Dairy News 27 Nov 2012

Fonterra board culture raising eyebrows. Page 3

celebrating diversity

Dairy women’s conference preview. Page 21

gathering water data

Better planning and efficiency Page 33

november 27, 2012 Issue 281 // www.dairynews.co.nz

investors swarm taf Fonterra’s $500m public offering attracts investors far and wide but farmers’ response is lukewarm.

PAGE 5

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Dairy News november 27, 2012

news // 3

Change boardroom culture – farmers ANDREW SWALLOW andrews@ruralnews.co.nz

Plan well or risk failure.

PGS. 14-15

Ignore effluent pond size and location at your own peril. PG.28

Passing a feed supplement roadblock.

PG.36

FONTERRA SHAREHOLDERS say directors must listen to the membership and seek to heal wounds in the wake of TAF (trading among farmers), the governance review row and allegations of election malpractice.

Many large suppliers, including a dozen or so from the North Island, last week attended a packed meeting in Ashburton to air concerns to directors Malcolm Bailey, David Jackson and chairman-elect John Wilson.

Dairy News understands several other current and former directors were present, including Colin Armer who resigned from the board in August.

The meeting was closed to media and many shareholders spoken to by Dairy News after the event did not want to go on the record. “We’ve got to sort this in the family,” said one. “Everyone is just trying to get these concerns resolved.

If they’re not [resolved] then we may have to do it more publicly.”

Comments in the news media by directors about a letter sent to the board, in confidence, by a group of 30 shareholders expressing concerns about the governance culture, are understood to have prompted the Ashburton meeting.

Lachlan McKenzie, who flew from Rotorua to

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“They need to send a very clear message to the board and have to be very careful about which incumbents they vote in or out. And there is a vacancy there…. They need to vote in directors who will put in place an appropriate cooperative culture and ethos.”

While some regional Federated Farmers Dairy representatives were at the meeting, the federation’s national dairy chair, Willy Leferink, was not, owing to a Feds national council meeting in Wellington.

“This is a Fonterra shareholder issue, not a Feds issue. Unless there is serious harm to Fonterra and our members start to complain to us [Feds], then we do not have to be there,” Leferink told Dairy News. @dairy_news facebook.com/dairynews

‘The ship has turned’ ROTORUA-based Fonterra shareholder and

former board candidate Trevor Hamilton was also at the Ashburton meeting.

“There was robust discussion about the need for a culture change and about some of the board behaviour.”

Hamilton, who has lodged two affidavits with

the board alleging electoral interference by outgoing chairman Henry van der Heyden, says he’s been assured “the ship has turned in terms of culture and behaviour”.

“My personal view is that soon after the next board meeting there will be an outcome,” Hamilton says.

‘They’re getting it wrong about water’

News ������������������������������������������������������ 3-17

Management ��������������������������������21-24

attend, says while no formal motion or resolution was passed at the meeting, those present provided “a very clear message” to the board.

“These people are not muck-rakers. They have huge amounts invested in their businesses and they want the production and marketing arm of their business, ie Fonterra, to be highly successful.

“When a significant number of these people stand up and say we have concerns, and these are the concerns we have, it is the duty of the board to sit up and listen.”

McKenzie says those concerns centre on the governance culture, integrity and ethos of the board.

While the message from the meeting was for the board to change its ways, shareholders “will have the power in their own hands very shortly when they receive voting papers,” he points out.

ENVIRONMENT MINISTER Amy Adams (pic-

tured right) says she is annoyed by a persisting public assumption – in the debate on water – that dairy farmers believe they should have as much water as they want.

She told Federated Farmers national council

last week that a lot of people fail to grasp the fact that irrigation is equally crucial to arable and sheep and beef farmers, commercial growers wine growers and others in the primary sector.

“If people want to debate the sustainability of intensive dairying in some areas that’s fine, we can have that debate. But it’s not the same as the water debate and we need to start seperating those out in people’s minds so they understand the two aren’t intrinsically linked,” she says.

Also of concern to her is that the blame for water quality is all laid at the feet of farmers. “Yes it has a big part to play… and a lot of the issues are related to poor farming practices, but it is not the only issue to do with water quality. to page 5

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Dairy News november 27, 2012

4 // news

Council no-vote advice slammed ANDREW SWALLOW andrews@ruralnews.co.nz

A RECOMMENDATION by the Fonterra

Shareholders Council that shareholders should vote against an annual meeting resolution on farmer director numbers has been slammed as hasty, misleading and an affront to shareholders’ democratic rights.

While Shareholders Council chair Ian Brown defends the recommendation, movers of the resolution question how the council could have conducted a “careful review”, as it claims, without contacting them, their lawyer, or, seemingly, very many farmers.

The resolution is proposed by Bay of Plenty producer and former Federated Farmers Dairy

chair, Lachlan McKenzie, and seconded by Takaka farmer and former Tasman Milk director Ann Jones.

Jones told Dairy News she spoke to all shareholders councillors in the South Island after announcing the remit and they were “right behind it”. However, after a nationwide councillors’ conference call, the voteagainst advice was issued on November 16.

“The council is concerned the resolution could serve to constrain the findings of the council’s and the board’s recently commenced joint governance and representation review and it would not be in the best interests of the co-op to pre-empt its findings,” said council chair Ian Brown at the time.

“If any proposed

changes come out of the review, shareholders can be confident that no changes can be made without consultation and a 75% shareholder vote in favour.”

But Jones says that misses the point. The problem is that there is no protection for farmer representation on the board in the constitution as it stands.

Since Fonterra was formed the balance of the board has already shifted from 10 farmers and three independents, to nine and four. Overseas the recognised maximum independent to member-elected ratio of directors on a cooperative’s board is 1:3, she says.

“We need to stick a finger in the dyke, urgently, to ensure we retain control. We’re already in excess of that

and all those [Fonterra] independents are corporate people. When you look at the numbers of staff earning over a million dollars, you’d have thought we have enough of that sort of expertise on the payroll.”

She stresses the resolution is a separate issue from TAF (trading among farmers). It has also been in preparation a long time, and was not prompted by the governance review.

“We should have got this done earlier but with so much fine print it was easily overlooked,” she admits.

Now that the resolution is on the table, she is urging all shareholders to consider it and use their vote, but she fears that ‘issue fatigue’ may be setting in, given all the politics surrounding Fonterra in recent months.

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“We really want all shareholders to address this. We really are just trying to get the ship back on an even keel.”

Brown told Dairy News the vote-against advice was neither hasty nor misleading nor an affront to shareholders’ democratic rights. It is every shareholders’ right to put forward resolutions but, equally, the council is duty-bound to consider resolutions and make a recommendation on them to shareholders, he says.

Before the advice was issued, the resolution was discussed at “three or four” council meetings, councillors read material on the matter and sought opinions, and several conference calls were held.

He’s adamant any change to the current nine farmer, four independents board would

require a constitutional vote. “You cannot go to eight and five without 75% shareholder support.”

Even if the McKenzie/ Jones remit gets 75% support, Brown says council could still veto it under clause 18.1 of the constitution which requires 50% or more of the Shareholders Council to support a resolution for it to pass, as well as it clearing the 75% shareholder vote threshold.

“We are withholding the right to use 18.1 until we have heard from shareholders. They’ve not had

Ian Brown

the opportunity to debate this yet, or look at the details.”

Ideas from that debate may feed into the governance review and could be used in future, he adds. @dairy_news facebook.com/dairynews

Carter heads trade mission INDIA, INDONESIA and Sri Lanka are the target of a special agricultural trade mission last week led by Primary Industries Minister David Carter.

The ten-member party includes a Fonterra representative and people from the meat, horticulture, agritech and banking industries. Before he left last week Carter told Dairy News there is good opportunities for the dairy industry to expand sales in all the countries being visited during the two week mission.

Carter says as well as looking to sell additional or new products, he will be arguing for freer access and lower tariffs in all the countries.

“India is a country the Government has identified as very important and where

we are negotiating a free trade agreement (FTA). I’ll be discussing that FTA. Sri Lanka is an important market for Fonterra and while it’s not a big market, there is potential as their economy grows.”

India has one billion people, Indonesia 300 million and Sri Lanka 21 million.

Trade missions headed by a senior government minister such as Carter carry a lot of weight in Asia and usually have good outcomes.

“Ministers open doors. We create the potential for companies to get access to important people. Once that door is open then it’s quite clearly for the companies themselves to harvest the potential of that introduction,” he says.

0800 745 297 – garyb@ipnz.co.nz

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Dairy News november 27, 2012

news // 5

Fonterra expects ‘wait and see’ approach by farmers GARETH GILLATT

FARMERS are likely to “wait and see” whether they will offer units under TAF (trading among farmers), says Fonterra chairman-elect John Wilson.

The scheme will be officially launched this week.

Wilson last week told the BNZ Northland Dairy Development Trust annual conference in Whangarei

that there is a lot of interest among would-be investors but farmers are more circumspect about trading their units.

“Fonterra farmers will put in what Fonterra farmers will put in,” Wilson said.

“The feedback we’re getting is that farmers want to wait and see what’s happening… which is totally understandable.”

Fonterra has promised to offer the equivalent

of$500 million in units to make up any initial shortfall and Wilson expects farmers to use that as a ‘litmus test’ of whether or not it is worth listing excess units. “We may see more involvement by farmers with the release of the first half-year annual results in April.”

Meanwhile Wilson wants farmers to vote for Resolution 8 – a new policy which limits the number of units in the co-op that can

‘Signed up and staying on’ JOHN WILSON says he expects outgoing chairman Henry van der Heyden to attend his last board meeting in May next year.

Wilson told the conference that van der Heyden had stayed on because he had signed the original TAF prospectus and it was good practice for directors who put their names to documents such as that

to remain on the board until the action had been passed.

“He’s already stepped into the background in several areas,” Wilson says.

Van der Heyden’s decision to stay as a director after stepping down as chairman at next month’s annual meeting has raised eyebrows among shareholders.

be held by outside investors. Resolution 8 reduces the total percentage of shares on offer via TAF from 25% to 20% and prevents farmers from selling the economic rights to more than 33% of their shares through TAF at any one time.

The shareholders council-prepared Resolution 8, which is to be presented at next month’s annual meeting, is a copy of Resolution 2 of the original TAF proposal put to shareholders in June. Resolution 2 got 72.8% of the vote – just over 2% short of the 75% it needed to pass.

Wilson urged farmers to vote for the resolution, saying it was the only way to ensure Fonterra’s focus remained on farmers.

“This resolution locks in the integrity of farmer ownership of the fund and the protection of the milk

Fonterra chairman-elect John Wilson says farmers want to wait and see how TAF progresses.

price. As a dairy farmer, having 100% farmer ownership and control and having integrity around the milk price is non-negotiable.”

Wilson told the meeting he was aware how tight cashflows were on an advanced $3.85kg/MS payout.

“We are committed to improving the book price once the forecasted [global] milk price does move above 30 cents [a litre].”

Chinese interest bothers TAF sceptic ANDREW SWALLOW andrews@ruralnews.co.nz

CHINESE OWNERSHIP of Fonterra units

would give the superpower “the first lever on our milk price,” a leading TAF sceptic says in the wake of a November 14 Wall Street Journal report that Fonterra is in talks with the state-owned China Investment Corp.

“China wants quality product out of New Zealand and clearly if they can get it cheaper they will be

better off,” Leonie Guiney, Fairlie, told Dairy News.

Annual reviews of milk pricing mechanisms, as ruled for in the TAF enabling legislation, paves the way for outside investors to influence pricing, she warns.

“Do we really think the Chinese government will respect our cooperative purpose to deliver milk price to the New Zealand farmer first? Or will they argue the milk price calculation disadvantages the investor, [so less] should go into milk price and

Leonie Guiney

more into dividend?”

Guiney says there are “three potential handbrakes” available to apply to such influence.

“The first is to support the McKenzie and Jones remit (see p4)… The second is to make absolutely sure resolution 2, which puts some controls

and limits on fund size, is voted into our constitution.”

The third is in the hands of MPs in the form of Damien O’Connor’s private members bill which seeks to legislate a limit on the Fonterra fund size.

“This is important now our council has allowed us to be in a position where TAF has been launched and resolution 2 is not yet in the constitution, despite [the council] arguing [its] support of TAF was dependant on these controls being in place.”

Guiney believes “extremely hard questions” need to be asked of Fonterra’s leadership and their intent. “Didn’t this start as trading amongst farmers?”

Friends of Fonterra and broker firm applications for units closed November 21. The institutional offer and bookbuild was scheduled for today (November 27) and yesterday, with pricing and allocations to be announced today.

Allotment of units and trading on the NZX and ASX is expected Friday.

