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SEPTEMBER 27, 2016 ISSUE 365 // www.dairynews.co.nz

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DAIRY NEWS SEPTEMBER 27, 2016

NEWS // 3

Revamp puts co-op in ‘pole position’ PAM TIPA pamelat@ruralnews.co.nz

Treble your calf cheques. PG.12-13

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NEWS ��3-14 OPINION �� 16-17 AGRIBUSINESS ��18-19 MANAGEMENT �� 20-22 ANIMAL HEALTH �� 23-25 MILK QUALITY �� 26-28 MACHINERY & PRODUCTS �� 29-32

FONTERRA IS in “pole position” compared to

its competitors after a tremendous transformation, says Fonterra chief executive Theo Spierings. It has been a defining year for the cooperative, with a very strong result, he said last week at the release of the annual result. The co-op announced a 65% increase in net profit after tax to $834 million for the financial year ended July 31. “We fundamentally believe in a very strong future for dairy,” Spierings said. But very low prices for a long time had placed a lot of stress on farmers in “an unstable world, and our farmers have adapted with efficient and innovative systems in a tremendous way”. “We in the business have also adapted, and we drove this transformation which brought back good results and also proves the strategy is working. It was really hard work for the whole team... because it was not an easy market to operate in. “We are in a pole position vis a vis our competitors after this transformation, which makes me very proud.” Chairman John Wilson says Fonterra sets out every day to maximise the total payout to its farmers, intending this year to return every cent possible to them in an environment of very low global dairy prices. “We have stayed on course and strategy, with significant discipline financially and operationally across the business, chasing value wherever we could and supporting our farmers. “At the same time we have strengthened our balance sheet so we are a stronger cooperative.” Wilson says unsustainably low prices are still being seen in the global dairy market; they will

need to increase to get a milk supply response which the dairy market will need over the next 12 months or so. The cooperative will make a cash payout of $4.30/kgMS for the 2016 season to a 100% sharebacked farmer -- a farmgate milk price of $3.90/ kgMS and a dividend of 40 cents per share, of a total available for payout of $4.41/kgMS. Wilson says the 2015-16 season has been incredibly difficult for farmers, their families and rural communities, with global dairy prices at unsustainable levels. The business strategy is serving the cooperative well, he says. “We are moving more milk into higher-returning consumer and foodservice products while securing sustainable ingredients margins over the GlobalDairyTrade benchmarks, especially through speciality ingredients and service offerings. “Through increased earnings and continuing financial discipline we have increased the return on capital and strengthened our balance sheet by significantly reducing debt.

“We have done what we can to support our farmers with the co-operative support loan and early payment of dividends.”

Theo Spierings

KEEPING THE VALUE-ADDED PROMISE CHIEF EXECUTIVE Theo Spierings says more milk sold at higher value is at the heart of Fonterra’s strategy. “For our farmers, our promise is we will make the most of their milk; we’re keeping that promise,” he says. “We’ve seen the real strength of our ingredients business this year. “The money... invested in stainless steel is giving us more choice, and we have matched production to the highest-value customer demand. In a difficult market, we increased ingre-

dients normalised EBIT this year by 24% to $1204 million. “In consumer and foodservice we converted an additional 380 million litres of liquid milk equivalents (LME) into higher returning products, bringing our total volumes in this business up from 4.5 billion LME to 4.9b. Increasing our consumer and foodservice volumes – especially foodservice – meant we increased our normalised EBIT in this business by 42% to $580m. “Our results show [us doing] what we said we would do across the co-op.”

DAIRY NEWS SEPTEMBER 27, 2016

4 // NEWS

$40 million on offer for lake clean-up

Edendale back to normal NIGEL MALTHUS

SUDESH KISSUN sudeshk@ruralnews.co.nz

THE EQUATION is simple for dairy farmers around Lake Rotorua: agree to reduce the nutrient discharges from your farms into the lake and collectively pocket $40 million. The voluntary scheme had its first success this month: the Bay of Plenty Regional Council announced it had struck a deal with an unidentified dairy farmer (confidentiality is part of the deal). The dairy farmer agrees to convert to dry stock support and cut feed and export it off farm. This

deal will prevent 5.75 tonnes of nitrogen from entering the lake. The council expects to achieve 100 tonnes of nitrogen reductions via voluntary land-use change. It is one of four schemes underway to prevent 320 tonnes of nitrogen entering Lake Rotorua by 2032. The Lake Rotorua Incentives Board has the task of negotiating with landowners; its chair, Rotorua chartered accountant Judith Stanway, is confident of more deals in the coming weeks. “We are close to finalising another deal and we hope to announce it before the council’s term ends,” she told Dairy News.

BLOCKING NITROGEN ■■

■■

100 tonnes of nitrogen reductions will be achieved via voluntary land use change; $40 million is available to compensate landowners 140 tonnes of nitrogen reductions will be achieved via regulatory rules 30 tonnes of nitrogen reductions will be achieved via voluntary gorse conversion 50 tonnes of nitrogen reductions will be achieved via engineering initiatives.

MILK COLLECTIONS at Fonterra’s flagship Eden-

Authorities want to prevent 320 tonnes of nitrogen entering Lake Rotorua from nearby farms.

Stanway expects more farmers around Lake Rotorua to reach agreements now that the first deal has been announced. She reports a mixed reaction from farmers. “The fact that the rules are not completely established at this point has meant some are holding off and waiting... for the first deals to happen. “Now that we have announced the first deal, I expect a lot more interest.” Stanway says the board’s negotiations with the dairy farmer were “quite prolonged”; both parties had issues to sort. “But the farmer was good to deal with; both

parties were focussed on getting the best deal for the landowner.” Improving the health of Lake Rotorua is a top priority in the region. Apart from being important to tourism and local residents, the lake has the most landowners in its catchment. Stanway says farmers understand the importance of cleaning up the lake. “The quality of the lake is the primary concern and they understand change must occur, though they may not like it.” Stanway says the board is determined to reach the 100 tonne target. “We are going to get

it, and there’s $40 million to go back into the catchment. That’s a good thing and I’m sure farmers don’t want that to go begging.” The board is talking to eight other farmers around Lake Rotorua. “We have begun negotiations with eight other landowners which could mean up to 28 tonnes of nitrogen secured by the end of the financial year.” Regional council chief executive Mary-Anne Macleod says the landowner’s decision to engage with the Lake Rotorua Incentives Board and convert to a lower-nutrient farm system is a big step towards sustaining the lake water quality.

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dale factory are back to normal after the catastrophic collapse of a large milk silo. Although large parts of the plant remain out of action, Robert Spurway, chief operating officer global, says Fonterra is balancing milk across the South Island, and will communicate directly with farmers if there is any further effect on their collections. A five-storey milk silo -- about 10% of the plant’s milk storage -- collapsed suddenly on September 16, smashing though a gantry carrying steam pipes. The collapse was first widely reported as an explosion because of the noise, which neighbours said was followed by about 30 minutes of the sound of steam escaping. Spurway says teams were on site clearing the damaged area and that will continue for a few weeks. Investigations into the cause of the collapse were underway. “Our Edendale D4 dryer and milk protein concentrate plant may take some time to reinstate, but we have expert engineers working on a plan,” Spurway said in a statement. He says Fonterra teams have been committed to keeping farmers informed of expected collection delays and letting them know if they would need to dispose of milk. Where disposal was needed, they had worked with farmers and councils to ensure this was managed appropriately. Federated Farmers Southland Dairy Chairperson Graeme McKenzie says Fonterra has handled the incident well. About 100 farmers were affected but the interruption was only one pickup, or about four milkings worth. McKenzie said the season worked in farmers’ favour because many farmers had replacement calves to raise so the uncollected milk went straight into their feeding vats. “If it had been a different time of year they would have had to look at either dumping it through their effluent systems or finding other people who may have had other uses for it, to come and pick it up and take it off farm.” McKenzie said he is unaware of any farmer suffering serious difficulties. All will have proper effluent handling systems so even if some have to dump milk there will have been no adverse environmental effects. He expected Fonterra to reimburse the affected suppliers but calculating the financial consequences will be complicated because of the time of year, with milking herd numbers changing daily as cows come into milk. “They were good at coming out and making farmers aware of what they could and couldn’t do and how they would be reimbursed. The specifics aren’t quite out yet but it was very clear they would be doing that.” Established in 1881, Edendale is believed to be New Zealand’s oldest manufacturing site and is Fonterra’s largest, processing 15 million litres of milk a day at peak season. It produces 350,000 tonnes of milk powder, 60,000 tonnes of anhydrous milk fat, 5000 of tonnes of cheddar cheese, 4000 tonnes of mineral acid casein and 1000 tonnes of whey cheese a year.

DAIRY NEWS SEPTEMBER 27, 2016

NEWS // 5

Algerians to thank for milk price hike PAM TIPA pamelat@ruralnews.co.nz

FONTERRA

SURPRISED

observers last week by announcing an early upgrade of its milk price; the Global Dairy Trade (GDT) price index lift of just 1.7% was lower than expected, says ASB’s senior rural economist Nathan Penny. The cooperative raised the forecast farmgate milk price by 50 cents to $5.25/kgMS. Dairy farmers may have the Algerian government to thank for Fonterra lifting its forecast early. “The Algerian tender was a big deal,” Penny told Dairy News. “It was strong, so perhaps Fonterra is confident, because of this, that people will use it plus the (GDT) auction price as a benchmark for the next few months.” The Algerian government’s tender for whole milk powder (WMP) was about US$3150/ tonne and skim milk powder about US$2500/t. Milk futures were strong last week on that basis. “If other markets’ partici-

pants are keying off that, it may have given Fonterra extra confidence,” Penny says. “The fact they announced early [suggests] they are confident prices will stay at the level they have got to. They are seeing what I am seeing in terms of production here and in Europe: things are much weaker.” Nevertheless the early forecast revision is a surprise because the last forecast was less than a month before, on August 25. They had only one GDT auction to go by because the forecast came straight after last week’s GDT auction so it is unlikely they had time to incorporate that result. “We thought they would wait a month or two given that in late August they had upgraded their milk price. The main surprise is the timing – not that they lifted it.” The GDT result wasn’t quite as ASB had expected. The overall price index lifted just 1.7% and whole milk powder (WMP) prices were largely unchanged (down 0.2%) after big moves in the three previous auctions. “Dairy prices had lifted a lot anyway so at some stage markets

need to catch their breath,” says Penny. “Markets are probably keen to see more data to verify production is weaker. Spring data will be key. There is not much data yet; Fonterra’s will be out shortly for August. We probably want to see September as well before we are confident production is weak again. “Markets will want to wait for that and assess whether they should build more into the lift to date or whether they have done enough. “Some other prices aside from WMP were pretty firm: butter, anhydrous fat… and even skim milk powder wasn’t too bad. Markets will want to have a look-see over the next couple of months.” Penny has for some time been forecasting a $6/kgMS for the 201617 season. “Fonterra is coming around to my view,” he says. The whole basket of products is in line with where it needs to be, he says. To reach its $6/kgMS, ASB has the average overall price at $2950/t including anhydrous milk fat and butter, which are already higher than that.

“We are pretty close; it is just a matter of seeing over the coming months whether the prices stick,” Penny says. “We think they will but the markets want a bit more confirmation.” Farmers have changed their behaviour: for example slaughter has been higher, which is hard to reverse. “Last year El Nino had everyone thinking ‘El Nino is going to hit and the weather will drive lower production’,” he says. “I don’t think we are relying on the weather this time; we have seen the herd is smaller. That is in some ways irreversible, and the weather can turn out better than expected as it did last year.” Synlait has moved to $5/kgMS and it is always competitive so that is part of the pressure on Fonterra. But he thinks Fonterra’s is a reasonable forecast for now and he is still confident of his $6/kgMS forecast. “It is still back from that so they are not running ahead of the game. Fonterra’s is a plausible forecast and not out of whack with what the market is doing,” he says.

