Dairy News 09 May 2017

Fonterra faces A$60m payout bill. PAGE 3

JERSEY BREEDING GIRL ORGANICS GOATS Saanen is tops PAGE 28

MAY 9, 2017 ISSUE 378 // www.dairynews.co.nz

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Fonterra faces A$60m payout bill. PAGE 3

JERSEY BREEDING GIRL ORGANICS GOATS Award winning Saanen is tops PAGE 28

milk PAGE 6

MAY 9, 2017 ISSUE 378 // www.dairynews.co.nz

THE BIG CHEESE

Cathy Oakley, Okaihau in the Far North, is the best sheep milk cheese maker in the country. PAGE 5

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DAIRY NEWS MAY 9, 2017

NEWS  // 3

Aussie suppliers may jump ship to Fonterra SUDESH KISSUN sudeshk@ruralnews.co.nz

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from a potential exodus of farmer suppliers from Australia’s largest dairy processor. Murray Goulburn last week announced it will close three plants as part of a financial restructuring. Bonlac Supply Company, whose 1500 members supply milk to Fonterra in Australia, says it will contact disgruntled MG suppliers in the coming months. Bonlac chairman Tony Marwood says while it is too late to talk to new suppliers for the next season starting June 1, it will be talking to MG suppliers in June-July. “Farmers show their allegiance to milk companies by supplying local factories; MG is closing three factories leaving some suppliers without a local factory,” he told Dairy News.

MG will start closing the Edith Creek site in Tasmania and Rochester and Keiwa sites in northern Victoria in August this year; about 360 employees will be laid off. MG says the closures will improve the future processing footprint by an annualised net gain of A$40 million to $A50m. MG expects to spend A$60m to enable the closures. Marwood says the whole Australian dairy industry is facing challenging times and last week’s MG announcement is causing “further upheaval”. He says farmers are waiting for milk companies to announce their opening price for the new season. “It all depends on how the opening milk price looks; if the price is not competitive, farmers will continue to lose money.” MG’s decision to close three factories is being welcomed by some farmer suppliers. South-west Victorian dairy

farmer and long-time Murray Goulburn supplier John Hateley says the decision to close three factories and cut costs might be disappointing for the areas but says it is logical for the cooperative. “I had no doubt Koroit would stay but some of the facilities needed a lot of money spent on them to bring them up to scratch so it was a logical decision,” he says.

“They can do the products elsewhere and they’ve just got to contain costs.” “I think they’ve turned the corner and are on the right path as long as they come out with a competitive opening price. I still like the cooperative model if it’s run properly.” A Fonterra spokesman says it anticipated several of MG’s announcements. “And we’re working through what this means for our farmers and our Australian business. “We are meeting with some members of the BSC board, as they are an important stakeholder in this, and we will provice an update as soon as we can.” Bonlac Supply Company chairman Tony Marwood.

RIVAL’S OVERPAYMENT BOTCH-UP HURTS CO-OP FONTERRA FACES forking out an extra A$60 million to its 1500 farmer suppliers in Australia this season. This results from Australia’s largest processor, Murray Goulburn, scrapping its attempted clawback of A$183m in milk price ‘overpayments’ from farmers. Bonlac Supply Company, which represents Fonterra milk

suppliers in Australia, held talks with the co-op last week. Bonlac chairman Tony Marwood told Dairy News it is “working through the issues” with Fonterra. “We can’t say more at this stage.” Fonterra is legally obliged under a 2012 milk supply contract — the Bonlac supply-agency agreement — to match or better the farm milk price paid by Aus-

tralia’s biggest dairy group and price setter, Murray Goulburn, at all times. MG’s announcement last week effectively adjusts the average milk price the company paid its farmers for the 201516 f­ inancial year significantly upwards, from A$4.95/kgMS to A$5.53/kgMS. Fonterra’s milk price for the season is A$5.20/ kgMS.

Murray Goulburn is being sued by the Australian Competition and Consumer Commission which alleges it misled farmers about the milk price it expected to pay them for the 2015-16 season. It alleges that MG told farmers a final milk price of A$5.60/ kgMS was the most likely outcome for the season, when that was not true.

DAIRY NEWS MAY 9, 2017

4 //  NEWS

Prices stable, even rising PAM TIPA pamelat@ruralnews.co.nz

THE OUTLOOK for the coming dairy season is positive with prices stable and lifting slightly, several economists say. Bank forecasts for the farmgate milk price for 2017-18 season range from $6.10/kgMS to $6.75/ kgMS. Last week’s GDT Event price index increase of 3.6% was higher than anticipated -- the fourth consecutive rise and the biggest increase so far this year. The whole milk powder index was up 5.2%, to an average price of US$3233/tonne. Rabobank dairy analyst Michael Harvey says milk price is a positive story. “We see market conditions remaining elevated through next season and helping deliver a slightly higher milk price,” he told Dairy News. Rabobank has $6.25/kgMS pencilled in for the 2016-17 season, a “slight improvement on where things are at”. The past two season

have been challenging for farmers so higher milk prices will be welcome. “It will help farmers get their businesses back on track by paying down debt and rebuilding equity positions and even catching up on farm maintenance... things that may have been deferred through the down cycle,” Harvey says. “So we are suggesting the outlook for the next season is positive for New Zealand farmers because of higher milk prices and because a lot of input costs should remain reasonably affordable by historical standards. “We are talking about fertiliser costs still being relatively affordable and palm kernel as a feed source is still quite cheap. Good seasonal conditions leading up to the spring flush will point to a good season for profit. “The [upwards] correction we have had in prices has largely been driven by farmers in exporting regions around the world reacting to low milk prices and cutting production and that has

tightened them up. We are seeing signs of China continuing to buy product and we think that will continue through the year. There are still pockets of demand in South East Asia; buyers are still looking to stock up on milk powder. “The GDT result last week was more a reaction to the poor weather NZ had in April which meant the volumes being sold

through the auction were reduced. That caught some buyers off-guard and made them a bit nervous.” Rising milk prices in export regions globally always has the potential to “turn on the tap”, he says. “But we still take some comfort [from the thought that] the price signals are not really strong enough to drive a

strong reaction to supply growth over the next 12 months. ANZ rural economist Con Williams says recent gains combined with NZD weakness have raised opening milk price forecasts to the low-$6/kgMS. “This combined with the likely upside to the season just ending means sector cashflow prospects are looking healthy for 2017-18,” he says.

Michael Harvey, Rabobank.

Ploughing ahead SEAN LESLIE and Kaye Walker from Middlemarch won the Rural News Group sponsored horse ploughing competition for the second year in a row at this year’s national ploughing championships at Kirwee, Canterbury. They won the event last year at Manawatu but it will be their last competition as a team: Kaye is calling it quits and handing over to a younger person. But Sean says he hopes to be back for next year’s event in Southland. There were good crowds at the two day event with the fine autumn weather and beautifully set up plots making for a great occasion. Ian Woolley of Blenheim, who won the conventional class, described conditions at Kirwee as perfect with the ground conditions superb and the event itself brilliant. “The ground was even and the plot great; the venue plus the crowdh made it a great event,” he says.

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DAIRY NEWS MAY 9, 2017

NEWS  // 5

Big cheese of the Far North Cathy Oakley had to be cajoled into entering her Just Ewe Farmhouse sheep milk cheese in the New Zealand cheese awards and it won the Gold Medal Champion Sheep Cheese and she was named Cheesemaker of the Year – only the second woman to win the title. Reporter Peter Burke called recently at her Far North farm. WINSAM FARM at

Okaihau, between Kerikeri and Kaikohe, is home to Cathy Oakley and Rod Clarke and the two dogs -- Winston and Samara -- they brought back to NZ in 2001 from Canada where they had been living. Rod jokes that their Winston is bigger and a bit more intelligent than the other well known Winston in Northland. UK-born Cathy met Rod in Canada; returning to NZ they had a dairy farm at Waiuku, later deciding to farm goats, the start of Cathy’s foray into cheesemaking. But they decided to move to Okaihau and, as you do, they brought along the house too, relocating it, some goats and a few milking ewes. The house is a beautiful two storey building sited on the side of a hill with stunning views to the east. They own 16ha and lease a further 115ha where they run their 150 East Friesian milking ewes. The move to sheep and cheese making was determined largely by their location, says Cathy. “When we moved up here we looked into goats, but being so far north it was too far away for the milk to be picked up. Whangarei was the furthest north they would go for pick-up and we would have had to have 400-500 goats which was impos-

Big cheese: Sheep milk cheese makers Cathy Oakley and husband Rod Clarke.

sible given the size of our property. “At the time we thought it may be more sensible to have the sheep because we could also sell the lambs for meat and have the milk for cheese. It was also a time when the sheep milking was just starting to be a little bit more interesting,” she says. During her days with the goats, Cathy had developed an interest in cheesemaking and this continued with the sheep. She read books, searched the internet and attended a course in cheesemaking. The first cheeses were made in the kitchen of their home but as the praise for Cathy’s cheese grew, she and Rod realised that to make a living from sheep cheese they needed better facilities. So four years ago Rod managed to buy a second-

hand goat milking plant which they installed in their shed, but the challenge was finding suitable vats to store the milk. “We couldn’t find anything suitable in NZ and couldn’t find anything used anywhere in the world including the US. I did find some vats there but the power system was different which means the refrigeration motors would have burned out quickly. Eventually I found a company in Greece called Milkplan and I got two 300L refrigerated milk tanks from them for a quarter of the cost of a NZ unit. They were great to deal with and as a result I am now their distributor for their sheep and goat milking equipment in NZ,” he says. The other focus for Rod has been the genetics of the flock. They

started off with pure-bred East Friesians plus a flock of Border Leicesters and bred up the progeny to pure-bred status at the same time as buying in more pure-bred East Friesians. “I am looking at the genetics that are coming in as embryos. I am reluctant to buy from the South Island because it has been proven they don’t shift well up into the north in particular. So I figure if we get embryos they will be born here and that will work better.” As the new equipment and stock arrived on Winsam Farm, Cathy was busy concentrating on her cheese making. To call her a perfectionist and her own best critic is an understatement. Cathy gave some of her cheese away, but sells some to a delicatessen in Auckland called The Dairy.

Cathy’s modesty about her cheesemaking skills were given a boost when Jean Mansfield, a home cheese maker, teacher, mentor and cheese judge visited their farm as part of a tour of NZ. Mansfield and her husband David stayed on the farm and saw firsthand their operation. But according to Rod, when Jean and David tasted the farmhouse cheese they said it was a winner and that Cathy should enter it in the cheese awards. The Farmhouse cheese produced by Cathy Oakley is based on the Welsh Caerphilly which is a semi-hard, white cheese that originated in the area around the town of Caerphilly, Wales. It is thought to have been created to provide food for the local coal miners. The unique flavour of the Farmhouse cheese probably comes from the plantain and mixed grasses and the rich volcanic soils of Winsam Farm. As well as pressure from Jean Mansfield, Cathy’s friends and those buying her cheese were adamant she should enter the competition. “For the last three years they kept saying how good it was, so in the end I decided to enter, as much a confidence booster for myself as to get feedback. I entered two cheeses, the Farmhouse and Cheddar which won a bronze medal. We also produce a Tomme, Piquant and Feta,” she says. The day before the awards were announced,

Cathy received a call from the awards’ public relations company asking if she would be attending. She said no, it was too far. Finally the PR person relented and told her she was the winner, but she was not to tell anyone else, including husband Rod. Ironically he was in Palmerston North that week attending the annual

sheep milking conference. For Cathy and Rod it is an unbelievable accolade considering the cheese was marked 100% by all 34 judges – a unique occurrence. Their win has created huge interest in the small sheepmilking community, in the wider cheesemaking industry and especially in the Far North.