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Water concerns from page 3

“I don’t care if a council has a resource consent to pump all their effluent into the waterways; it doesn’t change the water quality. You may have a resource consent – good on you, but it doesn’t mean the effluent going out doesn’t have an impact on water quality.”

Adams says there needs to be better public understanding about the contaminant sources in our waterways: “Where they are coming from, what we can and can’t manage, what is naturally occurring and what’s historical. Until we get a good picture of that, it’s hard to get sensible discussion of what we can expect farmers to do on their properties.”

Adams sees misconceptions among New Zealanders about water resources and she is highly critical of “a particular group in New Zealand society” who are keen to run us down internationally on water quality and management for political gain at home. “It makes me absolutely furious that they would go overseas and deliberately destroy our brand so they could further their domestic agendas.”

Adams says water is the most difficult policy issue the Government is grappling with. And she acknowledges the country must better manage water.

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Dairy News november 27, 2012

6 // news

Database move to DNZ ‘a welcome event’ SUDESH KISSUN sudeshk@ruralnews.co.nz

THE COUNTRY’S second-largest breeding company is welcoming the transfer of the dairy core database to DairyNZ. CRV Ambreed marketing manager Peter Berney says it makes good sense to have the database and animal evaluation service separated from a commercial environment.

LIC shareholders this month voted to support the transfer control to DairyNZ. The core database contains 46 fields raw data derived from New Zealand dairy farmers who herd test and which relates to calving, mating and production data. The LIC proprietary database contains at least 18,500 fields of data and remains the

property of LIC. DairyNZ has called for tenders as part of a transfer plan for the database. A dedicated project and stakeholders’ group, including representatives from LIC, CRV Ambreed, Federated Farmers and the Ministry for Primary Industries, are involved in the transfer, which could take up to two years.

Berney says LIC has been responsible custodians, “but the industry has moved on from the days when LIC was an industry-good entity and in the early days of DIRA when the industry’s first priority was to protect the asset that is the national dairy database.” It is pretty clear now that the industry is strong enough and the database secure enough in its own right for it to be placed with DairyNZ as the

⅓ ⅓ ⅓

industry-good body.”

CRV Ambreed started its herd testing and herd recording service in early 2000. But it has been hamstrung by the cost of access to data.

“This has meant innovation in the use and supply of information to New Zealand dairy farmers has been restricted so farmers haven’t really gotten the best value out of the database that they could have. Commercial companies can only survive by providing added value to their clients and that’s where we would like to see the focus of the industry.

“The database is protected so farmers don‘t need to fear that it will be taken away; and CRV’s own history is as a farmerowned cooperative, so we understand the impor-

tance and necessity for dairy farmers to look out for their industry.”

Berney is confident the national dairy database, if well structured, will attract investment from outside the New Zealand dairy industry to create products and services that will increase their profitability and competitiveness in the international market.

The transfer was a recommendation of an industry-wide consultation in 2009 headed by Professor Robert Anderson.

LIC Chairman, Murray King says 88.2% of voting shareholders supported the transfer of the core database.

“The core database is a strategic industry asset, built upon the commitment of thousands of dairy farmers who regularly herd test their herds,

LIC chairman Murray King (right), chief executive Mark Dewdney (centre) and shareholder Richard Myers at the annual meeting this month.

yet the benefits accrue to every dairy farmer in the country. It is important to understand that the LIC database will operate in parallel and that LIC retains all ownership in cow breeding worth.”

Sire breeding worth

will be made available on a royalty free licence arrangement with DairyNZ. King says the LIC board and shareholder council had exhaustively examined the issue and believed the transfer to be the best out-

come for LIC and for the dairy industry.

“For all intents and purposes, business will continue as usual. The transaction is expected to occur within two years.” @dairy_news facebook.com/dairynews

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Dairy News november 27, 2012

news // 7

One Plan worries unheeded

by Carter – for now PETER BURKE peterb@ruralnews.co.nz

THE GOVERNMENT

will not at this stage heed ‘rumblings’ about a necessity for commissioners to run Horizons Regional Council, says MPI Minister David Carter, despite a damning report by Landcare Research on the effect of the council’s One Plan on farmers’ incomes.

“We need to now allow the court process to continue and deal with what comes out of the court process,” Carter told Dairy News.

Federated Farmers Manawatu- Rangitikei Provincial president, Andrew Hoggard, says calling in commissioners to run Horizons is not his preference.

“But if the council is not willing to admit it’s at fault once more solid economic evidence is presented and as more information comes out and the council sticks with it, that could be the time the government has to step in and do something about it.”

A report by Landcare Research for MPI shows some farmers and commercial growers face up to a 43% cut in their incomes if the One Plan as it now

stands is implemented.

This figure has been disputed by Horizons chairman Bruce Gordon, who told news media the impact of One Plan on profitability would be no more than 1%. He has also called for “calm”.

But Carter is backing his ministry, saying MPI is not wrong. “MPI have commissioned a report; it has been done by Landcare who have no interest in publishing a report and putting their reputation at risk as they estimate the effects of imposing nitrogen limits on farming. So I don’t accept for one minute that MPI are wrong.”

Carter says he is disappointed the chairman of Horizons clearly does not understand the implications of the recent Environment Court decision on the One Plan.

Gordon’s claim of a 1% impact on farm incomes is true only as it applies to the ‘decision version’ of One Plan. This is the version the hearing commissioners originally produced and it is vastly different from the One Plan the Environment Court handed back to the council and the community – a point Hoggard has noted.

“What is gutting is that

Council sticking to its guns HORIZONS REGIONAL Council chairman Bruce

Gordon continues to claim that the Ministry for Primary Industry (MPI) is quoting incorrect figures on the impact of One Plan on the income of farmers and commercial growers in the region.

MPI say it could cause incomes to drop by as much as 43% and Minister David Carter has again backed their interpretation of a report by Landcare Research.

But in response to questions by Dairy News, Gordon says the Environment Court accepted the drop in income was 5-16% of their annual on-farm operating costs. He also says in the original plan the impact was about 1%, but that is no longer relevant given this plan has been dumped by the court.

Gordon claims the council was required by the Environment Court to provide additional evidence from its experts and effectively could not unconditionally back the ‘decision version’ of the plan – a move which has raised the ire of Fed Farmers.

“In order to impartially assist the court as required by the Environment Court process, Horizons modeled all options put up by the appellant in relation to water quality outcomes. [Scientist] Brent Clothier provided evidence on [nitrogen] losses from horticulture to model water quality outcomes,” Gordon says. @dairy_news

facebook.com/dairynews

Federated Farmers was fairly happy with the decision version of the One Plan,” Hoggard says. “This was decided by the council’s independent hearing commissioners and we spent some two years preparing for and being in front of the commission-

ers. What they came up with we could have lived with. This work by Landcare Research provides a circuit-breaker for the council and it would be unwise of them to ignore it.”

Hoggard says he fully backs the minister when

he says the Horizons call for calm is dumb. “This belief we should just hold our tongues and wait and see how many farmers go broke, farm staff get laid off or rural service businesses downsize, impacting rural towns, is beyond dumb,” says Hoggard.

Primary Industries Minister David Carter is not looking at commissioners to run Horizons Regional Council, – for now.

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Dairy News november 27, 2012

8 // news Up to 50,000 Burmese people have been scanned for bone health since Fonterra launched checks in that country in 2011.

Co-op eyes Myanmar’s growing dairy market JOHN KEY became the

first New Zealand Prime Minister to visit Burma last week at the same time as Fonterra announced expansion plans into the country of 56 million people.

Fonterra has appointed

Prashant Pradhan as manager for the country – known as Myanmar and Burma. He will lead Fonterra’s business development in the fast-growing dairy market.

Pradhan will drive growth and explore oppor-

660 The number of antibiotic syringes Helen & Bruce Donald of Tirau used on their farm per year before installing ADF.*

tunities for Fonterra. It is the first time the co-op has employed its own Myanmar-based staff. Pradhan will be based in Yangon from 2013.

Fonterra ASEAN/ MENA managing director, Mark Wilson, says Pradhan’s appointment will allow Fonterra to better understand the opportunity in Myanmar for nutritional dairy.

“Myanmar has a population of around 56 million people and dairy consumption per capita is expected to increase as people in Myanmar increasingly look for high quality nutrition that supports the health of their families,” he says.

Wilson says the tourism sector is also growing fast, driving demand for high quality foodservice products from hotels and restaurants.

“Fonterra has already established a fast-growing consumer business, through distributor relationships, which has more than doubled over the last year.”

Pradhan joined Fonterra in New Zealand in 2007 as a strategy manager and relocated to Singapore in 2009 as performance and process improvement manager. Most recently, he led a project to grow Fonterra’s foodservice business in Asia and the Middle East.

Pradhan says Fonterra has established relationships with key customers and industry partners through supplying dairy to Myanmar for the past six years. “Our priority is to further build the supply of high quality dairy nutrition to Myanmar and explore new opportunities to expand the brands we offer.”

Fonterra in 2011 started selling high-calcium Anlene brand milk through a local distributor to retail outlets and pharmacies. It launched the Anlene bone health check the same year and has scanned at least 50,000 people to date.

Fonterra also supplies cheese, cream, butter and milk to bakeries, restaurants, and hotels.

The Prime Minister’s visit last week was largely symbolic to recognise Myanmar’s progress towards democracy.

A military junta has ruled the country for 50 years but general elections were held in 2010. The generals changed the name of the country from Burma to Myanmar two decades ago but the pro-democracy movement opposed the name change. When US President Barack Obama visited the country earlier last week, he called it both names as a courtesy to both sides.

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FONTERRA AND DairyNZ are joining forces with the Federation of Maori Authorities and the Maori trustee to focus on increasing the productivity of Maori-owned farm land.

The new Maori land productivity initiative ‘Te Kokiri mo te Whainga Hua o Nga Whenua Maori’ is the private sector’s response to the Maori economic development panel’s recommendation 17 to raise the productivity of Maori land.

The Federation of Maori Authorities chief executive Te Horipo Karaitiana has agreed to chair the group; Beef + Lamb, Landcare Research, Massey University and Zespri are foundation members. They will meet next month and report publicly by Waitangi Day, briefing the iwi chairs’ forum on the work.

Fonterra chairman Henry van der Heyden, who is also the chairman of Tainui Holdings Group, says the initiative complements Fonterra’s existing relationships with its Maori suppliers. “We already work closely with a number of our Maori suppliers and we welcome the opportunity to further build on this and make New Zealand land more productive for dairying.”

Dairy News november 27, 2012

news // 9

New conversions must be top notch water managers pam tipa pamelat@ruralnews.co.nz

INVESTMENT IN new

dairy conversions could be affected by last minute changes to the Land and Water Forum’s third report, says IrrigationNZ’s chief executive Andrew Curtis.

“Dairying that goes in from now on has to be high performance, top of the management practice if we are going to move to what needs to be achieved in water quality,” Curtis

told Dairy News.

“With consents not being addressed in the report so they are of longer duration without explicit right of renewal, it is creating an unnecessary barrier to investment.

“And it’s people not understanding how the banks work. In the past the banks haven’t really paid much attention to this sort of stuff, but they have all woken up to what’s going on in the water quality space.

“All this water quality stuff will require invest-

ments and if people are going to invest in good quality kit that’s pushing the irrigation side of things then you need longer-duration consents; the water infrastructure is going to need a longer consent still.

“If you are building infrastructure that lasts 70-100 years, it should be consented for that sort of time frame. That will allow easier financial investment and open up more opportunity.

“If people are going to invest on-farm, then

having explicit right of renewal makes sense as well.”

Curtis says a framework needs to allow for long-term thinking; at the moment is a “bit confused”. He recently travelled to UK and Israel with Australians from the irrigation industry.

“It allowed me to compare what’s happened in Australia, UK and Israel.

We are the only country in the world that doesn’t have subsidies. Australia doesn’t have subsidies as such, but the Govern-

Water management on dairy farms is coming under greater scrutiny.

ment is putting a lot of money into infrastructure upgrades – billions of dollars.

“Australians have property rights for water, UK is moving towards having property rights, in Israel they have a permit which is perpetual although the water in Israel is all owned by the Government. They can revoke a permit but that has compensation associated with it.

“Look at what’s hap-

peterb@ruralnews.co.nz

NEW RULES governing

the management of water are likely to emerge soon following the recent publication of the Land and Water Forum’s (LAWF) final report.

Minister for Primary Industries David Carter says these new rules will be “within the parameters, outlined in the LAWF report”. But Carter has hinted that not necessarily all of LAWF’s recommendations will get the nod from the Government.

“We are still studying the report as we only got

it the other week. I don’t think that even LAWF members would say it’s given us the answers to the management of water but it’s certainly creating a platform for us to now make some final decisions,” he says.

