your local council for any requirements they may have.

Silage stacks on the ground also require a sealed surface with leachate directed to a collection point and properly contained. A shallow cut-off trench around the stack will help prevent water run-off from the paddock entering the stack.

All other stored feed is best contained in a concrete bunker. At the very least, it needs a sealed surface plus proper sides and a cover to keep rain and wind out and control leachate production.

Minimising leachate Silage leachate is surplus water from silage, which carries soluble sugars, proteins and nutrients with it as it seeps out of the stack. This leachate is extremely acidic and polluting to waterways. It is about 40 times stronger than farm dairy effluent and 200 times stronger than raw domestic sewage. It is also extremely corrosive and can damage concrete and steel. Leachate entering freshwater is likely to result in regional council enforcement action.

Leachate production is initially determined by the moisture content of the cut pasture (or other feed) when it is placed in the bunker. Maize silage produces very little leachate.

Wilting is the key to minimising silage leachate. If grass is cut and ensiled without wilting, at least 500 litres of leachate per tonne of grass would be produced; if the grass is wilted to 25% dry matter (DM), no more than 30 litres per tonne is produced.

Properly covering stacks to keep the oxygen out and prevent rainwater entering is crucial to reduce the volume of leachate. For bunkers with sides, the cover should extend and be secured over the sides. Stack the grass higher in the middle to allow water to run off the cover.

For free-standing stacks, timber or concrete posts and soil should be used to hold the cover in place.

If the silage stack or bunker is close to the farm dairy, the easiest option may be to channel leachate into the effluent system (unless it is an oxidation pond treatment system as this will overload the system).

If the silage stack or bunker is away from the dairy, leachate should be directed into a watertight storage sump. The sump should be resistant to corrosion with at least 3m storage per 100 tonnes of grass ensiled. It is recommended that it is diluted (1:1) and applied to land at regular intervals, or it can be added to farm dairy effluent.

Applying 25m/ha will supply about 25-75kg/ha of nitrogen, 25kg/ha of phosphate and 100kg/ha of potassium.

A good design will reduce silage spoilage.

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Dairy News october 16, 2012

58 // hay & silage

Allowing grass choice by region AN ECONOMIC forage value index (FVI; $/ha) will allow farmers and advisors to compare perennial ryegrass cultivars in overall economic terms for seasonal dry matter (DM) production.

The index is the work of DairyNZ and the New Zealand Plant Breeding & Research Association Inc (NZPBRA).

FVI ratings are presently only available for a limited combination of cultivars and endophytes, but this will increase later in 2012 as another dataset becomes available. The FVI is currently a combination of seasonal DM production traits and regionalised economic values.

Over time, information on nutritive value (within two years) and persistence (within three to five years), now being collected, will be combined

into the FVI, says DairyNZ in its October publication of Dairy Insight.

Notably, farmers first and foremost should choose cultivars that have the characteristics (e.g. particular endophytes, diploid or tetraploids) that suit their system and environment, DairyNZ says.

“This is especially so in the Upper North Island (north of Taupo) where AR37, NEA2 and Endo5 endophytes are recommended.” Help with these decisions is provided at dairynzfvi.co.nz.

The FVI is most similar to the production worth (PW) of dairy cows. Both FVI and PW give an estimate of profit; $/ha for a perennial ryegrass cultivar and endophyte combination for FVI and $/4.5 t DM eaten for a dairy cow for PW. The current FVI is made up of seasonal DM

production traits corresponding to winter, early spring, late spring, summer and autumn.

These combine with economic values (EV) to make the overall FVI. In the FVI system, each trait is expressed as a performance value (PV) relative to the average performance of a genetic base. The genetic base is “all perennial ryegrass cultivars first tested in national forage variety trials (NFVT) administered by NZPBRA before 1996”.

The genetic base includes cultivars with familiar names such as Nui, Yatsyn and Bronsyn. PVs for the five seasonal dry priods have been estimated. These are expressed as the expected total change in DM production over that period (e.g. +300 kg DM/ha over the months of June and

July for a winter DM PV) relative to the genetic base.

In some instances, cultivar performance for DM yield re-ranks when comparing performance in sites north of Taupo (Upper North Island) as opposed to sites south of Taupo. This is commonly referred to as a genotype by environment interaction, where genotype refers to a particular cultivar/endophyte combination.

The term environment relates to the set of climatic, soil, pest, disease and management conditions for a particular region. This means the best cultivar and endophyte combination for Southland is not necessarily the best for Northland.