NZ REMAINS KEY MARKET FORCE WESTPAC SENIOR economist Anne Boniface says dairy prices took their foot off the gas pedal in last weeks’s GDT auction. This result was a clear disappointment to the futures market which had been hinting at another double digit price gain. “It’s likely that New Zealand production will remain a crucial influence on global prices this season,” she says. “And this season has started on a fairly firm footing in many parts of the country. Fonterra’s season-to-date milk collec-

tions are running almost 4% behind the same period last season (to the end of August). “But this needs to be kept in context. Milk collections over the three months to August comprise less than 10% of milk collected over the season. In addition, Fonterra has been losing share of the local milk supply. “Weather and pasture conditions over the next few months will be even more important than usual in determining

domestic production. NZ farmers have gone back to basics in an effort to trim costs as much as possible given the low payout environment of the last couple of seasons. “That’s meant cutting spending on supplementary feed and relying on pasture growth to drive production. Consequently, we’ll be keeping a close eye on how the NZ season is progressing over the coming months.” Westpac is retaining its $5/kgMS forecast.

Nathan Penny

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DAIRY NEWS SEPTEMBER 27, 2016

6 // NEWS

NZ features in Irish plough challenge PETER BURKE peterb@ruralnews.co.nz

NEW ZEALAND’S Ambassador

to Ireland, Sir Lockwood Smith, says NZ has the kind of innovative agritech businesses that interest farmers in Ireland. New Zealand Trade and Enterprise (NZTE) has for the first time exhibited at the Irish National Ploughing Championships, near Tullamore, County Offaly (Ireland midlands), on September 20-22. Sir Lockwood told Dairy News at the event that NZ is exploring where its agritech businesses can be involved. Ireland has a similar farming system to NZ’s so it’s natural that several NZ high-tech agri companies were at Tullamore. The ploughing champs resemble NZ National Fieldays, with a massive array of farm equipment and technology visited by about 250,000. Notably different, though, is that

Former speaker and High Commissioner to Ireland, Lockwood Smith.

the event is held every two years in a different location; it has no permanent venue but still crowds visit from all over Ireland. Some dedicated souls are interested in the ploughing but the main attraction for visitors is the mass of exhibits. Sir Lockwood says the Irish realise

innovation is crucial to the sustainability of their farming industry and that R&D is very important. And though Irish and NZ farmers individually have concerns about markets, there is a lot of room for working together as NZ has done with US sheep producers. The similarity of farming in Ireland and NZ should help foster such cooperation, he says. Brexit remains a hot topic in Ireland but it is too early to predict how the issue will pan out. “The British government is exploring a range of approaches to the EU. We are working with them closely because of our experience in international trade negotiations. We are seen as a world leader in trade liberalisation, so the UK government is looking to us for help.” One issue to be resolved is whether or not the UK will have a customs union with the EU and what that might mean to trade with other countries.

PROTRACK LAUNCH LIC AT the ploughing champs launched its Protrack system, called Saber for the northern hemisphere market. The technology is now used on at least 2000 NZ farms, says LIC Europe manager Mark Ryder. The Irish showing was its first in the northern hemisphere, and interest was huge, he says. Saber, among other uses, has high-tech sensors that draft cows

automatically and take somatic cell counts. “The Irish are very tech savvy,” Ryder says. “Every Irish farmer I have dealt with over five years, regardless of age, has a smartphone and that’s their point of contact. “Saber is labour saving, making things easier, which fits well with Irish farmers. They are looking to expand but they don’t want to bring in more labour.” LIC Europe manager Mark Ryder at the event.

2015

DP0011 Harmony_Dairy News 200x265mm v1.indd 1

1/09/15 3:57 pm

DAIRY NEWS SEPTEMBER 27, 2016

NEWS // 7

Vigilance call in renewed velvetleaf campaign THE MINISTRY for Primary Industries is calling on farmers to be ‘Vigilant with a capital V’ for velvetleaf infestation as the new growing season approaches. MPI velvetleaf incident controller David Yard says some farmers who had velvetleaf on their properties last season took up MPI’s offer of helping them plan to manage the infestation, but many did not. “We are negotiating with regional councils to contact all the higher-risk premises to make sure individual farm management plans are drawn up then implemented. We’re still working with farmers and regional councils to support those we know are contaminated. “Any farmer aware they’ve had velvetleaf on their property need to be extremely cautious, even if they’ve identified it, and they need good onfarm hygiene practices. There’s plenty of advice on our website about farm management plans.” Last season’s infestation came from six lines of fodder beet seeds imported from Europe by DLF Seeds and Science, the Christchurch subsidiary of a Danish seed distribution farmers’ co-op. Yard says MPI is “extremely confident” contaminated importation would not happen again. “I think we can put everyone’s mind to rest that any new seed lines that come in this season will be free of velvetleaf. We know what the problem is, we’ve tightened up the import requirements and the contaminated seed lines themselves are banned from entry.” In off-season MPI visited all the relevant European authorities, made recommendations and tightened the import standards, Yard says. “We have a much tighter control in place to prevent further contamination coming in. So the problem is not new seed lines, it’s the seed lines that were planted last year.”

DLF Seeds and Science expects to be selling new season fodder beet seed for sowing from about mid-October. Managing director Tom Bruynel says the protocols on preparing and cleaning seed in the factory in Denmark are much tougher. “We’re confident about it because of everything that’s been done, right back to the paddocks and the weeding of the paddocks prior to harvesting the seed, that happened a couple of months ago.” Bruynel says DLF is also doing its own internal testing – “vastly more” than MPI is doing – and has found no velvetleaf contamination. However, Yard says MPI expects “quite a number” of new velvetleaf finds as stray seeds from plants which grew last season start to germinate in November and December. Yard says MPI will not repeat the intensive “search and destroy” programme it did with other authorities last season, which was primarily aimed at the first two seed lines identified. “Later in the season we became aware of another four seed lines but it wasn’t possible given the timing to do a wider search-and-destroy so anyone who received these six seed lines remains at greater risk than the average farming population.” Velvetleaf was identified on 252 properties but Yard says there is likely to be farmers who, for whatever reason, missed it. Because the fodder beet seed was imported in pelletised form it had been an arduous and expensive process testing it for velvetleaf seed. Each 5kg box contained 100,000 seeds which all had to be stripped and inspected by microscope. “To put it into context, the level of contamination was extremely low. In some cases it was as low as one seed per box,” he says. “We’ve had to discover one seed in 100,000. But that one seed once it’s planted will produce one plant capable of produc-

ing 15,000 seeds, if they remain undetected this season. “The saving grace is that the seeds are not generally windborne so it’s quite likely you’ll get an area of a few square

metres of velvetleaf fairly intensively growing, which will make it easier to spot.” Yard says suggested management plans and other advice is on the MPI website. Risks to be aware of include seeds being

spread by muddy equipment, or eaten and spread by stock. Stock should be held in quarantine areas in case they have eaten seeds. Farmers can call the MPI helpline on 0800 809966.

MPI says not all farmers took up its offer to tackle velvetleaf infestation on their farms.

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DAIRY NEWS SEPTEMBER 27, 2016

8 // NEWS

Irish splash on dairy to lure young entrants University College Dublin (UCD) recently opened a dairy shed for students doing a range of agricultural related courses. Peter Burke visited the facility as a guest of Enterprise Ireland. THE SHED’S 40-bail rotary milks 200 cows on the 53ha milking platform at Lyons Farm, Kildare, 30km from Dublin. Setting this facility apart is that it caters for students and visitors while being a commercial shed in every way. Visi-

The new shed.

tors watch from a smart seminar room behind and above the shed, and viewing platforms outside afford a view down on the operation. This teaching facility is yet another example of the Irish government’s big spending to encourage

young people to choose careers in agriculture. Dr Eddie Jordan, a graduate of UCD, manages Lyons Farm. “The primary role of the university is teaching. Five years ago the dairy facility here was lagging behind the industry

standards. We had students whose facilities at home were better than we were teaching them on. “We decided five years ago to do something radical and this [facility] is the outcome. We spent $3.8 million on the open pens, calving facilities, milking parlour and offices.” Jordan says 35 postgraduate students study full-time at Lyons Farm and 100 other agriculture students also come to the farm. The largest group are veterinary students who develop practical skills there as part of their course. While the new dairy shed is a major focus, the farm also runs sheep, cattle and horses to meet the teaching needs of UCD. At its peak the farm has up to 16 staff working there. But there is also a commercial side to the enterprise, supplying milk 365

Lyons Farm manager Dr Eddie Jordan.

days of the year. “Of the 200 cows, 60 are autumn calving and 140 calve in spring, of which 60 are in a systems research trial looking at maximising milk solids from a fixed land base, and the remaining 70 cows are used for transitions studies and suchlike. “It is and it isn’t a commercial farm. Our primary role is to do the teaching and research; outside of that we have to be as commercial as we can. There is no point in doing research on cows that are not set in a commercial environment, and our milk sales play a huge role in our farm income.” The emphasis at Lyons Farm is on a pasture based system, but for two months each winter the

cows are housed. There is no grass to graze and the winters can be bitterly cold. The cows in milk get a mix of maize silage, grass silage and concentrates; the cows dried off are maintained on grass silage. The cow bails have rubber matting to maximise cow comfort. While the farm is not in the wettest part of Ireland, the soil is clay and at risk of the heavy Friesian cows pugging the pastures. “We have stuck with Friesians to answer a certain research question: if you have a fixed land base and you haven’t got the space to expand and increase cow numbers, the only way to drive output is by raising output per cow. “So we have stuck with

a cow to which we feed concentrates during lactation, and have selected a breed with the potential to respond to that additional feed and give us the extra output of milk solids we are chasing.” In the coming year at Lyons, the 200 cows will produce about 4.1 million litres of milk, of which 40% will fulfil liquid milk contracts and the remainder will be sent for manufacturing. This new UCD dairy teaching facility is already attracting the attention of visitors to Ireland with an interest in farming. Last week people from around the world who were in Ireland for the National Ploughing Championships called at Lyons and were clearly impressed.

The emphasis is on pasture and cows are housed for only two months every year.

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DAIRY NEWS SEPTEMBER 27, 2016

10 // NEWS

Oz co-op leaks milk as supplies leave STRAPPED AUSTRALIAN milk processor

The co-op angered suppliers by retrospectively cutting milk prices in April. And a controversial support package of threeyear loans offered to farmers in April has also come undone. MG, Australia’s largest dairy co-op, acknowledges the loans had been counter-productive, with farm-

Murray Goulburn (MG) says it has lost 300 million litres of milk this season -- about 8% of supply -through suppliers opting out of the co-op. Suppliers have either moved to other processors or retired from the industry.

TELLING ITS STORY MURRAY GOULBURN says it is working on a new advertising campaign to emphasise its need for support. The co-op is 100% farmer controlled. The ads will tell consumers that Australian dairy farmers are committed to making high quality dairy products. The co-op has also sponsored the recent television series of MasterChef. MG is under pressure from farmer shareholders to boost revenues.

ers feeling less loyal to the company. As farmers leave the partially listed company, those remaining are left having to repay more. Replying to questions posed by suppliers, MG says about 240 of its 2400 suppliers have left, from all regions. “Also, MG’s overall milk supply is down year-on-year due to wet weather during the start of the season.” The co-op says it plans to reduce manufacturing costs in line with milk supply to insulate the farmgate milk price. “We also have flexibility to move supply between plants to maximise efficiency.” Farmers have asked the co-op to tell them how great the milk supply

Murray Goulburn says it will market its Devondale brand to lift earnings.

losses would have to be to cause a serious problem. MG says it understands the loss of confidence among suppliers. “We are working hard to improve the farmgate milk price to start to rebuild this confidence and limit milk supply loss.” The co-op says it will consult more with farmer suppliers on the farmgate milk pricing structure. “This was last fully reviewed in 2013 and significant changes were made then, including moving more payments into the peak base price and moving to a single base price. MG will continue to talk with suppliers about how to best distribute the milk pool.” Farmers also asked MG

why it cut milk prices after only a slight decrease in revenues in the 2016 financial year. MG says lower revenues in ingredients were driven by lower commod-

“In addition, higher costs in distribution, sales and administration and higher volumes of inventory at June caused larger inventory revaluation than in previous periods.”

ity prices. “This has not impacted the cost of ingredients products and therefore this reduces margin to the extent of the commodity price reductions.