LAWF was set up by the Government in 2009, involving 58 stakeholders with an interest in water management, including Fonterra, DairyNZ and other farming, recreational, iwi, environmental and business interests.

This is their third and final report and it contains 67 recommendations on the management of fresh water. The main empha-

sis in the recommendations is the need to manage water by catchments and includes a call for farmers to adopt ‘good management practices’ when dealing with water related issues. The report has several recommendations on water allocation which are of particular interest to dairy farmers. It says there’s been an absence

of any clear direction on water allocation and says any ‘water allocation framework’ needs to foster investment certainty and allow water to its ‘highest value use’ over time. It also calls for a more consistent approach to setting thresholds to deal with contaminants. Regional councils come under fire with concerns expressed about

quality is best managed in New Zealand. A package that provided a sound platform to support sustainable future growth had been produced.

“The report did a lot of footwork and landed in a useful space then there was a lot of back-and-forth at the last minute. It has ended up with a split recommendation.”

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Dairy News november 27, 2012

10 // news

Bright future despite US plans andrew swallow andrews@ruralnews.co.nz

EXPECT INCREASED

competition in Asian export markets, particularly from the US, says Rabobank.

“The US has arrived, and arrived in numbers,” the bank’s food and agribusiness senior analyst Hayley Moynihan warned at a series of South Island functions this month.

Speaking to the title,

“Uncle Sam gatecrashes the Asian dairy party”, Moynihan explained the US dairy industry is getting its export business organised like never before.

Once it looked at world markets “as a place to get rid of product” so domestic prices would recover but now it is targeting export markets, notably Asia, from the outset. This year the US is forecast to export 8bn L, nearly as much as Australia’s entire

production.

Moynihan warns we “don’t want to be complacent about how price competitive the US can be, despite drought, despite high feed costs. It turns very quickly for them and when it’s good, it’s very good.”

The fact that for sustained periods in the last five years world dairy markets have actually been at a premium to US domestic prices has caused the mindshift, she believes.

Hayley Moynihan

“They’ve realised New Zealand farmers have been getting a better price for their milk.”

Vietnam, Japan, Indonesia, and particularly

Korea, are now importing from the US, and in some cases are taking more product than from New Zealand.

Moynihan says the good news is it will not be a smooth ride for US producers as their market becomes export led, and demand growth in Asia looks likely to be sufficient to mop up the extra supply.

Based on annual dairy trade growth of just over 4%, by 2020 there will be

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demand for an extra 25bn L on top of the 60bn L currently shipped.

New Zealand might contribute 3bn L of that, and other relatively low cost production regions – Australia, Uruguay, Argentina, Belarus – will chip in with a bit more but “the thick end of 20bn L needs to be found from somewhere else,” says Moynihan.

“Our view is that [most] of that will come from Europe, as quotas come off in 2015, and a fair chunk from the United States because of their competitiveness and ability to export. But it’s still likely to be challenging for the market to fill that demand so there’s still likely to be some [upward] pressure on prices.”

Rabobank’s current forecast is for a price range centred on US$3500/t for whole milk powder. Shortterm a “sharp tightening” in the market in early 2013 will probably see prices spike above that. However, it’s important prices don’t go too high as that will turn off demand, she says.

A weaker US dollar could put pressure on the price range, as could feed costs, and the global economic recovery.

“In terms of where’s the party? It is on New Zealand’s doorstep. That import demand is strongest generally through Asia and the Middle East and they struggle in most of those countries with self-sufficiency as well.” @dairy_news facebook.com/dairynews

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TWO NEW products designed to give dairy farmers new milking options have been launched. The products – a new large milk filter and a new rotary platform design – were launched last week to an audience of about 30 DeLaval agents and staff in Whanganui.

The milk filter MF 100 can provide ‘premium’ filtration for up to 880 cows, making it the largest milk filter on the market, the company says.

DeLaval solutions manager for conventional milking systems, Gareth Johns, says unlike tradi- Gareth Johns tional milk filters, the MF 100 design ensures almost all the sock’s surface area is used, maximising filtering performance. Notably the filter conforms to the new code of practice for milk filters introduced in 2010.

The new platform, the PR1500, is modular in design and offers options to suit a farmer’s specific needs, Johns says. “What sets this new system apart is we can take a customer anywhere…. This can be a real basic system with no automation at all, but one which can be added to as needs change. For example the farmer’s financial position may change, he may buy more land or milk more cows. With this shed he simply adds technology as the need arises to make it easier.”

Add-ons can include automatic cup removers, animal identification on the platform, in-shed feeding, milk recording and automatic drafting.

New technology now enables farmers to have their office in the milking shed, Johns points out. “New Zealand farmers were late to embrace technology, but in the last five to seven years they have embraced it at record speed.”

It took one year to develop the PR1500 from concept to market, DeLaval says. The company has tested the plant at its Hamilton premises, and has had test sheds running near Whanganui and Geraldine.

The cost of the new system depends on what farmers want; it can range from about $600 per bail to $3000 or more.

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Dairy News november 27, 2012

12 // news

New uni dairying school eyes 100 students pam tipa

A NEW graduate school of

dairying will get underway immediately at Auckland University, says the dean of science, Professor Grant Guilford.

An agreement to set up the school was signed last week between The University of Auckland, DairyNZ, LIC (Livestock Improvement Corporation) and AgResearch. A joint management committee will meet before Christmas and

K

ID

E

IK AL UY FO UR

Grant Guilford

The Joint Graduate School in Dairy Research and Innovation will set out to attract the brightest and best students, both from within New Zealand globally, giving research and innovation in dairy a major boost.

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will select the school’s director.

The school will span disciplines that contribute to sustainable productivity on-farm – such as genetics, agricultural technology and environmental science – through to those that add value beyond the farmgate such as food science and business.

“We have a number of students already enrolled in the university who will be immediate starters for the school,” says Guilford.

“They are doing various PhD and masters programmes in the different faculties like the science faculty, engineering, medicine and business.

“The recruitment of new students will go on into the new year. We are expecting a minimum of 50 students but we want to get up to 100 students as quickly as we can. We will also attract students from other universities either in New Zealand or internationally.

“We are trying to attract the best possible talent from around the world into the New Zealand dairy industry. We’ve got the chance to do that on a big urban campus like Auckland, with this university’s very strong international reputation.”

With a shortage of agricultural science graduates, in the last two decades the dairy industry’s scientists have tended to come from the chemistry, physics or mathematics disciplines and have found themselves in the dairy industry without originally intending to be there.

“So they didn’t come off a farm and they didn’t enrol in an agricultural degree and go through what we might consider

the normal path,” says Guilford. “So we are now still reaching out to the top students in all those science and engineering disciplines – and also in business and the health professions – but we will ensure an interest in the dairy industry is stimulated.

“We will pack around their programme a range of short courses on the dairy industry, and a range of experience so they get to know their industry and hopefully can see a role in it. And the parties will also get a chance to interact with them and spot talent they can hire into their own organisations.”

Students can apply for a large number of scholarships already offered at Auckland. “We also anticipate the students will be written into the research proposals of AgResearch, the University of Auckland, LIC and DairyNZ and in that way support large numbers of students. The university will also use its skills in attracting philanthropic donations to help support the scholarship programme.”

Guilford says the school will stretch right across the value chain. Pre farm gate students may study such things as robotics and dairy sheds, water quality or animal genetics.

Post farmgate it will link into the university’s food and health programme which has about 150 academics involved in food science, food process engineering and the business of food. This will include areas such as business expansion, exports, logisitics, nutrition, medical, dairy farm welfare and psychology.

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AGRESEARCH CURRENTLY recruits at least twothirds of its scientists from overseas because of a shortage of local graduates.

AgResearch chief executive Dr Tom Richardson says the joint graduate school is “a significant move towards redressing that”.

DairyNZ chief executive Tim Mackle says the collaborative initiative is “all about how we can work together to encourage the best and brightest to see the great career and research opportunities that exist in our sector.”

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Dairy News november 27, 2012

14 // news Corporate farmer Trevor Hamilton says the changing farm shareholder base is one of the biggest challenges facing the industry.

Lack of succession PETER BURKE peterb@ruralnews.co.nz

A LACK of good business

and succession plans is causing a number of large dairy farming businesses to falter, risking collapse, says a dairy farmer who’s now regarded as an expert

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Trevor Hamilton, who owns or has interests in eight dairy farms in the North and South Island, told Dairy News that though some of the people running these large scale operations have grown their businesses, they haven’t grown at the same

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pace in business planning, succession planning and governance. He says there have already been a number of high profile collapses in the dairy industry and more are occurring right now.

“One of the biggest challenges facing the dairy industry is for dairy companies to understand the wide diversity that’s within the shareholder base. If you go back ten or fifteen years, seldom did people own multiple farms; most people owned one farm, certainly no more than two.

Now we have some large families – almost corporates – owning a number of farms doing several million kilograms of milk solids. I think the inability to address the issues with those is going to be to the ongoing detriment of the dairy industry,” he says.

“We have him in the boardroom the same as you would a chief executive. The aim is to give him a full understanding of what the board’s all about, where it’s going to, how we need to deliver on things and the general discussion of policies and strategies.

We’ll ask him to leave if and when we feel there is something we need to discuss in private.”

The board meets bimonthly and it’s set some clear strategies and policies which drive the business. From these are set the key performance indicators (KPIs).

Says Hamilton,“We have a high stocking rate and a policy of utilising pasture first and then filling the feed deficits as required with the cheapest possible alternative. So for every effective hectare in the business last year

“People make the mistake of thinking it’s all about the money, but for me it’s all about the challenge.”

Hamilton’s farms produce 2.4 million kgMS. His farms each run about 860 cows. The farms are near each other and form a hub which makes management easier. The four North Island farms are just south of Rotorua and the South Island ones are near Dunsandel, Canterbury. He has an operations manager in the South Island who looks after the four farms there and he has taken on the role of North Island operations manager as well as his owner responsibilities. He says they may appoint a separate operations manager in the North Island if they buy another farm.

Setting Hamilton apart is his unique governance structure. He and his wife Harriet have set up a board which consists of themselves, plus two independent directors, Massey academic Dr James Lockhart and accountant Greg Eden.

None of the Hamiltons’ five children is on the board but they may be appointed in the future.

The only other person present is the operations manager, Peter Aitken, but he does not have a vote.

we produced 1880kgMS/ ha. What we focus on is earnings before interest and tax (EBIT). Our focus is on profitability per hectare. We’ve ended up with a farming system that is a bit like franchising McDonalds burgers in that we have a farming system which we duplicate on all our properties. This makes it easier for staff.”

Communication is a top priority for the Hamilton operation. The operations manager meets with the farm managers on a regular basis and they in turn meet with staff.

Reports are fed back to the board.

“I’d go to the South Island possibly once every six weeks and just deal with my operations manager, Peter Aitken and talk to him about any issues he may have. We ask managers to report every 10 days on pasture walks and provide monthly farm reports which come back to the board through the operations manager. So we don’t want to take our eye off the ball on any of the KPIs.” This structured approach is critical to the success of their business,

Dairy News november 27, 2012

news // 15

planning risky Hamilton says. Problems occur when junior staff don’t understand the farm policies and structures. “We implement that very strongly and there isn’t a lot of room for deviation.”

Occasionally outside experts are called in to talk to all staff. For example their insurance company FMG recently talked to staff in the South Island about ways to reduce insurance claims. The same will be done soon for North Island staff.

What surprises many people is that the Hamiltons’ children are not on the board and in fact have to report the board.

“When we started going down this path of formal governance we called all the five children and said ‘This is what we’ve achieved in the last 30 years and the last 10 years and this is where we can take the company in the next 10 years. We asked

lic 9639E 39x3

Trevor Hamilton with farm manager Robert Hartley.

them if they wanted to be part of it and we had 100% buy-in.”

Four of the Hamilton’s children work in the business and for them it’s a case of ‘earned opportunity’ but not an inheritance. “We don’t believe in inheritance because it doesn’t bring about any learning. For example, my son and one of my sons-

in-law have started at the bottom and worked up to where they manage some of the units, then we’ve opened up opportunity accordingly. The family members are now under no illusion that Harriet and I don’t make decisions, other than personal decisions, without the board. We have had instances of family differ-

The farms have a high stocking rate and a policy of utilising pasture first and then filling the feed deficits.

ences and the independents on the board dealt with these on a business basis. That puts the line between what is business and what is family and that is the line we want to keep.”

The key to it all is governance and having people on the board who think differently from him: they add value.

“The exciting thing is where we can take it in the next ten years.

People make the mistake of thinking it’s all about the money, but for me it’s all about the challenge.

I think we can probably take it from a $100 million business to a $250 million-300 million business in the next ten years.

