Dairy News 7 December 2021

Page 1

Keep a ‘war budget’ in the drawer. PAGE 3

FIGHTING COVID

ANOTHER MASTER CLASS

Dairy to the rescue? PAGE 10

Dual-rotor swathes PAGE 24

DECEMBER 7, 2021 ISSUE 485 // www.dairynews.co.nz

NEW CEO “It’s a tremendous privilege to be named the next chief executive of LIC, a great company with a critical role in New Zealand’s dairy industry, and a great team of dedicated people ”. – David Chin PAGE 6

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DAIRY NEWS DECEMBER 7, 2021

NEWS  // 3

Keep a ‘war budget’ in the drawer SUDESH KISSUN sudeshk@ruralnews.co.nz

Dairy provides a helping hand. PG.05

DNA sequencing milk. PG.20

Press screw separator. PG.23

NEWS ������������������������������������������������������ 3-12 OPINION ���������������������������������������������� 13-15 AGRIBUSINESS ������������������������������������16 MANAGEMENT ��������������������������������18-19 ANIMAL HEALTH ��������������������������� 20-21 MACHINERY & PRODUCTS ���������������������������������������22-24 FARM DAIRIES ��������������������������������25-27

FARMERS ARE being urged to use the strong milk price to pay off debt and be better prepared to withstand shocks. Speaking at online DairyNZ Farmers Forum last month, solutions and development lead adviser Paul Bird noted that while industry debt had dropped to $38 billion, reducing it further would be “a good thing”. “The average dairy farm is still made up of half debt and half equity. That’s still quite a big chunk of debt,” noted Bird. Farms with returns of around 5% would come under pressure if interest rates rose to 5% and beyond. Bird says paying debt puts farmers in a good position to withstand shocks. It also puts farmers in a solid place if they are “looking for the next opportunity to grow in dairying”. The farming sector is facing uncertainty on several fronts – environment regulations, market volatility and Covid. While New Zealand dairy farmers could end up receiving a record milk price this season, it’s hard to predict the milk price in the coming seasons. Over the past 10 years, NZ farmers have enjoyed a $7-plus milk price in three seasons while the milk price dropped below $6, including $3.90 in 2015-16, in another three seasons. For the remaining four seasons, the milk price sat between $6 and $7.

Paul Bird, DairyNZ urges farmers to use the strong milk price to reduce debt and save for a rainy day.

Bird notes that the midpoint is about $6.50/kgMS and Fonterra’s new strategy aims for a future milk price of between $6 and $7/kgMS. Budgeting on a $6.50 milk price is a reasonable starting point. “Some people will say that is too conservative but I think that’s reasonable with some dividend on top of that,” he says. Bird says the key thing is to plan around the “upside and downside” of the starting point. “This season the milk price could be much higher than $6.50/kgMS. “Then putting plans in place on how to actually utilise that extra money is very important. “Another couple of dollars on top of that $6.50 – that’s a lot of cash

coming and you can easily spend that or invest that unwisely. “So I really suggest that people sit down and think about how they can invest that money – is it debt reduction is it reinvesting in housing, a new farm or off farm investment?” Bird suggests farmers keep a “war budget” in the drawer for the eventuality of a low milk price. “We hope it doesn’t happen but it has in the past. Have a budget in the drawer [for when] you have a really low milk price. Let’s say $5 – I don’t know the right number, but put that in there and develop a plan so you know how you’re going to navigate if things turn to custard and we get a really low one.”

Bird says having a solid profitable business is the best way to be prepared for a shocking season. He compares dairy farming to walking across a bridge with strong crosswinds. “You’ve got to have both feet on the ground and you’ve got to hold onto the rail. From a financial perspective, to stay on the bridge and not get blown off is to have a really high operating profit margin and really high operating profit. “And that gives you that buffer in those margins, allowing you to hunker down and not get blown away by that gust of wind. “You are still there and you can start moving forward again when the wind dissipates.”


DAIRY NEWS DECEMBER 7, 2021

4 //  NEWS

Allow for rising costs SUDESH KISSUN sudeshk@ruralnews.co.nz

RISING INPUT prices

mean dairy farmers need to look at ways of managing costs and produce milk efficiently. That’s the message from DairyNZ principal economist Graeme Doole. He cautioned farmers that while the milk price is reaching a record level, they will be burdened with high cost inflation over the next two years. “So it’s just about planning and how we can reduce costs and be effi-

cient in our production,” he said. “That’s the big low hanging fruit for our industry.” Speaking at the recent DairyNZ Farmers Forum, Doole said Covid-19 is affecting the world trade situation – something he hasn’t seen working in the economics field for the past 20 years. “On the shipping, for example, we are having increases in shipping times of 75%,” said Doole. “Seen in the last six months alone, the cost of shipping goods from Asia

SHIPPING IS KEY

Securing vital ocean freight has helped New Zealand dairy industry attract top price for its products.

to the US has gone up by 15 times – this is just due to port delays and closures.” Input costs on farms

are also rising. Doole notes that superphosphate prices are up 15% and urea 67% since last year.

However, global demand for food remains high, despite prices rising a third on average compared to last year.