DIRECTORS FEE UNDER SCRUTINY MURRAY GOULBURN farmers, facing retrospective milk price cuts, are backtracking on their approval of a rise in the director fee pool. In May last year, 75% of shareholders voted in favour of increasing the pool size. MG says an inde-

pendent benchmarking review by Ernst & Young last year showed its director fees were well below the average for similar size companies. “As the setting of the director pool is a shareholder matter, this increase was put to shareholders at a meeting in May 2015,

called to approve the capital structure,” the company says. “Suppliers agreed, about 75% voting in favour of the fee increase.” The board unanimously agreed to waive directors’ fees for May and June because of the co-op’s plight.

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DAIRY NEWS SEPTEMBER 27, 2016

NEWS // 11

Customers will walk, Rural Women warn banks PAM TIPA pamelat@ruralnews.co.nz

BANKS THAT don’t

look after rural people may find rural people don’t look after them, says Rural Women vice-president Fiona Gower. “If there is not a bank, people will take their businesses to banks that are still there,” she told Dairy News. “There is some big business out there with a lot of money.” She was responding to ANZ saying it will close five rural branches – Otorohanga, Te Aroha, Massey University in Palmerston North, Milton and Ngaruawahia. This comes directly after Westpac announced

19 rural closures. Otorohanga and Te Aroha are to lose both banks. Gower comments that banks are closing branches because of overwhelming internet use, yet Rural Women is still battling to get better internet speeds for rural areas. It recently told the Telecommunications Act review that a key goal should be to bring rural speeds up to urban speeds. “If you are on satellite internet it can be slow and very expensive, and especially on dial-up internet banking is a waste of time,” Gower says. “We never used to be able to do it. Even broadband, when it gets slow, will time out; this is an issue for a lot of people

Saving energy on the West Coast WEST COAST independent milk processor West-

ANZ Milton branch is set to close.

because if you are doing a lot of transactions you want to make sure it is secure, not timing out, and that everything is done.” Some people prefer paying by cheque or cash to know the business is done. The elderly in particular like to do their

business in person; some do not know how to do internet banking. With the number of tourist businesses now linked to rural areas, Gower hopes the banks in places such as Otorohanga will still offer facilities for banking with cheques or

land Milk has been complimented on its energy efficiency. Energy Efficiency Conservation Authority (EECA) account director Paul Bull says the co-op is saving energy and cash and is cutting carbon emissions. Bull last week joined Energy and Resources Minister Simon Bridges on a visit to Westland Milk Products. The company has worked with EECA since May 2015 to save energy and reduce carbon emissions. “The company is getting its energy use down and cutting back on fossil fuel use,” says Bull. “It’s a great example of a smart business.” Westland recently upgraded an air heating dryer at its Hokitika plant. Energy use efficiencies identified in the heat dryer project will save Westland $24,000 per year and reduce carbon emissions by 380 tonnes a year,” Bull says. The company and EECA plan to save of 5GW/hours -- half from electricity usage and half from coal consumption. Westland aims in two years to be saving $250,000 annually and to cut carbon emissions by 830 tonnes. “It makes sense in terms of productivity and competitiveness to do this,” Bull says. EECA also works with large milk and meat processors.

cash without having to travel to a larger town that could be 45 minutes drive away. She says she understands the economic reasons for closing branches but sees it as tough for people who need some bank services.

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DAIRY NEWS SEPTEMBER 27, 2016

12 // NEWS

Farmers could t DAIRY FARMERS are being urged to review their breeding strategies for the upcoming mating season to get benefits gained by the breeding of low BW cows to proven beef sires. The advice results from the findings of a five year AgResearch-led project funded by Beef + Lamb

Calves involved in the AgResearch-led project.

NZ Mid-Northern Farmer Council and supported by LIC and Ezicalve (proven Hereford sires). The manager of the dairy beef integration programme, Doug Lineham, says the dairy industry has traditionally used beef genetics taken mainly from bulls of

unknown genetic merit. “The study compared the performance of progeny sired by proven and unrecorded Herefords confirming what the market is telling us: quality four day-old dairy/beef calves are in demand and fetching prices two, three and four times the average rate for bobby calves. “Simply by changing the breeding strategy to high BW sires for

dairy replacements and proven beef sires for the remainder of the herd will boost the bottom line of a farming business. “The question farmers need to ask themselves is, do they want to generate four day-old calves which will sell at bobby calf price, or quality dairy/beef calves which will be in demand by rearers and finishers. “We are now hearing reports of four day-old dairy/beef calves fetching

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‘ON AVERAGE $100 MORE PER CALF” TURUA DAIRY farmer Phil Hale changed his breeding strategy last year, opting to go all AI in the entire herd – high BW Holstein Friesian over the high BW cows, and proven short gestation Hereford over the low BW cows. Phil manages 90ha at Turua, Hauraki Plains, and says he discussed the change of strategy with the farm owner Les McWatters. “For three years we’d tailed off with Jersey bulls and they did the job but the profitability of the calves wasn’t great. When the payout started to drop we looked at other ways to make a dollar and this is one of the ways we adopted. “Last year we put around 60% of the herd to LIC Holstein Friesian with the balance Hereford and this year 140 will go to Friesian and 110 to Hereford. “I know the cows well; as they come forward high BW go to Friesian and low BW to Hereford. “We have had more calving problems than usual with big, beefy bull calves, partly due to their breeding but also a result of a good autumn. We just had to be more stringent during calving: checking the cows more often.” All dairy/beef calves are sold to calf rearer Mark Bocock and Hale says they are pleased with the quality of the calves they are getting. “We’re getting on average $100 more per calf than we’d get if they were straight dairy so it makes sense to breed to proven beef.”

DAIRY NEWS SEPTEMBER 27, 2016

NEWS // 13

d treble calf cheques $250 at saleyards in contrast to an average $40 for bobby calves.” Lineham says there is potential for farmers to get much bigger calf cheques next year and save a lot on breeding costs this year.

“Proven beef semen is cheaper than high BW dairy semen and there aren’t any concerns about bull performance. Proven short gestation beef sires also mean your cows will go into production sooner, increasing the

overall productivity and profitability of the farm. “Increasing the supply of quality dairy/beef calves is a win-win for the dairy and beef industries and for the consumer with an increased supply of quality table beef.”

Doug Lineham

Moving to an all-AB breeding strategy FIELD OWN two adjoining dairy farms at Ohaupo. They run the 130ha/450 cow home farm, and a contract milker runs the neighbouring 90ha/250 cow property. Both farms milk all year round, taking empties through to spring when they either get in calf or are culled. “Our breeding strategy on both farms, until now, has been six weeks high BW LIC AB Holstein Friesian followed by run bulls, but that’s going to change for the upcoming mating season,” Field says. “We have staff from overseas and the bull side of things started to become a problem. We don’t run the bulls through the shed, so that means cutting them out and reintroducing them after milking. We’ve never had an accident but it’s always in my mind that it could happen and we want to avoid that. “Bulls are unpredictable at the best of times and the more you’re handling them -- especially when seperating them from cows on heat -- the more you risk something going wrong. “Health and safety was a prime motivator for us moving to an all-AB

Steve and Sheree Field.

breeding strategy, but the reduced payout also meant we looked at every way we could improve the bottom line of the business. “Until now our run bulls have been Jersey, generating bobby calves. But tailing with short gestation proven beef genetics will give us calves worth up to three times more than we’d get on the truck. We will either sell the dairy/ beef calves to rearers or take them on to 100kg ourselves; we’ll decide that at the time.” The new all AB breeding strategy will see both the Field herds go

to high BW LIC Holstein Friesian for the first six weeks of mating followed by short gestation easy calving LIC Hereford. “Short gestation will enable us to tighten our calving pattern and mean that late cows come into production sooner. “We’ve got a 50 bail rotary with Protrack so drafting cows out for AB will be simple and take much less time than cutting-out bulls.” Replacement heifers are out at grazing and for logistical reasons will continue to be mated to Jersey run bulls.

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DAIRY NEWS SEPTEMBER 27, 2016

14 // NEWS

Synlait triples profit as infant formula and cream sales soar SYNLAIT HAS had its strongest year yet, tripling after-tax profit to $34.4 million for the year to July 31. This resulted mainly from a 400% increase in canned infant formula volumes and higher powder and cream product volumes. Chairman Graeme Milne says the full year result shows the company’s progress since its sharemarket listing in 2013, and its strategy of making more from milk. Its 2016-2017 forecast milk price is up from $4.50/kgMS to $5/kgMS following recent rises in dairy commodity prices. It also confirmed a total milk price of $4.02/ kgMS for the 2015-2016 season – a $3.91/kgMS base milk price and an average of $0.11/kgMS for special milk and seasonal premiums. Year-on-year revenue increased $98.8m this year from $448.1m in 2015

John Penno

to $546.9m and underlying NPAT – which mitigates unrealised foreign exchange gains or losses on USD inventory financing – is $32.7m ($12.2m in 2015). “Operating cashflow of $103.9m in FY2016 allowed us to reduce net debt by 18% to $213.9m. As a result, our [debt] ratio has improved to two and a half times,” says managing director and chief executive John Penno.

“Our record profit is a clear highlight for FY16, but all year we also spent on improving our business, developing customer partnerships, supporting our milk suppliers and… becoming a world leader in infant formula.” Synlait works with four of the world’s five large infant formula companies. It agreed a deal with The a2 Milk Company in August 2016 to supply a2 Platinum infant formula

for the next five years. It commissioned a third large spray dryer in early FY16, increasing production capacity and canned infant formula volumes. “Formula is a value added product and generates a strong margin, which improves our product mix and overall gross profit per metric tonne (MT). As a result, our gross profit per MT increased 51% from $567/ MT last year to $859/MT,” says Penno. Synlait will install a second wet mix kitchen in FY17, doubling infant formula capacity to 80,000 MT/year, to meet forecast growth in demand. With an accredited quality testing laboratory and in-house technical capability, Synlait will comply with Chinese infant formula regulations taking effect from January 2018. “We are working through our strategy with

infant formula customers exporting into China, including The a2 Milk Company and Munchkin Inc,” says Penno. “It’s likely the Chinese regulations will moderate canned infant formula growth in FY17 as the market deals with the changing landscape, but we expect the market to normalise in the longer term.” “We’re aware that low dairy commodity prices in FY16 impacted our Canterbury milk suppliers. For the second consecutive year our milk price is below the breakeven price for most of our milk suppliers, but our updated forecast of $5/ kgMS for the 2016-2017 season is encouraging,” says Penno. “We are paying our suppliers higher than normal advanced payments…. And we’re promoting opportunities to earn premiums, which totalled $5.7m in FY16.”

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Prevent the rain from washing away profits DAIRY FARMERS enduring wet weather could unexpectedly be losing soil nutrients due to a common misconception, says fertiliser co-op Ballance Agri-Nutrients. The key issue is how urea fertiliser behaves when soils are moistened by rain. Ballance says farmers may mistakenly believe that volatilisation – the process of nitrogen loss through conversion into ammonia gas – is minimised if urea fertiliser is applied to moist soils or before a heavy dew or light rain. The co-op’s cience manager Aaron Stafford says that, weather notwithstanding, a farmer can move tactically on nitrogen fertiliser applications, using smart science to help get the best from fertiliser spending – rain or shine. “Just because it’s been wet doesn’t mean volatilisation from urea will be negated; contrary to popular belief, nitrogen losses increase with increasing soil moisture,” says Stafford. “This is because urea fertiliser is rapidly converted to ammonium, especially when applied to moist soil. And once in the ammonium form, nitrogen will be retained close to the soil surface and will not be washed deeper into the soil with subsequent rainfall, therefore increasing the amount of nitrogen available to be lost through ammonia volatilisation.” This unexpected loss of soil nutrients could seriously affect production on dairy farms, causing many farmers to cut back on imported supplementary feed and rely on pasture production as a cost-effective alternative. “By using products in Ballance’s SustaiN range, which include the Agrotain nitrogen stabiliser to minimise ammonia volatilisation, farmers can negate the effects of ammonia volatilisation and increase the amount of nitrogen available to grow more grass,” says Stafford. He cautions it’s also possible that farmers affected by higher-than-average rainfall, particularly those on free draining soils, will have experienced high sulphate leaching from their soils over winter. Soils with low sulphur levels have the potential to limit pasture responses to nitrogen fertiliser in the early-spring period, lowering overall growth. This can be overcome by switching from a nitrogen only product to a product which combines nitrogen and sulphur, such as SustaiN Ammo or PhaSedN QuickStart.