This is based on the fact that 12 years ago we had two farms doing a total of 300,000kgMS and are now doing 2.4 million kgMS. How many people can I grow? How many family members can I grow? It’s hugely exciting.”

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Dairy News november 27, 2012

news // 17

Steady price rise reflects low supply GLOBAL DAIRY com-

modity prices continue to rise and fundamentals are supporting a firmer tone across dairy markets as global supply diminishes.

Most dairy commodity prices are now only marginally down when compared to the same time last year, excluding butter which is trading 20% lower than last year’s levels.

Spring has made a positive start in the southern hemisphere in both New Zealand and Australia where milk production was higher during the early parts of the growing season. In contrast, supply is trending lower faster in the Northern Hemisphere; milk production growth was negative for the European Union and the US during September.

Unfavourable weather and reduced profitability due to rising costs will continue to crimp milk production short term.

Given the emerging signs of a supply contraction, international buyers continue to take the opportunity to stock up for short term requirements. In particular, import demand has been positive in China and some key markets in South East Asia and the Middle East. Peak milk flows in New Zealand have generally arrived earlier and have been more easily accommodated in comparison to the gas pipeline disruptions that plagued 2011. Milk production continues to track about 6% higher season to date.

However monthly growth rates are easing year-on-year particularly in the North Island. Dairy commodity prices moved higher through October assisted by a modestly lower NZD/USD exchange rate to sit below the same period last year.

Dairy futures are pricing in an ongoing price rise right through to the

Currency Date Whole milk powder Skim milk powder Butter milk powder Cheddar

May 2013 contracts in both the whole milk powder (WMP) and skim milk powder (SMP) markets.

The Fonterra TAF (trading among farmers) prospectus was issued in late October and has stimulated much interest; the Fonterra Shareholders Fund will price and allocate the units in the fund on November 27, a date most dairy farmers will have locked away in their diaries. A lot is happening in New Zealand dairy markets; most indicators are pointing towards the positive with strong milk production and stronger commodity prices, while Fonterra breaks new ground with the TAF rollout.

In Australia, national milk production has increased year-on-year by about 2.1% in the year to October. Northern Victoria remains the standout region with milk supply up strongly. In Gippsland milk supply is slightly down so far this season with extended wet conditions cutting pasture growth rates.

The Australian dollar remains high with levels holding above parity with the US dollar. However subtle improvement in commodity prices (in USD terms) did improve the overall export returns to processors though October. Australia is in the peak selling season and the firmer tone to the markets would be welcome news.

October brought some cashflow relief for farmers following a round of stepup in farmgate prices.

The latest round of step-ups brings the average southern export region prices to A$ 4.0 – 4.80KG milksolids.

• Francis Wolfgram is an independent financial analyst with BA in economics including 15 years experience in the financial markets working for some of the world’s largest institutions. franciswolfgram@gmail.com

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3023

4432

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2990

3401

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Dairy News november 27, 2012

18 // OPINION Ruminating

EDITORIAL

She’ll be right mate

milking it...

Tricky timing?

FRIDAY THIS week will see Fonterra launch its Shareholders Fund at an event dovetailed with the official opening of the co-op’s new Darfield factory. The launch clashes with the annual meeting of the New Zealand Cooperatives Association down the road in Christchurch. Given some believe the fund signals the beginning of the end of the dairy giant’s days as a farmer cooperative, the timing seems ironic, not to mention sending a signal on where cooperatives rank in importance in Fonterra’s thinking.

Too clean for trout ACCORDING TO a letter sent last week to a string of rural newspapers by farm consultant Geoff Burton, several credible parties now say Lake Taupo is ‘too clean for trout’. These parties include anglers’ group Advocates of the Tongariro River, Taupo District Council and Department of Conservation. Apparently the fishery is in crisis with catch numbers and fish size down. DoC is so concerned it is launching a 3-year, $108,000 study.

Burton blames Waikato Regional Council’s Variation 5. “You cannot trust some regional councils to make long term decisions which are sustainable, and in the best interests of your communities, rural or urban,” he concludes. Hear, hear!

Who’s panicking mister chairman?

Bridge to nowhere?

HORIZONS REGIONAL Council chairman’s call for calm over the infamous One Plan is a remarkable parallel to a certain character in the television series Dad’s Army. Corporal Jones was famous for his cries of “don’t panic, don’t panic”.

Horizons is obviously on a war footing with the rural community but calling for calm is no substitute for sensible actions and decisions. Sadly Horizons is fast becoming a laughing stock in the rural community, but farmers look set to pay dearly for their comedy of errors

DAISY, THE cloned cow born of a $50 million investment, risks becoming a white elephant because people have no appetite for GM milk, research shows.

Sustainability Council executive director Simon Terry says the publicly funded research that allowed the multimilliondollar laboratory creation of AgResearch’s friesian calf could be “a bridge to nowhere”.

But despite the Sustainability Council’s concerns about the $50m spent on genetically modified (GM) cattle and cloning, AgResearch says the work was still “basic science” and looking at market opportunities was not a priority at this stage.

Daisy, who is tailless, was unleashed on the world by the Crown research institute six weeks ago.

LAST WEEK in the central North Island, there were rumblings, steam rose and an ash cloud covered some farms. Further south in the Horizons Regional Council region there was more steam, certainly some rumblings and a cloud of doom hung over many farmers in the region. Pressure is building at both Mt Tongariro and Palmerston North and the risk of an eruption of quite different proportions is looming.

What is puzzling is that Horizons seems to think that having a public spat with the Minister of Local Government, the Minister (and ministry) of Primary industries, Fed Farmers and HortNZ, is going to win the hearts and minds of the rural community.

Being told by the minister that your section 32 analysis of One Plan was “woeful” and that calling for calm was “dumb” should ring a bell. Then finally to be told you don’t understand the implications of the Environment Court decision might have caused alarm bells to ring; but, no, Horizons continues to says it is right and everyone else is wrong. That’s a quaint public relations strategy!

It seems Horizons has got itself into a right old pickle of its own making. Had the council fully and steadfastly supported its ‘decision version’ of the One Plan in the Environment Court and distanced itself from the likes of Fish and Game and DOC, this may never have happened. The council effectively had farmers’ agreement to the ‘decision version’; only Fish and Game and DOC wanted more.

If Horizons had been smart it would have warned off these dissenters and backed the others.

Now having got what is clearly an unworkable plan, the Horizons way forward seems to be a call for everyone to stay calm and trust the council – a message that clearly does not resonate with either the Government or the rural constituents.

There a lot at stake with One Plan and there always was.

Unless the appeals of Feds and HortNZ are won in the High Court don’t be surprised if the Government steps in and appoints commissioners. But stay calm, don’t panic; she’ll be right mate.

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Dairy News november 27, 2012

opinion // 19

Buy NZ-made to save the planet jacqueline rowarth

NEW ZEALAND pro-

duces the freshest, cleanest milk – fastest, too, according to advertisements. ‘The fastest is the freshest and the freshest tastes the best’ is supported by research using taste panels; few people like the taste of milk as it sours.

An extra advantage in New Zealand’s milk is that cows feed on pasture with clover-ryegrass mixes. Research at the Institute of Grassland and Environmental Research in Wales has shown that clover increases the proportion of omega-3 fatty acids in the milk, and omega-3s play an important role in maintaining heart health, combating the effects of arthritis and assisting in the development of healthy brains in unborn children.

In the US high omega3s are used in marketing organic milk because cows on organic systems graze on pasture, in contrast to the bulk of milk which comes from grainfed cows in barns. Grain increases the proportion of omega-6. The balance between the two omegas is important, and clover assists.

New Zealand misses out by not making more of its pasture-based farming. Of more concern, New Zealand farmers miss out on added-value payments and that means less money coming into the country.

The concept of the cleanest milk is supported by research from the Netherlands published last year. Benchmarking of greenhouse gas (GHG) emissions for 38 countries showed New Zealand as below average in GHG production per kg of milk.

The US achieved lowest GHG emissions. The authors reported that in general GHG emissions at the farm gate were lower from larger farms with higher productivity than smaller farms in developing countries.

On-going research and life cycle analysis by Dr Stewart Ledgard’s team at Agresearch continues to show that New Zealand is doing well in GHG efficiencies. The headline in the UK newspaper last month ‘Buy NZ lamb to save the planet’ makes the point.

Of equal importance is the suggestion in the Green Growth Report, released by Pure Advantage last month, that “business and government leaders can play a proactive international role in defending NZ’s clean green brand and improving performance and policies where there is a mismatch between perception and reality”.

Part of the policy could be in dealing with people who don’t support the brand, whether individuals or media.

Playing on the heart strings is easier than providing facts, but when it comes to water, the Ministry for the Environment website states: “our most nutrientenriched rivers have about half the average nutrient levels of rivers in Europe, North America, and Asia.” This is why the Commissioner for the Environment, Dr Jan Wright, has suggested that New Zealand will have to decide what trade-offs it wants to make in the future. Technical fixes will cost money, and money is in short supply.

Cost benefit analysis will be an increasing focus as New Zealand struggles with the balance between economic growth and environment; Government support for this balance is growing. Minister for Primary Industries David Carter has questioned the cost-benefit analysis done by Horizons Regional Council on its controversial One Plan; he has shown the leadership that has been lacking from industry.

A decade ago the New York Times used the heading ‘It’s not easy being green when you’re deep in the red’. New

Zealand needs industry leaders, informed by farmers, to assist local and national government to give clear, costed, sensible and achievable

directions on environmental issues.

Add innovation to the basket in products and marketing, and the new headline could be ‘Buy

New Zealand-made to save the planet’. All New Zealanders would benefit.

• Jacqueline Rowarth is Professor of Agribusiness, The University of Waikato.

Jacqueline Rowarth

Dairy News november 27, 2012

20 // agribusiness

Record production set FONTERRA’S NEWEST site in South

Canterbury has broken a record already – producing 924 tonnes of whole milk powder in one week.

The Studholme plant, bought from NZ Dairies Ltd, operated around the clock during the record week last month.

Site manager Alan Maitland says the record is an outstanding achievement and testament to the hard work of the 45 staff.

“Our drier was only designed to produce 5 t per hour and we’ve managed to run it at 5.5 t per hour. This comes down to team work, skill and the meticulous planning....

People are really engaged on site. We’ve invested a lot of time to ensure the new team has a thorough understanding of the ‘Fonterra way’ – using our collective wisdom to make continuous improvements.”

At peak Studholme’s drier usually processes 900,000 L/day, converting 625 L of milk into about 260kg milk powder per minute. Managing director NZ milk products Gary Romano says Studholme is a good example of the co-op’s strategy refresh in action.

“Growing milk volumes and optimising our manufacturing assets is a key part of our strategy to drive better returns to our farmers.”

Operator Sarah Cunningham, who has been at Studholme since its beginning, says “a lot of effort was made to ensure we were prepared for the new season, with a proactive approach to problem solving.”

Since its integration into Fonterra’s supply chain in August, the site has been Halal-certified and meets all the co-op’s quality standards. “We

Cheese coolstore opening coincides with peak milk FONTERRA’S $23 million cool dis-

A record 924 metric tonnes of milk powder has rolled off the line at Studholme.

passed all customer audits first time and our quality grading has been 100% since day one.”

Studhome produces standard whole milk powder for sale on the GlobalDairyTrade

platform. The relatively small size of the drier means it also suits short and specialised manufacturing runs. The five-year-old plant sits on 55ha; it can make 30,000 t per season.

tribution centre at Whareroa has been completed in time to start storing peak product.

Fonterra director New Zealand logistics Mark Leslie says the six new state-ofthe-art rooms at the Lower North Island site have the capacity to store at least 14,000 pallets – about 12,500 tonnes of chilled product.

“With peak milk being processed it’s good to have Whareroa’s rooms up and running to help manage the additional volumes,” he says.

“This project is part of a wider plan to make our supply chain run more efficiently and effectively and builds on the success of our recent new distribution centres in Darfield, Mosgiel and Crawford Street.”

Three of the rooms at Whareroa allow staff to access product from both ends of the storage racks. The racking system uses robotic trolleys to shift product and gives the distribution centre greater flexibility to store and select it.

Overall this will reduce operating time, and speed up the product picking process, says Leslie. “This is a first

for Fonterra, and is an exciting development for the supply chain management of cheese.”

The new rooms will store mostly mozzarella and cheddar, and give the lower North Island capacity to better manage these products. They replace two 20-year-old cool stores no longer operating efficiently.

Fonterra has also expanded its distribution centre at its Kauri site in Northland by 30,000 metric tonne.