Consequently, a separate FVI exists for the four regions upper North Island, lower North Island,

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upper South Island and lower South Island that use different EV and, in some cases, different PV. For instance, Upper North Island uses EV and PV specific to that region, whereas regions further south use an EV estimated specifically for the region, multiplied by PV for lower North Island, upper South Island and lower South Island combined.

Only a limited number of trial results exist for

the upper North Island, but the cultivar x endophyte results from the upper North Island and the rest of New Zealand are not totally unrelated. This allows “out of region” information to be used when estimating PV. For instance, there is a strong relationship between summer DM production in the upper North Island and the rest of New Zealand, whereas for early spring it is weak.

These seasonal relationships were used to merge “out of region” data back into a PV. This ensures valuable data is not lost and provides a more robust estimate for the upper North Island, that otherwise may have been based on single trial results. It does, however, mean that FVI and PV in the upper North Island are more subject to change than for other regions, DairyNZ says.

Forage variety trials PERFORMANCE VALUES (PVs) are derived from NFVT data. The NFVT system was set up in 1991 by NZPBRA, encompassing the plant breeding companies Agricom, Agriseeds, Cropmark Seed Ltd, DLF Seeds Ltd, Grasslanz, PGG Wrightson Seeds and Seed Force Ltd. It is a means of independently testing new cultivars of ryegrass.

At least 110 individual, replicated, small plot yield trials have been completed under the NFVT system, including 44 perennial ryegrass trials that provided data

on the potential DM yield and seasonal growth pattern for a range of cultivars.

NFVT trialling of a new cultivar is one of the final steps in a breeding programme before release for commercial use. This process also involves crossing and individual plant selection (from hundreds or thousands of breeding lines) and plot screening trials using phenotypic or genotypic recurrent selection approaches. From the initial plant crosses to cultivar release, it may take 14 years.

Dairy News october 16, 2012

hay & silage // 59

Ways of saving silage nutrients MANY VARIABLES

can influence the ultimate quality of preserved forage, from decisions in the field to the management of the stack at ensiling and at feedout, says Vitec Nutrition.

The animal nutrition company says one of the most important factors in achieving efficient ensiling is minimising the amount of oxygen trapped in, or given access to the stack.

Chop length and effective compaction play an important role in reducing the amount of oxygen trapped in the stack itself.

Effective sealing of the silo is also crucial for success, the company says.

“Not an easy task when so many stacks are of the

impermeable to oxygen.

According to Vitec, trials carried out at Kansas State University have shown that average losses in the top 1m layer of a

lants designed to enhance fermentation and the use of oxygen barrier film can all help to reduce wastage and increase the value of conserved forage.

ness and numbers while controlling fermentation outcome.

A combination of good stack management, the use of appropriate inocu-

Silostop system with protective UV shade cloth and gravel bags.

silage stack are about 20% DM when a standard polyethylene silage cover is used.

In contrast, when Silostop oxygen barrier film is used, losses can be greatly reduced with losses of about 10% found to be typical using such a system.

It says implications for feed cost savings are con-

The recovery of dry matter and nutrients can also be influenced by the type of bacteria that control the initial fermentation. siderable if you take into account the value of forage dry matter under each square metre of plastic.

For example, a typical fresh weight wilted grass silage with a density of 600kg/mm3 (30% dry matter, according to DairyNZ) would yield about 180kg DM per m3 of top layer. Reducing losses in this layer from 20% to 10% using an oxygen barrier film, would equate to 18kg DM. At a value of about 23 cents/kg DM, this would be worth $4.14/m2 of the surface layer.

The recovery of dry matter and nutrients in the final silage can also be influenced by the type of bacteria that control the initial fermentation.

The inoculant Sil-All contains four scientifically selected strains of unique bacteria that cover the entire pH range encountered through the ensiling process, dominating the initial fermentation by overpowering any wild bacteria in both effective-

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drive over kind, with large surface areas exposed to air. Oxygen penetration into this top layer allows aerobic microorganisms to multiply, resulting in aerobic deterioration. Losses in highly digestible dry matter are a consequence, with a risk of mycotoxin production which can lead to metabolic problems in dairy cows.”

It was this scenario which stimulated farmers producing cheese in Italy to request help from a leading plastic film manufacturers and the country’s ag research institute. They wanted to improve their silage quality and minimise the risk of moulds in their silage entering the food chain.