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DAIRY NEWS SEPTEMBER 27, 2016

16 // OPINION RUMINATING

EDITORIAL

Keeping its promise

MILKING IT... Ushering in summer

LEWIS ROAD Creamery is adding strawberry milk to its novelty range, but as a ‘limited edition’ product – on sale only during spring and summer. Fresh Strawberry Milk, made from fresh fruit in collaboration with Omaha Organic Berries, is now offered alongside oldfashioned Strawberry Ice Cream, which will become a staple after a successful one day trial earlier this year. Lewis Road says this is the first in a series of limited edition, seasonal flavoured milks. The company’s flavoured milk first went nuts nationally two years ago when it teamed up with Whittakers, launching Fresh Chocolate Milk that people rushed to buy. The previous newcomer was a double caramel flavour.

Whaddayaknow? It’s milk!

BOTTLED MILK is competing with fizzy drinks and bottled water in the UK, and market watchers predict plain milk could be the next big drink craze. Milk producer Cravendale has launched a 250ml milk, offered in the chilled grab-and-go drinks section of supermarkets, saving buyers a trip down the milk aisle. The new smaller milk bottles, priced around $1.14, are offered to busy Britons as healthy alternatives to sugar-laden fizzy drinks.

Not laughing at this

CALIFORNIA GOVERNOR Jerry Brown is maintaining his assault on climate change, pushing through a law meant to reduce greenhouse-gas emissions from dairy farms and landfills. “You know, when Noah wanted to build his ark, most of the people laughed at him,” Brown said, adding that the ark saved Earth’s species. “We’ve got to build our ark too, by stopping... dangerous pollutants.” Brown’s approval of Senate Bill 1383 goes after short-lived climate pollutants which include methane, from cow poo. The bill will push dairy farmers to cut methane emissions to 40% below 2013 levels by 2030.

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ISSN 1175-463X

Can you identify this cow? No!

WE’RE USED to seeing faces and number plates blurred by Google to protect people’s privacy on Street View, but... cows? This bovine in Cambridge, UK, appears in all its bovine glory in one image, but Google then got overeager in a tighter-cropped pic. The search giant blamed its technology: “We thought you were pulling the udder one when we herd the moos, but it’s clear that our automatic face-blurring technology has been over-zealous. Of course, we don’t begrudge this cow its five minutes of fame.”

FOR THE first time in three years Fonterra farmers are looking at a payout above $5/kgMS. Last week they were buoyed by two further pieces of good news: milk price lifting by 50c/kgMS and a record profit for the co-op. While it may not be enough to compensate for the recent hardships and challenges, the co-op is is paying $4.30 for the 2015-16 season for a 100% share-backed farmer -- a farmgate milk price of $3.90/kgMS and a dividend of 40 cents per share. Most farmers would feel they are now out of the woods: with global milk production falling, prices are expected to rise even further. However dairy farmers know all too well about volatility; this isn’t the first price downturn they have endured. They know tough decisions will need to be made in the next upward cycle. Farmers will need to decide carefully whether to put some debt to bed or chase a profit margin by investing and spending more. Ultimately, New Zealand dairy farmers need to be the most cost-competitive globally to stay a step ahead of the price curve – in good times and bad. The experience they have accumulated in recent downturns should help them do that. A recent Rabobank report points out that NZ’s dairy industry has a greater need to build resilience than those of other milkproducing countries, due to its massive exposure to global markets and the resulting price volatility. Because the NZ industry is much less able than other nations’ producers to sell milk into more stable and often higher-returning local markets, it remains at the mercy of global market influences, greatly subject to volatility. And because most of our dairy production is exported, we feel the ups and downs of the global dairy industry much more keenly than producers elsewhere. The last two challenging seasons also prompted Fonterra to change its strategy. It is moving more milk into higher-returning consumer and foodservice products, and is securing sustainable ingredients margins over the GlobalDairyTrade benchmarks, especially in its specialty ingredients and service offerings. The co-op announced a 65% increase in net profit after tax to $834 million for the financial year ended July 31, 2016. More milk sold at higher value is at the heart of Fonterra’s strategy. It promised farmers it will make the most of their milk, and it appears to be keeping its promise.

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DAIRY NEWS SEPTEMBER 27, 2016

OPINION // 17

Wanting to know again and again ANDREW HOGGARD

FARMERS NEED to

start asking companies to get behind existing technology to make life easier for farmers when it comes to data collection. Recently in Federated Farmers we got asked to comment on whether we felt there should be any changes to the Statistics New Zealand’s annual production census. A review is happening and our policy staff wanted feedback as to what farmers thought; some responded asking why they can’t pull the information from somewhere else.

My dairy company wants to know so it can plan for milk production and nitrogen recording. NAIT wants that information because that’s what they’re about and Statistics NZ wants to know. My fertiliser company wants to know for nutrient budgeting, as well as the Overseer computer program, which unfortunately doesn’t inform the dairy company’s nitrogen recording system. My regional council wants to know for effluent and stock drinking water consents. My accountant wants to know, because IRD wants to know, and

“When I think about the number of organisations or companies that want to know how many cows, I have, it is actually quite a list.” This got me thinking about one of my pet hates: the amount of duplication that is out there with farmers needing to provide data to companies and agencies. All these organisations that collect data likely think they’re only asking for a little, which will only take a few minutes, but when you add up all those requests for data it becomes a mountain of work. When I think about the number of organisations or companies that want to know how many cows I have, it is actually quite a list.

so I need to enter it into my accountancy software. Beef + Lamb NZ wants to know so I get my allowed number of votes. Finally I actually want to know, because it’s a useful piece of information to have for feed budgeting and financial budgeting purposes. So I have to enter it into my herd management software. Chances are that none of those numbers provided above exactly match and the most accurate one is of course in my herd management software. There are pan industry

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agreed to it. • Andrew Hoggard is Federated Farmers dairy chairman. @dairy_news facebook.com/dairynews

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DAIRY NEWS SEPTEMBER 27, 2016

18 // AGRIBUSINESS Truck loaded with locally sourced maize grain.

Dried distillers grain (DDG) pellets.

Feed value booster keenly priced ADDING STARCH

and protein to PKE by blending it with pellets and crushed grain can come at a price, says feed supplier J Swap Stockfoods. It supplies dried distillers grain (DDG) in pellet form, which would usually add $50-60 to the price of 1 tonne of PKE,

the company says. But its scale and buying power enables it to source DDG in pellet form at a sharp price and pass the savings on to farmers. A grain crushing machine at its plant is now crushing thousands of tonnes of local grain each day, mostly maize, for adding to the blends

at a “better-than-normal” price. Swap operations spokesman Mike Taranaki says the DDG and wheat bran pellets plus local grain crushed on-site make for blends with nutritional and flow advantages without blown-out prices. “Blending these pellets

with the PKE adds more protein and fresh starch to the mix. The pellets especially also improve the flow through the augur,” says Taranaki. He says a typical blend for regular customers will average 35% of feed other than PKE. Blends are made to suit buyers: 60:40 through to 80:20 for those

keeping costs down. Some farmers have reacted to the low payout by just feeding PKE on its own, but Swap says about 80% of the feed it now sells is a mix. Blends that include DDG and/or wheat bran pellets sell from $265/ tonne upwards; the price depends on the ratio of

pellets and grains and it can include added minerals at extra cost. Director Stephen Swap says until now the DDG pellets have been a relatively small proportion of the stockfeeds J Swap sells. But the company hopes to at least double its current volume of DDG pellets.

Swap’s support for local grain shows in its buying the crusher. It is storing thousands of tonnes of local maize grain and this is turning over quickly as many farmers refill their feed silos every five-ten days, Swap says. @dairy_news facebook.com/dairynews

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DAIRY NEWS SEPTEMBER 27, 2016

AGRIBUSINESS // 19

Farmer confidence up DAIRY FARMER con-

fidence has reached its highest level since 2007, the Rabobank Rural Confidence Survey hows. Of dairy farmers surveyed, at least 67% expected conditions to improve, the most registered on this measure since October 2007. Dairy farmer sentiment is by far the highest but confidence in agriculture among farmers in all sectors rose for the second consecutive quarter and is now highest since 2013. Forty eight percent of all farmers expect the rural economy to improve (up from 25% last quarter), 37% expect no change (down from 52%), and only 13% expect it to worsen (down from 22%). Almost half of all farmers surveyed expect the rural economy to improve in the coming 12 months, resulting in overall net confidence shooting up by 35%; it rose by only 3% in the last survey. Rabobank NZ general manager for country banking Hayley Moynihan says the jump in confidence is chiefly because farmers believe commodity prices

– particularly for dairy products – have bottomed and will keep rising during the next 12 months. “Since the last survey in July three consecutive increases in Global Dairy Trade (GDT) results have lifted commodity prices by 25% and given the dairy sector a much-needed boost,” she says. “The big jump in the overall confidence reading also reflects how low confidence in the agricultural economy has been during the past two years, contributing to confidence reaching near-decade lows in several surveys during this period.” The improved outlook for the rural economy as a whole is also reflected in farmers’ expectations for their own businesses in the next 12 months. Dairy farmers are most upbeat, recording a net positive reading of +57% (up from +9% previously). “The survey also signalled a possible lift in milk supply for the coming season: 31% of dairy farmers expect their production to increase and only 15% expect it to fall in the 2016-17 season,” Moyni-

OPTIMIST NUMBERS JUMP IN THE coming 12 months 44% of farmers expect their businesses to do better, and 16% expect them to worsen – a jump in the net reading for this measure to +28% (+18% previously). Dairy farmers mostly caused this increase, recording a net positive reading of +57% (up from +9% previously). Moynihan says, “On top of dairy farmers vastly improved expectations for their own businesses, the survey also signals a potential lift in milk supply for the coming season: 31% per cent of dairy farmers expect their production to increase and only 15% expect it to fall in the 2016-17 season.” But the expectations of sheep and beef farmers for their own businesses in the coming 12 months dipped. “The net reading for sheep and beef farmers on this measure fell to +2%, back from the +22% recorded last quarter. “This result was not wholly unexpected as, despite lamb prices rising [nationwide], and farmgate beef prices remaining steady, the high New Zealand dollar is... challenging... the sheep and beef sector.” Horticulturalists’ expectations for their own business performance also fell, but are still up. “A net reading of +26% was recorded by horticulturalists this survey from +47% previously,” Moynihan says. “This result is well back on last quarter, but the confidence amongst horticulturalists in their own businesses is still relatively high, as it has been for several consecutive quarters.” Horticulture export gains, a bright spot in the NZ economy in recent years, look set to persist in this coming season, particularly for pip fruit and Gold kiwifruit.

han says. But sheep and beef farmers are gloomy about the coming 12 months, Moynihan says. “The net reading for sheep and beef farmers on this measure fell to +2%, back from the +22% recorded last quarter.” The investment intentions of dairy and sheep

and beef farmers have changed little since the last survey. The number of dairy farmers expecting to spend more increased to 19% (from 13% last quarter). But 67% of dairy farmers expect to spend about the same in the coming year as in the previous 12 months.

Hayley Moynihan, Rabobank.