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Dairy News november 27, 2012

agribusiness // 21

Dairying women to challenge boundaries OLYMPIC ROWING

gold medal winner Mahe Drysdale will be among a line-up of high-calibre speakers to the Dairy Women Network’s conference in Nelson in March where discussions will include the rural/urban divide, environmental constraints and developing future leaders.

The two-day conference at Nelson’s Rutherford Hotel, starting on March 20, 2013, is themed Taking down the boundary fences. Chief executive Sarah Speight hopes the conference programme will inspire dairy women to look outside the boundaries of their farms.

“The dairy industry is constantly changing and under scrutiny from people outside the rural sector,” says Speight. “As dairying women we can foster the understanding between our rural and urban colleagues that we want to and can look after the land, our animals and our people, while having sustainable businesses.”

The first of three keynote speakers, Hinerangi

Edwards, kicks off the conference speaking about the diversity of New Zealand’s dairy industry.

Edwards is a trustee of Taranaki-based charitable trust Parininihi Ki Waitotara (PKW ) Inc whose farming enterprise, PKW Farms Ltd, produces 2.3 million kgMS/year.

King Country tourism operator Dan Steele will follow. Steele believes in farmers and conservationists working together.

Eight workshops during the two days will include topics from profitable nutrition and cow behaviour to time management strategies and leadership mentoring.

Drysdale will close the conference talking about how dairy farming can be just as demanding as chasing an Olympic dream.

The network has a new industry partner and conference sponsor, farm nutrient management specialist Ballance Agri-Nutrients. Ballance general manager of Agro-Science and Marketing, Liz Muller, says the cooperative recognises one of the biggest

Hinerangi Edwards

issues facing dairy farmers is learning how to manage within nutrient loss limits.

“We bring our expertise on managing nutrients on farm to this partnership with the Dairy Women’s Network and provide farmers with viable options for working through these challenging times and for their continued success.”

The second Dairy Woman of the Year award winner will be announced at the conference gala

dinner. The winner will be awarded a position on the prestigious Women in Leadership 12 month course run by Global Women, which is valued at $25,000. The award is sponsored by Fonterra Milk Supply and nominations are currently being sought.

Registrations for the conference are now open and all women who work in the dairying industry can register at www.dwn. co.nz

Keen to guide peers to corporate boardrooms WOMEN MAKE up only

about 15% of the boards of agribusiness enterprises in New Zealand, yet are involved in 85% of buying decisions on farms.

This disparity has prompted Taranaki dairy farmer Katrina Knowles to support ardently any award that improves the skills of women so they can contribute at the top level of agribusiness governance.

One of six finalists in the Dairy Woman of the Year Award last year, Knowles says it helped her understand that her passion lay with nurturing younger women through the ranks.

She plans to put forward a couple of nominees this year who would benefit from having the stage set by someone like herself. “I have in mind a couple of who could contribute a lot to the industry by moving quicker

through to board level.”

The 2013 Dairy Woman of the Year Award is sponsored exclusively by Fonterra Milk Supply and includes a scholarship worth $25,000 to attend the year-long Women in Leadership course run by Global Women.

A highly successful dairy farmer and DairyNZ team leader, Knowles found entering the award a way to better understand her own on-going contributions to the industry.

“I realised that my passion was helping nurture younger women keen to move through the ranks, who had leadership potential and who could really benefit from entering the award.”

Knowles believes last year’s winner, Barbara Kuriger, was the ideal candidate to take the title and was able to devote the time and effort needed to complete the “high level”

scholarship programme that comprised the award. The prestigious Women in Leadership programme provides participants with high-calibre connections, mentoring and professional and personal development.

She is convinced Kuriger will move on to “bigger and better things” Katrina Knowles wants to help younger women move quickly. quickly to board level.

Knowles signed on to work; they recognise the the network in its early integral role women play days and has seen it prosin the decision making per over 14 years. on today’s modern dairy “I think the vision farms.” of those women who Nominations for the started the network is Dairy Woman of the now coming to fruition, Year award close Decemit has become a very prober 16 and the winner fessional, well-funded organisation. The support will be announced at a gala dinner in Nelson on is there from members March 20, 2013. and from sponsors wantwww.dwn.org.nz ing to be part of the net-

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Dairy News november 27, 2012

22 // management Heather, Andrew and Joshua Tripp.

Dairy conversion station a lot more The Grassland Association’s annual conference earlier this month was branded ‘Opportunities of Changing Land Use’. Andrew Swallow reports from a conference field trip that epitomises that title.

CONVERTING A corner of a large-scale Southland sheep and beef unit to dairy has made the whole business more sustainable, say Andrew and Heather Tripp.

The couple have been farming Nithdale Station, in the hills of the Southern Syncline just southeast of Gore, since 1994, initially as managers, then as owners of the farming company running the station for the family trust set up by Andrew’s grandfather, who bought Nithdale in 1924.

It’s traditional sheep and beef country but when the opportunity to buy the land from the trust arose in 2007-8, Andrew and Heather decided to convert a 275ha corner of the 1478ha station to dairy to facilitate that.

“It was a challenge and added complexity, but we saw it as an opportunity and life’s about taking opportunities,” Tripp told a Grassland Association conference field trip on the property earlier this month.

It also fitted with their vision of building a selfcontained, profitable, sustainable and diversified business that will endure

for future generations.

As the first dairy conversion in the Kaiwera district, it generated a lot of interest, but with dozens of other farms across Southland and Otago making the move to dairy that year, the transition was far from smooth.

However, after a “disastrous” first season, they’ve been reaping the rewards, as revealed by figures presented at the field day by local consultant Graham Butcher.

The station purchase and dairy conversion increased their debt $9.5m, Butcher explained.

At 6% interest, an overall increase in earnings before interest and tax (EBIT) of $372/ha was needed to cover that.

Last year’s whole farm EBIT was $1003/ha.

Crunching theoretical numbers for the station without the conversion, Butcher worked out it would have been $481/ha without the dairy.

Even this year, with lower payout, lamb and wool prices forecast, EBIT with the conversion looks like coming out ahead, at $879/ha, versus $357/ha without – a difference of $522/ha.

View of Nithdale’s dairy unit from the station’s airstrip.

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Dairy News november 27, 2012

management // 23

makes whole sustainable The dairy conversion increased debt but also created equity.

“Congratulations, you’re still coming up on the right side of the ledger, but not by a lot,” said Butcher to the field trip audience.

The conversion has also created $3.6m of equity, he pointed out, and the overall business – dairy, commercial sheep and beef, stud Romney and Suffolk flocks, and a farmstay – is certainly more diverse. “More resilient? Probably,” continued Butcher. “Though sheep and beef is probably more resilient if things got really tough.”

person in it, and bringing in specialist consultant Ivan Lines, turned the dairy unit round after a difficult conversion and first season. “I could just about write a book about what not to do,” he admitted to the field trip.

The conversion had been put in the hands of a management company.

There were problems with completion of the shed and plant, budget overruns, and staffing issues.

“I think the key thing is to get more involved yourself... and allow yourself plenty of time.”

achieved the year before last, he notes.

“We’re on track so far and if we do achieve that, with all these inputs, we’ll achieve budget.”

Table 1: Nithdale’s numbers

2008-09

2009-10

2010-11

2011-12

2012-13 target

Stocking rate

2.65

3.09

3.27

3.32

3.09

kgMS/ha

634

1148

1285

1269

1309

No data

193

150

181

150

Concentrate/ cow (kgDM)

108

343

485

300

Silage/cow (kg DM)

442

445

307

400

Pasture use (tDM/ha)

10.9

11.5

10.8

12.0

N kg/ha

Take out premium pasture growth cover for your farm

“I think the key thing is to get more involved yourself... and allow yourself plenty of time.”

Nithdale still has a big foot in that camp, with nearly 5000 commercial hoggets and ewes, 1500 stud ewes, mostly Romneys, and 131 beef cows.

There’s also 50ha of forestry and a farmstay.

The rest of the farm also provides the dairy support, rearing heifers and growing silage and winter crop. All costs are allocated accordingly.

A lower order sharemilker runs the dairy unit.

Tripp says introducing that role, with the right

After producing just 174,500kgMS in 20089, production leapt to 317,504kgMS in the second season. Last year saw a slight dip to 349,000kg from 353,000 in 2010-11, due to a tough season.

This year’s target is 360,000kg, which, as Lines explained, is despite trimming nitrogen use from 185kg/ha to 150kg/ha and cutting feed costs by switching silage for concentrate.

Target pasture use is 12tDM/ha, which was

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Dairy News november 27, 2012

24 //  management

Keeping pasture quality up DURING THE last month most cows will have reached peak milk production. The typical rate of post-peak decline for pasture-fed herds is accepted as being 7% month on month. This means if your herd peaked at 2.0kgMS/cow/day at the end of October, it should be producing at least 1.86kgMS/cow/day at the end of November (Table1).

If they are producing less than this there are two most likely reasons: you are short of feed or you

have lost pasture quality.

Pasture quality has a major impact on milksolids production as it not only determines how much energy there is in every kilogram of drymatter the cow eats, but also it drives cow intake. New Zealand grazing trials have shown that a 10% increase in pasture digestibility results in an increase in per cow production of 0.30 to 0.45 kgMS/cow/day (Table 2).

Pasture quality is determined by what propor-

tion of the sward is made up of young leaves (which are always high in quality) compared to older stalky plants, seed head and dead material (which is lower in quality). Grazing pressure

Table 1: Milksolids production (kgMS/cow/day) at 7% per month post-peak decline.

Peak Production

Months after peak production 1

2

3

4

5

1.8

1.67

1.56

1.45

1.35

1.25

1.9

1.77

1.64

1.53

1.42

1.32

2.0

1.86

1.73

1.61

1.50

1.39

2.1

1.95

1.82

1.69

1.57

1.46

2.2

2.05

1.90

1.77

1.65

1.53

is critical since pasture not eaten in the current grazing round decreases the quality of feed offered in the next grazing round.

This is particularly the case in the late spring as ryegrass enters its reproductive phase.

The key to good pasture quality is grazing to 7-8 clicks or 1500-1600kgDM/ha by offering the right pregrazing cover. If the paddock has been pugged this may rise to 9.5 clicks or 1800kgDM. If you have already lost control of pastures and have high grazing residuals, consider either making silage or topping.

A trial conducted at the DairyNZ No2 dairy in 1997-19982 showed mowing pasture, either before or after grazing, reduced pasture produc-

Table 2: The influence of pasture quality on maximum intake and milksolids production (500kg Friesian with no change in liveweight)1.

Pasture quality (MJME/ kgDM)

Effect on intake and milksolids production kgDM/day

12.0 (equivalent to 80%

18.0

2.3

17.0-17.3

1.9

16.0-16.6

1.5-1.6

digesibility of DM)

11.0 (equivalent to 73% digestibility of DM)

10.0 (equivalent of 66% digestibility of DM)

tion by 20%, and reduced milksolids production by 11% during October, but increased milksolids production by 12% during summer. Topping after the cows had grazed the paddock gave a higher spring milksolids production than topping before grazing.

Regular pasture monitoring next season will allow you to identify surpluses before they get out of control. Closing pad-

MS (kg/day)

docks for pasture silage or spraying them out and planting a crop like maize or forage sorghum, which can be harvested and fed when required, will allow you to transfer surplus feed from the spring to other times of the year when you need it.

If you plant your maize in paddocks which would benefit from pasture renewal, you can also increase your chance of successfully establishing

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new higher yielding and improved quality pasture in the autumn.

1 DairyNZ farmfact 1-2 Principles of Grazing Management.

2 Kolver et al. 1999.

Mowing pastures to improve milk production.

Proceedings of the New Zealand Grassland Association 61:139-145. • Ian Williams is a Pioneer forage specialist. Contact him at iwilliams@genetic. co.nz

Dairy News november 27, 2012

animal health // 25

Oral drenches outstrip pour-ons – AgResearch A STUDY by AgResearch scientists shows oral cattle drenches are far more effective than the equivalent pour-on or injectible products.

In an article due soon in the international science journal Veterinary Parasitology, Chris Miller and Dave Leathwick report having measured how effective the same drench active (moxidectin) was when given orally, as a pour-on or as an injectible.

They did trials on 14 New Zealand farms and say while pour-ons and injectibles are easier to use, they do not give the same benefits.

“Based on overseas data, I would not have been surprised if the pouron product was generally less effective than the other two routes as there are issues with drugs penetrating the skin and animals either licking the drug off their own backs or their neighbours’,” says Leathwick.

ence between the routes of administration.

Leathwick says the results are probably related to how the drug reaches the target (i.e. the worms) after it is administered. Drugs given as injections or pour-ons have to be absorbed into an animal’s bloodstream, and then re-circulated to be released into the gut tissue where the worms live. This is easier for an injectible than for a pouron product, as the latter has to get through a hide, which has evolved to keep things out.