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DAIRY NEWS MAY 9, 2017

6 //  NEWS

Switching to organic milk pays dividends SUDESH KISSUN sudeshk@ruralnews.co.nz

SWITCHING TO organic

farming is paying off for a Waikato farmer. John Vosper’s family farm Cleavedale in Matamata went organic in 2003 and two years ago launched the Jersey Girl

John Vosper loading Jersey Girl organic milk into the truck for delivery. PHOTO: LIFE AND LEISURE

Organics brand; now the bottled milk is sold North Island-wide and fresh milk is available from two vending machines in Tauranga and Mount Maunganui. The business won the outstanding producer dairy primary award at the recent Outstanding NZ Food Producer Awards. Vosper told Dairy News

the win affirms “we are on the right track; we are pleased to win award”. He sees a growing demand for organics in New Zealand. “Customers are increasingly concerned about where their food is coming from and how it is produced. Organic certification gives them assur-

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ance about environmental impacts and the way food is produced.” Vosper says the farm went organic “as it fitted our farming philosophy and we hoped to increase returns”. “Our milk is pasteurised to eliminate bugs; it is not homogenised. In the vending machine the milk is kept cold, dark and stirred. “Jersey Girl milk is audited to strict organic standards. You can be sure the milk is free of antibiotic, herbicide and pesticide residues.” The farm runs a herd of 250 pedigree Jersey cows, producing about 800,000L; surplus milk is sold to Fonterra. On the system 2 farm the Jerseys graze on organic pasture, supplemented with hay, silage and maize cut from local paddocks. A support block was used to graze replacements and produce silage. Vosper says after a series of dry summers the farm started growing maize for silage, giving more options for feed. “Maize paddocks are planted in permanent pasture consisting of a diverse species mix. After a few years of decreasing pasture production we now have a fertil-

iser policy of maintaining nutrient levels in the soil and spend above-average amounts on fertiliser.” The farm calves about 200 cows in spring and 50 in autumn; usually about 55 heifer replacements are reared. Cows are milked in a 20-bail rotary. Vosper says animal health is challenging at times as any animal that has a prohibited treatment has to leave the farm. “In future we will be placing more emphasis on animal health traits in sire selection. “Last October we did four weeks of Jersey semen followed by eight weeks of using short gestation sires. Our empty rate was 10%.” The Vosper family has been farming on Cleavedale farm for five generations. Vosper says the family loves organic dairying. “We love the land we live on and the animals that share it with us; we take pride in producing a top quality milk in a way that honours natural processes. “Organic production methods require committment and energy. There are no shortcuts, no artificial fertiliser, no production line fast tracking, no modifications.”

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DAIRY NEWS MAY 9, 2017

8 //  NEWS The recent floods in the North Island shortened the season for many farmers.

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AS NOW widely reported, dairy markets are in a somewhat balanced phase. Product supply has retreated as farmers worldwide respond to low prices, and demand has recovered thanks to those same low prices and a general rundown of inventories in key markets, especially China. Neither force has been enough to create a major price shock, so although some products (butter and skim milk powder) are trading at large premiums or discounts to average, the overall market is somewhere in the middle. Price shocks are, by their nature, difficult to predict. They’re usually brought on in turn by climatic, economic or political shocks, or by commodity bubbles. But the everyday ebbs and flows of supply and demand can also add up to unbalance a market. Milk supply is often where this happens, given the lagged response to market signals (caused by the nature of farming as a biological system). By the time the milk is produced and sold, the demand conditions that generated those prices have changed, and if everyone responded the same way at the same time, the overall response would effectively be an overreaction. The better the view of what’s happening in the market, the less chance there is of overreacting. The European Union has for some time been the elephant in the room in regards to milk production. The removal of quotas, coinciding with the loss of its largest market (Russia) and a broader commodity price trough have seen much attention focused on Europe in recent years. More recently, policy measures such as payments for farmers to reduce production, and the muchpublicised Dutch dairy cow cull have led to suggestions that European milk production will fall sharply. Then there was the impending seasonal flood of milk through the northern hemisphere spring, that put down-

ward pressure on commodity prices. So far in 2017, the reality has fallen somewhere between the extremes. Milk production has been relatively steady – about 1% below 2016 levels in February, and commodity prices have steadied after early-year losses. The intervention program has reopened, and skim milk powder is once again entering government storage, but many reports thus far indicate that only some contracts are trading at the floor price level. Nonetheless, eight rounds of tenders have failed to sell more than 40 tonnes of the 350,000 plus tonnes in storage, and the 109,000 tonne ceiling for this season is likely to be reached by the end of the spring. The European Commission expects that milk production in the 28 member states will grow by 0.3% in 2017, with per-cow production growth offsetting a likely fall in the herd size. Due to domestic demand growth, the US hasn’t been too much of a concern for dairy exporters in recent years. But US milk supply continues to expand, and local analysts have reported milk being dumped in at least four states and regions, with manufacturing capacity insufficient to deal with growth in production. Not surprising when you consider that in the last five years, US milk production has only posted negative year-on-year growth for six individual months (out of 60). Only one of these months has been in the last three years. March data shows 1.6% year-onyear growth in milk volumes for that month, in part due to there being 0.5% (15,000 head) more cows in the national herd. Whilst herd expansion is only part of the story, the USDA is forecasting that there will be another 25,000 cows producing milk by the end of the year; farmers are in expansion mode and more milk is on the way. Most of this growth is concentrated in the southwestern states (Texas, Arizona, New Mexico). The rule of thumb in the US is

that when ‘revenue over feed costs’ is greater than US$7.50/cwt for six months or more, milk supply expands. March marks the ninth consecutive month this has happened, with recovering milk prices and a continuation of low feed costs driving profitability. For the full year, the USDA expects milk production to grow by 2.5%, versus 2016, implying a total of about 99 billion litres. Closer to home, the oft-employed strategy of trying to pick market direction based on New Zealand’s milk production has proven a difficult one this season. The drop in production following a wet spring turned out to be somewhat smaller than originally forecast, with March production (up 10% compared to March 2016) appearing to herald a big finish to the season. As it happened, this was just in time for Cyclones Debbie and Cook to hit in April and shorten the season for a number of farms in various parts of the North Island – though at the industry level the damage is limited. With milk prices looking reasonable for a second season in 2017-18, NZ’s farmers are finally putting two years of extreme cashflow pressure behind them, and local analysts suggest confidence is increasing. That said, many farmers have much ground to make up in rebuilding their businesses, and combined with ever-tighter environmental regulations stifling new dairy developments, growth in milk production is unlikely to reach the double digit rates of years past. The bottom line? Milk supply is not likely to contract this year, so in the absence of a big shock we won’t see any material supply-driven gains in commodity prices. It isn’t expanding much either, but farmers in most regions are ready to capitalise if given incentive to do so. As a result, the expectation is that we’ll see competitive pressure keep commodity prices about current levels for some time. • John Droppert is an industry analyst at Dairy Australia.

DAIRY NEWS MAY 9, 2017

NEWS  // 9

Anchor products pop-up in China mall FONTERRA HAS

launched its first Anchor milk pop-up store at one of China’s busiest shopping complexes. The Super Brand Mall, Shanghai attracts more than 20 million shoppers every year; boasts 250,000 square metres of retail space. The full Anchor China range of UHT milks, milk powders, cheese and butter is on display at the store, where shoppers can also craft their own recipes, view videos of New Zealand farms and play interactive games. Famous Chinese actor Tong Dawei joined the store launch event, sampling products and helping to develop recipes using Anchor products. “Today’s Chinese consumers are much more brand conscious and

brand loyal than previous generations, so finding ways to create experiences and emotional connections with the brand is a key part of our ongoing brand-building strategy for Anchor in China,” says Christina Zhu, president Fonterra Greater China. “This higher level of discernment among consumers is driving strong demand for premium goods, so this pop-up is a high-profile opportunity for us to remind shoppers of the premium nature of Anchor.’ Vice president China Brands Chester Cao says that brands in China need to integrate their online and offline presence to reach consumers in the digital age. “Our pop-up store is recognition of that need to integrate,” says Cao.

“Online and offline go hand-in-hand and events like this are a great way to tell our story in a more real and engaging way. “We’ve had great feedback from shoppers on the farm videos in the

store – seeing the green grass and blue skies where New Zealand cows graze is unique for many people in China and it helps them understand Anchor’s provenance in more depth.”

From left: Fonterra’s China’s Chester Cao and Christina Zhu with actor Tong Dawei in the Anchor pop-up store.

Ice cream hits the sweet spot ONE NEW ice cream flavour just hits a sweet spot, says a lucky Auckland Year 6 schoolboy. The favour just “so delicious” that everybody should try it, says Tomas Graham from Westmere School, who was among 12 judges from the school for the Kids Choice Category in this year’s New Zealand Ice Cream Awards. However he was not allowed to disclose the flavour until the results of the judging are announced at the 2017 NZ Ice Cream Awards on May 26, in conjunction with the 90th annual conference of The NZ Ice Cream Manufacturers’ Association. The Kids’ Choice judging was held with a sampling session last week, where the kids had to rate 15 flavours. Isabela Harcourt and Renee Cunningham, also Kids Judges, told Dairy News some flavours were better than others and some were “way too sweet”. In the wider awards, there are 12 categories being judged with a total of 340 ice cream, gelato, sorbet, low fat and non-dairy entries for 2017 – compared to 334 entries last year. The first competition in 1997 had 61 entries. – Pam Tipa

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DAIRY NEWS MAY 9, 2017

10 //  NEWS

Snapping at Fonterra’s heels PAM TIPA pamelat@ruralnews.co.nz

OPEN COUNTRY Dairy Westland Milk’s expansion into Canterbury hasn’t been easy.

(OCD) is the benchmark commodity processor

and Tatua the benchmark value-added processor, says TDB Advisory. “Both are focussed on their core businesses and delivering higher-thanexpected risk-weighted

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returns to their shareholders and farmers,” says the report on Fonterra’s main New Zealand competitors. Synlait is successfully shifting more of its milk into higher-margin returns and has the access to capital and confidence from recent returns on assets of above 10% to invest in higher-value manufacturing assets, the report says. Westland has acknowledged its underperformance and the report says little milk volume growth can be expected until it reduces its costs. Tatua invests two and a half times more than OCD for every unit of milk processed, showing that higher value-add strategy is not as simple as it sounds. OPEN COUNTRY DAIRY OCD is the only new processing company to have grown its milk collection and processing presence in a number of regions – Waikato, Taranaki and Southland. It is now NZ’s second-largest milk processor and global supplier of whole milk powder, the report says. OCD’s average milk volume growth rate has been 10% over the last five years. It pays farmers a premium above the farmgate milk price. SYNLAIT MILK Synlait’s milk volumes have grown at 7% pa on average over the last five years. “Synlait is now well established and has a high level of credibility with its Canterbury farmer-suppliers. It has paid farmers a similar base commodity milk price to Fonterra but has moved to paying higher prices for A2 and grass-fed milk and for milk supplied by farmers with Synlait-accredited ‘superior-farming’ practices. “It has also established close partnerships with trade customers.” Since its 2013 IPO, Synlait has successfully positioned itself as a busi-

ness-to-business (B2B) manufacturer of highvalue milk products. It has progressively shifted more volume into specialty ingredients, infant formula base powders, canned infant formulas and cream. TATUA Tatua’s market share of NZ milk collections is small at 1%. It has successfully grown its high value ingredient products business. The company’s focus is on export markets, with sales in at least 60 countries. Tatua has increased its value to its farmersupplier shareholders by making the highest milk payments in the industry. It has invested in modern manufacturing capability to produce specialised ingredient products and small volumes of consumer products. The products include caseinate, whey protein concentrate and anhydrous milk fat. WESTLAND Westland processes 3% of NZ’s milk volumes and within its Westland catchment has a monopoly protected by the cost of transporting milk across the Southern Alps, the report says. It has expanded into Canterbury and competes with Fonterra and Synlait in that region. The expansion has not been easy and Westland has markedly varied its payout to its farmer-suppliers relative to the farmgate milk price in recent years. In the last five years milk volumes have grown by 6% pa on average. Westland has invested significantly since 2012 in improving its product mix. It has established its own export sales channels, opened an office in China and recently partnered with its largest nutritional powders customer Ausnutria, in Hong Kong. This company is expected to provide the capital and a sales channel for Westland to grow its business.

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DAIRY NEWS MAY 9, 2017

12 //  NEWS

SUCCESS BREEDS SUCCESS.

Each dairy processor is a major company in its own right, says a new report.