In collaboration, the groups saw an improved oxygen barrier film, Silostop, developed as an alternative to standard black/ white polyethylene film.

This film works in two ways: it clings to the surface of the silage, minimising air movement, and it is

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Dairy News october 16, 2012

60 // machinery & products

Mat sweeps farmer off his feet WHAKATANE FARMER Peter Laing

turned to Kura mats 18 months ago after getting tired of cows slipping on concrete at the feed pad, reports manufacturer Numat.

One season Laing lost five cows, and he toyed with the idea of a standoff pad costing about $60,000. But he changed his mind after looking at a few farms where Kura mat had been installed.

He has now had them down for 18 months, with two-thirds of the feed pad covered last year, and the final one-third this year.

He has had no more cattle slippage. No cows have been lost.

Laing says lameness

is also a thing of the past.

Previously, through hoof wear on the concrete entry and exits, lameness was a problem. In 20120-11, 45 cows had foot problems.

This season only nine were lame. Barbara, Peter’s wife, keeps track of health problems with computer software.

Another benefit has been when cows are calving. They are stood to one side of the feed pad, where they are close at hand and in good light. It is much easier to see if there are problems than if the cows are down in the paddock, he says. Milk production is about the same as last year, but there are factors other than matting involved in this; for exam-

Kura mats prevent cow slippage, says farmer Peter Laing.

ple a smaller herd and inexperienced staff, Laing adds.

“Farm management has been easier. We wintered off our cows on the feed pad last year and it was excellent. Even with

twice as much rain as the average, there was no pasture damage and much less mud.”

Laing says the purchase cost of the matting, though a lot, does justify the benefits.

As to design, the mats do a good job just as they are. “Although it was a lot of work for us to install them, there was minimal wastage because of their size.” www.numat.co.nz

Auto accessory firm marks 30 years AN AUTOMOTIVE accessory business founded 30

years ago in a lock-up garage behind a takeaway shop in South Auckland by Michael Parker is now reckoned a leading New Zealand and Australian designer, manufacturer and supplier of vehicle towbars and auto accessories.

Best Bars Ltd says New Zealand is regarded as the highest towing nation per capita and, because of our demanding environment, the knowledge gained has contributed to the company’s innovations.

Plans are underway to move the business into larger, modern Auckland premises in early 2013. Chief executive Stephen de Kriek says he doesn’t know how they’ll celebrate the anniversary.

The company started as a car care business offering towbar fitment as a side venture. Within six months it had expanded and began concentrating on towbars, from development to manufacturing and fitting.

A decade later it moved to its current premises and later take over two neighbouring buildings to triple the size of the factory and warehouse. By 2001, Best Bars had produced its first half million towbars and is now well past one million mark. It also produces Ezi Grip bike racks, and other products under the Advantage brand, including decks and tonneau covers for utility vehicles, nudge bars, running boards/steps, vehicle storage boxes and styling accessories.

Dairy News october 16, 2012

machinery & products // 61

Total satisfaction A TOTALSPAN

Manawatu building was chosen by ABC.Com Construction for a large North Island dairy industry project.

Totalspan franchise owner Warwick Dunn, a civil engineer with 20 years industry experience, has worked on a number of dairy sheds. He says his company was able to provide the right construction and materials at the right price. “We were also the leading choice because of our ability to deliver this kind of shed in a tight time frame.”

He first worked with Totalspan designers on a

design for the purposebuilt 22m long by 22m wide building.

The wet environment, which needs careful cleaning and maintenance, demanded the choice of steel for its durability, strength and convenience, he says.

The design called for the walls and framing to fit as a sleeve outside a concrete floor and wall construction. A new framework design ensures the shed is bird-proof.

The construction schedule – one month to completion – meant Totalspan had to work closely with the main contractor.

The company also organised council consents.

“As Totalspan does across the country, we work seamlessly with our local council. Our building approach also allowed the team to save time on putting down the concrete, particularly during the wet weather.”

The crew built from the outside in – constructing the framework and cladding around the foundation before lifting on the roof structure. “Sealing it off quickly probably saved a couple of additional weeks on the concrete.”

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No magic, just bio-chemistry WHEN TUAKAU farmer James

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Legg knew that adding 5L of Biomagic Impact to his effluent pond every month would prevent excessive sludge accumulating.

“There was no need to spend $20,000 on a stirrer James Legg or pump to de-sludge.”