“This became obvious when we measured the amount of drug in the bloodstream in the treated cattle: the levels were far higher in the animals given injections than in those treated with either of the other two routes.”

He says despite these results, the oral drench was still better at killing worms. “We don’t know for sure why this is

repeat the study against different worm species and also develop techniques to measure drug concentrations in the tissues where the worms live.”

He says there is four to five years of research ahead to determine

Trials on 14 farms found pourons easier to use but less effective than oral drenches.

whether the research findings apply equally to all worm species, and to assess the likely implications for long-term, effective worm control should farmers continue to use pour-on or injectible products.

Protect your whole herd

“There are issues with drugs penetrating the skin and animals either licking the drug off their own back or their neighbours” “We also thought the oral drug would work pretty well, while injectible macrocyclic lactones (the drug family which includes moxidectin, ivermectin, abamectin etc.) are regarded as the gold standard when treating cattle parasites on a global basis.”

He says when the results were analysed, the study confirmed how ineffective the pour-on product was, reducing the number of worm eggs shed in faeces by only about 50%.

“What came as a surprise, however, was that the injectible product performed no better than the pour-on. In comparison, the much cheaper oral product reduced worm egg output by over 90%.”

The parasite that survived the treatment was predominantly Cooperia, which on most farms showed resistance to these drugs – but not always, and the presence of resistance does not explain the differ-

the case, but some recent overseas work suggests that the oral drug does not need to rely on absorption and transport around the body in order to reach worms living in the gut.

“Instead, the drug gets bound to material in the gut and passes directly to the organs where the worms live. It appears that this results in higher overall levels of drug reaching the target worms, hence higher efficacy.

“What we have already proven is that using drugs with higher efficacy against worms lifts animal productivity, while killing more worms by using an effective drench reduces the selection pressure for resistance to develop, promoting the sustainability of worm control.”

Leathwick says followup studies have confirmed that this is not unique to moxidectin and that other pour-on and injectible products were no more effective.

“The next steps are to

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Dairy News november 27, 2012

26 // animal health

Level hooves trim lameness ANDREW SWALLOW

HOW LEVEL are your cows’ claws?

If any hoof has more than a 2mm differential between either outer or inner claw, then risk of lameness is increased, judging by the findings of a newly published study of three large-scale Canterbury farms.

The study, reported in the November issue of the New Zealand Veterinary Journal, included 2695 cows. The authors found trimming to level claws delayed the onset of lameness but did not reduce incidence by the end of the season.

“The effect seemed

to be there for about 10 weeks,” Mark Bryan, one of the report’s authors, told Dairy News. “The incidence was reduced in that first 70 days [after trimming] but after that there was no difference.”

That’s not to say trimming to level uneven claws isn’t a worthwhile practice. Rather, farmers need to be aware hooves grow back and the benefit may have a limited timeframe.

Bryan’s a director of VetSouth, Winton, and was called in to help study instigators and fellow report authors Helwi Tacoma and Fred Hoekstra set up the work and analysis of resulting data.

Cows were enrolled in the study in November

2009. All had calved more than a week, were not on antibiotics, and were grazing pasture between twicea-day milking.

At the outset both hind feet on all cows were examined by trained operators, noting height differential between claws.

Cows were then blocked by age and breed, and randomly assigned to treatment (ie trimming) or control groups. All trimming was done by the same experienced practitioner. Thereafter farm staff coached in identification and description of lameness lesions recorded incidence and treated as appropriate.

By the end of the season at least one inci-

dence of lameness had been recorded in 10% of limbs, trimmed or not.

Nearly 18% of untrimmed cows had no claw height differential at the outset. Incidence of lameness among these was 11.6% but among those with over a 4mm difference in claw height, incidence was 15.8%.

Breed, age and claw height differential were all significant risk factors, but there was no significant interaction between them.

Fewer Jerseys went lame, and four-year-olds had the lowest incidence; nineand ten-year-olds were the highest.

There was also a significant farm effect, with 7.1% incidence on one farm, but

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11% and nearly 12% on the other two.

Preliminary findings of the study were presented last year at an international conference on lame cattle in Rotorua. Bryan says it prompted some “robust discussion” and another look at the data, which lead to the NZVJ paper.

The authors note that for some of the factors, such as lower risk of lameness in Jerseys, the paper appears to be the first peer-reviewed work on the topic in New Zealand. As for the effects of trimming, they say they’re unaware of any studies anywhere of such treatments for cows at pasture.

The bottom line is that there’s still an awful lot to

learn about the incidence and causes of what is the second biggest animal health issue in New Zea-

land’s herds, says Bryan.

“We need more research.

We just don’t know enough about lame cows.”

Mark Bryan

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THE LACK of objective, peerreviewed data on lameness in New Zealand herds is just one example of an animal health related marketing opportunity being missed, says Bryan.

“I genuinely believe we should be capturing this sort of disease information and using it as a marketing tool because we’ve got nothing to be ashamed of… This is a huge marketing opportunity lost.

“When I go overseas I hear people talking about 30% lame-

ness but we’ve got no data to show we’re any better.”

On a trip to France he was confronted by mastitis rates running at 60-100%. “Yet they’re concerned about our antibiotic use!”

He’s also worked in China, and was a vet in the UK’s main dairy region, Cheshire, for six years before emigrating to New Zealand in 1995.

“I know I’d rather be a cow in New Zealand than the EU, and I’ve had experience working with them in both.”

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populations have soared after two wet summers in the North Island, says pest alert service Pestweb (www.pestweb.co.nz).

The parasitic wasp biocontrol agent is keeping the weevil in check on many farms but some are experiencing damage from high levels of larvae.

While there is no need for new biocontrol releases in the North

Island, clover-friendly management practices and compensatory nitro-

gen may be needed to maintain pasture quality, it says.

Dairy News november 27, 2012

genetics / animal health // 27

Super sires put out to grass THE FIGURES speak for themselves, says CRV Ambreed. Nearly 86,000 daughters still milking in the national herd and producing a combined 1.23 million straws of semen between them.

Now the company is putting out to grass two of its ‘super sires’ after their years of service to the New Zealand and international dairy industry.

Jersey sire Okura Manhatten and Holstein-Friesian sire Top Deck KO Pierre had semen collected for the last time in June. The company last week hosted a final viewing of the sires at its centre at Cambridge. Manhatten now retires at age 13 years and Pierre at 14.

“These two remarkable CRV ‘teenagers’ leave incredible legacies, having made huge impacts on the Jersey and Holstein-Friesian breeds respectively in this country,” the company says.

The bulls will leave special memories with CRV staff, in particular operations manager Andy Medley who has worked with both sires since the beginning of their careers.

“Pierre’s first year at AmBreed was also mine.

The most rewarding part of the job is when you see a bull come back to the collection barn as a 4-yearold. So for him to still be here as a 14-year-old shows how special he has been.”

Manhatten will be remembered in particular for his performance at bull parades. “He just knew he was the number one bull, and played up to the crowd,” says Medley. “He was a real show-off.”

When Manhatten entered CRV Ambreed’s progeny test scheme in

2000 via a joint venture project with Jersey NZ his genetics were at the time considered “a little bit left-field”, being sired by Danish bull Fyn Lemvig.

However he was out of a bull dam – already turning heads – from the Okura stud of Bruce and Ngaire Cutforth.

Upon graduating in 2003-04 Manhatten immediately became recognised as an ‘allrounder’ with the added feature of transmitting exceptional protein.

Manhatten went on to dominate the Jersey sire ranks for the latter half of the 2000s as the undisputed ‘protein king’ of the breed, heavily used domestically and in offshore sales.

At least 37,600 Manhatten daughters currently milk in the national dairy herd, and he still ranks as one of the breed’s top sires for protein, the company says. Manhatten retires having sold at least 670,000 straws of semen, of which 294,000 were in export sales. A further 18,000 straws remain in stock.

CRV Ambreed says Pierre was also the result of its involvement with breed societies, being procured from the Top Deck syndicate via CRV’s joint venture with HolsteinFriesian New Zealand.

“Pierre quickly rose to the top upon graduating 200203 establishing himself as a production sire and leaving much-liked daughters with exceptional udders….

Demand for Pierre was to grow even more upon his second-crop reproof in 2007.”

Pierre boasts nearly 48,500 New Zealand daughters still milking today and he remains a top

ranking udder bull. He is being retired after having sold at least 560,000 straws of semen, including 89,470 doses offshore to at least 14 countries.

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Dairy News november 27, 2012

28 // effluent & water management

Plan well to avoid snags in size, location sudesh kissun

FARMERS PLANNING an effluent storage facility on their farms must get the size and location right.

That’s the advice from Hauraki Plains’ farmer Kevin Firth, who last year built a 4.5 million L pond with 90-day storage capacity. The pond took three weeks to complete and cost $160,000.

Firth, who owns the 550-cow farm with brother, David, says the project has been a learning curve for them. The Firths held a field day at their farm last month where 48 farmers heard what went right and wrong during construction.

The biggest issue post-construction has been the pond’s close proximity to neighbours and smell carried to properties by prevailing wind. Firth notes there is almost no mention of smell in

most articles promoting effluent ponds.

But he found out it can be a major issue.

Neighbours complained to the Waikato Regional Council, prompting contact by council staff.

But Firth says they had also noticed the strong smell and were already taking steps to remedy the issue. “We’re using a biological product to reduce smell and it’s working,” he told Dairy News.

If Firth was to build another pond on his farm, the most important thing would be location – as far as possible from neighbouring homes, he adds. “We tend to look at ease of management and the cost factor when choosing a site for the pond and the smell factor is mostly ignored.”

Firth also believes the larger the pond the better.

The pond size calculator gives the minimum size required.

For the new effluent pond, the Firths

is 0ha eff farm The Firths’ 18 clay. % 60 d an 40% silt loam 40-aside e milked in a ■■ Cows ar ey are Th . shed herringbone tween be d pa ed fe fed on the regularly d an g sprin autumn and . ea g wet w ther stood off durin include entary feeds ■■ Supplem y. he w P6 d maize, PKE an

■■

chose Hitech Irrigation and an EDMP rubber liner from Pondco.

The design took into account the high water tables on the farm.

Farmer Kevin Firth says pond size and location are critical.

Firth says the design and coordination among the contractors helped the project. “The contractors were good to work with and they displayed efficiency and high standard.”

He agrees effluent ponds are costly to build but that should not deter farmers. Benefits take into account a large part of the costs in the long run, he adds.

“There are fertiliser savings; effluent is a valuable source of nutrients.”

Nutrients are irrigated by a moveable system over a large area and pasture growth lifts. Firth points to last November when the paddocks went a little dry and yield dropped to 55kgDM/ ha. The irrigator was turned on and within days the nutrients helped double DM yield.

Dairy News november 27, 2012

effluent & water management // 29

Pond gives room to move tony hopkinson

KEEPING UP with

changing compliance for the storage and disposal of dairy shed effluent is a work-in-progress for most dairy farmers. One of the biggest changes is to holding capacity to avoid spraying effluent during wet weather. Regional councils add to the confusion with differing storage capacity rules.

One farm with new storage with plenty of spare capacity is Rainbow Lea Farm at Horahora, south of Cambridge, owned by Stephen and Katherine Bates.

The farm’s pond is 60 x 23 x 4m deep with a capacity of 3000m3. It is gravity fed from the adjacent cowshed. All washings from the nearby feedpads and dairy yard enter the pond, and only the roof water is diverted.

The pond, fully lined, was installed by Aspect Environmental Linings.

The material is high density polyethylene, 1.5mm thick. It comes in rolls 7m wide and is overlaid 150mm and double-heat welded and pressurised to test for

leaks before filling.

“We are a high input farm with the pads being used all year so it was not practical to divert rain water,” says Bates.

Bates hails from Gloucestershire, UK, is a

age 600kgMS/cow and to reach this we will reduce cow numbers to feed all cows better and reduce the farm’s environmental impact.”

The farm is managed by contract milkers Kobus

“We are close to achieving our aim to average 600kgMS/cow.” retired Boeing 747 pilot who was based at various times in Sydney, Auckland and Hong Kong.

Before retiring he bought a drystock farm in 1991, intending to convert it to dairying. It supplied its first milk in 1999, before then running drystock and dairy grazers. The farm is 245ha with a milking platform of 183ha of rolling land with river flats and some steeper sidings.

“We started with a blank canvas, building the 50-bail Rotaflow dairy shed in the middle of the farm. It is raced, fenced and watered to 60 paddocks. This season the farm is milking 540 Friesian cows on seasonal supply.

“We are close to achieving our aim to aver-

and Suzette Englebrecht who employ two full-time staff plus one extra during the calving/mating period.