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DAIRY NEWS SEPTEMBER 27, 2016

20 // MANAGEMENT

Home-grown best for young farmer LOUISE HANLON

MARKUS WOUTERSEN has just begun

his dairy career but his low cost operation is already attracting industry attention. He’s in his fourth season, sharemilking 285 cows on the family’s 98ha effective farm near Cambridge, Waikato. He says that his father built an efficient farming operation, allowing him to focus on ironing out the kinks. “The building blocks were in place when I arrived, but there is still lots of potential on this property. Our output is already pretty good, about 1350kgMS/ha, but over the next few years I believe we will be able to reach 1450kgMS/ha. “In my first three years as a sharemilker our working expenses have ranged between $1.10 and $1.26/ kgMS. One of my goals is to cap costs at $1 to $1.10 by further increasing efficiency, pushing production while maintaining a low cost base. This gives you options; even with the current payout we can still do all right.” Woutersen closely watches all costs; his emphasis on buying in

Waikato sharemilker Markus Woutersen and partner Taylor on their farm.

minimal amounts of supplement and skilfully managing pasture, are playing a big part in his success. “We are aiming to get upward of 450kgMS/cow. We calved early in spring (June 28 this year) with high covers -- our goal is over 2500kgDM/ha at planned start of calving -- and use PKE when required to fill any gaps. Then we go all-grass from balance date until summer, when we get back in with the homegrown maize silage and fodder beet. Our aim is to have a long lactation with a long,

flat peak. The cows generally peak in August and just sit there.” Woutersen’s passion for farming dates back to his childhood. “I have always wanted to farm this farm, that’s been my dream,” he says. “I used to milk on farms in the district after school and in the weekends. I was paid well for doing it, so the people who employed me helped set me up.” Woutersen believes smaller herds like his one play an important part in the industry, although the definition of small may be

changing. “Small herds hold a great place in society and in the community, and they will continue, although what small is may be redefined. They are probably the most resistant to low payouts, and the most resilient to volatility, because they often have lower debt levels and they are chiefly run by owner/operators, who generally run them to a high standard. “[I like] being small enough to enjoy farming, knowing the cows personally, but being big enough to have some flexibility and being able to delegate some tasks. My ideal farm is one big enough to have one person working with you. “You gain more skills on a smaller farm than on the big farms. We fix most things ourselves, which keeps costs down and also adds some variety to our day. You are better for it if you can help yourself.” Woutersen has a thirst for knowledge and is a firm believer in the benefit of getting off the farm to learn, from agricultural professionals and other farmers. That is where SMASH fits in. “I came to the winter SMASH conference at the end of my first season,”

says Woutersen. “It was really good. Since then I have attended a few field days and workshops. The days are well organised. “I have always liked learning about farming and how to do things better, and going along to events can be quite interesting; when there are good guest speakers, everyone learns a lot. “It is a good chance to get off the farm, have a chat with mates, or make new contacts, and see how other people are going. Sometimes if things aren’t going as well as you would like, talking to others gives you a bit of comfort as

often everyone is experiencing the same difficulties. “The SMASH lunches are always good, which is essential; if you have a good lunch break it gives you the chance to talk to people. The events provide a great opportunity to network; I enjoy meeting and talking to people. The collaboration in the industry is awesome; farmers are happy to share experiences.” He is also willing to put his own operation under the microscope as he believes it is an excellent learning opportunity. This led to him agreeing to host

a SMASH field day. “The day here was well put together by the SMASH committee and their sponsors; everyone enjoyed it. The feedback was good and the questions I had to answer made me think. I like the opportunities where you have to push yourself, the personal development, and get quizzed on what you are doing. It either gives you ideas about how to do things better, or shows you are doing the right thing.” • Louise Hanlon is an executive committee member of Smaller Milking and Supply Herds (SMASH).

Be prepared for a visit PAM TIPA pamelat@ruralnews.co.nz

THE LABOUR inspectorate is randomly visiting dairy farms across the country and all farmers should be prepared for a visit, says regional manager Natalie Gardiner. Farmers complying

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with the rules have nothing to worry about, she says. “The inspectorate has given farmers plenty of warning, and has worked with industry organisations to provide additional support,” Gardiner told Dairy News. “Farmers know their obligations but they’re just not [meeting them], which is extremely disappointing.” Asked whether or not this related mainly to migrant labour, Gardiner said that was irrelevant. “All farmers must meet their obligations as employers. This is the law, and it is not an option to ignore it. If they do not meet their employment obligations the inspectorate will not hesitate to fine them.” This follows an earlier warning that farmers who do not keep written employment agreements or time records can expect a sharp shock. Six farmers have already been served infringement notices of $1000 or $2000 for breaching one or both these basic employment obligations, following the inspec-

torate’s investigation of 28 farms in Waikato during the last two months. Gardiner says she was disappointed to find half the dairy farms the inspectorate visited in the Waikato in breach. “The farmers we talked to in this investigation were well aware of their obligations, but chose to ignore the considerable amount of information made available by industry groups to help them get it right,” says Gardiner. “Having time, wage, holiday and leave records, and a written employment agreement, are the foundations of a good employment relationship. “It’s time for dairy farmers to take action to meet these basic obligations, as the inspectorate will not hesitate to take action against employers whose practices aren’t up to standard.” A total of 21 employment breaches were identified on 14 farms, the inspectorate issuing seven improvement notices and three warnings in addition to $9000 in infringement notices.

DAIRY NEWS SEPTEMBER 27, 2016

MANAGEMENT // 21

Dryland conversion tick all boxes SOUTH CANTERBURY dairy farmers

still farming sheep and beef on the original family farm. Today Gregan Dairy milks around 1000 cows on 360ha over two properties in the Blue Cliffs district, including the original

their staff management and engagement, and for building a “culture unique to their farming business”. In the 2016 awards Gregan Dairy won three categories, including the

John and Cara Gregan say the Ballance Farm Environment Awards (BFEA) highlight good examples of sustainable agriculture. The former sheep “It’s easy to think your operation is and beef farmers started converting to going well but a lot of things can go dairying about 10 years wrong when you are dealing with ago and were surprised livestock based systems.” how much negative publicity dairy farming Farm Stewardship Award. family farm of 100 years. generated in the region. Entering the 2016 Can- Supported in partner“It’s probably not so ship by the QE II National terbury BFEA helped the bad for us because we Trust and the New ZeaGregans benchmark their are a dryland operation,” land Farm Environment Gregan says. “But irrigated dairy operation and conTrust, this award recogdairying in Canterbury has firm their sustainability nises the creation of spedirection. a high profile and some cial places onfarm and The judges were people have a skewed management systems that impressed at how much vision of dairy farmers as time and money went into include productivity and environmental vandals, sustainability. planting unproductive when that’s not the case.” Gregan says the stewareas and protecting wetThe Gregans first ardship award was special entered the BFEA about 15 lands. And they completo the family. mented the Gregans on years ago when they were

“We are the third generation to farm here. The foundation was laid by my father and grandfather and it’s nice to have their efforts recognised.” He says their first time in the awards was a good learning experience and helped them when they later made the switch to dairying. “We’ve always been environmentally aware. The home farm has a good history of tree plantings, but our first experience with the awards taught us more about the value of riparian planting and planting for run-off control.” Cara says they did a lot of preparation for their 2016 entry, presenting plenty of information to the judges, who made them feel relaxed and gave

John and Cara Gregan.

them good feedback. While winning three category awards was a stamp of approval for their operation, they want to keep improving. “You never know all the answers,” Gregan says. “It’s easy to think your operation is going well,

but a lot of things can go wrong when you are dealing with livestock based systems, so it’s important to keep reviewing what you are doing. “We encourage others to enter the awards because you learn so much about your business. It’s

a good time to stop and look at your operation and decide what you want to achieve.” Entries for the 2017 Canterbury BFEA close on October 31. Entry is free and entry forms are available online at www.nzfeatrust.org.nz

DAIRY NEWS SEPTEMBER 27, 2016

22 // MANAGEMENT

School farm spots chicory as best value There’s a Gaucho treated seed, and then there’s the rest!

MARK DANIEL markd@ruralnews.co.nz

STUDENTS AT a recent Waikato school farm field day scrutinised their growing and yield of chicory as a summer crop. The event at Owl Farm – part of a St Peters School, Cambridge and Lincoln University joint venture – looked at, amongst many things, the value of chicory as a break crop in the region’s increasingly dry summers. With PGG Wrightson Seeds veterinary agronomist Charlotte Westwood and agronomists Emma Bell and Kyle Gardyne, the group looked at all aspects of growing the crop. Their first step had been pasture condition scoring to identify the poorest performing paddocks. The paddocks were rated from worst to best (score 1-5), the poorer being earmarked for cropping or re-grassing. Endorsed by the Pasture Renewal Charitable Trust and DairyNZ, this exercise takes account of bare or damaged areas, weeds, less

vigorous grasses, sward density and clover content. The students chose chicory as a high value summer feed for the 450 cow herd, based on consumption of about 2.5kgDM/cow/day. Seven paddocks were earmarked for sowing, totalling 12ha – about 8% of the farm’s 150ha (effective). Permanent pastures were sprayed out and direct drilled in October 2015, at a rate of 8kg/ha, and grazing began in the second week of December; each was grazed four-five times in a 21-day rotation, finishing at the end of March 2016. Overall the area yielded about 9000kgDM/ha – costing 7.4c/kgDM based on establishment costs of $666/ha. This cost should not be taken in isolation, the group says, because of the need to account for the value of the underperforming grass areas; these would be excluded from the supply chain between October and April. With an estimated production of 4700kgDM/ ha the chicory value was 22.6c/kgDM, similar to

From left: Kyle Gardyne, Emma Bell and Charlotte Westwood, PGG Wrightson Seeds.

maize when feeding losses were taken into account. For the 2016-17 season, the crop will continue to be used – not least for its being a good leadin to pasture renovation – with a target closer to 12,000kgDM/ha; this is reckoned achievable with better attention to weed control and fertiliser during establishment and post-emergence. The summary is that chicory has the potential to deliver a good protein boost mid-season, but the area needs to be increased to about 10% of the farm; the feed will help increase milk solids and cow condition scores, and will balance the energy cost of cows walking to grazing. Gardyne also urges

growing the crop against a ten-point plan for success: understand how much area is required, pick poorer performing paddocks, soil test in the autumn and pay particular attention to spray-out, and try to reduce the weed burden. At planting, resist any temptation to start before soil temperature hits 12oC, split plantings for succession of availability, use slug bait to cut losses at emergence, and do not graze too early. He suggests a regular ‘pull test’ 50-80 days after planting to ensure plants are properly anchored and not at risk of being pulled by stock, which would reduce total output. www.owlfarm.co.nz

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DAIRY EFFLUENT is a great

source of nutrients for growing pasture. But if not managed properly effluent can also be a significant source of contaminants which harm our waterways. Understanding how soil properties affect nutrient loss is a key to maximising the benefits of effluent on farm and minimising its impacts on waterways. Soil texture and structure determine the amount of water that can enter and be retained within a particular soil, and the rate of transmission of excess water through that soil. So, effluent irrigation systems should be matched to soil properties to minimise runoff and leaching. The rate at which effluent can be applied to land for maximum production benefit is determined by the soil’s properties including structure, porosity and infiltration rate. The nature of the effluent and cattle treading on soils can affect the infiltration rate. Treading damage,

which occurs most when the soils are wet, significantly reduces the infiltration rate. For some soils this can result in accumulation of effluent below slopes and in hollows. It can then enter surface waterways. Movement of water through soil pores is generally described as hydraulic conductivity; when this is low, irrigation of effluent will result in ponding and run-off once the total water capacity of the soil is exceeded or if application rate exceeds infiltration rate. Low rates of hydraulic conductivity are found in soils that are poorly drained, and ponding and runoff often occur with high rainfall. Many of these soils are artificially drained to reduce the incidence of ponding and water-logging, and this carries a risk that effluent can bypass the soil and be directed rapidly into waterways Leaching occurs as excess water moves through the soil. So, soils with lower water holding capacity are more susceptible to leaching, while soils with high water holding capacity (deep silt loams) can store significant quantities of effluent.

Soils with low available water holding capacities are the shallow to moderately deep soils, and sandy or stony soils. Effluent irrigation on these soils is likely to result in leaching unless it is applied at low rates and in small doses. The irrigation system on these soils must be capable of low rates of application to gain the maximum nutrient benefit. Drainage and the level of biological activity of the soil at the application site are important. Aim to apply effluent at a rate that keeps it in the root zone so that the nutrients can be utilised by pasture. Permeable soils with a deep water table and no drainage limits are best for putting effluent on. However, on stony soils the risk of effluent draining directly to ground water would be an issue to consider. In such situations, application depths and rates should be adjusted to account for this risk. • Bala Tikkisetty is a sustainable agriculture advisor at Waikato Regional Council. Contacts: bala. tikkisetty@waikatoregion.govt.nz or 0800 800 401.