Typical effluent ponds are dominated by anaerobic bacteria. Biomagic converts the pond into an aerobic state, dominated by aerobic bacteria. These bacteria digest effluent up to 12 times faster and once digested the effluent can increase the plant-available nitrogen. The solids and odour are substantially reduced, according to Biomagic.

Legg first heard about the product in 2009 when a sales rep visited his 90ha Mercer farm running 250 cows. He was impressed by its results.

“There was no crust in the effluent and when sprayed on the paddock, it looks like green water and kept the nutrients in.

“It’s also easy to use: a 5L container arrives in the mail every month and you just tip it into the pond.

And the cows were eating the sprayed pasture.”

In 2010 Legg bought a 70ha farm at Tekohonga, about 17km from Mercer. He decided to use Biomagic Impact from day one. That’s the best time to use it, he says.

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Dairy News october 16, 2012

62 // machinery & products

Software makes NAIT tasks easier PROCESSING ANIMALS for NAIT is said to be easier with a new piece of software for the I-Read RFID reader tag sold by Leader Products.

Sales and marketing spokesman Murray Jacob says operators of the GST reader are now able to download a free program to easily register stock and transfer stock ownership in the NAIT system.

Farmers find uploading and handling stock on the NAIT plat-

form can require tricky navigation says Jacob. “With the software people don’t need to go to the NAIT site at all to register the animal or transfer the animal. The next thing is they’ve got an email back from NAIT.” The hand sized reader, which can scan up to 2045 individual animals on a 9v battery, is docked to the computer via a mini-USB cable.

The software uploads information from the reader as a Notepad

file before showing the RFID tags in the software. Once there, Jacob says, registering the animals on the NAIT system is as easy as entering the operators’ NAIT number and the type of animals to be registered and then hitting ‘send’. Transfering animals can be done by entering the two NAIT numbers into the relevant boxes.

“As a convenience factor it’s just a straight registration/transfer operation.”

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Measured, precise fertiliser application Protect the groundwater Enhance the soil Feed the foliage Improve your bottom line

Visual tag numbers can be added or removed from the system manually and the program can be run through a proxy.

A computer running windows XP or higher and 4-net framework is required to run the program.

Jacob says they eventually hope to add group registration to help organisation of multiple groups of cattle from multiple farms.

Tel. 0800 242 824 www.leaderproducts.co.nz

Database, weigh scale work well together THE LATEST version of MindaPro simply and easily

As seen on TV

contact Metalform today for a demo or discussion!

interfaces with Tru-Test’s XR3000 weigh scale, the company says.

Coupledwith Minda Weights and the new Tru-Test SRS Bluetooth stick reader, the system gives “an easy, cost effective platform to capture EID tag information in addition to managing weighing programme and NAIT compliance.”

According to Minda’s developer LIC, reaching target live weights is essential for young stock to achieve top incalf rates. Well grown heifers also produce more milk and survive longer in a herd.

Tru Test says the SRS reader captures EID tag information and sends it to the XR3000 weigh scale via Bluetooth.

“The EID number can then be linked to an animal weight and uploaded straight into MindaPro or you may simply use the system to scan a line of animals into the XR3000 which is then uploaded straight into Minda pro to manage a NAIT movement provided you are hooked up to NAIT.

Stick reader claims

0508 747 040 www.towandfarm.com

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World’s fastest and most reliable handheld reader.

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Reads all HDX and FDX-B tags.

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Waterproof and dustproof IP67 enclosure.

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Superior read distance and long reach make it practical and safe to use when handling lively animals.

Automatic connection with all EID capable Bluetooth weigh scales.

Fast charging and long battery life (up to 19 hours per charge).

Dairy News october 16, 2012

machinery & products // 63

Powered crush makes handling large herd a one-man operation TE PARI Products new

“We put big numbers of cattle through the yards but this unit handles them with ease,” Robinson is quoted as saying.

“The control panel has made the job a one man operation: we can draft the cattle, squeeze them up, head bail them, mark the calves, and tag and weigh them all at the press of a button or flick of a switch.”

Cattlemaster iDraft cattle crush is said to be getting the ‘thumbs up’ from Lochiel Farms, Franklin, general manager Kim Robinson. The 3600ha farm has bought two units.

Robinson’s staff had had enough of old manually operated crushes, so the business bought the semi-automatic, air levercontrolled iDraft crushes.

And the farm has the option of upgrading to fully automated iDraft crushes.