Wide ranging strategies in dairy lineup PAM TIPA

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THE REVENUE range/kgMS of New Zealand’s dairy companies is remarkably wide -- from Tatua’s $18.58 to Fonterra’s commodity return of $5.81 -- says a new report on the dairy industry. ‘New Zealand Dairy Companies Review’, published in April by TDB Advisory (TDB), reviews the performance of Fonterra’s milk processing competitors in NZ, the four that make their financial reports public – OCD, Synlait, Tatua and Westland. Each is a major company in its own right. The revenue range reflects the differing strategies of the various companies, TDB says. Among Fonterra’s competitors Tatua is recognised as having a strong focus on high-value ingredient products while Open Country Dairy (OCD) has a strong focus on commodity products, TDB says. In between are Synlait, with its specialty ingredient business-to-business strategy, and Westland which produces both commodity products and consumer products. Tatua has invested more than any of the other companies to generate higher sales per kgMS, while OCD has invested the least, TDB says. However, revenue generated per kgMS is only part of the consideration and doesn’t reconcile with profitability. TDB’s figures show OCD as the lowestcost operator at $2.35/kgMS while Tatua is the highest at $11.26. Synlait’s operating costs are $4.51/kgMS and Westland’s $5.57. The report says the industry and various commentators have for many years referred to the possibility of growing the value-added component of milk sales, but that might be difficult. “Fonterra processes over 1.5 billion kgMS in NZ and if the co-op was to manufacture a similar product mix to Tatua, even if it could, it would require an extra investment of over $7b in fixed assets (to at least double its current investment in NZ plant and equipment). “This would equate to an additional investment of about $675,000 per farmershareholder, with no guarantee of success.

Operating costs will be lower for the commodity processors but there is not enough public information for us to make direct comparisons,” the report says. While Fonterra remains the dominant processor in NZ, its share of ‘new’ milk is estimated to be two thirds, the report says. “Their respective amounts of new committed processing investment and access to capital indicate the competing companies are likely to continue to grow faster than Fonterra.” Fonterra’s market share could fall from 84% to 79% over the next five years. TDB estimates the combined value of the assets of Fonterra’s competitors is at least $2b and their revenue exceeds $2.5b. With combined annual sales of about $2.3b (for 2016), the four companies collectively account for 90% (by milk volume) of the milk processed by Fonterra’s competitors in NZ. The report says Fonterra’s competitors have grown their milk volumes by about 10% on average over the last five years: OCD has growth of 10%, Synlait 7%, Westland 6%, Tatua 4%, Miraka an estimated 10% and Oceania an estimated 15%. Other growth points to note include: • Synlait’s September 2016 capital raising and news of a $300m capital expansion project over three years • OCD’s recent news that it is preparing to build a new powder plant at Horotiu, Waikato, for the start of the 2018-19 dairy season. It will have capacity for 250m L of milk, an increase of 20% on 2016 volumes • Oceania’s intention to triple in size to 630m L by 2019. The report notes that its catchment area includes the Hunter Downs irrigation scheme, whose construction is expected to markedly increase milk volumes on farms • Westland’s current performance review indicating a lower cost structure. The report says if the annualised industry growth in milk volumes over the next five years is (as Fonterra and DairyNZ expects) in the 2-3% range and Fonterra’s competitors maintain their 10% growth rate, their market share will increase from the current 16% to 21%. Oceania, Yashili and Miraka were not covered in detail in the report.

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14 //  NEWS

Farmers rise to GEfree cheese demand SUDESH KISSUN sudeshk@ruralnews.co.nz

A GROUP of farmer FrieslandCampina is eyeing GE-free milk cheese for German consumers.

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project. They will get a premium price for the GE-free milk, to be made into cheese for the German market. The products will conform to the VLOG standard set by a German association responsible for certifying products and issuing the Ohne Gentechnik label. The VLOG association was founded in 2010 and is recognised by the German government. A number of FrieslandCampina dairy farmers in Germany are already producing milk bearing the Ohne Gentechnik label for Landliebe products. FrieslandCampina says the move will capitalise on the growing demand from German supermarkets for foodstuffs produced without any genetic engineering in the production chain. A few hundred member dairy farmers in the vicinity of the cheese plants in Born and Workum have the opportunity to participate in the pilot. These may give their cows only feed that meets the VLOG criteria. “It is of major importance that no use is made of feed produced with or from genetically modified organisms, like much soy meal coming from the

US,” the co-op says. “Locally grown roughage, such as grass and maize, which is by far the most important feed for cows, does meet the VLOG criteria. Before the milk may be used in products featuring the VLOG label, the cows must have been fed in conformity with the VLOG criteria for three months.” As a result of the higher feed costs at the farms, and higher logistic and production costs, cheese with the VLOG label costs more than regular cheese. Participating dairy farmers will receive an extra $1.59/100 kgMS on top of the FrieslandCampina guaranteed price for farm milk to compensate for the higher feed costs. FrieslandCampina says its cheese plants in Born and Workum (the Netherlands) will be prepared for separate processing of the different milk flows. On genetic modification, the co-op says it remains open to “research, innovation, basic materials and products in which, in a responsible way, use is made of genetic modification proven safe and approved as such by the responsible authorities”. @dairy_news facebook.com/dairynews

Arla’s $19m boost for baby formula ARLA FOODS is pumping $19 million into boost-

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ing its infant formula production. An upgrade of its Akafa plant in northern Denmark will allow it to add infant milk formula (IMF) production to its existing powdered milk capacity. The site will not be expanded; instead relevant sections will be upgraded to produce high-quality IMF. Arla sells high-quality IMF products under its own brands Arla Baby & Me and Milex and is a preferred supplier to a number of third party brands. The biggest markets for Arla in the IMF category are China, Southeast Asia, Latin America and Europe. “We are seeing double-digit growth in our global IMF sales, and we expect the growth to continue in the coming years due to rising demand in the category worldwide,” it says. “By upgrading Akafa to include IMF production, Arla will be able to meet the growing demand with high-quality production,” the co-op says.

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DAIRY NEWS MAY 9, 2017

16 //  OPINION RUMINATING

EDITORIAL

Fess up, move on

MILKING IT... Milk stoush over

A DAVID and Goliath battle has ended with David’s victory! A dispute between Fonterra and Lewis Road Creamery over labelling on Kapiti milk bottles is over. Fonterra last week confirmed it is updating its Kapiti milk range with “distinctive new packaging”, due to hit stores from June. Lewis Road Creamery posted a statement to their Facebook page indicating their pleasure. “Hats off to the Fonterra team who will be rolling out distinctive new packaging on their Kapiti milk range from June,” the post read. “This change has enabled us to resolve our packaging dispute with them. We are delighted to have sorted things out, and want to thank each and every one of you for your unwavering support.” The agreement between the parties is confidential, Fonterra says.

Truth about milk

THE AUSTRALIAN dairy industry is joining the fight to clarify the meaning of the word ‘milk’. Milk drinkers are increasingly switching to almond, soy, oat and rice alternatives, turning their backs on cow’s milk. But in a market that offers so many choices, what exactly constitutes milk? The labelling as ‘milk’ of plant-based milk alternatives is being disputed by Australian agricultural advocacy group Dairy Connect, which argues the products are confusing consumers. The push is backed by producers of camel, buffalo, sheep and goat milk, who agree the word ‘milk’ as applied to plant alternatives is misleading, deceptive and harmful to the dairy industry. Following a similar bill in the US, the NSW lobby group is calling for ‘truth in labelling’ to prevent companies from using the word.

Unfazed by rules

SELLERS OF raw milk in New Zealand are taking new regulations in their stride. A raw milk farmer in Golden Bay says business hasn’t soured at all since the clamp-down of food safety rules. Village Milk managing director Richard Houston says the demand for raw milk is still high, and the company is even introducing a double milk dispensing machine in July to replace the single one at its Takaka farm. It is also looking at producing pasteurised, non-homogenised milk for local businesses. New regulations on the sale of raw unpasteurised milk to consumers came into effect in November last year. Under the new rules, operations must be verified, premises and equipment must be appropriate, animals have to be in good health, and higher standards are imposed for testing, sales recording and labelling.

Plantain to the rescue

WILL PLANTAIN come to the rescue on nitrate? Researchers at Massey University think so. Researchers at Massey’s No 4 dairy farm are comparing and measuring nitrate leaching in paddocks planted with three pasture mixes -- plantain only, plantain combined with red clover and white clover, and ryegrass with white clover. Three groups of 12 cows are grazing the different pastures and every month for ten days data is collected. They also have a reserve mob. “The project began this summer and took a bit of setting up with fancy plumbing consisting of tile and mole drains so samples could be collected from each grazed plot,” the uni says. Results from research at Lincoln show that the concentration of nitrogen in cows’ urine is halved when they graze plantain, so we expect a substantial decrease in nitrate leaching from plantain paddocks this winter.

A FRESH start can require an admission of wrongdoing, difficult yet often the only way forward. Australian dairy co-op Murray Goulburn realised this with its clawback – an incomprehensible blunder inflicting much angst on its suppliers. MG’s decision puts Fonterra in a tight spot: it now has to match MG’s milk price and pay its 1500 suppliers more. Granted, MG’s decision to scrap the clawback was made after realising the white-hot anger it caused among its suppliers and their consequent decision to leave the co-op en masse. However, the decision has been made to scrap the clawback and the suppliers have welcomed it. The co-op has made the hard decisions to close three factories, inflicting further pain on local communities already feeling the pinch of a lack of flow-on spending; now the hard work begins. MG needs to offer a competitive opening milk price to suppliers or perhaps watch them walk to its rivals. It won’t be easy; it’s using debt to prop up its end-of-season price of $4.95/kgMS, saying the market rate is about $4.60/kgMS. MG suppliers hope they will get a further sense of closure of the devastating events of the past 12 months with the ACCC’s decision to target former chief executive Gary Helou, who is still yet to acknowledge he was wrong. The ACCC is seeking an official admission by the co-op that it misled its suppliers, but is seeking financial penalties against Helou and his right-hand man, chief operations officer Bradley Hingle. It also wants to see them banned for a time from director roles, which would hurt Helou most. We can’t see Helou admitting wrongdoing, so this may be the next best thing for those hurt by his actions. The ACCC will not pursue Fonterra, saying it “was more transparent about the risks and potential for a reduction in the farmgate milk price from quite early in the season”. This has been debated widely by farmers, many of whom are angry that it dropped the milk price severely one week after Murray Goulburn dropped its price. It quickly sought to recover money from its suppliers too. United Dairy Farmers president Adam Jenkins has called on Fonterra to reverse its decision and for the Bonlac Supply Company to “stand up for its suppliers”. At the time of press, Fonterra was deciding on which position to take, following MG’s decision to repay the clawback money. Fonterra has not admitted any wrongdoing in Australia and the ACCC agrees; perhaps Fonterra should admit some blame.

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WAIKATO: Ted Darley ........................... Ph 07-854 6292, 021-832 505 ted@ruralnews.co.nz WELLINGTON: Ron Mackay ........................ Ph 04-234 6239, 021-453 914 ronm@ruralnews.co.nz SOUTH ISLAND: Kaye Sutherland ..............Ph 03-337 3828, 021-221 1994 kayes@ruralnews.co.nz

DAIRY NEWS MAY 9, 2017

OPINION  // 17

Border skirmishes mark first 100 days in office STEVEN SPENCER

PLENTY’S BEEN said

about the first 100 days of the Trump presidency – more about unfulfilled campaign promises than tangible action – but in recent weeks the dairy industry has been drawn into some of the posturing. While Trump’s promise to tear up NAFTA (a 23-year-old free trade deal with Canada and Mexico) and send home many illegal migrant farm workers have the US dairy industry deeply concerned, the recent dramas stem from other issues. Canada has retained strongly protectionist policies to support its dairy farmers: it hangs onto a supply management system created in the 1970s that regulates farmgate milk prices based on different end-use categories, and controls access to the higher-value parts of that pricing structure via quotas for individual farmers. This sounds familiar: NSW and Queensland ran something similar prior to deregulation of farmgate arrangements in 2000. The Canadian supply management system is one of the world’s most reviewed and ridiculed pieces of farmgate regulation, and has faced mounting internal and external pressure, including persistent trade complaints from the US, EU, Australia and New Zealand. The WTO has ruled that the high prices paid to Canadian farmers are subsidies that would help make exporting easier. Canada also maintains a high tariff wall on most dairy products, which keeps out most imports from the US (and others), helping to prop up higher domestic milk and cheese prices. Exceptions to these are ultra-filtered milk and other proteinrich dairy ingredients used in cheese and yogurt, which enter Canada dutyfree and hence land at a much lower cost to manufacturers. In recent years, US dairies have expanded

exports of these low-cost products to plants. In 2016 the Canadian industry (well… farmers) convinced the government to close the loophole in dairy tariffs with a new lowerpriced class of milk as an incentive to get dairies to produce these protein ingredients using Canadian milk. That door shut. US imports of these products have crashed. With the slowdown in access to this market, some US processors have recently found they had too much milk, and blamed Canada for the need to cut contracts to about 75 farmers, who have since been rescued by a host of other companies. The brewing political furore drew in Trump, a profound protectionist who complained of Canada being far too protectionist! Pot kettle black. In truth (if there is such a concept for Trump) he probably got involved to shore up support in dairy-rich Wisconsin where his support base held a marginal win over Democrats in the 2016 election. The milk volumes involved in this fracas are small. The milk effect of US exports of protein products in the past year is estimated at 220 million litres, or 0.23% of US milk output -- less than a day’s production. Trump has threatened to tear up NAFTA to sort out these and a host of problems, and address a growing overall trade deficit between the two countries. That would have spelt a major disruption for the US dairy industry: about a quarter of national SMP output is trucked into Mexico, and it is the country’s biggest cheese export market. He was forced to back down from that threat in late April after a chorus of business and industry leaders – and others in his party – pleaded for a rethink. In fact both US and Canadian dairy industries have a glut of milk at a time when the world market has an increasing oversupply and weak demand, and have each

cried to their governments to solve the problem. It seems a strange situation in the US, as steady growth in milk output has long been a feature of the industry, yet there

is a barrier to investment in new cheese plants. Cheese production has grown faster than total milk output in the past 15 years. Quite a contrast from New Zealand where new plants are installed

ahead of milk supply, but the economics in manufacturing are quite different. That’s another story. • Steve Spencer is a director of Freshagenda, an Australian food consultancy in Victoria.