VERY GOOD access to ocean freight has helped New Zealand dairy farmers attract top prices for their products. Graeme Doole, DairyNZ, says secure shipping services has helped us maintain access to international demand. The high milk price has also been helped by poor production seasons in the US and the EU – down by 1 to 1.5% in milk yield. “This means the low supply is pushing prices up,” says Doole. He notes that all agricultural sectors across the globe have been affected by the pandemic – some even more impacted than NZ. He says NZ dairy has done the fundamentals well, resulting in a strong milk price and its flow-on benefits to the economy. “We are the most competitive dairy producer in the world with well established ways of farming – farming pasture with good grazing skills and financial management.” He notes that countries with less developed export functions aren’t doing so well. The US, for example, is producing more milk but they are finding it hard to get their dairy products on ships. “Ships are being paid 15 times more to carry goods from Asia to the US; they are unloading goods and going straight back to Asia without filling up with US products,” says Doole.

For next season, Doole is predicting a $6.50/kgMS milk price. Doole is banking on global milk supply to increase next year. He notes that two of the world’s largest milk producers – the EU and the US – will produce more milk next season. “I expect them to be 1% up rather than 1% down as they are this year,” he says. “This will put more milk and dairy prod-

ucts into the global markets. With the increase in global supply, we expect prices will come down but will still be around the average price that we have seen. We are looking at $6.50 given the world isn’t going to correct itself anytime soon.” He believes New Zealand farmers will remain in the box seat thanks to better access to ocean freight and cost effective systems based on pasture grazing.

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DAIRY NEWS DECEMBER 7, 2021

NEWS  // 5

Dairy prevents falls in aged-care facilities JESSICA MARSHALL jessica@ruralnews.co.nz

NEW RESEARCH

published in the British Medical Journal has revealed that increasing the amount of dairy foods in the diets of agedcare facility residents can reduce the likelihood of falls and fractures. According to Dr Sandra Iuliano, who headed up the study, when dairy was introduced to the diets of aged-care facility residents, there was an 11% reduction in the number of falls that occurred. She says that current nutritional recommendations meant that women require 4 servings of dairy and 3.5 servings of dairy for men per day. “What we observed in aged care is that residents consumed about one serve of dairy, which is about a quarter of what

they need,” Iuliano says. She says they asked the question of what would happen if the diet of agedcare facility residents by adding more protein and calcium into their diet, would it change the amount of falls and fractures among residents? To answer this, the study looked at 7195 residents across 60 different aged-care facilities of varying sizes in Australia, with 30 facilities providing 1.5 additional servings of dairy to their residents and 30 continuing as normal. “We included the dairy food in several different ways,” Iuliano says. These included giving residents the option of cheese and crackers of yoghurt at snack time. Where dairy was already present, it fortified the milk, meaning residents received twice as much protein and calcium in

A study has found that when dairy was introduced to the diets of aged-care facility residents, there was an 11% reduction in the number of falls that occurred.

one serving. Substitutes were made within the menu, with gravy being switched out for a white sauce, and modifications were also made to meals to increase the dairy content. Iuliano says these basic changes made a big difference. “The results of the study showed a 33 per cent reduction in all bone

fractures, a 46 per cent reduction in hip fractures and an 11 per cent reduction in falls. “Those residents having the extra dairy maintained lean muscle mass in their arms and legs, which could likely have contributed to the reduced falls risk.” Dr Catherine Gunn, senior research scientist at Fonterra’s Research

RABOBANK HQ MOVES TO MOOLOO COUNTRY RABOBANK SAYS the reloca-

tion of the bank’s head office to Hamilton marks a new chapter for the bank. Rabobank New Zealand chief executive Todd Charteris says the bank is now located at heart of the vibrant Waikato food and agri region. “The new Rabobank Centre will be a place where our employees, farmers and community leaders can come together to share ideas to further advance the industry and

to help the bank’s clients achieve their goals,” he says. “But this is about much more than opening a new office. It’s about making a statement about who we are and what we stand for. “It’s about helping us embed a mindset across our business centred on getting closer to our clients, regardless of where we work across New Zealand, so we can make even better and more effective decisions for them.” Charteris says the Waikato is a

real hub for food and agri innovation and development. “We feel we are now ideally positioned to support our clients and to further grow our New Zealand business.” The new head office in Union Square houses employees: 50 head office staff based in Wellington previously joined in the new building by members of the Waikato regional team who had previously been based in the bank’s Hamilton office on London Street.

Synlait trims emissions CANTERBURY MILK processor Synlait says it has recorded a significant improvement in its operation’s greenhouse gas emissions. Synlait’s on-farm emissions intensity, per kgMS, reduced 5% over the past year, or 10% compared to its financial year 2018 (FY18) base year when targets were first established. Total off-farm emissions have remained stable since last year, however, emissions intensity per

kg of product, has reduced by 24% compared to FY18. The company produced its sustainability report last week. Synlait director – sustainability, brand, beverages and cream, Hamish Reid, says the company’s sustainability journey started in 2017. “That’s when we realised that business could no longer talk about, and plan for, perpetual continuity.

“Since then we have chosen to pivot, building and delivering on our sustainability strategy, and we are making some impressive gains, which have exceeded our own expectations. “We still have a long way to go – as a company, as an industry, and as a country, but here at Synlait we are determined to change, and to inspire others to join us.” @dairy_news facebook.com/dairynews

and Development Centres, was on the study’s steering committee and says the results show that dairy can be helpful to the elderly in terms of their health and wellbeing.