Using the full auto system, cattle can be automatically weighed, released from the crush and directed through the appropriate draft or exit gate.

This unit is easily managed by one person with the auto-draft functions

Cattlemaster iDraft cattle crush.

Auto Inline Liquid Dispenser

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set up on a touch screen control unit. It can also be operated remotely via a 10 function hand held radio remote control, says Te Pari principal Jeremy Blampied.

“It is simple to use and well suited to an older farmer given the less physical effort required to operate it. With an eRail EID reader system incorporated into this crush, it really is possible to weigh, record and draft hundreds of animals per hour.”

Blampied says Te Pari’s new iDraft control panel

Kim Robinson, Lochiel Farms says big numbers of cattle are handled with ease.

– standard on all models – has precluded some problems often found with cattle crushes.

“One of the biggest features is the internal routing of loadbar cables, which keeps them tidily out of the way and completely shields them from

activity around the crush.

Up to 70% of all problems with weigh scales can be attributed to damaged cables.”

The weigh scale mounting is at eye height, easy to use and read, and no add-ons are required.

Other features of the con-

trol panel include a storage tray for tools and tags, and a cupboard where air regulators, EID reader control units and batteries can be stored.

A lockable cover goes over the control panel for extra security and protection against the elements.

Dairy News october 16, 2012

64 // machinery & products

Safer and more fuel efficient THE SUBARU 2013 symmetrical all-wheeldrive Legacy and Outback models go on sale this month. The new models boast fuel economy improvements for the 2.5-litre models and the introduction of Subaru’s ‘EyeSight’ safety technology.

The 2.5-litre models have been upgraded with the latest quad cam version of Subaru’s boxer engine.

This was originally introduced in the Forester last year and a 2.0-litre derivative has been fitted to the new Impreza and XV models launched earlier this year.

This new engine has 4 kWs more power – up to 127 kWs – than the SOHC motor which has powered the Legacy and Outback 2.5 until now.

Torque has risen 6 Nm to 235 Nm. This motor has

chain-driven camshafts, reducing servicing costs.

The 100,000km cambelt change which costs around $700 is no longer required.

But the main benefit is in the improved fuel economy and lower exhaust emissions. The overall fuel economy of the Legacy 2.5 sedan has been reduced 6.3% and is now 7.9 L/100 kms, having dropped from 8.4 L/100 kms. And the Legacy wagon and Outback 2.5 has improved 5% from 8.4 to 8.0 L/100 kms.

The more efficient operation of the new double overhead camshaft motor produces more mid-range torque from 2500 rpm. And some of the better economy has been provided by improvements to Subaru’s Lineartronic Transmission. It is now lighter and more compact with less internal friction.

“We have already proved the economy of the outgoing powertrain in the 2010 Energywise Rally,” says Wallis Dumper, managing director Subaru of New Zealand.

In that event a Legacy 2.5 with Lineartronic transmission recorded 6.54 L/100kms over four days of competition around the North Island over a wide variety of terrain. And an Outback achieved 6.81 L/100kms, well under their combined fuel consumptions of 8.4 litres/100kms “We expect these revised 2.5-litre Legacy and Outbacks to perform even better when driven with economy in mind,” says Dumper.

The 2013 Legacy and Outback are also cleaner running with 8.8% improvements in CO2 emissions - down to 182 g/ km compared to 198g/km

Subaru Outback

Subaru Legacy

for the outgoing Legacy sedan. This new engine meets Euro 5 emission control regulations.

While the main change to the 2.5 models has been the new engine and revised transmission, the turbocharged Legacy GT Spec. B and the six cylinder 3.6-litre Outback and Legacy sedan have “EyeSight” safety technology for the first time. www.subaru.co.nz

Take your Effluent Pond from this …

This pond took only eight weeks to go from crusty and stagnant to aerobic and biologically active.

visual changes shine VISUAL CHANGES for the 2013 Legacy and Outback include larger front fog lights, sharper, sportier grille, bumper and headlights and the introduction of three new paint colours, burnished bronze, deep sea blue pearl and Venetian red pearl.

There are new designs for the 17 and 18-inch alloy wheels – depending on model – across the range.

In the cabin of 3.6-litre and GT Premium models there are electro luminescent liquid crystal display instrumentation. The economy gauge is now at the top of the instrument cluster for easier viewing. The steering wheel follows the same design as the new Impreza with more controls, including the SI (Subaru Intelligent) Drive on the higher specification models on the

to this …

spokes. The Legacy 2.5 Premium and Outback 2.5 Premium models now come with satellite navigation. Mapping is via an SD card shown on the 7 inch screen which is also used for the reversing camera.