Donald Trump has completed a turbulent 100 days in the White House.

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DAIRY NEWS MAY 9, 2017

18 //  AGRIBUSINESS

Sweet finish key to success f PAM TIPA pamelat@ruralnews.co.nz

MUCH OF the suc-

cess of Whitestone’s Vintage Windsor Blue cheese comes down to North Otago milk, with the cows grazing off grass from limestone soils, says chief executive Simon Berry. Their unique mould strain they developed themselves is the other flavour aspect. “It has a sweet finish no one else in the world has. When taken onto the international stage it stands out,” Berry told Dairy News. Vintage Windsor Blue has just won one of the supreme awards, Outstanding Producer Dairy Crafted, at the inaugural Outstanding NZ Food Producer Awards. Three other cheeses from the

Oamaru based cheesemaker were also finalists: Vintage Five Fords, Windsor Blue and Lindis Pass Camembert. Berry says Vintage Windsor Blue had numerous wins in the New Zealand Cheesemaker awards and is highly decorated nationally and internationally. The last award was a silver medal in the blue category in Wisconsin USA at the World Cheese Champs. “So it is right up there on the world stage,” says Berry. A recent scouting trip to France turned into a sales trip when a French cheesemaker sampled the blue cheese. Immediately he wanted to sell it in his shop. “Another cheesemaker tried it and said, ‘New Zealand has got the All Blacks and now you’ve got

Whitestone Cheese chief executive Simon Berry.

a blue cheese’.” Whitestone buys Fonterra milk under DIRA regulations but has a preferential system to get milk from two farms in the spring and a couple of winter milkers. “We know the milk is local; it comes from about

15km away and we know which farms it comes from. We build relationships with those suppliers.” Those Otago soils are limestone “plus we’ve got the lovely water coming from Mount Cook and irrigated onto it. That

combination gives us great grass and from that we get fantastic milk.” He reckons if you lined up a cheese made with their milk versus exactly the same recipe used in the North Island the flavours will differ. “They are not better or worse,

but you can taste it definitely.” All Whitestone’s processing systems are natural; they produce small batches and methods are partly craft and partly science. “Cheesemakers have to adjust to seasonal variability and that can be a challenge particularly for white mould cheeses because you have the fluctuation of milk solids through the season. “We are not standardising, we are not extracting cream or fat or putting it back in. We are using the milk that comes in the door; we have certain recipes we put cream in but we are not standardising our milk so we have a fluctuation through the year. “That can be a challenge to get things right 12 months of the year. But

that is part of the process; we still respect the natural processes…. It is a really handcrafted product right across the board.” The cheese is sold nationally and they export to South East Asia, Australia, Singapore, Hong Kong, Japan, Fiji and a small amount to Qatar and the US. “We focus on the domestic market but we export…. mostly by air freight so we can’t go too far. But we are working on getting Vintage Windsor Blue into Paris now. “We have ticked all the EU boxes (for accreditation) and we have to wait six months for the cheese to mature.” While the snow-capped mountain image is important, taste comes first in marketing overseas, he says. “We think it comes down more to the flavour

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DAIRY NEWS MAY 9, 2017

AGRIBUSINESS  // 19

s for winning blue cheese and what has been developed in that taste.” The grass-fed and free range cow image is important, but it is the blue culture that stands out when

taken internationally, he says. “Also the texture…. People are looking for something different; they don’t want a replication

of something already in the market, particularly in Europe. “We are seen as a ‘new world’ producer; we are a young market developing

new flavours and new recipes…. There is interest in what New Zealand is producing, what is coming out of the ‘new world’…. “Blue is our flagship

CALL FOR JOINT PROMOTION DAIRY should get together more with other primary sector producers to promote their products, says Whitestone Cheese chief executive Simon Berry. Berry says his company’s cheese Vintage Windsor Blue has had wins before but they entered the inaugural Outstanding NZ Food Producer Awards because they were excited by the format. “It was highlighting producers – the people who actually create the products. We liked the whole concept; it was broader than just cheese or dairy. It was showing what NZ is good at producing and celebrating that.” On awards night it was great

to have all the producers in the room – aquaculturalists, farmers, cheesemakers and other food producers. “There was ice cream, peanut butter…. many exciting things happening in our food; to put them all together in one room and one event and have one celebration was great.” The people in the room had realised “hang on, there is nobody actually pooling all these great producers together and recognising them together. So this is a step in the right direction”. It is good for New Zealand Inc, Berry says. “You can see that from the list of winners;

you’ve got a variety there and producers have some fantastic products.” Canapes were made on the night using all the products from finalists. “It was just sensational what came out of the kitchen.” Further events in restaurants have been suggested. “We can have all the winning producers together and it can be celebrated in a restaurant format and things will flow on.” Such events can be great for attracting consumers. “There are food innovations bubbling away under the surface; you need awards like this to get them on the table.”

product that introduces us. They see we are creating something new and different with that flavour and texture. That’s why it stands on its own two feet against, say, European established cheeses like Stilton or Roquefort. An interesting learning from their European trip was getting people to try the product, to see why it is different. “Then the

flavour speaks for itself. They look at the environment that is producing it and say ‘wow you must have a good environment if it tastes like that’. So that backs it up.” People, product and place are Whitestone’s three core pillars. “When we go to the market we push that we are family owned, an owner-

Whitestone Cheese’s winning Vintage Windsor Blue.

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operated business… then you’ve got the place it comes from as well – 45° latitude, lush pastures and glacier fed waters and so on.” The latest win is a great tribute to the team, Berry says. “We have 50 staff and everyone is focused on quality and attention to detail. That shines through our product.”

DAIRY NEWS MAY 9, 2017

20 //  MANAGEMENT

Nitrate sensor ready for launch NIGEL MALTHUS

LINCOLN AGRITECH

has unveiled an advanced optical nitrate sensor for groundwater which it says will bring a paradigm shift in New Zealand’s groundwater management. The slim stainless steel device is designed to give real-time data while being cheap and simple enough for widespread deployment. Now at the beta-testing stage, it is hoped to be commercially available by the end of the year. The Lincoln University-owned R&D company says that, as NZ moves to adopt caps for nitrogen losses to waterways, it “remains unclear” how levels would be reliably measured. Current approaches are based on modelling rather than direct measurement, largely because present realtime sensors are too expensive. But it says its sensor should retail for no more than $US5000 but yield data with similar accuracy and calibration consis-

Lincoln Agritech’s Brian Miller with a prototype of the nitrate sensor beside sampling bores.

tency as sensors retailing for $US15,000-$US30,000 each. The sensor is housed in a slim cylinder with a single hole through the middle. Water flowing through the hole is analysed by shining various wavelengths of light across the flow. Agritech’s group manager environmental research, Blair Miller, says the device works by measuring the transference of UV light at 220 nanometres wavelength, which is absorbed by nitrates. Other wavelengths are detected and corrected for

factors such as dissolved organic carbon and turbidity from silt. He says other more expensive optical sensors are designed primarily for the wastewater industry and are more complex, having to measure a far greater range of targets and contaminants. “We’ll never sell this as a wastewater sensor. But this will go down a dairy farm well anywhere in NZ, within reason,” says Miller. The other devices are also “much fatter”, while theirs is specifically designed to fit in a 50mm bore, which could be

direct-driven rather than expensively drilled. The device has electronics that allow for easy connectivity by landline, wireless or cell network, which will also help keep deployment costs down. Agritech hydrogeologist Jens Rekker revealed that prototypes of the sensor have performed well in monitoring the Hinds/Hekeao managed aquifer recharge project, south of Ashburton. The year-old pilot project is aimed at recharging shallow aquifers in the district by taking clean alpine water from the Rangitata and letting it

seep in from a purposebuilt ‘leaky’ pond. Rekker’s data shows that both the MAR and the new sensor have been working as planned. Nitrate concentrations in downstream groundwater have been markedly lower, and the sensors’ continuous data correlated very well with nitrate measurements from conventional sampling. Rekker says the “utes and boots” method -having a person drive out to take a sample for lab analysis to get a paper report three weeks later -- is “an expensive snapshotty way of collecting data”. “We know, especially in the flow field, how much richness that automated data collection provides for us,” he says. Lincoln Agritech chief executive Peter Barrowclough says the sensor’s ability to vastly increase the amount of data available for decisionmaking in the whole community will be “huge”. “We don’t know exactly yet how it’ll be used in all circumstances. But we’ve got science pro-

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grammes running alongside it. “We’ll sell this to people like DairyNZ, regional councils and NIWA. They’ll all learn from having more data, so over time we’ll have a much richer data set from which to make betterquality decisions.”

@dairy_news facebook.com/dairynews

Help is near JAMES THOMAS

AFTER THE wettest autumn I have ever experienced, there are now, as widely reported, farms severely affected by flooding. And there are maize crops that may not be harvested because contractors cannot get onto some paddocks; so the feed value of the maize is declining. This will obviously mean less supplementary feed available onfarm for the winter. Better-than-average grass growth in some areas will counter this but the damaged farms will have to accurately assess what resources will be needed to avoid compromising next season’s milk production. Once flood waters have receded farmers must look at the physical damage to fences, races and other infrastructure. Then it will be time to look at pastures and replanting some or all before the onset of winter. These areas will need to be treated as ineffective until spring which will impact feed budgeting. Decisions must also be made on what areas are sown in permanent pasture and what get annual or Italian type ryegrass. Importantly a feed budget must be done and this will show what supplements, if any, need to be purchased or whether culling or winter grazing may be more appropriate. Every case will be different. Obviously this is a stressful time for farmers and their families and I would like to reinforce the point that help is available for any affected people; the rural support trusts will play a big part in coordinating farm advisory help and arranging for supplements and grazing. Do not think that you are alone in facing these issues. The rural support phone number is 0800 787 254. • James Thomas is a LIC FarmWise consultant.

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Miller says Overseer “finishes” at the bottom of the root zone but a lot of farms would have natural assimilative capacity for denitrification below that, which the sensors could potentially demonstrate.

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DAIRY NEWS MAY 9, 2017

22 //  MANAGEMENT

Newcomers stamp their mark early NIGEL MALTHUS

A MID-CANTERBURY

couple in only their second season milking their own herd have been named the Canterbury/

North Otago Share Farmers of the Year 2017. City-raised in Christchurch and with backgrounds in tourism and teaching, Christopher and Siobhan O’Malley are latecomers to farming,

although there is dairying in Christopher’s family, his grandfather having farmed on the West Coast. For them the journey started when they returned in search of a Christopher and Siobhan O’Malley with children, Finnian, 5, Aisling, 3, and 10-month old Ruairi on their farm.

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career change after two years managing a tourism business in Ireland, and began working on a farm near Darfield. Liking what they found, they began lowerorder sharemilking in 2011, moving to North Otago, then the West Coast, and North Otago again. Trading as Pukeko Pastures, the O’Malleys and their three children, Finnian (5), Aisling (3) and Ruairi (10 months), are now 50:50 sharemilking on a farm near Lauriston, inland from Rakaia, in Mid-Canterbury. The couple like a challenge. “We like to stretch ourselves,” says Christopher. Stepping up from lower order sharemilking to 50:50 meant taking on a huge amount of debt to buy the cows at a time when the milk price was low. “That could have been stressful but we found it exciting,” says Siobhan.