“This study helps to demonstrate the important role dairy could play in improving nutritional outcomes in the older population. “A glass of milk continues to be one of the richest sources of readily available dietary calcium and protein, which play a significant role in growing and maintaining healthy bones, muscle and immunity through all life stages.” Gunn says today’s consumers are focused on leading healthier and more active lifestyles, something she says dairy can help contribute to. “By 2030, over 0.7 billion of the world’s population will be aged 70 and

over, reaching 0.9 billion by 2040. Studies like this latest one provide solutions to some of the challenges faced by the ageing population.” Fonterra supported the study along with the Centre National Interprofessionnel de l’Economie Laitière, Aarhus University Hospital, University of Melbourne, Austin Hospital Medical Research Foundation, Sir Edward Dunlop Medical Research Foundation, Dairy Australia, California Dairy Research Foundation, National Dairy Council, Dutch Dairy Association, Dairy Council of California, Danish Dairy Research Foundation and Dairy Farmers of Canada.

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DAIRY NEWS DECEMBER 7, 2021

6 //  NEWS

Chin named new LIC CEO FARMER CO-OPERATIVE LIC has promoted

David Chin to the role of chief executive officer. Chin, currently LIC’s general manager operations and service, starts in his new role on January 17. He replaces Wayne McNee who stepped down last week after nearly nine years in the role. Chin is part of the co-op’s senior leadership team, and is responsible for its laboratories, farms and the field teams that deliver services onfarm, including artificial breeding, herd testing and FarmWise consultancy. He has held various

other leadership roles at LIC since starting in 2006, including chief transformation officer, key account manager and marketing manager. Chairman Murray King says Chin is a highly regarded leader at LIC with extensive experience in the business. “It really is great news for the co-op that we have the depth of talent to appoint from within LIC to provide continuity for the wider team and our farmers,” says King. “David Chin has a natural empathy for people, knows our farmers well and knows the busi-

David Chin, who takes over as LIC chief executive next month with Agriculture Minister Damien O’Connor at the co-operative head office.

ness having led several key strategic initiatives, including overseeing the recent transformation programme.” Chin was heavily

involved in the refinement of LIC’s strategy earlier this year. The implementation of this strategy will continue to be a key focus for the co-op under his

leadership. King says the board is confident in Chin’s leadership, combined with his deep operational knowledge and passion for

delivering value to farmers. Chin says it’s “a tremendous privilege’ to be named the next chief executive of a great company with a critical role in New Zealand’s dairy industry, and a great team of dedicated people. “I’ve been fortunate to get to know many of these people as well as many of our farmers over the last 15 years and it is truly an honour to be given this opportunity to lead the co-op. “At the forefront of this will be the ongoing implementation of LIC’s refined strategy, which

is strongly supported by farmers because it puts them at the heart of everything we do. “Under that strategy, we have made clear commitments to our farmers in key areas to deliver value to them on-farm, and a key focus for me as CEO will be making sure we are meeting those commitments.” He thanked McNee for his hard work at LIC. Interim chief executive David Hazlehurst will return to the role of chief financial officer when Chin starts his new role. @dairy_news facebook.com/dairynews

LAMENESS DATA COLLECTION SNAG FONTERRA SAYS its Farm Insights Report sent out to farmers recently doesn’t benchmark lameness on shareholders’ farms. This is because of variations in how farmers count lameness, says veterinary technical manager Ash Keown. The Farm Insights Report is an assessment given to Fonterra-supplying farms each year, covering food safety, animal health and welfare, and environmental topics such as effluent management and stock exclusion. The reports were sent out to farmers in September. Speaking at the Smaller Milk and Supply Herds (SMASH) online seminar recently, Keown said the co-operative relied on farmer shareholders for information on their farms. “This is really valuable to the

duction. “This can be a really impactful disease, both in terms of animal wellbeing but also, cows that are lame or have reduced mobility tend not to eat as much, they’re not going to be as productive in terms of milk, they’re not as fertile, so it’s got all these other downstream effects.”

co-op, and we need that to do what we do, but this is really an opportunity to reflect that back to you as farmers,” Keown says. He says lameness can have a big impact on animal welfare and milk pro-

Lameness can have a big impact on animal welfare and milk production.

However, Keown said the reason they were unable to benchmark lameness is because of the differences in how different farmers record it. “The challenge that we’ve got here is just in the way that farmers are recording and reporting this data,” Keown said, adding that there were differences in how farmers approached it. “So, some farmers might be recording and reporting every single cow… even a grade 1 lameness and all they might have done is identified her and then they’ve given her a rest for a couple of days and she’s been fine and they record that down as a lame animal. “Whereas we’ve got other farmers that are only sort of reporting the animals that they draft out and treat,

for example, so maybe they’ve treated them with veterinary medicines and those are the ones that they report.” He says this spread of results makes it difficult to benchmark lameness within the Farm Insights Report. He says that instead of benchmarking, and telling farmers they sit somewhere the co-operative isn’t certain they are at, the report is warning farmers that every lame animal they have has a cost attached to it. “So, really, this page [in the report] is just about saying, ‘Hey if you hadn’t thought about lameness before, there’s a significant dollar value attributed to this’, and we’ve really focused in on things that contribute to lameness rather than necessarily the number itself.” – Jessica Marshall