DAIRY NEWS SEPTEMBER 27, 2016

FEED / ANIMAL HEALTH // 23

Making high quality pasture silage RECENTLY THERE has

spread the material into 100 - 150mm layers and compact until the surface is firm. Use a high quality plastic cover and weigh it down with tyres that are touching. Seal the edges with sand or lime. For baled silage, use high quality wrap and apply it according to the manufacreduces the risk of nutrients being lost from the silage stack as leachate. Silage leachate is surplus water from silage which carries soluble sugars, proteins and nutrients with it as it seeps out of the stack. Silage leachate is one of the most potentially contaminating wastes generated on a farm. It is considered to be 200 times stronger than raw domestic sewage and 40 times stronger than dairy shed waste3. 3. Add a quality silage inoculant at harvesttime Quality silage inoculants contain the right strains of lactic acid producing bacteria to ensure a good fermentation. They can help to reduce fermentation losses while at the same time improving silage quality. Trials show that when fed to dairy cows, Pioneer brand 1127 inoculated pasture silage gives 30 litres more milk per tonne and generates a return of at least $2.50 per dollar invested.4 But not all inoculants are the same: local research has shown some products simply don’t work. Look for four things when choosing an inoculant: guaranteed bacteria numbers of the label, trial data that shows the inoculant works, proven application technology and a company which understands silage and can help you get the best return from it. 4. Compact and seal properly For stacked silage,

turer’s recommendations (i.e. use the recommended stretch factor and number of wraps). It costs roughly as much to produce rubbish silage as it does to make high quality silage. Focusing on the silage making process this spring will really help improve your

returns. 1 Macdonald et al. 2000. The effect of pasture silage quality on milk production and liveweight gain of dairy cows. Proceedings of the New Zealand Society of Animal Production 60: 253-255. 2 Wren & Mudford. 1996. Making quality silage. Proceedings of the Ruakura

Dairy Farmers Conference 49:100-105 3 Tikkisetty et al, 2004. Environmentally friendly silage management. SIDE Conference. 4 Drymatter recovery data is based on 16 pasture silage trials conducted at independent European research stations that

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been an increased dairy industry focus on getting more out of pasture. I believe farmers should also be focusing on getting more out of their pasture silage; the first step is making a quality product. High quality pasture silage is a valuable supplement for increasing milk production or condition score gain, but poor quality silage is at best an expensive filler for dry cows. A trial by DairyNZ researchers compared the milk performance of cows fed high (10.4 MJME/kgDM), medium (9.4 MJME/kgDM) and low (8.3 MJME/kgDM) quality pasture silage in the spring, summer and autumn.1 On average, cows fed high quality pasture produced 0.22 kgMS/cow/ day more than the cows fed low quality pasture silage. At a $4.50/kgMS payout, this equates to an increased return of almost $1.00/cow/day for the high quality silage. Making high quality pasture silage requires the combination of a quality pasture, an excellent fermentation and excellent stack or bale and feed-out management. The following steps are key: 1. Harvest at the correct time The feed value of the ryegrass plant drops rapidly as it enters its reproductive phase. Research suggests that the drop can be as much as 0.3 MJME/ kgDM per week of closure.2 Harvest pasture silage no later than 35 - 40 days after the last grazing or when a maximum of 10% of the ryegrass seed heads have emerged. 2. Wilt to at least 28% drymatter Wilting concentrates the plant sugars and

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were submitted to the official German silage additive approval scheme. Milk production per tonne of pasture silage fed is based on three independent dairy trials. Assumes a milksolids payout of $4.25/kgMS. • Ian Williams is a Pioneer forage specialist iwilliams@genetic.co.nz

DAIRY NEWS SEPTEMBER 27, 2016

24 // ANIMAL HEALTH

Body condition scoring service s PAM TIPA pamelat@ruralnews.co.nz

BODY CONDITION

score (BCS) will increasingly be adopted as a measure in welfare assurance schemes, so scoring must be accurate throughout the BCS range, say DairyNZ’s Chris Leach and Jacqueline McGowan. The National Body Condition Score Assessor Certification Programme, backed by DairyNZ and the Ministry for Primary Industries, was launched in 2012. This is to ensure the dairy sector has access to trained, competent rural professionals who maintain calibration to the DairyNZ BSC national reference standards, say Leach and McGowan in a paper for the NZ Veterinary Association. The programme

ensures delivery of training, initial and ongoing assessment, and BCS assessment activity levels necessary to achieve and retain calibration. It certifies those achieving the set requirements and agreeing to provide service; they must agree to a code of practice and become certified BCS assessors. Accurate BCS assessment is essential when farmers use it to support decision-making or when the BCS is a criterion in animal welfare assessments. Farmers are encouraged to do their own BCS assessments, but many do not due to lack of time or confidence, the paper says. Equally, in corporate farm structures, grazing arrangements and herd sales, a BCS assessment provided by a certified BCS assessor holds more

weight than unvalidated assessments. The Code of Welfare for Dairy Cattle stipulates a minimum BCS of 3.0. Farmers can be prosecuted under the Animal Welfare Act 1999 if they have cows thinner than this and fail to take action. Since 0.5 of a BCS unit could mean the difference between compliance and noncompliance, any operator scoring cows at the lower end of the range needs to be certain of accuracy. Accurate BCS assessment is also essential to farmers for decision-making. For example, cows may be dried off to give them time to regain body condition lost during lactation before calving. When using the BCS dry-off rules for cows in a low input system, incorrectly estimating a cow’s BCS by 0.5 could lead to

Chris Leach, DairyNZ.

premature dry off and missing out on another 30 days in milk. Alternatively, cows may calve thinner than the recommended optimum. Although affected by milk price, the value of increasing BCS at calving from 4.5 to 5.0 is conservatively estimated at $60/ cow (InCalf), through increased milk production and better reproductive performance. The positive relationship between calving BCS and milk production continues above BCS 5.5 but the risk of metabolic disease increases significantly. Peripartum health is very sensitive to calving BCS. For example, the risk of ketosis is doubled in cows that calve at a BCS >6, compared with cows that calve at a BCS 5.5. In a recent DairyNZ study, 40% of cows that calved at a BCS of 5.5 had β-hydroxybutyrate concentrations greater than 1.4mmol/L postpartum whereas none of the cows

calving at 4.5 exceeded this threshold. In the same study, although all cows underwent an inflammatory response around calving time, cows that calved at BCS 4.5 appeared to recover faster than cows calving at either BCS 3.5 or 5.5. As farmers move toward winter crops such as fodder beet and put more value on achieving BCS targets, it is essential that accurate BCS is provided at the top end of the scale as well as the lower end to guard against metabolic disease. Given that subtle changes in the BCS at calving can have significant effects on subsequent productivity and health, particularly when BCS is greater than 5.0, it is important that farmers make management decisions based on accurate BCS. Despite evidence of the importance of BCS management for productivity and welfare, it is a subjective measure that requires

against which assessors are tested. In the first two rounds of testing, only 69% of newly trained practitioners passed (i.e. were within 0.2 BSC above or below the model). There was also a marked difference between regions. For example, in the first round, candidates in Northland scored an average of 0.21 above the model, but candidates in Waikato scored an average of 0.26 below the model, i.e. there was a difference between those two regions of almost 0.5 BCS. The general consensus was that annual retesting was appropriate because of international evidence of the need for calibration to reduce drift, i.e. that accuracy of BCS declines with time since training. However, participants in the BCS programme frequently state that annual onfarm retesting is excessive. Results from the NZ BCS certification assessments suggest that the

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practitioners to be trained and perform regular calibration. Although rural professionals (RPs), particularly vets, consider themselves well able to assist their clients to score their herds, farmers have little confidence. DairyNZ began to develop a BCS certification scheme in 2011. Initially, this was a one day training course aimed at improving the scoring capability of attendees (vets and other RPs), so that they could score a group of cows to within 0.2 of the trainer-derived mean for the group. However, most RPs believed they were fully competent and therefore did not need to attend training. In autumn 2012, a BCS operator test scheme was piloted, which assessed individuals for their ability to score a group of cows (i.e. mean and range) as well as their ability to score individual animals. A ‘gold standard’ team provides the model scores

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DAIRY NEWS SEPTEMBER 27, 2016

ANIMAL HEALTH // 25

e shaping up better scoring of most assessors changes relative to the DairyNZ reference standard from one assessment to the next. Additionally, assessors tend to underscore cows with high BCS and over-score cows with low BCS. Even for candidates who had passed, and had an acceptable difference from the gold standard overall, scores were biased toward the herd average, and the range of scores allocated to the same cow by different assessors was more variable at the extremes of BCS. This highlighted the importance of re-calibration and re-testing to maintain high scoring accuracy among certified assessors, and the need to expose them to unfamiliar BCS scores in between on-farm assessments. At the launch of the DairyNZ BCS certification scheme, the gold standard team consisted of five DairyNZ animal hus-

bandry extension specialists. To facilitate greater flexibility, RPs with a history of BCS accuracy were invited during 2015 to join the gold standard team. Once certified to the gold standard, these additional trainers have been helping to run training and assessment days in their regions. Every six months the whole team reconvenes to repeat BCS calibrations and for reassessment. The calibration consists of hands-on scoring of a range of cows in a vet race, openly discussing all eight points of each cow, using the DairyNZ BCS Made Easy field guide, and scoring 80 cows in a paddock. Most of the gold standard candidates also spend time scoring alongside one of the DairyNZ team in the months beforehand. For the gold standard assessment each candidate scores a whole herd of 300-600 cows during

milking, followed by hands-on scoring of 15–20 cows in a vet race. The candidates’ scores are then compared with the modal score generated by a group of gold standard scorers (minimum n=5), who have been accepted to this standard for at least 12 months. To

pass the gold standard, a candidate must achieve 75% agreement in a range of criteria, whereas regular certification requires 50% agreement. There are currently 12 gold standard scorers in the team – five DairyNZ extension specialists and seven contracted assessors.

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THE UPTAKE by farmers of the BCS system has been encouraging, say Leach and McGowan. The BCS management initiative has exposed farmers in most regions to the benefits of using a certified assessor to help manage BCS. In the 2014-15 season, 21% of 485 surveyed farmers reported they used a certified assessor. The true proportion is likely to be higher since many are unaware that assessors are certified. Also, 53% of farmers believed that assessors provide BCS as a ‘value-add’ service, and are unlikely to query the credentials of an assessor if they are not paying specifically for the service. There were 223 certified BCS assessors as at the end of March this year and a total of 676 rural professionals were recorded as having engaged with the programme since its launch in 2012-13. Over the past 12 months, the scheme has been trialling an online calibration tool, to determine whether it may be used to maintain accuracy over time and potentially to extend the interval between onfarm assessments for those who demonstrate continued accuracy. “Unfortunately, the trial has been plagued with technical issues which were not apparent during piloting,” they say. “Consequently, the calibration is not developed and proven to the point that it could be relied on for either of the intended purposes.” In a recent survey of participants in the programme, 75% of respondents supported some use of online calibration, including further development so that it performs as originally intended.