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They are milking 515 cows and hope to increase that to 630 next season. The property is 138ha effective, and mainly pivot-irrigated. They employ two staff. This was their third time in the awards contest but only their first with their own herd. Siobhan says the first reason to enter such competitions is to network with like-minded people. “They tend to be people who are pushing themselves, who are reaching for big goals, who go for it. Another reason is to benchmark ourselves against those people to see how our business is stacking up against them.” “[Entering] makes you do all those things you think will be good; it gives you a deadline, a push to finish all the little bits of analysis or data inputing. All that stuff that would be nice to look at in detail -- it forces you to do it.”

Siobhan says they like to live by a quote from the American poet Maya Angelou: “Do the best you can until you know better. Then, when you know better, do better.” “So when we find a better way of doing something we don’t just say ‘Oh we could do it that way, but it might be a bit hard’. We do it. That might be a better system, a better product, or a better method of doing something on the farm.” An example is their move to GPS plotting of their break fences to manage exactly how much feed the cows are getting, and allowing the herd two breaks into the fodder beet field when they realised one line was not giving each cow its recommended shoulder room. In taking the regional title, the O’Malleys won the financial and business merit award – the single most important of the 11

judging criteria, weighted at 21% of the total score -and also the Ecolab farm dairy hygiene award. Christopher says winning the financial section required “a clear understanding of what you’re doing and why you’re doing it. And both of us know exactly that”. Of the hygiene award, he said it was due to attention to detail. “Everything starts at the cowshed. If you keep that clean and tidy and orderly, then other things in the business and staffing should flow from there.” As Dairy News went to press the O’Malleys were due to go up against the regional winners from the other 10 regions, in the national finals. The national winner, and the national Dairy Trainee of the Year and the national Dairy Manager of the Year were due to be announced at a gala evening in Auckland on May 6.

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DAIRY NEWS MAY 9, 2017

MANAGEMENT  // 23

How will Northland cope next season? PETER BURKE peterb@ruralnews.co.nz

THE WEATHER in the

next two months will play a big part in how dairy farmers in Northland cope in the new season. That’s the view of DairyNZ’s regional leader in the province, Chris Neill. Overall he says it’s been a challenging season for dairy farmers in his patch over the past few years and this has resulted in changes being made on farms. Meanwhile if farmers get a good autumn that will set them up for winter and spring and hopefully mean they have enough feed to carry them through this period. Neill says Northland has a significant mix of spring and autumn calving herds. Each farm has challenges producing enough pasture at critical times of calving and peak milk. The traditional autumn growth works for autumn calvers, particularly those on free draining soils. Spring calvers this year took a knock from the wet spring then the dry summer but could extend their season with a

kind autumn. Neill says dairy farmers in Northland had hoped for better weather and production last spring to match the improved payout, but the season was “untidy,” he says. “For a while it looked like the weather was improving and we thought ‘this is good we will get some growth’, but there was a very short window before the summer dry this year. We were concerned during the wet spring because that is a testing time for farmers anyway. “During the summer drought we supported Rural Support Trust with community dinners to engage with people and encourage them to get off-farm and talk to their neighbours; we reminded them they weren’t the only ones with issues.” Neill says in his experience farmers cope better with adverse weather conditions than with financial issues such as a low payout. But farmers don’t get any pleasure from having hungry cows. Conditions are good right now, he says, and many farmers are milking their cows for as long as they can to get close

to budgeted production which is close to a win win. “For some farmers, knowing the payout for this year but not next year

drives their behaviour. They’ll milk on to put money in the bank now, accepting the risks that they might compromise next season’s production.

DairyNZ regional manager Chris Neill.

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IMPACTS OF VOLATILITY THE VOLATILITY in the dairy market has prompted many farmers to review their farm system. Chris Neill says those under financial pressure are pretty much obligated to reduce costs if they cannot increase income. He says those without financial pressure are more able to weather the volatility without needing to change. “At the time the milk price dropped from $8 to $4/kgMS there was a significant change to take the high cost feeds out of the system. The DairyNZ message was ‘pasture first, not pasture only’, meaning get all you can out of your pasture, so there’s been a focus on that. As a result of that adjustment we have seen herds reduced in size, but that reduction in size has also brought a reduction in labour demand -- less demand for some of the young people who want to come into the dairy industry,” he says. Neill says a lot of talented young people, especially lower order sharemilkers, were disillusioned about how the financial thing rolled out for them and they will not return to the industry. Yet the dairy industry needs young people and good staff, and it’s a challenge to get people given the volatility. Recently DairyNZ produced a booklet about careers in the dairy industry which has already attracted much positive feedback.

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DAIRY NEWS MAY 9, 2017

24 //  ANIMAL HEALTH

Combo pour-on resists rain A COMBINATION pour-on that

is rain resistant has been released by local company Alleva Animal Health. The company says the new formula was developed after farmers questioned the efficacy of pour-on in wet weather. Alleva general manager Blair Loveridge says the company gets many calls about this from “anxious” farmers. “The first question we are

asked is, ‘will this affect the efficacy of the pour-on I have just applied?’ The other question is, ‘it has been raining and can I treat the cows while they are wet?’ “Fortunately, most singleactive pour-ons are rain-resistant and their efficacy will now be affected by rain after treatment.” But it’s not so with combination pour-ons, he says. “First generation combination pour-ons are not rainfast, so

rain can [knock their] efficacy. “The surprise to us was that in Martin Powell creating a formulation that resists run-off and rain, we have also improved active ingredient absorption…. It con-

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High risk of nitrate poisoning STOCK COULD face increased risk of nitrate poison-

ing, say Ravensdown experts Jeremy Klingender and Dr Julie Wagner. Summer droughts followed by the recent heavy rainfall will result in higher-than-normal nitrate levels in the soil, putting stock at increased risk of nitrate poisoning, they say. Klingender is Ravendsown agronomist and seed product manager; Wagner, vet and animal health product manager. “Any farmer will be thrilled to see their crop or pasture shooting up after the recent rain, but the downside is it’s likely it will be very high in nitrate levels. This can be fatal for your stock if not managed and monitored properly,” says Klingender. He says there are four key things to watch for when identifying a paddock that should be tested: fast growing crops, younger pastures (less than 21 days rotation), overcast days and high soil temperatures. “High soil temperatures speed up the conversion of ammonia to nitrate in the soil, making more available for the plant and the cow. Overcast days stop the photosynthesis process and put higher nitrate levels in the pasture, especially in the mornings and evenings; that’s why early afternoon grazing is better.” Certain plant species are more at risk of high nitrate levels such as ryegrasses, brassica crops, maize and oats. Wagner says it’s important to remember the hay and silages from these crops are not exempt from the toxicity issues. “Farmers need to be testing herbage and feed before grazing, and if they have concerns they should take their stock off immediately. We can do urgent nitrate tests, which are turned around in a day, but the essential thing to do is transition your stock slowly onto paddocks and/ or feeds high in nitrates. “Starting your cattle off with an hour grazing after a feed of hay or silage early to mid-afternoon means they’ll be less likely to gorge. Don’t put hungry stock on at-risk crops or pastures and monitor your stock closely, removing them at the first sign of trouble.”

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DAIRY NEWS MAY 9, 2017

ANIMAL HEALTH  // 25

Antimicrobials deserve our full attention Antimicrobial resistance (AMR) is the buzzword in the animal health sector. In a series of articles, microbiologists Greg Cook and Adam Heikal explain AMR and look at how the agriculture sector should respond. EVEN THE least scien-

tifically minded among us has probably heard in the news media of antimicrobial resistance (AMR), often with talk of ‘superbugs’ or similar. Kiwis may be tempted to think of AMR in the same way as other issues affecting the rest of world – someone else’s problem. But there is no doubt that AMR threatens both New Zealand’s healthcare and economy, so it deserves our full attention. A UK government report on AMR, lead by the economist Jim O’Neil, estimated that if no action is taken, by 2050 there could be an extra 10 million AMR-related deaths per year, costing the global economy a staggering US$100 trillion. Irresponsible and incorrect usage of any antimicrobial can lead to and accelerate rates of AMR. Given that antibiotic usage in food production is roughly 63,000 tonnes/year at present and predicted to rise by 67% by 2030 to over 100,000 tons, it’s clear agriculture has a role to play in averting an AMR crisis. Because of this and other studies, the use of antimicrobials in agriculture is firmly in the firing line; an entire section of O’Neil’s report is dedicated to “reducing unnecessary use and waste” in agriculture and the environment. NZ is a low-use country, but with the all the signs globally pointing to ever-increasing use of antimicrobials in agriculture, we all need to understand AMR, the risks it presents and how we can protect ourselves and our farming industries. In humans, the link between antimicrobial use and AMR is well established, that is, the more any given antimicrobial is used, the faster resistance to it develops. Whether drug-resistant microbes

passing from livestock to humans is a risk to human health or not is less clear, though farm workers and others certainly have been infected by AMR-bacteria found on farms. Versions of those AMR-bacteria have even been found in NZ, having travelled here from overseas. Scientists have long known of the extraordinary abilities of bacteria to mutate and pass resistance genes to other bacteria, even if they are from different species, allowing resistance to spread. If the AMR-bacteria that are on the loose are resistant to a medically important (those used to treat people) antimicrobial, then that antimicrobial becomes ineffective at treating patients. With that in mind, it is extremely worrying that in the US alone at least twice as many medically important antibiotics are used in animals as in humans. Even common bioactive ingredients found in teat sprays, such as chlorhexidine and iodine, are considered by the World Health Organisation to be essential for basic healthcare, so we have a responsibility to use them wisely and correctly. Poor practice when using any antimicrobial is a key cause of rising rates of AMR, so it’s vital that famers use antimicrobials correctly, whether it’s listening to the vet’s advice on antibiotic treatments

“It’s not worth taking shortcuts in teat care” Adam Heikal, University of Otago.

or following manufacturer instructions for diluting teat-sprays. In some parts of the world the situation is critical, with millions of deaths each year caused by previously treatable diseases like tuberculosis (TB). In China and India, both now big trading partners for NZ, there are extensively and even totally drug-resistant forms of TB disease, where no treatment options remain. So, if we’re running out of effective antimicrobials why don’t scientists just discover new ones? The answer, of course, is that we’re trying extremely hard to do that, but it’s not easy. Antimicrobials have been around for as long as bacteria have, so they’ve had millions of years to perfect their various resistance strategies, whilst the modern antimicro-

bial era only really began in the early 20th century. That means we’re chasing the game a little, but we’re taking great strides to better understand both how antimicrobials kill bacteria, and the bacteria themselves. By applying recent, successful strategies in human antimicrobial discovery which led to the first new anti-TB drug discovered in 40 years to the agricultural sector, we’re aiming to develop new antimicrobials purposemade for use in agriculture. This innovation is long overdue and is vital in protecting NZ’s status as a global leader in responsible, high quality food production. In the meantime, we all need to think carefully about how and when we use antimicrobials, as well as what the future might hold for NZ agriculture.

About the authors Adam Heikal is a microbial biochemist with a background in antimicrobials for bio-medicine and agriculture. He works at the University of Oslo, Norway, and is co-leader of a MBIE project at the University of Otago, developing sanitisers for treating mastitis, with the animal health company Deosan. Greg Cook is a microbiologist at the University of Otago, specialising in bacterial energy metabolism as a new antimicrobial. He has recently led projects funded by MPI and MBIE as part of his research into antimicrobials for NZ agriculture.