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DAIRY NEWS DECEMBER 7, 2021

NEWS  // 9

Website showcasing livestock exports goes live A WEBSITE has been

set up to fight the Government’s plan to phase out livestock exports from 2023. In their fight to keep the trade going, the Animal Genetics Trade Association (AGTA) have built the website – www. livestockexports.nz – to build awareness and understanding of exporting livestock from New Zealand. It showcases why exporting livestock is important, the extent of the supply chain involved and helps address animal welfare concerns. The website also facilitates

submissions against the bill. “We need to look at this from a global perspective, we can’t just look at this from inside New Zealand,” says the technical advisor to AGTA, Dr Jim Edwards. “The level of urbanisation around the world is affecting food security, and we are in a position where we can and should help.” AGTA says it represent the interests of the livestock export and germplasm industries and the chair Mark Willis is worried about the long-term impacts of the ban.

Animal Genetics Trade Association chairman Mark Willis (inset) is worried about the long-term impacts of a ban on livestock exports.

“We know they will extend across farmers and throughout the supply chain and have potential trade ramifications, but the full impacts are not fully understood yet,” Willis says.

“Trade relationships have been built from livestock exporting. We watched the sales of New Zealand whole milk powder grow exponentially since the start of livestock exports to

China. “It’s concerning that those customers could start forming relationships with other countries to obtain cattle for their domestic farming operations, and if that evolves

into other relationships and they buy products from those countries instead of New Zealand, where are we going to sell our milk powder?” In 2020, New Zealand exported $255.89 million of live cattle to the rest of the world. Additional to the livestock value that farmers receive directly, a shipment of around 3000 animals can return roughly $1.5 million to New Zealand based service providers. It’s the rural areas and rural service centres that see most of the economic benefits from the trade. But claims surrounding

animal welfare during the voyage on the ships was the Government’s reason for the ban. AGTA says this is despite two independent reviews into the trade concluding that it should continue with some modifications. “The website is one tool we have to address concerns and help more people understand what livestock exporting is all about; it’s a valuable trade and it will be hugely disappointing if the ban does come into effect,” Willis says. • Find out more at www. livestockexports.nz

ANCHOR TURNS ON THE MILK TAP IN CAFES FONTERRA IS turning on milk taps in cafes, all in the name of sustainability. Fonterra Brands New Zealand (FBNZ) is kicking off a trial which will see baristas making the same great coffee, but with a more sustainable pour, using ‘Anchor café milk taps’. The Anchor café milk tap is connected to a recyclable 10 litre bladder, filled with milk, which replaces five 2-litre standard milk bottles and results in 65% less plastic. The co-operative says this is another step in Anchor taking a leadership position around sustainability and follows on from the launch of Anchor’s plant-based bottle and the specialised range of ‘carbon zero’ milks.

FBNZ director for marketing, Mike Boness, believes cafés and coffee shops will also benefit because the milk tap measures the precise amount of milk into coffee cups, which means less waste and ultimately reduces their costs. Anchor will be trialling 10 milk taps across the country and taking feedback from customers. The first trial café is Emporio Coffee located in Wellington and owner Eric Heycoop is excited. Heycoop says more people want to know that their food and drink is being served more sustainably. “Because there is less waste and spillage with every pour from the taps, it means

less cost for us and increased productivity and time savings for the baristas making coffee,” he says. “From our perspective it also enhances the whole café experience because it gives us more time to connect with our customers.” Boness says a team from Fonterra research centre in Palmerston North has conducted an evaluation of the available tap systems. “The MilkIt system (supplied out of Israel) was recommended as the best fit for Anchor proceeding to trial in cafés,” he adds. @dairy_news facebook.com/dairynews

Josh Williams, Fonterra Brands NZ business development manager (left) and Eric Heycoop, Emporio Coffee Owner.

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DAIRY NEWS DECEMBER 7, 2021

10 //  NEWS

Kiwi dairy product that could help Covid immunity MARK DANIEL markd@ruralnews.co.nz

HAMILTON-BASED RUAKURA Technolo-

gies is developing a dairybased natural product that it says has the potential to offer immediate short-term immune support against the virus causing Covid-19 disease. The eventual product is intended to safeguard people in high-risk situations including events, frontline work, or during mass transportation such as on trains or flights. Still in the early stages of development, a technical breakthrough captured as a provisional patent

filing, means the product is getting ready for on-farm pilot-scale production of the immune milk-based active ingredient using selected animals. Chief executive officer Dr Steve Hodgkinson says the product is positioned to meet a market need for science-backed immune support, particularly relevant considering the current pandemic. “Beyond vaccines, PPE and social distancing, there are few options available for people wanting to reduce their personal risk of contracting Covid-19. We are working towards a product that can provide science-

Ruakura Technologies chief executive officer Dr Steve Hodgkinson claims the product is positioned to meet a market need for sciencebacked immune support.

backed immune support,” says Hodgkinson. The science mimics

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nature in much the same way that a mother’s milk protects the new-born.