Rainbow Lea Farm is spray-irrigating effluent to 53ha and plans to extend the irrigated area by a further 45ha.

“We have not needed to spread fertilizer on the sprayed pasture and maize blocks for the last ten years and the maize block yielded 28t/ha,” says Bates.

Bates has three outlets from the effluent pump which can be automated to switch the valves to spray effluent to three different parts of the farm.

Concerned with effluent accumulating on the bottom of the pond during non-spraying periods, he recently installed

a Numedic pond stirrer, a machine launched at this year’s National Fieldays.

The lower end of the pond mixer is angled down at 45 degrees to the driveshaft and has two opposing propeller blades.

They can rotate clockwise or counter clockwise, stirring or drawing in the material. The entire lower unit can also rotate 360 degrees, and can be programmed to change to many positions and for any length of time. It is designed to operate from a floating pontoon and has a foot to protect pond liners.

“We believe this mixer will mix the entire contents of any size pond and there will not be any dead-

end corners”, says managing director of Numedic and designer of the machine Peter Reid.

Reid had assistance from Tony Loader of Brevini New Zealand and Frans Schalkwijk of TR Industries. “They helped in designing the gearing and computer programing which is at the heart of the machine.”

At present it is operating at five minute spells from eight different positions, in two hours fully mixing all material including surface crust.

The effluent is spread using a Numedic travelling irrigator, pods and a water cannon for the sidings.

Tel. 07 347 9974

Stephen Bates

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Dairy News november 27, 2012

30 // effluent & water management Resources put into planting and fencing will ultimately benefit farms.

A little planning goes a long way A LITTLE planning goes a long way in farm waterway management.

Planning well can help make the most of the time and resources put

into planting and fencing efforts, which will ultimately benefit farms, waterways and the broader environment.

If your farm’s water-

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Seek specialist advice Talk to staff at your regional council and connect with nurseries, suppliers, consultants and contractors. Find other organisations that can help (e.g. QEII National Trust, NZ Landcare Trust). Explore any funding that might be available for fencing and planting (ask your regional council).

Plan ahead Use a farm map to work out fence lines and crossings and decide on a logical order for doing the work.

Set realistic timelines for completion. Allow adequate time for site preparation (e.g. weed spraying) and plant delivery. Cost out materials, plants, labour etc, including ongoing maintenance. Once you have done all this, confirm a plan that suits your budget.

Sort consents Find out if consents are required for any of the work – culverts or bridges, for example – and apply

for them in good time.

Make a start Get on with it. Go for steady progress – not a big push.

Count on doing maintenance Don’t underestimate the time and effort required to maintain planted areas. Prepare for plant losses in your budget and for the time necessary for replanting (in wellplanned projects, losses could be 10-20%). Set up a regular schedule for weeding, drain clearing and replanting as needed.

Keep the momentum going Progress at a manageable pace. Make it an interesting change of pace from daily activities, not just another chore.

Involve farm staff in all aspects of the project so there is a sense of ownership.

If there is a lot to do on your property, do it in stages. Start with the easy and most effective tasks. www.dairynz.co.nz/farmfacts – environment section

watching costs Things to consider when costing the work: ■■ Fences, gates and plants.

■■

Crossing culverts and bridges (including earthworks).

■■

Alternate stock water supply.

■■

Consents (e.g. council fees for bridges).

■■

Use of contractors for preparation, planting or maintenance.

Dairy News november 27, 2012

effluent & water management // 31

Through thick and thin STUART REID

DO YOU have a nitrogen gradient across your farm?

Some paddocks may be fertiliser rich and others fertiliser poor so that pasture production may be greatly variable across the farm. Your fertiliser test programme should reveal this, and your fert truck will apply the necessarily applications to remove the fertiliser gradient. Then you’ll come along with the manure spreader and throw everything out of kilter.

One glaring omission in the new effluent Code of Practice is that it does not evaluate the complete effluent system for uniformity of application. It emphasises irrigation uniformity and, though this is important, there are two other vital elements that are overlooked – pump performance and pond mixer ability. It’s pointless having the perfect irrigator while asking it to spread mixtures of wildly varying strength or quantity. The Farm Dairy Effluent Standard calls for uniform application of effluent as one of its six initial aims, but the Code of Practice only refers to the distribution ability of the irrigator itself.

All elements should work

together to produce the desired uniformity.

For example, if your pond mixer is fixed on a float, it will mix a localised area and sludges will accumulate in the quietest zones of the pond. As pond level falls, the mixer will struggle to entrain the solids on the other side of the pond. Therefore the irrigator will be getting a mouthful of thin liquid initially, followed by thicker brews later.

This is not the uniform product that pasture (and soil organisms) need for their best performance.

So poor mixing will be a contributor to the fertiliser gradient on your farm.

The second factor relates to your effluent

irrigation pump. If it is a constant speed centrifugal pump, then there will be a difference in operating pressure between the hydrant closest to the pump, and that furthest from it.

Elevation between hydrants will also have a profound impact. Centrifugal pumps will reduce their output flow as the pipelines get longer or higher and so each paddock will have a different flow rate at the irrigator.

All this will add to your fertiliser gradient and uneven performance of the pasture.

Our company, Spitfire Irrigators, has worked for the last eight years to develop a package with a good overall system uni-

formity index (SUI) for use as a farm production tool.

Our designs ensure that the pond mixer, pump and irrigator all co-operate to distribute collected rainwater and effluent as uniformly as possible in dryer conditions.

Spitfire’s low energy mixing propellers are always just above the bottom of the pond and they move over the whole base, creating as uniform a mix for the pump as is possible.

The pumps are progressive cavity units which use half the power of centrifugals and yet deliver the same flow to each hydrant irrespective of distance or height. Spitfire irrigators are capable

of excellent distribution uniformity and of course they measure the amounts that they are applying.

So these three elements – mixing, pumping and irrigation – should be considered together when designing a system. Atten-

tion to only one factor of these three critical elements will simply add to the imbalance of nutrient and water on your property and so increase the water-fertiliser gradient over the farm.

Your grass will do

better if it shares the goodness of diluted manure evenly. Spitfire seems to be the only system designer aware of this aim.

• Stuart Reid is managing director of Spitfire Irrigators, Hutt City. www.spitfire.net.nz

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Dairy News november 27, 2012

32 // effluent & water management

Sharemilkers set on futureproofing plant

Rene Burri

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WHEN YOU are doing

your best to store and dispose of dairy shed effluent responsibly, help and cooperation between milkers and owners works well for both parties.

The Hopkins Estate with 50:50 sharemlkers Rene and Verena Burri has recently installed a Kliptank to give the farm more storage capacity so effluent can be sprayed at the correct time to avoid risk of pollution running into drains and streams during wet weather.

The farm is at the foot of the Kaimais adjacent to the nearby Ballance AgriNutrients bulk store. It is 53ha raced to 38 paddocks with rolling contour.

“We are subject to high winds and at times heavy rain. This last winter in the space of three weeks we had three spells of 100mm in 24 hours,” said share milker Rene Burri.

Burri was born in Switzerland and has farmed

there and in Germany, Canada and now New Zealand. He met his German wife when visiting here ten years ago. They travelled, married, returned to New Zealand for one year in 2005, then after returning home immigrated to New Zealand in 2010.

harvesting. The dairy shed is a 15-aside herringbone.

Adjacent to the shed is a 700m2 feed pad used in wet weather and where cows have access to PKE in mobile troughs. The pad is covered with Numat matting.

Previously the efflu-

“We aim to grow our business through the New Zealand sharemilking industry.”

They are a couple on the move, both taking in AgITO courses leading to Diploma in Agricultural Business and Management. They are entrants in the 2012 Sharemilker of the Year competition.

Their first year’s production was 65000kgMS. “We aim to grow our business through the New Zealand sharemilking industry and we are always looking for opportunities.”

This is the second season of their first sharemilking job. They have 180 Jersey-cross cows and do not employ staff but have contractors for

ent was pumped direct to pasture from a sump with no storage during the wet.

Last June a Kliptank storage tank was installed – 2m high, 17.5m diameter and holding 485,000L. All shed waste and material from the pad pass through a stone trap to the storage tank.

The tank has a floating agitator used before spraying to incorporate all material and this is delivered to a travelling irrigator by a 5.5hp Water Force Ecopump. The farm has a right to spread on 30ha.

Tel. 0800 255 222 www.kliptank.co.nz

‘smart and reliable’ IT IS simple, smart, and reliable and we have a future-proofed system in that we can perhaps cover the pond and extract methane gas, says Rene Burri.

“We sell our dairy products overseas with the ‘clean and green

image’ and our aim is to do our part at this end of the process.”

Burri appreciates the willingness of the owners to improve the effluent disposal system.

“It is good for them, for the farm and for us,” he says.

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Dairy News november 27, 2012

effluent & water management // 33

Telemarketing water data ‘enables usage efficiency’ RECENT RESOURCE management regulations require that all consented fresh water takes will soon have to be measured and recorded.

The regulations are part of a national water strategy, so a regional and national picture of current water use can be developed. This will allow better planning and efficiency of water use.

Farmers need to register with a metering provider before the regulations take effect (20L/sec or more, 10 Nov 2012; 10-20L/sec, 10 Nov 2014).

Measurement systems suppliers Regen and Datacol say measurement “offers farmers benefits such as confidence, enhanced decision making and increased efficiency. Having more clarity about water usage efficiency enables you to make better use of it.”

These companies together offer systems for water metering, rainfall/ weather data collection and effluent and irrigation scheduling. Once telemetry equipment is in place for one service, other sensors can be added to get more value in other parts of the business.

Bridgit Hawkins, chief executive Regen, and Bruce Franks, chief executive DataCol, and regional council staff recently met with farmers

Bridgit Hawkins, Regen (left) and Bruce Franks, DataCol, recently met Hawke’s Bay farmers to discuss new water regulations.

Fined over effluent breach A TAUWHARE farmer has been fined

$34,000 for illegally discharging dairy effluent.

The case, brought by Waikato Regional Council, concerned two events in January of this year at a farm in Lang Rd, Tauwhare, owned and leased by Bryce Silvester.

Council staff inspected the property following a complaint from a member of the public that the nearby Waitakaruru Stream was “running green with effluent”.

During the inspection a large plume of dried effluent solids was found

extending from the farm’s holding pond into a spring-fed gully.

A stationary irrigator was also found to have extensively over-applied effluent to a paddock causing ponding and runoff into farm drains that flowed into a tributary of the Waitakaruru Stream.

The council discovered that Silvester had left the irrigator operating overnight resulting in about a week’s output of dairy shed effluent being discharged into the environment.

Silvester pleaded guilty to the two Resource Management Act charges arising from the incidents.

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in Hawke’s Bay to discuss the regulations.

“We found farmers wanted to know more about the regulations, why everyone needed to do daily reporting and they were particularly interested in the benefits of telemetering, which can add value to a business,” says Hawkins.

“Telemetering means all the water usage data automatically comes back to one central place, making recording and reporting an easy task. Once you can see how much water you

are using and when, you are able to manage this yourself. You may then add weather and soil moisture recordings and other tools such as Regen’s water irrigation scheduling. Not only do you comply, but you get a farm management tool to help improve efficiency.”

Often farmers were said to have concerns about data being stored securely. The water usage records are stored securely in a database and are only provided to the council as part of a farm’s required reporting.

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Dairy News november 27, 2012

34 // effluent & water management

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from liquids before they enter storage is a major benefit in the process of effluent handling, says GEA Farm Technologies (GEA FT).

This company supplies the range of Houle equipment in New Zealand, covering the spectrum of effluent handling, from solids separators, pond pumps and agitation systems.

Of particular interest, the solids separation technology offers a more modern way to manage the effluent that results from livestock intensification. As farmers are col-

lecting more solids from feeding areas, they are faced with some of the challenges this can present.

Solids in a pond (or tank) become difficult and costly to manage and over time accumulate to a point that reduces the available storage capacity.

Hence seperating solids out before they enter storage is helpful.

Discharging effluent to land has also changed with a greater focus on deficit irrigation and matching the irrigation system to the farm’s soil types.

By removing solids a lot of the ‘binding’ effect is

Firestone EPDM Geomembrane sustainable, future proof and environmentally friendly storage solutions.

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Solids separation technology offers a more modern way to manage effluent.

removed when solid particles block soil pores, impeding soil infiltration ability and causing surface ponding. Another key benefit is the ability to irrigate effluent through many low application rate irrigators without the risk of blockages.

The Slope Screen is passive and the equipment involved does not require the same level of maintenance as screw press type separation systems. In combination with GEA FT’s sand sedimentation pit this system is very effective at removing virtually all solid material from the effluent stream.

The Slope Screen comes in two sizes depending on effluent volumes and processing requirements.