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DAIRY NEWS MAY 9, 2017

26 //  ANIMAL HEALTH

Mulling over culling cow ROD DYSON

I NEVER really liked

2036. She was the wild one as a calf. Then as a heifer she had a “spooky” look in her eye and she was always the one who went the wrong way when trying to get a mob through a gate. After having calved she caused our sharemilker some grief trying to break her in, so it was no surprise that when it was my turn to milk at the weekend, he warned me to “be a bit careful” with her. Both Saturday milkings had been uneventful, so maybe my guard was down, but on a cold frosty Sunday morning, she got me with a well-timed and savage kick, flush on my frozen fingers. As tears welled up in my eyes, I muttered “That’s it, you’re gone!”, but probably using a lot more colourful language and at high volume! After milking, I duly booked the truck for the next day, so on Monday morning she left the farm forever, and was marked in our herd records as “Sold – temperament”. As we now approach dry-off for the spring calving cows, culling often becomes part of the dry-off discussion; after

all, there is no point in spending money to treat cows that will be culled. There are many different factors that go into considering which cows are to be culled - mastitis control is only one of those factors. Sometimes the deci-

best chance of curing sub-clinical infections. Persistently infected cows are cows that have had subclinical infections (as demonstrated by high individual cow cell counts) across consecutive lactations despite being treated at the inter-

“There are many different factors that go into considering which cows are to be culled, mastitis control is only one of those factors. sions are carefully considered and sometimes they can be quite spontaneous. (That is when I always remember 2036!) In terms of mastitis, culling can mean different things to different farms and even to different cows. It is possible to cull a cow, cull a quarter (by making her a 3-teater), or cull a cow from the normal milking routine to reduce the risk of spread. Both clinical cases of mastitis and sub-clinically infected cows represent a significant risk of spreading infection to other cows in the herd, and the longer they stay in the herd, the greater the risk. Obviously, not all cows will respond to mastitis treatments, but treatment at dry-off is definitely the

vening dry-off with antibiotic dry cow therapy. So the following are some of the thoughts we use in contributing to the discussion about culling for mastitis control. Number of clinical cases in this lactation? Countdown recommends that cows with 3 or more clinical cases of mastitis during the current lactation should be considered for preferential culling – this is the “three strikes and you’re out” concept. What is the cow’s previous clinical mastitis history? Did she have clinical cases last season? If so, how many? Have the cow’s previous clinical cases resolved quickly and easily, or

The longer an infected cow stays in the herd, the greater the risk.

have they been difficult to treat? Have cases recurred within 14 days (which suggests they weren’t cured originally)? What is the likelihood of treatment at dry-off being effective? Are there relatively recent milk culture results available to understand the likely type of infections in the herd - you should never just assume that the current infections are the same as they have always been. Some infections are likely to have significantly lower cure rates - your vet will interpret milk culture results for you in terms of likely cure rates at dry-off.

Was she treated with antibiotic dry cow therapy at the end of the previous lactation? Is she a persistently infected cow? (If so, chances of a successful treatment are probably low.) What is her current stage of lactation, pregnancy status, and production level? Cows that are not pregnant, in late lactation, and low producers could be considered for immediately culling. Cows that are pregnant, in late lactation and not producing well could be considered for early dry-off. How old is the cow? Treatment cure rates

have been shown to be lower for older cows with chronic infections, whilst young cows have a better chance of success. Is she a “good” cow? Cows with high genetic merit, favourite cows, etc. may all be considered worth another chance, but cows with low genetic merit, poor conformation, and/or poor behaviour will generally be culled earlier! This is obviously not a complete and exhaustive list of factors to consider when considering culling, but they are common points of discussion that arise for us. And whilst each of these points could individually determine a cow’s

future, generally they are all considered together to make those decisions. Obviously cows that transgress on more than one of these points will have a higher ranking on the preferential “cull list”, because treating a cow with a low chance of success, or a cow with a short future is likely to be counter-productive and frustrating. And at the end of the day, considered decisions are likely to be the best decisions – perhaps I should have given 2036 another chance. • Rod Dyson is a veterinary surgeon and mastitis advisor at www.dairyfocus.com.au @dairy_news facebook.com/dairynews

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DAIRY NEWS MAY 9, 2017

WINTER STOCKFEED  // 27

Make a good move to fodder beat FODDER BEET, while having been grown in New Zealand for many years, has only recently gained popularity as an important part of dairy cow winter feeding systems. Increasing use is allowing DairyNZ to better understand the issues associated with feeding this crop. The key to successful use of fodder beet for non-lactating (dry) cow grazing is to follow good practice and not cut corners. Transitioning cows onto fodder beet ■■ Make accurate yield and dry matter (DM) measurements, especially in the area to be allocated during transitioning ■■ Transition cows carefully by slowly introducing them to fodder beet. Decrease the proportion of pasture/ silage and increase the amount of fodder beet in the diet over 14-21 days. ■■ Start mature cows on 1-2kg DM fodder beet/cow/day and only increase by 1kg DM every second day to the required allocation. Do not keep raising the allocation if all cows are not eating beet or bulbs are being left on

■■

■■

■■

previous days’ breaks. Start heifers and rising yearlings on 1kg DM fodder beet/cow/day and only increase by 0.5kg DM every second or third day once all animals are eating. Rising two-year-old heifers and rising oneyear-old calves will be slower to take to eating the bulbs and will sometimes benefit from splitting bulbs by, say, a tractor wheel, to get them onto the crop. If transitioning onto unrestricted (ad lib) fodder beet, do this over at least 21 days. After transitioning to 7-8kg DM fodder beet hold this allocation for seven days and then slowly increase the break line a little each day until the cows leave fodder beet behind to achieve ad lib intake. These cows still require 2-3kg DM/ day of a good quality fibre source (silage, straw, hay). Work out your break size accurately: measure the rows, yield and width of your paddocks. Remember cows can graze under the fence by up to 1m so include this area in the allocation.

■■

Offer a wide enough face of fodder beet so that all animals in the mob can access the crop at the same time. In paddocks without a grass headland to provide additional space at

the start of transitioning, or very high yielding crops, harvesting the beets in the headland and using these for the first few days of transitioning is an option.

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SNIFFING OUT VELVETLEAF ANOTHER TOOL in the fight against velvetleaf has been trialled on some of Southland’s highest risk farms – Rusty the velvetleaf detector dog. Velvetleaf was discovered in contaminated fodder beet seed and at least 400 properties in Southland are known to have planted the suspect seed lines. Rusty and his owner John Taylor spent three days working for Environment Southland as part of this season’s velvetleaf management programme. Senior biosecurity officer Randall Milne says 55 Southland properties were found with velvetleaf during a search and destroy response last year and the aggressive weed poses a major risk to the region if it gets established. “This weed has the potential to devastate future crops by competing with them for nutrients and water. We haven’t found any plants this year, but that doesn’t mean we can be less vigilant.” Last year Rusty and his owner worked with the Ministry for Primary Industries to develop a proof-of-concept training protocol which will help already trained detector dogs to discover velvetleaf. Rusty has recently shown proficiency in detecting velvetleaf in Waikato.

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DAIRY NEWS MAY 9, 2017

28 //  WINTER STOCKFEED

Calf rearing skills in high demand renowned for quality. Hicks’ calf-rearing skills are a key component of their success. Contract milking a herd of 690 cows in the central plateau near Ohakune, on one of the country’s highest altitude farms, is a challenging engagement in a climatically harsh environment that’s probably not too dissimilar to Southland; snow cover in winter, very cold winds and lots of rain are 403ha farm at Ohakune common. 690 crossbreed and Friesian cows; about 170 But she calves wouldn’t have it Pasture: ryegrass and clover, crops (turnips) any other way. She loves the Analysis: tow-behind pasture meter, rain 403ha of the measurement, herbage and silage tests, annual Atihau-Whansoil tests ganui IncorporaFeed strategy: pasture and some silage; muesli, tion’s AWHI dairy 20% pellets, 18% pellets, Calflyx, Crystalyx where she runs (Easy breather & forage plus). Good uptake the milking operawithout rejection, all-round improvements tion with great skill, including weight gain for well-grown heifers. infectious enthusiasm

WHEN LISA Hicks and partner Graham Sorensen opted for a career change in their early 40s they followed their passion for farming, reports feed maker SealesWinslow. With a great deal of enthusiasm and a focus on education, they worked their way up the ladder and soon became

Farm facts ■■ ■■

■■ ■■

■■

and much success. Thanks to a host of improvements, the first season already brought record production levels and a sight firmly set on best practice and ongoing improvements across all areas. Success is also due to Hicks’ outstanding calf-rearing skills which she has honed over the years and which are in high demand. Thanks to three full-time and two casual employees she is now able to pass the baton, share her expertise and give back to the farming community. “It’s good to be able to pass on practical knowledge,” she says. “It’s building the industry and supporting the farming community.” She is a powerhouse in upskilling her peers, be it through her role as a convenor of the Dairy Women’s Network (DWN) or by opening the farm to WWOOFers, students from the Nippon Veterinary and Life Science University in Japan and other volunteers. Unsurprisingly she attracts top-notch farming students.

Calves are well cared for and fed.

She champions DWN teaching modules and such events as the SealesWinslow calf rearing day run last year in Feilding. Such events can improve skill levels and align with Hicks’ focus on quality, evident in her operation, e.g. no cryptosporidium or scouring. Her calves are well housed, cared for and fed. The SealesWinslow products they eat are “always gone the next day,” she says. Her approach is tried and proven, she says. The 170-odd calves get colostrum immediately after they’re born “within the golden hour” and with tube assistance if need be. “We have the necessary manpower on the farm… so we can attend to newborn calves quickly.” Her feeding regime includes quality colostrum twice a day for two weeks,

then once daily. She also adds muesli from day one plus straw. After four weeks she introduces the calves to 20% pellets, then 16% pellets before moving them onto pasture. Quality is foremost: extensive analysis (rapid pasture meter, rain measurement, tests for herbage, silage, soil, etc), a new in-shed feeding system and carefully documented processes for calf rearers. A closed Facebook group for staff allows them to communicate issues, discuss solutions and implement them without delay. After weaning, the calves are moved onto the incorporation’s nearby farm where they weigh in at 100kg and are raised on pasture. From there, they eventually make their way back to Lisa once they’re in calf, starting the cycle afresh.

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or exposed locations. Triticale Range of cultivars from single to multiple grazings. Oats Best suit single grazing or multiple cut-and-carry where height is controlled. Quality changes with maturation: protein declining and soluble carbohydrate increasing. Sown in autumn; grazing time in winter not as flexible as Italian ryegrass. Brassicas Fall into two categories: summer feed or winter feed. All provide high quality feed; bulbing brassicas are a source of carbohydrate (stored starch and soluble sugars). Dangers in feeding can be avoided by careful transitioning between diets (at least 10 days) and supplement-

ing with straw and silage to increase gut fill and reduce rate of intake and by offering two-three smaller breaks during the day. Swedes Low DM% (11-12%) which can limit intake. Kale High in protein, good levels of soluble carbohydrate and high levels of calcium (7-8g/kg DM compared to pasture 2-2.4g/ kg DM). Can be ensiled; need to manage effluent loss. Turnips Use long narrow breaks. Introduce cows gradually to adjust to crop; offer a maximum of 2kg DM/cow (about 2-3sq.m/cow/day) in first five days increasing over next five days, up to 5kg DM/cow/day; no more than one third of the daily ration.