The recent breakthrough, made in collaboration the University of Waikato, has

centred around the design of coronavirus antigens that induce antibodies in ruminant milk that block virus binding to the receptor that allows entry to human cells. The product is intended for immediate, short-term protection, so users would take a protective dose when entering a high-risk situation and receive protection for 3-4 hours. The product is different to a vaccine, which is slower to act, but provides longer term protection. Hodgkinson says the freedom that the product could provide consumers is exciting, especially with so many Kiwis currently facing alert level restrictions. With the proof-ofconcept phase complete, the time to market for

the final product, which will likely be taken as an oral supplement or nasal spray, should be relatively short. Hodgkinson says the potential applications of the technology extend well beyond the current pandemic, with opportunities to provide immune support against other pathogens, such as norovirus, which regularly sweeps through closequartered environments like cruise ships and retirement villages. Notably, the research has been self-funded to date via a loan from Callaghan Innovation. Hodgkinson says, “we are looking for funders and partners who can help us move into pilot-scale production and launch a product next year”.

Elite herd offered online AN ELITE Southland Friesian herd is set to

become the biggest single livestock offering sold online so far. PGG Wrightson Southern South Island dairy livestock manager Mark Cuttance claims he is overseeing New Zealand’s first online dairy herd sale this week. Winton farmers Simon and Liz Harnett’s cow herd, which Cuttance says ranks in Southland’s top 2%, goes under the hammer on December 9. “This is the first time PGG Wrightson has sold a dairy herd online,” Cuttance says. “Usually when you sell a herd, prospective buyers are the people you already know. “This is an excellent herd, particularly well suited to this ground breaking selling format,” says Cuttance.

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DAIRY NEWS DECEMBER 7, 2021

12 //  NEWS

Plan makes co-op competitive SUDESH KISSUN sudeshk@ruralnews.co.nz

FONTERRA’S PROPOSED capital structure

will allow the co-operative to compete with other processors based on its milk price and overall performance. That’s according to a report from financial advisers Northington Partners, commissioned by the Fonterra Co-operative Council. Fonterra is facing declining milk supply and competition for milk is rising with new processing plants in the pipeline. The report says declining milk supply on Fonterra’s long-term performance do not appear to be major. However, if no changes are made to the current capital structure there

will need to be meaningful changes to the strategy and scale of the co-op. “Maintaining a sustainable milk supply and avoiding these negative consequences would clearly be beneficial for Fonterra and its suppliers,” it says. The report also states that maintaining a sustainable milk supply will also depend on several other key drivers, including the impact of increasing environmental restrictions on total production from the sector. There are some downsides to the proposed solution. Capping the size of the Fonterra Shareholders’ Fund (FSF) and delinking the FSF from the Fonterra Shareholders’ Market will likely have a negative impact on the pricing and liquidity of

Fonterra Co-operative Council chairman James Barron says the report should assure farmers that the proposal is in the long term best interest of both the co-op and its suppliers.

Fonterra shares. Farmers looking to exit the co-operative and realise their investment in Fonterra shares in the short-medium term are

most exposed to these potential issues, the report says. “All else being equal, the exit price is also likely to be lower than would be

possible under the status quo.” Council chairman James Barron says the report has been sent to farmer shareholders who

will vote on the new capital structure on December 9. “Northington’s comments should provide a level of reassurance to farmers that this proposal is in the long term best interest of both the co-op and its suppliers,” Barron told Dairy News. Fonterra’s board sent out the proposed flexible shareholding capital structure to its farmer shareholders this month. The proposal needs 75% support to pass. It also requires the Government to approve changes to the Dairy Industry Restructuring Act (DIRA). Agriculture Minister Damien O’Connor says the proposal cannot be approved by the Government in its current state. But Fonterra chairman Peter McBride is

confident that an agreement can be reached with the Government once the proposal is passed by shareholders. He says doing nothing to arrest the slide in Fonterra milk supply is not an option. McBride says Fonterra’s supply depends on the actions it takes with the capital structure, performance, productivity and sustainability. “If we do nothing, we are likely to see around a 12-20% decline by 2030 based on the milk supply scenarios we have modelled. “Protecting a strong New Zealand farmerowned co-operative of scale is in all our interests.” He notes that being a strong co-op ensures it pays the highest sustainable milk price.

WE-9002845AE


DAIRY NEWS DECEMBER 7, 2021

OPINION  // 13

What COP26 means for co-op Fonterra’s Amsterdam-based trade strategy and stakeholder affairs manager, Mark Casey, recently attended COP26 – the annual United Nations Convention on Climate in Glasgow. Here are his thoughts on this globally significant event and what it means for the Co-op. LAST MONTH I had the opportu-