The common size being 1.2m which can process up to 36m3 per hour and new to the country is an 2.4m model that has been recently installed on a 2000 cow farm, pro-

cessing all effluent from a dairy shed, feed pad and barn.

This larger screen can process up to 145m3 per hour. The high processing capacity gives the operator greater ability to handle high inflow from rainfall events and minimises processing times.

GEA Farm Technologies supply transfer pumps to feed the separators and this includes the AgiPompe that is designed to get effluent into a suitable state for efficient separation by agitating, chopping and transferring effluent all in one unit.

The Agi-Pompe has shear knifes on the propeller to cut fibrous material.

This transfer technology is very robust and reliable, designed by Houle to cater for the demands of Northern Hemisphere farms who predominantly have to deal with thick effluent from barn environments.

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Dairy News november 27, 2012

effluent & water management // 35

Breaks muck, saves water tony hopkinson

A RECENT major upgrade by Shane Goldsmith included building a farm dairy on a new site and installing an effluent processing and disposal system.

Shane and wife Sarah farm at Te Poi, 10km south of Matamata. He is the third generation on a flatto-rolling farm now covering 70ha. They milk 235 Friesian-cross cows with production exceeding 105000kgMS. “We have set up the new shed to be run by one person with Waikato swing arm automatic cup removers.”

The former shed had 12 rows and the new 30-aside dairy has only eight rows to complete the milking. Goldsmith milks in the morning before starting an AB run which he has been doing for 26 years.

His one worker arrives at the end of milking to wash the machines and hose the dairy and yards and then he does the afternoon milking.

“The new shed with all of its features makes it easy for one person to milk in good time which also allows more paddock time for the herd.”

When designing the effluent disposal system Goldsmith wanted to process the effluent but also conserve water.

He was helped in the layout by the rolling contour with each stage gravitating to the next and allowance was made for

the addition of a feed pad or a bigger herd if more adjacent land becomes available.

The stone trap has two channels 20m long x 2m wide, falling from the entrance to 1.4m deep at the end, emptying into the second channel returning another 20m to the exit where most of the solids will have been stripped from the waste. “I got the idea from my neighbour Richard Grayling, who had designed a similar trap which works well. Dave Taylor bricklaying and I made some changes and adjustments to our design once it was in use and it is now working to suit our farm practices.”

Eventually the first section will be hard enough to walk on with the material travelling underneath and the solids being stripped into the surface crust.

After wash down the first section rises about 450mm and then slowly settles; The process then repeats onto the second section it takes approximately 90 minutes for the material to travel the 35m.

“This is the intention of the design, to be emptied out once a year with the front end loader.

Of course this may vary depending on the amount of solid matter.”

The green water will flow into an in-ground holding tank of 25000L and the overflow to a 700,000L holding pond.

This pond is made of concrete blocks waterproofed with two-pot epoxy paint.

It measures 32 x 8 x 2m

Take your Effluent Pond from this …

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using one of these:

Two-stage stone trap.

deep, flowing to the end where a graduated bath bottom ensures total emptying. If in future more capacity is needed the walls can be raised and beams laid to allow the entire area to be covered.

Pond agitation is by a Reid and Harrison 15hp right-angle stirrer. “With a right-angle stirrer you get better action over a greater distance and you get a better stirring action

This pond took only eight weeks to go from crusty and stagnant to aerobic and biologically active.

in square or rectangular ponds,” says Reid & Harrison general manager Seton Dalley. The whole pond can be fully agitated in five minutes. These stirrers are considered better for lined ponds because their action, reducing the chances of damaging the liner.

Effluent is pumped from the pond using a 15hp horizontal end pump and 90mm delivery lines

feeding 63mm drag lines supplying a travelling irrigator. A flow meter will be fitted to this variable speed pump so that any sudden changes will shut the pump off. This will also ensure a consistent product applied to the paddock.

Goldsmith believes the pond gives the farm 40 -50 days of storage.

Tel. 07 888 8224. www. yardmaster-pumps.com

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Dairy News november 27, 2012

36 // machinery & products

New way through feed supplement roadblock sudesh kissun sudeshk@ruralnews.co.nz

WAIKATO FARMER

Chris Lewis says a new feeder called conedose offers opportunity for large herd owners to solve a known feed supplement problem.

Lewis says farmers have always struggled to get lime and magnesium

oxide to cows. “It’s always been an Achilles heel as we could not get enough minerals into cows unless it was manually drenched,” he told Dairy News.

The conedose, launched by Winton Stock Feed, has changed all that.

It allows any liquid or powdered mineral supplement including non-water soluble products like magnesium oxide to be mixed

Beats pasture dusting, buying minerals WINTON STOCK Feed says the conedose gives huge advantages over pasture dusting and buying bulk mineralised feeds.

It says the amount and selection of additive can be varied at each milking. Dosage quantity of minerals such as zinc, for instance, can be changed day to day. Molasses is very palatable to livestock and is an excellent carrier for minerals, masking any unpleasant taste.

It says all other elements currently being dosed into the water can be added into this system avoiding losses from trough system leaks. Salt and lime can be included as part of the mineral mix as and when required.

With the introduction of the air agitation system, particles falling out of suspension gather at the bottom of the cone where they are lifted to the top again by the introduced air.

Farmer Chris Lewis says the conedose makes it easier to feed minerals to cows.

into molasses. It mixes through vigorous air agitation and then hold them in suspension through a low rate of air agitation while they are fed out in liquid feed systems during milking.

Lewis says he mixes 50kg of magnesium oxide and 100kg of lime flour with 800kg of molasses in the conedose. He noticed the positive effect immediately. In the first week of September, the farm had two downer cows. Since he started using the conedose, there have been no cases.

“It’s a basic system and easy to use. It’s a good tool

but not the only tool in the tool box. But it’s a good tool to ensure adequate minerals for cows.”

Lewis employs four full-time and three parttime staff on his 330ha farm at Pukeatua. He milks 1100 cows on mostly pasture. However, he also supplements grass with maize grown the farm, 800 tonnes of PKE, 200 tonnes of tapioca and barley and 150t of molasses.

He was approached by Winton Stock Feeds two months ago to trial conedose. While the conedose is leased free, the deal requires him to buy molasses from the company.

Lewis says the company wants his farm to give the conedose a good punishment. “The idea is to see if the conedose can stand up to the test of a large herd. So far,so good.”

Lewis says his staff found it much easier to mix minerals with molasses.

One issue they have is mixing the lime and magnesium oxide by hand before pumping it into pipes from the conedose.

“Mag and Lime is a hard product to mix so the staff mix it with water in a 200 litre drum into a slurry before pumping it into the conedose.”

? t u o y a P w Lo e The Answer! v a H e W

‘Specialists in Dairy Automation Solutions’ 5 Tasman St, PO Box 16, Opunake 4616, Taranaki www.corkillsystems.co.nz

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“Dear Vern, Since fitting our CSL Lobe Pump and CSL Milk Flow Controller, we have seen a lift of 7.14% in our milk solids test. Our average test has gone from 7.97% to 8.54% as you can see on the statement I have faxed.

Thanks again, Kevin Davidson, Plantation Dairies”

Dairy News november 27, 2012

machinery & products // 37

Fewer lame cows despite weather SOUTHLAND FARMER Shannon Crawford has had fewer lame cows recently. He says the Numat DairyGrip laid at the entry of his cowshed on August 20 may be the reason.

“There’s been a bad run of weather in Southland lately, so we are still getting some sore feet, but a whole lot less than in other years.

“We used to get 10 to 20 lame cows a

year, but this year there were only two or three. When the cows were calving, we had up to 20 lame ones this year, but in previous years we could have up to 40.”

Crawford has found far fewer stones on the concrete holding area.

“The mat holds the stones, so they don’t find their way into the cows’ hooves. We just hose the stones off once a week. We are getting virtually

no stones on the round area, and only a couple on the holding area, which is much fewer than before.

“Even if there are stones, the matting absorbs the pressure from the cow’s foot, so the stone gets squashed into the mat, rather than the cow’s foot.”

The amount of mud has been much less than other years too, he says. www.numat.co.nz

Milfos has been sold to GEA Farm Technologies.

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HERD AND farm management company GEA Farm Technologies says it is looking at growth opportunities in New Zealand following its buyout of Milfos, subject to approval by the Overseas Investment Office (OIO).

The acquisition is an important step in the company’s “total solutions strategy,” says chief executive Dr Ulrich Hüllmann.

“The Milfos product portfolio enables us to better meet the requirements of grazing markets by offering best-inclass tailored solutions. In addition, our combined sales channels will strengthen our position in Asia Pacific and increase [our] influence in emerging markets.”

Milfos designs and makes milking, cooling, stalling and automation plant, and services and maintains grazing farm systems.

Chief executive and co-shareholder Jamie Mikkelson says the acquisition offers significant benefits to its customers.

“Our companies share strong common values and innovative spirit. These elements are at the heart of our daily activities and our drive to deliver technological advances that create sustainable value for our customers.”

Milfos, exporting to at least 20 countries, was formed in 1987 and now has at least 100 employees. Its core business is precision stainless steel manufacturing and the company has diversified into electronics, plastics and mild steel products.

It manufactures in-house, controlling complete product life cycles, including research, design, production and delivery.

GEA Farm Technologies has its main office in Bönen, Germany. It employs about 2300 people worldwide in subsidiaries in at least 60 countries.

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Dairy News november 27, 2012

38 // machinery & products

Three-star accolade for teat spray robot ROBOTIC MILKING has a new

addition: a teat spray robot (TSR) said to offer consistent application, optimal use of teat dip and less labour. It was launched this month

by DeLaval at EuroTier.

TSR is a standalone unit designed for external milking rotaries. The cows are sprayed immediately after take-off at the end of rotation, not in the exit lane where bottlenecks can occur. It can serve up to 400cows/hour.

DeLaval spokesman Robert Jensen says TSR is a natural spinoff solution from the AMR (auto-

matic milking rotary) the company launched at EuroTier 2010.

“Farmers spend several hours a day manually post-spraying teats after milking, some up to 20 hours or more per day. TSR automatically sprays each teat, helping to reduce labour.”

Another advantage of TSR is said to be its consistent operation which can help keep cows calm. “We know from our experience with DeLaval voluntary milking system VMS and AMR that cows like a predictable barn environment. Farmers can also create a good environment for their

cows by using TSR,” says Jensen.

Teat dip consumption and coverage are consistently managed with TSR. Consumption per cow depends on the product, its viscosity, and chosen spray pattern, but the system’s accuracy and uniformity will help keep conditions optimal for good udder health, the maker says. TSR will be available in limited numbers in 2013 with a full launch in 2014. This year it won the highest recognition (3 stars) in the European News category by Agromek – Northern Europe’s largest agricultural fair.

The Kia Optima LX brings a blend of sharper pricing and high equipment levels to the mid-to-large car segment in New Zealand.

Entry-level Kia Optima has raft of features KIA HAS expanded its

Teat spray robot in action.

BUILT TO LAST

Optima range in New Zealand with a new ‘entry level’ model, on sale at $41,990 plus on-road costs.

It has the same 148kW/250Nm 2.4L GDi engine and 6-speed automatic transmission as on the current Optima EX and LTD models, plus “a long list of high tech equipment”.

“The new Optima LX has to be one of the best buys in the new car market,” says Todd McDonald, general manager of Kia Motors New Zealand.

He says the decision to specify the larger 2.4L engine was influenced by its direct injection technology – performance and fuel economy. Size-wise,

Optima is one of the longest vehicles in its segment, the company says.

“It also has “generous” interior space because of compact front-drive mechanical layout, long wheelbase and cabin design.”

A high level of standard equipment comes automatically with the LX.It retains the LED daytime running lights seen on the current Optima models and also has dual projection headlights, foglights and cornering lamps that light the direction the vehicle is turning. Plus, it has a colour reversing camera and reverse warning sensors.

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shift knob, and convenient ambient lighting. The driver’s seat has height adjustment and the steering column can be adjusted for reach and rake.

Dual-zone climate air is standard, along with rain-sensing wipers, steering wheel-mounted cruise control and audio system controls, Bluetooth connectivity, user interface LCD screen trip computer and a glovebox chiller.

Remote door locking and alarm, power windows (with driver’s auto down/ up), heated/electric door mirrors and 60/40 split folding rear seat backs are also included. Wheels are 17-inch alloys, with a full size spare.

Safety features include electronic stability programme (ESP), ABS brakes with electronic brake distribution/brake assist and six passenger airbags, which helped to win a 5-star ANCAP safety rating for the Optima.

McDonald says a fleet purchase programme has been put together for companies and rental businesses.

The price includes Kia’s 5-year/100,000km warranty programme, with 24-hour roadside assistance.

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