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DAIRY NEWS MAY 9, 2017

DAIRY GOATS  // 29

Dairy goats worth the effort MARJORIE ORR

KEEPING GOATS can

be a challenge for the farmer. They don’t just have to be kept behind fences, they sometimes have to be individually restrained for various procedures, the flock has to be yarded from time to time and the goats must have secure housing and shelter from the elements. All this can be difficult, but fortunately dairy goats generally adapt well. Sheep facilities are generally suitable for them, although adaptations are beneficial and effective shelter is imperative. Here we discuss physical restraint, shelter, housing, mustering, fences and yards, and mixing goats. Physical restraint Restraint of individuals is best by an arm round the chest and an arm round the back of the goat. If the goat can be coaxed against the wall of the yard with its rump in a corner, a hand under the chin is often enough to provide good restraint. The goat’s head is pushed up if the goat moves forward and this prevents it barging forward. Goats must never be physically hit or hurt in any way during handling, dogs shouldn’t be used unless the dogs are quiet and the goats accustomed to them, and electric prodders must never be used. Goats are sociable animals and they should

not be isolated unnecessarily. Shelter Good shelter is very important for goats, especially dairy goats. They dislike being cold or wet and are very susceptible to hypothermia, especially if they are thin or very old or very young. Unlike meat goats, dairy goats don’t have a lot of muscle and fat under their skin to help keep them warm, and unlike fibre goats they don’t grow an insulating layer of fibre to protect them from cold weather. They must have enough shelter to keep them comfortable in cold wet windy weather. In summer, they must have enough shade to prevent sunburn and heat stress on hot days. The best form of shelter is a shed that is wind and water proof and well drained, with a dry base and bedding such as straw so that the goats can rest comfortably. The shed must be cleaned out regularly; bedding must not become wet and dirty. Sprinkling the floor with lime after cleaning can help keep it smelling fresh and prevent flies breeding in the litter. Wooden slats can make a suitable floor if the slats are close enough to prevent toes becoming trapped but far enough apart to allow free drainage. Hay racks can be made from a wooden frame with vertical wooden slats fixed firmly to the wall

Goats need shelter to keep them comfortable in cold, windy and wet weather.

within easy reach. However, if the gaps are too narrow, heads and feet can become trapped. Commonsense design is important. In the paddocks, natural shelter like banks and windbreaks that provide effective shelter at stock level can help protect goats against showers and breezes but artificial shelter such as huts, sheds or a barn are still necessary in bad weather. Housing Unweaned kids that are being hand reared should be housed in a well-ventilated building that is wind- and waterproof with no draughts. The house will be warm enough for the kids if you can sit there comfortably in your shirtsleeves. Dry bedding is important, and the house should be cleaned out regularly to keep it comfortable and hygienic. Ventilation must be good. If ammonia builds up to a level at which it irritates your eyes and nose, the goats

will be suffering too. Individual covers can be useful for kids and adult goats that are weak. However goats with covers are very likely to be bullied by other goats, kids wearing covers can be abandoned by their mothers, and loose covers can easily become tangled. If covers are used, very good supervision is needed. Mustering Herding goats can be a bit like herding cats, and it is necessary to be patient, and to move them quietly and slowly. A food incentive in the yards can be a help. It’s best not to use dogs unless the goats are accustomed to them and the dogs stay back and are quiet. Fences and yards Dairy goats are generally much easier to keep in than feral goats, but goats of all types need good fencing to contain them. Because they are so intelligent, they can find their way out of many enclosed spaces unless

the enclosure is made goat-proof. Some goats are good at jumping and will soar over the average stock fence. It requires ingenuity to keep them in if they are determined to

get out. The best solution is to provide them with compatible companions and sufficient feed, water and shelter for them to prefer to stay in. Wooden neck frames and dragging ropes can cause more problems than they solve. Electric fences and electric outriggers can be very effective, but they must be well-positioned and maintained and well supervised. They shouldn’t be used near very young kids, because they are not well-enough coordinated to avoid shocks and can die a horrible death if they become entangled. When goats are yarded and pressured they are

more likely to bully their flock-mates, and if bullying occurs it takes good supervision to prevent injuries. The time in the yards should be minimised and any bullies removed. Yards can be dangerous if there are protrusions that can cause injuries or gaps where feet or heads can become wedged. Try to remove potential hazards. For example, block the space above hinges on gates. Always watch yarded goats carefully to prevent accidents. • Dr Marjorie Orr is a lifestyle farmer and retired vet. This article was reproduced with permission from lifestyleblock.co.nz

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DAIRY NEWS MAY 9, 2017

30 //  DAIRY GOATS

Long history of milking to NZ to provide dairy products en route. Some were farmed for their milk by the early setGOATS HAVE been tlers, but the commerused for milk produccial dairy goat industry tion for at least 9000 didn’t begin to develop in years, but in New Zealand dairy goats are a rela- earnest until the 1980s. tively recent introduction. Since then it has become a small but well-estabSometimes milking does lished industry centred were kept on the ships in Waikato. In 2005 the that brought immigrants MARJORIE ORR

region had about 26,000 milking goats; all NZ had about 40,000. There is a small but steady market for dairy goat milk and dairy products in NZ. Goat milk is popular because it has the reputation of being more readily digested and less likely to cause allergic reactions than cow’s

PLACID, INTELLIGENT GOATS dairy breeds are generally good animals to have on the lifestyle farm because: ■■ They are placid and intelligent ■■

They don’t require shearing or Tb testing

■■

With good handling and good facilities, lactating does can be handmilked fairly readily

■■

Hand-reared kids make good pets for children; castrated male kids can usually be acquired from dairy goat farms, where they have little value.

Dairy goats are a relative recent introduction to NZ. Right: Goat milk infant formula from NZ is highly regarded around the world.

milk, it’s suitable for a range of dairy products and is particularly good for making cheese. Milk from many of the North Island commercial dairy goat farms is taken to the Dairy Goat Cooperative (DGC) factory in Hamilton where it’s made into milk powder and exported, mainly to

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China. The DGC is farmerowned, with 69 farmer shareholders, most in Waikato region and some in Northland and Taranaki. All the suppliers’ farm milk goats only -- mainly Saanen, and some Toggenburgs and some Nubians. Most dairy goats in NZ (probably about 80%) are Saanen, a breed that originated in Switzerland. They are mediumlarge, with coat colour white or cream and they have erect ears. The Sable is a coloured variant of the Saanen developed in NZ.

The Toggenburg is of medium size, brown in colour varying from light fawn to dark chocolate, with distinct white facial stripes from above the eye to the muzzle and with white along the edges

and tips of the ears, on the lower legs and inside the legs to the trunk and around the tail. • Dr Marjorie Orr is a retired vet. This article first appeared on www.lifestyleblock.co.nz

DAIRY NEWS MAY 9, 2017

DAIRY GOATS  // 31

Goats must get fresh pasture every day.

Goats at the end of their tethers MARJORIE ORR

DO YOU think the easiest way to

keep your berm tidy might be to get a goat? Don’t be fooled; it takes a lot of time and effort to properly care for a tethered goat. Many people who tether goats truly think goats are tough creatures that will eat anything, but in fact they are remarkably fussy eaters, and they have a miserable life for many reasons. They usually have insufficient food and water, they are always lonely, they are often cold and miserable, and they are very much at risk from vandals, dogs and vehicles. The tethered goat is the subject of more complaints to the RNZSPCA and to MAF than any other animal, and in too many cases the complaints are justified. Goats must have good shelter ■■ Goats don’t have a layer of fat under their skin as sheep do, and their coat is not greasy like wool so it’s not so waterproof. For these reasons they suffer in cold wet weather. Tethered goats are particularly at risk from the elements, and they must be provided with a robust weatherproof hut. ■■ Don’t forget to clean the hut out regularly if it has a solid base or move it frequently if it hasn’t. Goats will spend a lot of

time in their shelter when the weather is bad and it will get very dirty inside. Tethered goats often don’t get enough food and water ■■ Goats must get fresh browse or pasture every day and they are surprisingly fussy eaters. They may have a good appetite for young trees and the growing tips of expensive plants, but they don’t like soiled food. The grass that grows by the roadside is often dusty, oily and rank. It is not good feed unless there is plenty of it and the goat is moved frequently. ■■ Tethered goats need to have clean water available to drink at all times, especially when conditions are dry. The water container should be secured so it can’t tip over easily. Single goats are lonely ■■ Goats are intelligent social creatures, and they like the company of other animals -- preferably other goats. Solitary goats will be lonely. ■■ If a goat is to be tethered, it should be very tame, preferably hand-reared, and it should be given a lot of attention. Tethered goats are vulnerable ■■ Tethered goats are much at risk of theft and attack by dogs. They should be supervised at all times and brought close to home at night and at any other time when

they can’t be supervised. The tether should not be long enough to allow the goat to wander onto the road where it could be hit by a vehicle and/or cause an accident. ■■ They shouldn’t be tethered beside gravel roads where they can’t get away from the dust stirred up by traffic. ■■ They are at risk of becoming tangled in their tether or even strangled by it, so they shouldn’t be tethered on banks because of the risk of strangling if they should jump off, and they shouldn’t be tethered near any object the rope could become tangled around. Their general health is often neglected ■■ Like sheep and all other goats, tethered goats may need anthelmintic drenches to get rid of internal worms. Your vet will advise how often you should drench them. ■■ Their hooves should be trimmed at least once a year, and sometimes more often if the horn grows rapidly. ■■ Angora-type goats must be shorn every year, preferably in spring. So, if you need to keep your berm tidy, much better to use a scythe or a lawn-mower rather than a tethered goat. • Dr Marjorie Orr is a retired vet. This article is reproduced from www. lifestyleblock.co.nz ■■

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DAIRY NEWS MAY 9, 2017

32 //  DAIRY GOATS

Breeds in NZ ANGLO NUBIAN

BRITISH ALPINE

The Angelo Nubian is of Eastern origin. They are alert, sound, and well balanced with a high proud head carriage. They are medium to large, with pronounced nasal bones (Roman nose) and long pendulous ears set low on the head, wide and open. The coat is any colour or combination of colours.

The British Alpine is of Swiss type. They are large, graceful, with a smoothly blended body exhibiting an attractive dairy type. The colour is black with the same white Swiss markings as the Toggenburg. SAANEN

The Saanen originated in Switzerland. They are mediumlarge, of attractive dairy type, alert and vigourous. The coat colour is white or cream. Ears should be

erect and alertly carried, preferably pointed forward. Saanens are the predominant breed in NZ.

edges and tips of the ears, legs from the knees and hocks down to the hooves and the inside of the legs to the trunk, on the rump and around the tail.

TOGGENBURG

The Toggenburg is of Swiss origin, coming from the Toggenburg Valley in Switzerland. This breed is of medium size, sturdy, vigorous and alert in appearance. The colour is brown, varying from light fawn to dark chocolate. Distinct white Swiss markings are: facial stripes from above the eye to the muzzle,

SABLE

The Sable originated in NZ about 1985. It can be any colour but must not have more than 50% white. The Sable was developed from the Herd Register Saanens which have a colour gene. The milking ability of the Sable is the same as the Saanen. • Source- NZ Dairy Goat Breeders Association website

Saanen is the predominant breed in NZ.

Goats with sore feet lose vigour OVERGROWN HOOVES

can cause a lot of problems including stress on joints and bacterial and fungal infections. When your goat has sore feet, she/he will not eat properly and can lose vigour. At six-weekly intervals, use shears and a sharp knife to trim the sidewalls of the claws and sole. It may take many months to achieve the desired result. Hints: Put a glove on the hand holding the foot, for protection in case the shears or knife slip. Trim after rain or after the goat has walked through wet grass, or after scrubbing hoof with a nail brush and warm water; the hoof will be softer to cut. You can cut safely until pink starts to shine through the white of the trimmed

part; this shows you are getting near the ‘quick’, which will bleed if you cut deeper. This does not show as easily on black-hoofed goats, which usually have softer feet anyway, so go easy on them. Start on a front foot, and then move on to the back ones; the goat is less likely to play up. If the goat kicks very hard with her back foot, pick it up by putting your hand tightly round the hamstring above the hock, then run your other hand down to the foot, take up your usual grip, and get cutting. The hamstring grip immobilises the muscles of the lower leg long enough for you to get a firm grip without hurting the goat, and once she realises you have her, she will behave better. • Article sourced from NZ Dairy Goat Breeders website

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DAIRY NEWS MAY 9, 2017

MACHINERY & PRODUCTS  // 33

Balers have it all wrapped up

McHale Fusion 3 Plus applying film on film.

carry two types of film, and a premium of about $1 per bale over the traditional net wrap/film technique. This premium is likely to disappear as the technology gains acceptance. McHale claims the concept can

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mated milking system from GEA is now on sale in the US after being cleared by the FDA for the production of gradeA milk. The Monobox has the same robotic milk module and milk rack as GEA‘s DairyProQ automated rotary, but in a box-style configuration. Milking is efficiently done in one quick, uniform procedure, the company says. After attachment, each milking step – stimulation, teat cleaning, forestripping, milk harvest and post-dipping – occurs inside the liner. The speed of milking requires cows to spend less time at the milking box and more time eating and resting; and the technology also allows more milkings per robot per day. “The efficiency of the milking process takes the Monobox to the next level in automation,” says

Matt Daley, a senior sales executive at GEA. “A camera on the milk rack matches the teat cups to the teats for the fastest unit attachment in the industry. It‘s an extremely efficient and proven system giving dairy farmers an automated milking option unlike anything else on the market.” The Monobox is said to offer fast milking for herds of any size, and to focus on milk quality. High-tech sensors analyse milk colour, conductivity and temperature, and the back-flush process cleans and disinfects the milking unit between each cow. GEA suggests the system can be seamlessly integrated into any operation and suit many different management styles. Its surface box mount makes it easy to install in new or existing barns, and maintenance is quick and convenient.

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LA

THE MONOBOX auto-

result in up to 15L of extra milk production per bale because of ‘sweeter’, more energy-dense and protein-rich fodder. These claims are backed up by independent trials by Dr D. Davies of Silage Solutions Ltd in the UK.