ACVM: A10249. ® Registered Trademarks. Schering-Plough Animal Health Ltd. Phone 0800 800 543. NZ/ALCE/0716/0010

DAIRY NEWS SEPTEMBER 27, 2016

26 // MILK QUALITY

Take care with heifers AFTER CALVING,

suitable for the herd. for an individual herd Some practical and heifers are often will depend on: ■■ Gap in performance uncomfortable because of highly effective ways to swollen udders (oedema), prevent mastitis in heifers between incidence of include: and may be difficult to clinical mastitis and ■■ Using internal teat move, handle and milk industry targets. ■■ Costs, potential risks out. sealant about four For young cows calving weeks before the and likely benefits of for the first time, the planned start of each approach. ■■ Availability of milking routine is a new calving. ■■ Spraying teats experience. infrastructure for safe It takes about two administration of with normal teat weeks for most heifers to internal teat sealants to disinfectant two-three establish a quiet, reliable heifers pre-calving. times per week for the response to milking. last three weeks before ■■ Opportunities to teat Milking staff spray regularly must be patient before calving. ■■ and gentle during It takes about two weeks Labour for most heifers to establish availability to this period, to maximise a quiet, reliable response to pick up newlyproduction, born calves milking. Milking. minimise milking twice per day times and reduce and bring risk of injury to milkers animals to be milked. calving. ■■ Picking up calves twice and animals. Herds experiencing Extra labour may be more than 16 cases of daily and milking required at calving time. clinical mastitis per 100 animals within 9-12 Choose the heifer preheifers within the first hours after calving. calving management most ■■ The choice of strategy two weeks of lactation (or

eight cases per 50 heifer calvings) should consider ways to reduce heifer mastitis. Discuss options and potential costs with your veterinarian. Use of antibiotics in heifers at calving time is not recommended due to high costs and the risk of antibiotic residues in milk. It’s also important to train heifers in the milking area before calving. It takes about two weeks for heifers to familiarise themselves with the surroundings of the milking area and entry and exit routes, and to establish a quiet, predictable routine. To maximise production and minimise risk of injury to milkers and animals, milking staff must be patient and gentle

Heifers with swollen udders may be difficult to handle and milk out.

during this time. The first two weeks of milking can be made a lot easier if heifers are trained prior to calving, starting with just walking to the dairy yard and holding them for a short period, building up to turning on machines and walking

them through the dairy. Take this opportunity to teat spray. Using an internal teat sealant in heifers can also be the time to familiarise heifers with the dairy and yards four-six weeks before calving. Take your time moving

animals into the farm dairy -- don’t rush. This minimises injury to udders and teats, and contributes to cows being comfortable during milking. Encourage the co-operation of the cow by gentle animal husbandry – don’t rush.

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CALM COW WILL BE PRODUCTIVE UNEXPECTED NOISE and movement can cause cows to be fearful. Fearful cows will not let down their milk. Ensure all staff follow a calm and consistent routine when handling stock. Attend to heifers with severe udder oedema; if heifers are tight with udder oedema prior to calving, milk them out and feed saved colostrum to their calves. If they are very uncomfortable, seek veterinary advice. Prevention is better than cure, so discuss heifer nutrition with your adviser to ensure diet does not contribute to severe oedema. If heifers are very uncomfortable, seek veterinary advice. Ensure all quarters of all cows are milked out Ensure each cow has a milk let-down at each milking, particularly heifers. Use let-down hormone (Oxytocin) if necessary. Avoid over- and under milking. •Article sourced from DairyNZ. wwwdairynz.co.nz

DAIRY NEWS SEPTEMBER 27, 2016

MILK QUALITY // 27

‘Go the extra mile in feeding those heifer obscenely well’ The first six months are critical and you only get one shot at it. Compensatory gain is a myth. I’ve coached farmers to ad lib feed their heifers and to keep them on milk for at least four months, preferably 6-8, just as nature would. The feedback is that the size and condition of the heifers fed in this manner is spectacular. Have we been consistently underfeeding our calves for our own convenience but to our own detriment? Have we been seeing average and assuming its normal? For every kg of average daily gain pre-weaning, a heifer will produce an additional 32kgMS in the first lactation alone. On a $5 payout that’s around $160 value for each kg of heifer weight gain before weaning. If you do the maths you realize that the best place for the milk you produce is inside your replacement heifers. According to Cornell University, the increased milk production continues for life of the cow. So go the extra mile in feeding those heifers obscenely well. If you’re conventional and tempted to give calves antibiotic milk, don’t. It just sets the stage for early antibiotic resistance

Phyllis Tichinin, True Health Animal Remedies.

and may contribute to heifer mastitis. Your heifers are your most valuable asset, after your soils. Don’t treat

either of them like dirt. If you’re considering a transition to organics, begin now to give your heifers the best possible

worth it. • Phyllis Tichinin is the founder of True Health Animal Remedies. www.truehealth.co.nz

start so that they can form the core of an immune competent herd that easily maintains condition and fights off bugs. It’s

grains. A basic tenet of organic farming is to keep it as natural as possible. So how does mother nature ‘raise’ calves? 24 hour a day, ad lib access to milk, green and dry grass to nibble on, an exposed streambank to lick for extra minerals and sunshine from day one. Yes, I fully understand how calves need shelter and how all the advertising says to get them on calf pellets right away for good rumen development and weight gain. But about 75% of replacement heifers are not making either weaning or mating target weights. So, is the recommended system working well? Inexpensive 200L plastic drums with rubber teats around the middle with surgical tubes to the bottom work well for self feeding. Or use an existing calf feeder but keep it topped up. These babies need to drink as much as they desire on their own schedule, in a leisurely fashion, in order to thrive. They must lay down initial fat cells very early in life. And brace yourselves because a two month old Jersey calf is quite capable of consuming 10-12 litres of milk a day.

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AS DEMAND for organic milk rises worldwide, the value of certified cows and wellraised, long-lived organic heifers is also going to rise. Even with the jaw dropping $9.20/kgMS payout for organic milk, the farm economists still tell us that the most powerful predictor of long term dairy profit is not the milk price but the longevity of your cows. So having cows that efficiently produce milk and a calf each year for 10+ lactations is more important than any other factor in the dairy long run. Twenty to thirty years ago our herds used to regularly contain cows 12 to 16 years old. According to Massey University animal nutritionists, our national herd average number of lactations per cow is 2.5 contrasted with the US confinement average of 1.8. What happened? I think the two main contributors to the drop in cow longevity have been the shift to a urea driven fertiliser approach, which has depressed the nutritional quality of our pastures, and the change in calf feeding practices to 4L once a day ASAP and early introduction of

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DAIRY NEWS SEPTEMBER 27, 2016

28 // MILK QUALITY

Winning the battle against mastitis DURING LACTATION,

cows can become infected with contagious or environmental mastitis bacteria. Contagious mastitis is caused by bacteria such as Staph. aureus and Strep. agalactiae that are transmitted between cows during milking. Occasionally Strep. uberis and Strep. dysgalactiae (normally classified as environmental pathogens) can also be transmitted between cows during milking. Environmental mastitis is caused by bacteria such as Strep. uberis and E. coli. The primary source is faeces and mud, so wet and dirty conditions are a risk for this type of mastitis. Prevention of environ-

mental mastitis involves minimising build-up of mud and manure in the cow’s environment to keep udders and teats clean and healthy. This applies especially to areas with high cow traffic, such as water troughs, gateways, collecting yards, feed pads and housing systems. Subclinical mastitis during lactation can also be caused by bacteria known as the minor pathogens such as CNS and C. bovis.. These bacteria usually cause subclinical mastitis and contribute to a cow’s rise in SCC towards the end of the lactation. They are often found on the skin of the cow so prevention is through good teat disinfection after milking.

Use good milking technique and a consistent routine. Contagious mastitis is caused by bacteria such as Staph. aureus and Strep. agalactiae that are transmitted between cows during milking. Occasionally Strep. uberis and Strep. dysgalactiae (normally classified as environmental bacteria) can also be transmitted between cows during milking. Milk from one infected quarter is spread to the teat skin of other quarters and cows by dirty hands or gloves, by teat cup liners and cross flow of milk between teat cups. Damaged teat ends are particularly susceptible to infection. Malfunction or poor use of the milking machine can contribute to

transmission of infection. Prevention of contagious mastitis involves: ■■ disinfection of teat skin after milking ■■ keeping hands and gloves clean during milking ■■ careful use of machines that are operating well ■■ keeping cows settled and teat ends healthy. ■■ Ensure that cows enter the farm dairy willingly by maintaining good stockmanship. Calm cows dung less frequently, kick the cups off less often, have a better milk let-down and move through the dairy more easily than stressed and anxious cows. Cows that are fearful produce adrenalin that prevents milk let-down. Minimise fearful experi-

Minimise build-up of mud and manure in cow’s environment to keep milk clean.

milking reduces new infecular fore-stripping of all ences in the dairy such tions due to cow-assocows in their first month as yelling, use of sticks, ciated bacteria such as of lactation, or all lactadogs or electrified backStaph. aureus by 50% and tion. ing gates. is also important in reducFore-strip all cows Foremilk strip cows to ing Strep. uberis infecwhen clots are found on detect abnormal milk. tions. It is one of the most the filter sock and/or the Foremilk stripping, effective cell count and bulk milk SCC shows a or fore-stripping, is the mastitis control measures sudden increase. single most effective way available, but it only works Use post milking teat to detect clinical mastitis. if it is done thoroughly. Consider fore-stripping all disinfection on every teat Teat disincows in their first fectants must month of lactation After milking, bacteria be diluted to and in periods of multiply on the teat skin the correct high risk. and may extend into the concentration Periods of high teat canal. If the whole for use. The risk include the surface of each teat is active ingrecalving period, or dients often when the clinidisinfected immediately cal case rate is too their disafter milking, this spread lose high, or when the infectant abilcan be minimised. bulk milk SCC is ity over time too high. after mixing, after every milking. Routine fore-stripping and if you include addiBacteria in milk from of cows in the first month tives to improve skin coninfected quarters may condition (emollients) these of their lactation also taminate the skin of many may reduce disinfectant helps accustom them to having their teats touched other teats during milking. activity. Any contaminaFor example, after a liner and provides an effective tion with milk and other has milked an infected signal for milk let-down. organic material also quarter, bacteria may be If done poorly, howreduces activity. Correct transferred to the next ever, fore-stripping can mixing each day is best contribute to the spread of five-six cows milked with to get maximum perforthat cup. bacteria from teat to teat mance. After milking, bactevia milkers’ hands. Good Some emollients are ria multiply on the teat milkers rinse and disinnot suitable for use with fect their gloves if they get skin and may extend into particular disinfectants. the teat canal. If the whole milk on them. Failure to cover the surface of each teat is disSmartSAMM strongly whole teat of every cow at infected immediately after every milking and poorly recommends fore-stripmilking, this spread can be diluted teat sprays are the ping all cows in the colosminimised. Teat disinfectrum mob at least once a most common errors in tion also helps to keep teat teat disinfection. day. skin supple and healthy. Farmers should con@dairy_news Teat disinfection after sider systems to allow regfacebook.com/dairynews

USE A REGISTERED TEAT DISINFECTANT SELECT A product based on duration of activity, speed of bacterial kill and ability to function in the presence of organic matter. For mixing purposes, farm water must be of high quality. Use this checklist to select a teat disinfectant for your farm: ■■ Effectiveness: generally a part of registration, although professional advice may be required for unusual bacteria

■■

Suitability for your farm water

■■

Occupational health issues such as staff skin reactions

■■

Teat skin reactions

■■

Visibility on teat skin

■■

Price per cow per milking

■■

Shelf life: will the quantity be finished prior to expiry?

■■

Milk residues: a condition of registration and on label use.

DAIRY NEWS SEPTEMBER 27, 2016

MACHINERY & PRODUCTS // 29

Case Maxxum 125

Zero grazing needs reliability SWAPPING A career in the Department of Correc-

tions for farming dairy goats was a radical move for Frans Osment five years ago. He first went into an equity partnership, and eventually bought his partner out. Osment Dairy Goats, just north of Cambridge, runs 650 milkers and 250 followers on 56ha. The heart of the system are large volumes of cut-andcarry fresh feed for the flock daily, requiring machinery that is efficient and reliable. Arriving in the Waikato from Otago, Osment had no

Fitted with a self-levelling Sigma loader, the tractor earns its keep handling baleage, grains and shavings for the shed. brand preferences so it was a no-brainer to deal with the Case IH dealer, Giltrap AgriZone, on his doorstep. Nowadays two 6-cylinder, Case Maxxum 125s take care of the workload, one with a cabin, and the other a rare beast with a basic ROPS layout, which Osment claims “fills the bill to a T”. Both tractors have front linkage and PTO, to ensure there is always cover for the feeding operation, which in practice relies on a front-mounted, 3m mower to knock down the crop, then a Giltrap feed wagon fitted with an in-line Silerator specially built by the dealer. Osment favours the 6-cylinder tractors because “they are always boss of the job” and in particular have plenty of lugging power, especially for the undulating terrain on the farm. The ROPS tractor also scores highly with its flat platform easily accessed from either side, excellent visibility in paddock and yard, and allowing the operator to hear any “strange noises” that might be muffled by a cab. Talking of noise, he also smiles when the “growl” of the lusty 6-cylinder hits his eardrums. Crucial in the choice of the ROPS unit was the folddown safety frame that makes the tractor only 2.6m high, allowing easy access to the deep litter goat sheds that need cleaning out bi-annually. Fitted with a self-levelling Sigma loader the tractor earns its keep handling baleage, brewers grains and shavings for the sheds. Osment believes in having servicing done right on the clock hours, because of the nature of the operation and he likes to see his investment hold value; he sells them when they hit the 3000 hour mark.