Dumper says Subaru is also meeting the need for increasingly economical vehicles in a changing world. “There is a perception that all-wheel-drive is a fuel consumption penalty,” he says. “But the engineering of our Lineartronic powertrains make our cars – which are among the largest in the medium sized segment – still one of the most economical in the class.”

The Legacy and Outback range includes 2.5i, 2.5i Premium, Legacy GT Spec. B, Legacy 3.6X sedan and Outback models and is priced from $48,990.

QUALITY DAIRY HOT WATER CYLINDERS 180 litre – 1200 litre available for new or replacement installations. Optional stainless steel case. Stainless steel barrel now available, 600 litre – 1500 litre with plastic case.

Your pond will stay clean, crust free, sludge free and look outstanding for good!

using one of these: The EPS Stirrers come in a number of different Hp sizes and all of them are very low kW/Hr, starting at .75kW.

All the bearings are above the water line and are fitted with auto greasers that grease for 12 months unattended.

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Available from your local dairy merchant.

Manufactured by:

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Superheat Popular Sizes (measurements in mm) 180 ltr 610 dia x 1330 high 3kW 225 ltr 610 dia x 1550 high 3kW 270 ltr 610 dia x 1750 high 3kW 270 ltr 710 dia x 1350 high 3kW 270 ltr 810 dia x 1050 high 3kW 350 ltr 710 dia x 1660 high 2 x 3kW 350 ltr 810 dia x 1400 high 2 x 3kW 450 ltr 710 dia x 2010 high 2 x 3kW 450 ltr 810 dia x 1600 high 2 x 3kW 500 ltr 915 dia x 1400 high 2 x 3kW 600 ltr 810 da x 1900 high 3 x 3kW 600 ltr 915 dia x 1500 high 3 x 3kW 700 ltr 810 dia x 2200 high 3 x 3kW 700 ltr 915 dia x 1700 high 3 x 3kW 800 ltr 915 dia x 1900 high 3 x 3kW 800 ltr 1160 dia x 1400 high 3 x 3kW 1000 ltr 915 dia x 2400 high 3 x 3kW 1000 ltr 1160 dia x 1650 high 3 x 3kW SUPERHEAT STAINLESS SIZES 600 ltr 920 dia x 1650 high 3 x 3kW 1000 ltr 1170 dia x 1640 high 3 x 5kW 1200 ltr 1170 dia x 1865 high 3 x 5kW 1500 ltr 1170 dia x 2180 high 3 x 5kW Special sizes available on request.

Superheat cylinders include elements, thermostats, valve pack, vacuum break and sight tube.

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Superheat mains pressure domestic cylinders now available

Dairy News october 16, 2012

machinery & products // 65

Summer show entries open PREPARATION FOR Whanga-

rei’s A&P Annual Summer Show has begun. Entries are now open for all livestock and equestrian classes, and bookings are being taken for trade sites. Information, schedules and entry forms are available on line at www.summershow.co.nz The Summer Show is being held on December 8-9. Admission will again be $5.

The region’s top equestrian and livestock competitors will battle for a

Bending design lines keeps cars looking fresh

slice of the $33,000 prize money available. There are 630 classes to enter so there is something for everyone – from calf club and best dressed lambs and goats to the prestigious Sloan Bros Memorial Jump for horses and the longstanding ‘best of beef’ Meat and Wool Cup. Over 2,300 red, blue, yellow, green and orange satin ribbons are awaiting presentation and a top line up of judges from as far away as Timaru and Christchurch in the South and Mas-

terton and Carterton in the North are ready and set to cast their expert eyes over the best livestock and competitors in the region.

Entry forms and more information can be found by checking out the Society’s website www.summershow.co.nz; or by telephoning Whangarei Agricultural & Pastoral Society on (09) 438 3109 or call into the office at 127 Bank Street, Whangarei.

Livestock and equestrian entries close November 16.

For when the going gets tougher

Kia Sportage

HOW MANY times can a straight line be reinterpreted to

emerge as a fresh element in a new car model? The process is never ending, according to Peter Schreyer, Kia Motor’s chief designer.

Schreyer has been famously quoted eschewing the “simplicity of a straight line” as part of the Design DNA he injected into the new era cars from Kia since joining the company six years ago, but it goes much further, he says.