nity to head to the (almost) annual Conference of Parties, more commonly referred to as COP. This was the 26th COP since the United Nations Convention on Climate Change began and was touted as the most important since COP21 in 2015 when the Paris Agreement was signed. The best way to describe COP is two distinct parts. The first is where all the officials get together and negotiations take place, culminating in a final agreement being reached. Then there’s an area that’s like a mini expo, with countries and industries having booths to hold panel events, discussions and showcase their country and its efforts towards climate change. Over the week I was there I attended (and presented at) a number of sessions on agriculture and climate change along with Zoom sessions with the New Zealand Government’s negotiating team, plus a breakfast meeting with Minister for Climate Change, James Shaw. Fonterra is part of the Global Dairy Platform (GDP), which is a group of dairy companies from around the world who work together to show the sector’s commitment for responsible and sustainable food production. Here’s a brief rundown of the top four things that happened at COP that relate to the co-op. Overall outcome At the beginning of COP26 three objectives were set out: Get commitments to cut emissions to keep within reach of the global warming limit of 1.5 degrees (over pre-industrial levels). Reach the target of $100 billion per year of climate finance to developing and vulnerable countries. Complete the rulebook around the Paris Agreement, which seeks to keep global warming below 1.5 degrees. On the 1.5 degree target, this was not achieved, but has a “weak pulse”, as COP26’s UK President Alok Sharma puts it. Prior to COP26, the planet was on track for 2.7 degrees, and with the agreements reached at COP26 it’s now predicted we’re on a path between 1.8 and 2.4 degrees, so a lot of countries may need to sharpen their pencils a bit. Countries have, however, agreed to revisit their commitments by the end of next year to ensure they’re on track to reach less than 1.5 degrees warming. For funding, there was recognition that many countries had fallen short of the $100b target, and financing

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Mark Casey, Fonterra’s Amsterdam based trade strategy and stakeholder affairs manager at COP26.

efforts have been ramped up; New Zealand has announced a quadrupling of its contributions in this area. And importantly, the so called ‘Rule Book’ left outstanding from Paris 2015 was settled – an important step that should now mean that countries are properly held to account for their emissions, requiring transparent reporting and avoiding dubious ‘off-setting’ of carbon credits. In order to deliver on these promises, an agreement was reached to accelerate efforts towards the phasedown of unabated coal power and inefficient fossil fuel subsidies – and although the wording is not as strong as many at COP26 would have preferred, it is still a milestone to have coal and fossil fuels expressly called out in this agreement for the first time. This is unlikely to impact us as a co-op as it’s more about using coal to generate power and we’ve already committed to getting out of coal by 2037. So, these were the ‘big ticket’ items of the agreement; there were many other important side agreements and outcomes reached between the COP26 parties, which I simply don’t have room to cover here, but some of the more New Zealand and agriculture specific issues follow below. New Zealand’s recent target to reduce emissions by 50% by 2030 Technically this was announced prior to COP26, but it was part of the New Zealand Government’s ‘homework’ it needed to get done in preparation – ramping this up from the previous 30% to 50% by 2030. Methane Pledge This is a big one for New Zealand and took many by surprise, including

the New Zealand Government, when it was announced earlier than anticipated. New Zealand is one of 105 countries who have joined a global alliance which together has pledged to reduce methane by 30% by 2030. There was some criticism around this as New Zealand has a target of 10% methane reduction. Global Dairy Platform - Pathways to Net Zero Fonterra is part of the Global Dairy Platform (GDP), which is a group of dairy companies from around the world who work together to show the sector’s commitment for responsible and sustainable food production. They recently launched an initiative to accelerate climate change action in the dairy sector, which we have signed up for. Agriculture is not expressly mentioned in the main COP26 agreement, despite there being a number of panels and discussions related to our sector. It was encouraging to see a separate multi-government workstream (the Koronivia Joint Work plan) recognised that agriculture is part of the solution to climate change and plays a crucial role in global food systems and bio-diversity. It will be interesting to see what COP27 (hosted in Egypt next year) presents for agriculture. It was an eventful few days and an incredible event to be part of. While by no means an expert on climate change, I have certainly learnt a lot from what I have seen and heard at COP26, and gained some real insights into the overall environmental importance of global food systems like ours, and the part we can all play in providing nutritional goodness, in a sustainable way, for generations.

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DAIRY NEWS DECEMBER 7, 2021

14 //  OPINION RUMINATING

EDITORIAL

It’s decision time!

MILKING IT... Hit job

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NEWS THAT New Zealand taxpayers forked out nearly $50,000 for a documentary that smears the dairy industry will go down like a cup of cold sick among industry workers. The film, currently screening in New Zealand cinemas, claims that the dairy industry causes climate change, pollutes water, destroys land, abuses cows, and victimises dairy farmers. The NZ Taxpayers Union says with constant shots of the Beehive in the trailer, and contributions from Greenpeace, SAFE and the Green Party, the film appears to be more of a leftist propaganda against farmers. Many industry workers will be scratching their heads at the NZ Film Commission decision to approve the grant. What a way for NZ taxpayers to repay an industry that helped prop up the country’s economy over the past two challenging years!

CLIMATE CHANGE Minister James Shaw and his 14-strong entourage to the COP26 summit in Glasgow are back home. After spending nine days in the Scottish capital talking climate change, the delegation spent 10 days isolating upon returning to New Zealand. Critics point out that Shaw spent more time in isolation than he spent in Glasgow where he announced the Government’s pre-existing policies and NZ joining the Global Methane Pledge. Critics question why Shaw even bothered to go, burning jet fuel heading to Glasgow to announce things New Zealand had already announced. It could have been worse though. At least he didn’t take a private jet like 118 of the attending state leaders did, to attend a summit that produced more hot air than progress.