KV 9590 Hydro helps operators save time.

Two into one made easy MARK DANIEL markd@ruralnews.co.nz

WITH THE start of grass harvest just around the corner, twin rotor, centre delivery rakes will be getting pulled out of winter storage for a fettle up or, if Christmas has come early, new toys will be getting dropped off in yards around the country. Distributed by Power Farming, Kverneland’s latest arrival here is the KV 9590 Hydro, with key features which make the machine more durable and help operators save time in a busy period. A newly designed frame carries two 3.85m diameter rotors which

achieve an adjustable clearing width of 8-9m and a hydraulically adjustable swath width of 1.2-2.2m for a perfect feed to balers, harvesters and wagons. A clever design sees the rear axles of the machine having the ability to ‘lower’ by up to 50cm, which has the advantage of giving the machine a sub-4m transport height without the need to remove tine arms. This lowered centre of gravity has additional benefits: improved comfort and safety on the road and greater machine stability when moving between paddocks. An active rear wheel steering system ensures the machine tracks the pulling tractor by allowing up

to 80 degrees of wheel movement, so it should prove useful in small or irregular shaped paddocks. The machine also features the Pro-Line drive system with rotor gearboxes using fully enclosed, oil immersed crown wheel and pinions lubricated in all conditions and maintenance-free. Beneath the rotor gearboxes, 400mm diameter, hardened steel cam tracks offer smooth control of the tine arms for a gentle action on the crop, and extended resistance to wear and tear. Bi-tangential tine arms use Super-G tines to gently sweep the crop into the swath; these can be quickly replaced if they suffer any impact damage. Contour following is by the

aptly named Terra Link Quattro system which can act in three dimensions to ensure accurate tine control and minimal soil contamination. Each rotor uses six wheels for support, with the front items are mounted with swivels to allow the machine to operate through curves and corners. Rear wheel equipment on the chassis takes the shape of 380mm tyres, helping with weight distribution and machine stability. All functions can also be activated from the cabin to save extra minutes during the day, and that same control allows single or dual lift rotor control for small or awkward shaped paddocks. www.powerfarming.co.nz

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DAIRY NEWS SEPTEMBER 27, 2016

30 // MACHINERY & PRODUCTS

Tractors appear to be hot stuff MARK DANIEL markd@ruralnews.co.nz

WHEN THE website says

100hp cab tractor and a self-levelling front loader for $59,900+GST, you have to look closer at the Mahindra mForce 100P –

right? Standard spec runs to a 4-cylinder 4.4L Perkins engine mated to a powershuttle/powershift transmission with 32F and 32 R speeds including creep, a two stage hi-lo shift, and both key items covered by a 3-year/2000

hour warranty. Electronic 3pt linkage gives a 3.1t lift capacity at the rear; and that loader has a third service and can lift 1870kg safely. Open centre hydraulics provide the industry norm of 60L/ min; the PTO has electrohydraulic engagement and

single speed 540rpm. The driver gets to ride in a 6–post cabin, complete with heating and air conditioning and FM radio and CD player. Instruments are just the basic necessities but who wants more than that in a utility tractor?

Mahindra’s latest offering – 100hp cab tractor.

One man who can spot a bargain is Mark Ofsoske, who farms several properties in East Waikato/ Southern Coromandel; though he claims not to like tractors he runs a

mixed fleet of 14 units. Ofsoske likes to control his own destiny, doing mowing, baling and wrapping. He was quick to see the potential of these wellappointed utility trac-

tors and now runs three Mahindras. “These tractors do everything I want and offer truly exceptional value for money,” he says. www.mahindra.co.nz

Stretching beyond the horizon WITH MAHINDRA claiming

to be the world’s largest manufacturer of tractors by volume, it’s interesting to see where it’s come from since its start in 1946, building under licence versions of the Willys Jeep. Today’s tractor business dates from 1963 when Mahin-

dra formed a joint venture with International Harvester to build the ubiquitous B275, churning out a staggering 8500 annually. Over the years as production increased it bought out Jiangling in China, TYM in Korea, and recently started a joint venture with Mitsubishi Motors in Japan.

Today, as well as the Indian, Korean and Chinese factories, the company has assembly plants in Houston, Texas; Red Bluff, California; and Chattanooga, Tennessee, and distribution places at Bloomsburg, Pennsylvania and Lyons, Kansas. In 2013, Mahindra produced

a staggering 619,000 tractors – 29% of world output; at home they held at least 40% market share. Worldwide the business turns over US$18 billion from its ten sectors – farm gear, automobiles, motorcycles and information technology.

Mahindra claims to be the world’s largest manufacturer of tractors.

Check out our websites BREAKING NEWS MANAGEMENT STORIES MARKETS & TRENDS MACHINERY REVIEWS COMPETITIONS AND MUCH MORE...

www.dairynews.co.nz

DAIRY NEWS SEPTEMBER 27, 2016

MACHINERY & PRODUCTS // 31

Now back to the woodpile MARK DANIEL markd@ruralnews.co.nz

WITH SUMMER to hand, forward-thinkers will be replenishing their woodsheds – a backbreaker or a breeze depending on the machinery used. Hefty splitters – vertical or horizontal – from Daytech Engineering, Masterton, lean towards the breeze outome. At the heart of the machine a double-skinned main beam ensures strength and durability,

while the business-end brandishes a unique, fabricated, dish-shaped splitting wedge with a sharpened BIS alloy leading edge. The wedge also uses extra thick wear strips and bears down on a 50mm thick anvil for fast, jamfree splitting Mounted on an integral chassis and running 12 inch wheel equipment mounted on 1500kg rated hubs, the units are easy to tow and position for splitting, the drawbar including a jockey wheel set-up.

The standard hydraulics are powered by a quality 9hp 4-stroke engine driving a two stage Barnes hydraulic pump for fast cycling. The

pump acts on a 4 x 24 inch hydraulic cylinder to drive the wedge. An oversize hydraulic reservoir and large bore hydraulic pipework

Hefty wood splitters to make your work easy this summer.

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try is doing it tough: most markets declined in firsthalf 2016 (FH16) and the industry predicts worse in the second half. Germany and France predict total sales will drop 9% and 2% respectively, but Spain, bucking the trend, expect an increase for the year of about 9.5%. The big four tractor buying countries Germany, Italy, UK and France, report FH16 sales of 14,230, 9096, 5892 and 16,166 units respectively; the first three showed declines of 10-12% but, interestingly, France showed an increase of 12%. The six-month total of 47,400 shows a persistent decline during the last four seasons, versus sameperiod sales of 56,500 units in 2013. The decline results from low commodity pricing, in particular milk, given that dairy farmers are key buyers in the 80-200hp market. Some commentators predict bigger drops in SH16 because the present wheat harvest is modest in yield and quality Combine harvester sales are down 8.3% across the region, and forage harvester sales are 12% down. Mower and baler sales reflect the state of the dairy sector: sales of both are behind by 9%. Source: CEMA – Mark Daniel

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DAIRY NEWS SEPTEMBER 27, 2016

32 // MACHINERY & PRODUCTS

Mulch or chop with ease MARK DANIEL markd@ruralnews.co.nz

Maschio mulchers and choppers are about to hit the market with more features.

WELL KNOWN for its Maschio power harrows and rotary hoes, importer and retailer Power Farming looks set to broaden its offering with the company’s ranges of mulchers and choppers.

Following development and product testing in the Australian market, the broad range should do all, including grass mowing, mulching vineyard prunings and cereal residue chopping; there are machines to suit tractors 25-200hp in the case of mulchers or 300hp for choppers.

HARD WORKING. EASY TO OWN.

Built with strength and durability in mind, designs are focused on reducing stress in key mechanical components with clever engineering and oversized material dimensions. For example, the main rotors have pressed steel supports inside the mulcher frame in a position much less likely to experience failure than externally mounted bearings. Brava mulchers and Chiara choppers are designed for tractors 25-90hp, and should prove valuable to viticulturists, orchardists and lifestyle block dwellers who need to deal with prunings up to 60mm thick or keep grass or weeds under control. In the 50-150hp sector are the heavy-duty Tigre and reversible Bisonte mulchers and the high

clearance Tornado straw chopper and aimed at farmers and contractors. Suitable for grass work and tougher jobs like gorse, scrub or bush, their oversized components can be used by larger tractors to achieve higher daily work rates. At the upper end of the ranges the reversible Buffalo chopper or the Tornado and Gemella mulchers are aimed at bigger farmers or contractors; the Buffalo can handle 300hp and master very tough conditions. For versatility to cope with differing situations, the offset Giraffa SL or the heavy-duty Giraffona mulcher models deal with grass or prunings and can work at greater angles on steep verges or slopes. 605-365605-365

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AUTOMOTIVE ACCESSORY company, Best Bars 909HD PASTURE TOPPER† PER $ WEEK*

It’s never been easier to get into a John Deere. With a 3.99% p.a.* ﬁnance rate on our tractor + implement packages, you’ll have everything you need to get the job done, at a price that works for you. Get in quick, offer only available until 31 October 2016.

Drop into your local participating John Deere dealer, or visit us at JohnDeere.co.nz/HardWorking to see more package options. Some products, options, attachments or accessories may not be available in all regions and from all dealers. Images used are for illustrative purposes only and may show features or attachments not included in the advertised price. Products, speciﬁcations and availability are subject to change without notice. *Conditions apply. Finance available through John Deere Financial Limited to approved commercial applicants only. Repayments based on a price of $103,371 for 6100D cab tractor (excluding front weights and rear wheel weights) with H260 Non Self-Levelling (NSL) loader, $5,089 for a pallet fork and $16,105 for a pasture topper. Price does not include pre-delivery, freight, assembly or dealer charges, these are determined by your dealer. Implements and attachments sold separately. Calculated on a 60 month term at an annual percentage rate of 3.99% with 40% deposit and GST back. Fees and charges apply. Valid on eligible equipment delivered no later than 31/10/2016. Offer only applies when bundled as a single purchase. If not amended or withdrawn earlier, the promotion expires on 31/10/2016. †Implements shown are manufactured by FieldQuip and are available at participating dealers. TRACTA57340-6100D-NZ-DN

Ltd, has introduced a series of upgrades at its high-tech factory in New Zealand, which it is claimed, will result better quality tow-bars. Based at a modern facility at Wiri in South Auckland, the upgrades include improvements to the welding process, new plasma steel cutting equipment and a more comprehensive powder coating system. These investments follow on from the installation of a brand new paint shop at the site in 2014 costing $750,000. The welding process has come in for the greatest attention at the factory, with six robotic welders and a seventh is about to be added to automate the most repetitive tasks, ensuring product consistency and freeing up skilled welding staff for more specialised roles. Further investment in new, manual welding machines improves the ease of work and efficiency, while also improving the working conditions for workers. Three new, plasma cutting machines help deliver more accurate steel plate to the welding shop in less time, which is especially important, since the company has now introduced five night shifts per week for its welding team in order to keep up with customer demand for tow-bar products. In the paint shop, the powder coating process has been upgraded to include a three-step pre-treatment before the under-coat, and then the final coat, which is baked at 240 deg C, to help ensure a superior finish that complements modern vehicle design and looks good for years to come.

GAIN WITH Use SustaiN and get the benefits of reduced nitrogen loss and greater application flexibility.

AND AGAIN WITH With N-Guru we can show you how changing the application rate of nitrogen across your farm may give you even more gains.

To place your SustaiN order and request an N-Guru consultation call your Ballance Nutrient Specialist on 0800 222 090

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Mark and Shay Ingram - 338Ha Tokoroa Dairy Farm * Based on a $4.75 payout ($/kg MS) 5 applications per year

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Gain again... with SustaiN and N-Guru

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