Recently he gave journalists an insight into his design philosophy, which has seen Kia vehicles win huge international praise for their advanced styling and also garnered accolades for this quietly spoken German, including US website Automobile’s 2012 Man of the Year (he also won the same title with the BBC’s Top Gear magazine in 2011).

He’s still based in Germany, at the Kia Motors European design headquarters in Frankfurt, but travels to Korea twice a month and regularly visits the company’s third design centre in California to oversee creations.

Schreyer says design is all about proportion and the ability to evolve a company’s look to keep it fresh, adding, “You cannot sit on your butt and say it is good enough.

Design is an ongoing process that involves learning and thinking.”

The symmetrical proportions that Schreyer is clearly so passionate about can be identified in the new Kia cars he has overseen in recent years, from the larger Sorento and more compact Sportage SUVs, and mid-size Optima and Cerato, to the small Picanto city car and the latest Rio hatchback.

Whilst they all wear the distinctive ‘Tiger Nose’ grille to signal a design and brand connection, none of the Kia models is a clone of the other, with each projecting its own style and character. Even the Kia family grille appears different on each model, adjusted to suit the proportions and styling of the model on which it sits.

The evolution of Kia design has continued apace this year with the unveiling of the Europe-only Cee’d hatchback, which shares its floor plan and many components with New Zealand’s Kia Cerato, and the all-new Quoris luxury flagship, the first rear-wheel-drive sedan built by the company and only available in overseas markets.

Kia’s global sales are up 7.4% for the first eight months, led by the Kia Rio and Kia Sportage, while in New Zealand they are ahead by 28.3% to the end of August.

5045E STARTING AT

$

31,577

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For producers or property owners who need just a little more tractor, the 5E Series from John Deere offers the features you need to handle a wide range of property maintenance, material handling and around-the-farm chores, all at a price that will surprise you. Take a look at the 5045E with its powerful 33.6kW (45-hp†) three-cylinder turbocharged diesel engine, 9F/3R SyncShuttle™ transmission and Mechanical Front Wheel Drive (MFWD) all as standard. Around the back, the fully independent 540- RPM PTO gives you power for all your rotary and PTO-driven implements.

So if you’re thinking about a new tractor, we have an easy answer.

Find out more about the 5E Series from your John Deere dealer or visit us online.

* Price is the Recommended Retail Price (RRP) including GST, valid until 31 December 2012 at participating dealers only. Some dealers may offer different pricing. Price excludes dealer pre-delivery, set-up, installation and freight charges. Price is for the base tractor unit only.

Loaders, implements and attachments shown above are sold separately. † The engine horsepower information is provided by the engine manufacturer to be used for comparison purposes only. Actual operating horsepower may be less.

0800 303 100 | JohnDeere.co.nz/5E

Dairy News october 16, 2012

66 // machinery & products

Heaven is a new round baler for Oz couple Chris dingle

THE PURCHASE of a

new McHale V660 round baler just before the start of last season has proved to be a brilliant move for Australian farmers, Adrian and Vickie Bond. Previously they had operated two balers, in conjunction with Adrian’s father, Colin, but they reckon they kept them going a season too long.

“They gave us so many headaches, chasing parts and with breakdowns,” says Vickie Bond, “this year was heaven!”

Adrian was born and bred into dairying with his parents, Colin and Vicki, who are still farming not far away on Cooriemungle Road.

Adrian’s wife, Vickie, was also off a dairy farm and the pair had been sharefarming at Scotts Creek and came here to ‘Coorie Ridge Farm’ in 1996, virtually straight from their wedding, almost as the honeymoon.

They started with 40ha, plus a 48ha leased block.

The farm has extended to 174ha all adjoining. There are two run-off blocks, one at Scotts Creek, the other

at Cobden. They milk 350 Holsteins on a 24 swingover shed with automatic cluster removers and stall gates.

Adrian and Vickie had seen the McHale baler at Sungold Field Days and again when they were on a trip to New Zealand.

“In New Zealand, we saw the McHale working when we stopped by the side of the road and it just about made up our minds to get the McHale. The McHale runs four knives and we wanted to get into chopped silage to better feed the cows.

“Plus the dealer had

Adrian Bond with his McHale V660 round baler.

a lot to do with it – we have a lot of time for Rhys Evans in Colac and we are confident about their service and knowledge.

The service we’ve had from Rhys Evans over the years was certainly a factor.”