N

THE DEVELOPMENT of round bales for silage or baleage in the late 1980s made a huge difference to forage conservation, by removing the need for expensive and labour intensive silage clamps. First incarnations used twine for tying, making for time consuming and messy removal, so net wrap was quickly adopted, leading to high output in the paddock and easier feeding out. Back then, several companies experimented with barrel-wrapping the bales for weather protection, particularly for straw stored outside, but technical issues with the composition of films available at the time led to inconsistent results, mainly due electrostatic build-up in the machines.

Comparing bales made by traditional net wrap and film versus the film-on-film option saw an increase in overall dry matter of 2%, but DM losses due to moulds were reduced by about 80% from 8.64kg to 1.69kg per bale, with bales weighing about 865kg fresh weight. Meanwhile, DM losses during storage fell by 7.5%, thereby showing that overall losses attributed to moulds and storage was reduced by 52%. Looking more closely at nutritional values, pH remained similar at 4.5, sugar content (g/kg DM) increased by 27% from 70 to 89g/kgDM. The new technology has major benefits, not least in feed quality, which will help to justify the slightly increased costs of consumables, which as previously noted will no doubt fall as the technique is more widely adopted.

EW

ZE

A

IN

markd@ruralnews.co.nz

Today, a number of manufacturers and different film technology mean that film-on-film technology has gained a sound following: the bales are wrapped with wide film initially, before the normal outer covering is applied. The composition of the inner film allows it to be pre-stretched by 7-30% depending on the manufacturer, with the outer wrap normally applied as four layers and pre-stretched by 55 to 70%. One industry stalwart, McHale, distributed locally by Power Farming Wholesale, suggests film-on-film is a game-changer, not least because of a better end-product because of the immediate exclusion of oxygen, which leads to higher dry matter and less mould, and because of easy film removal, less waste and easier recycling. The only real negatives are the need for the operator/contractor to

MA DE

MARK DANIEL

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DAIRY NEWS MAY 9, 2017

34 //  MACHINERY & PRODUCTS

Visionary built global giant MARK DANIEL markd@ruralnews.co.nz

A WELL-KNOWN figure

in world agricultural engineering has recently died. Robert J. Ratcliff, the founder, president and chairman of global tractor and machinery giant AGCO, acted on a vision to supply the needs of farmers worldwide. His vision is said to have led him and his management team to buy Deutz-Allis Corporation in 1990, sowing the seeds for the AGCO business we know today. In 1994 AGCO bought the worldwide holdings of tractor stalwart Massey Ferguson, and in 1997 the

Robert Ratcliff

high-tech tractor maker Fendt. In 2002 Ratcliff led the acquisition of Caterpillar’s tracked tractor business Challenger, then snapped up Valtra

in 2004, so consolidating its position in Europe and South America. During his tenure Robert Ratcliff took the company from a turn-

over of $US200 million in 2000 to a lofty $US5.4 billion in 2005. He retired in 2006, having acquired 21 businesses along the way. He was a hands-on leader who strongly supported employees, their interests and goals; likewise the dealers, from whom he regularly gathered feedback. The current chairman, president and chief executive, Martin Richenhagen, says “Bob Ratcliff’s vision, leadership and dedication took AGCO to the heights that it occupies today; he will be greatly missed and our thoughts go out to his entire family.”

Amazone’s new paint plant.

Coating plant sets the standard GERMAN MACHINERY maker Amazone has spent Euro 20 million on a new paint plant at its Hude-Altmoorhausen drill factory; it is reckoned among the most up-to-date in the farm machinery industry. This single-largest purchase in the company’s history uses cathodic dip painting to achieve greater corrosion protection; it is similar to those used in the automobile industry. The technology sees the positively charged item to be coated attracting galvanising molecules from the solu-

tion in the dipping bath that are negatively charged. Capable of painting 750,000 sq.m of surface per annum, the plant covers 8000 sq.m, sub-divided into three key areas. Alongside hanging-up and takingoff stations, it has a pre-treatment and primer hall, a dip paint and powder coating area and three curing ovens. The areas are connected by an overhead track system extending to 2.3km and using fully automated transfer throughout.

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MACHINERY & PRODUCTS  // 35

Calves suck feeder dry every time MARK DANIEL markd@ruralnews.co.nz

A NEW five-calf open

feeder from Stallion Plastics is said to be light, strong, easy to clean, big enough for calves to grow into and up to a third cheaper than traditional feeders. Made by Axiam Plastics, Whanganui, the feeder is injection, rather than rotationally moulded, and is mounted on strong steel brackets. Widely spaced teats (Skellerup Peach) allow calves room to grow; these are screw mounted for fast removal, cleaning and replacement.

Because of the way the feeder has been shaped and angled, calves are able to suckle virtually all the milk out of it at each feed. Farmers who trialled a prototype last season particularly liked the hygiene aspect, Stallion says. “All we have to do is screw the teats out, blast the feeder with the hose and screw the teats back in,” says Louise Pickering, from Culverden. Rearing up to 600 calves a year, including replacement heifers, beef crossbreds and Friesian bulls, she was among several farmers who wanted to keep the prototype feeder after testing it last spring.

“I wanted to buy more. I like having some smaller feeders; they’re good when you have a pen of slow calves, and we could easily get five onto this one because of the way the teats are angled.”

Grant Allen, chief executive of Stallion Plastics, says the five-calf feeder has been designed to conform to industryaccepted best practice as recommended by Dr Bas Schouten.

“Calves bond in small groups; feeding them in groups of five to 10 appears to stimulate a good physiological response among pen mates and often a more

active suckling reflex in some slower feeding calves. “The new feeder helps nurture their bonding, and because it is an open

New fivecalf open feeder from Stallion Plastics.

trough the first calf to finish feeding doesn’t push the others off their teats.” www.stallion.co.nz

Reel in power bills

PRO FENCING MADE EASY

WINTER APPROACHES, putting upward pres-

P RO F E N C E E ASY BAT T E N SYST E M

EASY TO INSTALL

WORK6884

sure on dairy farm operating costs, and though fixed costs may be hard to reduce there is still scope for substantial savings. EECA, the government’s energy advisory arm, reckons New Zealand has about 5 million dairy cows on 11,970 farms, the average herd size being 419 cows. These farms annually use $310m of electricity, and EECA estimates dairy farmers could save about $44m by using energy reducing technologies, chiefly heat recovery ($25m), VSDS vacuum pumps ($12m) and vat insulation ($4m). A costs breakdown for a typical dairy farm shows energy at about 5%, of which water heating is 25%, water pumping 20%, the vacuum pump 15% and lighting 2.5% So how does a farmer save money? In the case of water heating, fit timers to make the most of the best tariffs, install flow restrictors and of course fix leaks. On the milk cooling front, check that pre-coolers are operating properly and regularly service refrigeration plant. As plant comes up for refurbishment or renewal, EECA suggests operators look at heat recovery systems. Traditionally, heat removed during milk chilling is released to atmosphere, so consider this energy source to heat water for cleaning and save perhaps 10-20% of shed costs. Properly done, payback can take as little as two years and help smooth out fluctuating milk solids income. It’s also worth looking at variable-speed drives for the plant’s vacuum pump system, which allows the pump to reduce or increase speed to meet the pressure demand. If more cows are connected to the milk cups, speed increases, and vice versa, as cups are taken off. The concept has the potential to make energy savings of 5-15%, reduce animal stress and lower somatic cell counts. And wear and tear on the plant is reduced, as pumps spend much of their time running at lower speeds.

LIGHTWEIGHT & STRONG

NATURALLY INSULATED FOR ELECTRICAL USE

COST EFFECTIVE

eurosteel.co.nz

5 YEAR WARRANTY

DAIRY NEWS MAY 9, 2017

36 //  MACHINERY & PRODUCTS

Compact, yet versatile AUSTRIAN MACHINERY maker Pottinger

has built a solid reputation for its loader wagons and claims to be the world’s number-one seller, offering some 50 models. Designs are specific to customer needs, such as mountains or flat terrain, and operations ranging from family farms to contractors and large-scale agriculture. The latest offering is the Torro 5510 Combiline, with more compact dimensions, including a shorter overall length, which will be welcomed by farmers dealing

with narrow field or yard entrances. The machine uses the proven Power Cut knife bank concept, with 45 integrated knives achieving a theoretical chop length of 34mm, which is said to produce best quality forage. The Easy Move swing-out knife bank is a pat-

ented part of the Power Cut system, and the choice of optional Twiblade double knives incorporates individual knife protection, as well as a double service life. Up front the wagon uses a 6-bar floating pick-up that is 100% free-floating, offering the ability to follow

www.originagroup. co.nz Pottinger’s Torro 5510 Combi line.

VW Amorak offers a new V6 engine.

The best just got better MARK DANIEL markd@ruralnews.co.nz

WHEN WE reviewed the VW Amorak in February 2016, it was fair to say we quite liked it. For 2017, that ‘like’ has just moved up to a ‘love’, especially because of the new V6 engine offering. Though pricey, as all flagship models are, with a V6 pumping out 165kW of power and delivering 550Nm torque, it is smoother, pulls better than James Bond and gets even better when the over-boost delivers 180kW and 580Nm. This occurs when the throttle is set at more than 70%, the speed is above 50km/h, and it lasts for about 10 seconds, so is great for overtaking on the open road: 100km/h comes up in 7.9 seconds. Stopping is by industryleading disc brakes on each corner. Interestingly, towing capacity remains unchanged at 3000kg, but even with that maximum load on the towbar the eightspeed transmission is a joy, and leads the field with its silky-smooth shifts, which can be hurried up by moving to the S-mode on the shift lever, or the wheelmounted paddle shifters. This reviewer let the technology do its thing and came away suitably impressed. The ride, as enjoyed in the previous incarnation, was comfortable and compliant and didn’t have the normal tendency of utes to feel over-sprung when the load bay is empty – none of that ‘twitchy’ feel.

ground contours accurately to ensure a clean, contaminant-free collection from the swath, and a lowered scraper floor which allows an easy switch from loading to transport duties as the season progresses.

Stop wastage – reduce pasture damage

NZ Made

Standard Feeder

Oval Feeder

C5 Bolted & C6 Pinned

S2 Pinned

• 1 x size 15 bale • 2m diameter • 15 feed positions • 25-30 animals

Whether or not this is because the rear leaf springs are set outside the chassis rails, we don’t know. Permanent 4WD with a centre Torsen differential makes cornering sure-footed, though some reviewers question the lack of 2WD. But the technology delivers a drive split favouring 60:40 rear to front as normal, shifting to 80:20 under hard acceleration or 40:60 when there’s soft stuff under the wheels. At the business end the load tray is the largest out there: 1555mm long, 1620mm wide and 508mm deep. Importantly, the distance between the inner wheel arches is 1222mm, no doubt helped by the widespaced springs, and accommodating standard Euro pallets. Vertically-challenged folk might find the 780mm load height a bit of a reach. The cab is wide and airy, and the front seat jockeys get great seats, great instrumentation and a good climate package. So is it worth the price ticket? A resounding yes! The opposition might point out that even at this level the Amorak V6 misses out on some hi-tech gizmos like blind-spot monitoring, lane departure warning and adaptive cruise control. Is that a problem? Maybe, but not for this driver who likes to drive, and is a follower of the KISS doctrine. One thing’s for sure, if you want to get from A to B quickly and smoothly while leaving the others in your dust, look no further.

$850 NOW

750

$

EX GST

• 2 x size 15 bales • 3 x size 12 bales • 35-40 animals

$100

DISCOUNT

$1200 $

NOW

1100 EX GST

NEW ZEALAND’S PROVEN STOCK FEEDER FOR 24 YEARS • 100% New Zealand Made • 100% New Zealand High Tensile Steel

Move easy with Meridian

Ubco 2x2 electric bikes 5 to be won

Sign up your new dairy farm with Meridian Energy and be in to WIN 1 of 5 Ubco 2x2 electric bikes. Moving farms is always stressful, but we do what we can to save you hassle. Our dedicated agri experts can take care of your move, offer electricity rates tailored to your farm and give you great deals through your rural supplier. What’s more, Meridian is committed to a cleaner environment, so we’re giving away five Ubco 2x2 electric bikes for you to blat around your new farm on.

JOIN NOW AND ALSO GET

$100 Welcome Credit for your first site*

$50

Credit for each additional site

*Terms and conditions apply – visit meridian.co.nz/tandc

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0292ADN

Signing up your new dairy farm is easy, call 0800 496 444 or visit meridian.co.nz/movefarm

12/04/17 1:44 PM