NATIONAL’S NEW leader Christopher Luxon’s first speech after his elevation to the top job included one important line about the engine of the economy: “Our provincial heartland feels taken for granted. Our farmers are not villains!” he told the press gallery. Perhaps an indication that the plight of the rural sector and farmers will be top of mind as Luxon tries to restore National’s fortunes and wrestle power away from Jacinda Ardern. After all, a good chunk of the 400,000 ex-National voters he alluded to in his speech would be made up of rural dwellers. Getting them back into the fold would be crucial to Luxon scoring the keys to Premier House in 2022.

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Seaweed saviour SCIENTISTS IN Ireland are going underwater to solve their dairy sector’s methane conundrum. They are combing the west coast for seaweed to feed to cattle and sheep after research showed it could stop them breathing out so much climatewarming methane. The project, coordinated by a state agriculture body, is banking on the country’s growing seaweed industry to help the dairy sector avoid reversing a surge in Irish cattle numbers to reduce Europe’s largest per capita methane output by 2030. About 20 species of seaweed, most from Ireland’s windswept Atlantic coast, have been tested by researchers. Scientists in the US and Australia have already demonstrated dramatic methanereducing qualities from one seaweed type – Asparagopsis – when small quantities are added to the feedstock. But they have not yet managed to scale up production of the seaweed, which is not easy to grow in northwest Europe. The Irish hope they are luckier!

FONTERRA SHAREHOLDERS will this week decide the future shape of their co-operative. The message for shareholders is clear: ignore the looming challenges facing the co-operative at your own peril. Fonterra is at a crossroads. Milk supply in New Zealand is declining or will remain flat at best, thanks to environmental pressures, new regulations and alternative land uses. At the same time, competition for New Zealand is showing no signs of slowing. Two more independent milk plants are going up in the Waikato, the heart of New Zealand dairy country. Fonterra has signalled a change in strategy – moving out of overseas milk pools and focusing on adding value to NZ milk. But it needs to change the way it does business with farmer shareholders or face around 12-20% milk decline by 2030, based on its own modelling. The capital structure isn’t the only thing that needs to change. The co-operative has to lift its performance and increase farmer returns, both through the milk price and dividends. At the same time, the environmental credentials of both the co-operative and its farmers must continue to improve. For the past few weeks Fonterra farmers have been mulling over the proposed flexible shareholding. An important issue for shareholders is the future performance of Fonterra. Management have laid their strategy on the table for 2030: a 40-50% increase in operating profit from FY21 and, with the reduced interest from having less debt, this should translate into an approximately 75% increase in earnings, steadily increasing dividends to around 40-45c/share. Management are also promising a group return on capital of 9-10%, up from 6.6% in 2021. Through planned divestments and improved earnings, they expect a return of about $1 billion to shareholders by FY24, and around $2 billion of additional capital available for a mix of investment in further growth and return to shareholders. Fonterra’s strategy and ability to achieve these targets depends on a sustainable supply of New Zealand milk and in turn a capital structure that enables this. Fonterra must be an attractive option to farmers, who have a choice on where their milk goes. That’s why the proposed capital structure gives all farmers a level of flexible shareholding, which is critical to supporting farmers to join or stay with the co-op. Fonterra farmers need to give a strong mandate to its board and management by approving the new capital structure this week. A strong vote will also make it easier for Fonterra’s board to get the Government onside and pass the necessary regulatory changes.

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DAIRY NEWS DECEMBER 7, 2021

OPINION  // 15

Why we need to change GREG GENT

ANY ORGANISATION’S capital structure

must align with its strategy. That is the mantra and that is something I support. Additionally, in the case of the co-operative a capital structure cannot be at odds with the cooperative structure and put that structure under such pressure the cooperative is lost. On this basis alone Fonterra’s capital structure needs to evolve. Go back 20 years when Trading Among Farmers (TAF) was put in place. We had very strong milk growth, mostly coming from the non-traditional dairying regions. That necessitated new (costly) stainless steel. The ‘value add’ part of the then payout was getting diluted by needing to be divided by more and more milksolids. The logic at the time was “growth funds growth”. It was correct and it meant Fonterra received the capital it needed to cater for that milk growth. Fast forward to the current day: the most optimistic forecast would be static milk, with a high likelihood of a falling milk supply, an organisation that has squandered billions of our dollars on multiple poor decisions, and a new group

of directors and senior management now in charge. Against that backdrop strategy and by implication capital structure has to evolve. Like no other time before, Fonterra needs to be competitive in the sourcing of milk. An entry price (share) is an obstacle when the competitors require no capital from farmers. Australia, over the last ten years, provides a good template of what happens when milk supply falls. Stranded assets – with little/no milk going through them – is commercially painful. Co-operatives can fail and Westland Co-op is our most recent example. Should New Zealand’s milk supply fall then some current processors will fail. The board needs to act decisively and fast to get the changes needed to be able to compete in this new world, just as it did 20 years ago. It’s a bitter pill to swallow having a $3 share price on our balance sheets. Apportioning blame typically achieves little, but as I see it, the new guard can’t be held to account for that. It’s largely a result of actions that happened well before they arrived. The new strategy appears to be way better aligned with our comparative advantage and also is way less

capital hungry – a pragmatic solution to our current state by the board, as I see it. I have thought about what’s proposed a lot. It may not be perfect, liquidity and the number of non-milk shares that it will create is a concern. That does however

Greg Gent

put pressure on Fonterra to perform. The dividend will need to be solid to ensure there is sufficient liquidity (buyers and sellers). Fonterra could also buy shares back in the future if it needed to. Many of these matters can be worked through over time should there

be a problem. What I believe overrides almost all else is a capital structure that is attractive in the market and ensures that Fonterra, as it enters the next phase of its evolution, can compete equally for milk. We will never all agree on every piece of detail in

the proposal. It’s not that detail that will define us but it is the overall change that will ensure we remain competitive and therefore keep our cooperative. • Greg Gent is a Ruawai farmer, agribusiness leader and former Fonterra director.