They operate the baler with a 155 hp Case Puma which was delivered by Rhys Evans at the same time in a tractor/

baler package. “It’s generally undulating country around here, so you need all of the 155 horsepower, especially if the knives aren’t as sharp as they could be.”

The McHale machine can handle a maximum bale size of 5’6”; “We usually do 4’6” in silage because of the heavier bales,” explained Adrian, “and 5’ in hay bales

Beat the seasons

Redpath’s clear roofing lets the light in for a clean, dry healthy floor from 10-year life r-Heavy all new Supe r roof elte duty Durash membrane.

WHAT FARMERS ARE SAYING “The shelter eliminates rainfall washing effluent from the feedpad – and the clear roof keeps the cows warm and the floors dry and disease free” Waikato “Protects my herd and my pasture during extreme weather and lifts my farm production as a result” Northland “The soft floor system is easy on the cows and I can hold them inside for as long as I want, I mix the litter into my feed crop when finished” Gore

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because they fit neatly on the truck.”

Adrian says they made 1000 bales last year before he hit the knives with the sharpener, from then on they are sharpened at every 500 rolls. “It’s a pretty easy job; we use a soft wheel on the angle grinder.”

Vickie helps on that job and it only takes 10 minutes to get them out, “pop out and pop in, half an hour altogether”.

Adrian says the baler is easy to clean, and a real bonus is the drop floor to relieve chokes. “You drop the door, it puts the crop through and away you go.

It only choked three times last season.

“It’s been a treat to operate and the monitor is easy to use.

“You can drive with it all day and have no problems. I’ve taken it to places I haven’t been able to get into with other balers and it handles damp conditions very well.”

Quite a few neighbours have been in to see the baler at work and a couple of weeks after our visit in mid-September, the team from Rhys Evans were planning to borrow tractor and baler for a local demonstration.

This year the Bonds will cut 64ha of either hay or silage, mainly ryegrass and clover. “We usu-

ally only do about 4o acres (16ha) of hay for the dry cows, everything else is silage.

“It’s ‘Western District dry cow hay’ here, it’s too wet to get good hay.”

The hay is all net wrapped, there is no twine box on the baler. Adrian’s father, Colin, brings over his Elho twin satellite silage film wrapper to wrap the bales.

This year is a contrast in seasons to last year which dried up pretty quickly, so there was not much hay made.

They usually start silage in the first week of October, but Adrian says it is so wet now it will probably be middle to late October.

For mowing, they have two Taarup 2432 eightdisc mower conditioners and they use a Taarup 8055 four-rotor tedder.

The Bonds have two young boys, Max, 11, and Lex 8, Adrian and Vickie alternate with the milking and have one full-time worker and one part-time.

“For years we were full on, now we have every second weekend off”, comments Vickie.

“Expansion depends on what’s around the corner,’ adds Adrian.

“You don’t say no to anything.” www.mchale.australiasia.com

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Card

Heat Detection Heat detection is an obvious factor in mating management, especially when artificial insemination is practised. However, detection has become more difficult over recent years as herds have increased in size and close observation of all cows is not possible. The result is that many heats are missed. With large herds, even paddock identification has become unreliable with up to 15% of cows being missed.

While cows are on heat for an average of 18 hours, they may also be in heat anywhere from 4 to 30 hours. Being on heat for only 4 hours is called a silent heat and can be easily missed as there is very little activity by the cow.

Tell Tail Aerosols > A convenient aerosol delivery system in a 500ml can, which is ideal for touch ups and general stock marking.

Tail painting is arguably the most cost effective, accurate method of heat detection. However, it’s important to check the cows at every milking, and touch up the paint when necessary. Water based paints are becoming more popular as they will not irritate cows, particularly those which have been excessively ridden and severely rubbed.

> Tell Tail Applicators – the brush head, attached directly to the 1 litre bottle, providing ease of application.

FIL offers a wide range of cost effective options for accurate heat detection. From the proven Tell Tail, to the new fluorescent Detail (a water based product that lasts on the animal for the required time).

> The highly visible fluorescent colours ensure accurate heat detection, making your job easier this breeding season.

> Tell Tail 1 litre tins – traditional and popular with smaller herd operators looking for a low cost option. > Detail 10 litre pails – an economic alternative for large volume paint users.

For advice on tail paint, contact your PGG Wrightson Technical Field Representative or call into your local PGG Wrightson store. www.pggwrightson.co.nz

| Freephone 0800 10 22 76

Helping grow the country