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DAIRY NEWS DECEMBER 7, 2021

16 //  AGRIBUSINESS

New head for FoodWaikato “I see it as a great opportunity to get involved in the Innovation Park environment.”

DAIRY PRODUCT

manufacturer New Zealand Food Innovation Waikato (FoodWaikato) has appointed Tony Giles as its new chief executive. Giles, formerly chief executive of the Dairy Goat Co-operative, takes over from Stuart Gordon, who has been chief executive of FoodWaikato for the past nine years. Gordon will remain as part-time chief executive at Waikato Innovation Park, where FoodWaikato is based. FoodWaikato chairman Barry Harris says Gordon was leaving the company in a strong position and FoodWaikato was fortunate to have attracted someone to replace him that also had an in-depth knowledge of dairy manufacturing. “Tony comes to FoodWaikato from NZ Dairy Goat Co-operative, so he not only has knowledge in the dairy goat industry, but he also brings

Tony Giles

a wealth of experience in dairy manufacturing, international marketing, leadership, and governance.” FoodWaikato offers specialised spray drying facilities for the manufacture of innovative dairy products, including infant formula. It tripled its manufacturing capacity with the commissioning of a new spray dryer in 2020 and it has grown its staff from two to nearly 40, over the past nine years.

Its customers include New Zealand’s two biggest sheep milk producers, Maui and Spring Sheep, both of which are tenants at the neighbouring Innovation Park. It also manufactures product for Australian-based Nu Mega, which develops bioactive ingredients for health and nutritional products. Harris says Gordon has put in place a strong management team with a culture of being flexible and innovative and the result has produced a high-quality product. He said the growth in New Zealand’s sheep milk industry was a boon for

Nominations open NOMINATIONS ARE now open for

FoodWaikato which has a bright future. The value of New Zealand’s largest supply of dairy sheep milk is likely to triple to $44 million over the next three seasons. Giles was with Dairy Goat Co-operative for 19 years in total, holding executive and marketing roles. He held the position of chief executive for five years, until 2018. “When I finished with Dairy Goat Co-operative, I wanted to take some time out with my family. We did some travelling and I worked on some personal projects. When this role came up it was the right time for me to take on another challenge,” says Giles. “I see it as a great opportunity to get involved in the Innovation Park environment, continuing to build on the great work Stuart has already done and helping emerging and innovative businesses to grow.”

the annual Dairy Women’s Network Regional Leader of the Year award. The award celebrates the work of the organisation’s volunteers at grass roots and the impact they have in their local rural and dairying communities. Supported by rural insurance company FMG, the award highlights the passion among volunteer regional leaders. DWN chief executive Jules Benton is encouraging members to celebrate their regional leaders who actively demonstrate leadership, and the values of DWN, with a submission. “As an organisation we are led from the ground up,” says Benton. “Our volunteers are our connection to dairy farmers all over the country; they work hard behind the scenes to deliver opportunities for connection and upskilling that fit with the needs of our members,” says Benton. “They are often points of contact and connection within their areas and are heavily involved in other groups and initiatives. “The effort they put in for both DWN and their own networks deserves to be acknowledged, as well as their personal growth and development.” Benton says FMG is known for supporting the wellbeing and achievement of New Zealand farmers and rural communities. FMG’s chief client officer Andrea Brunner says organisations such as the Dairy Women’s Network, play a criti-

2021 DWN Regional Leader award winner Donna Griggs.

cal role in keeping rural communities connected and create opportunities for knowledge sharing and personal development. “Feeling a part of your industry and community and growing as a rural professional are important and FMG wants to see our rural communities thrive. “That’s why we support the Regional Leader of the Year Award.” Nominations will close in March, when finalists will be put before a judging panel of representatives from Dairy Women’s Network and FMG. The Regional Leader of the Year recipient will be announced at a gala dinner during the 2022 DWN conference in Invercargill and will receive a registration to the Dare to Lead Programme facilitated by Kaila Colbin and Boma New Zealand, as well as travel costs and accommodation in the location of the programme.

ANZ TO SPONSOR INDUSTRY AWARDS ANZ IS throwing its support behind

the New Zealand Dairy Industry Awards (NZDIA). It will sponsor the financial and business merit awards in the share farmer and dairy manager categories in four regions – Southland/Otago, Canterbury/North Otago, Waikato and Taranaki.

A representative from the bank will also judge the National Share Farmer of the Year category. NZDIA general manager Robin Congdon says the bank is looking forward to working closely with the Awards team. Lorraine Mapu, ANZ managing director for business, says celebrating

success and best practice in our dairy industry is vitally important. “New Zealand farmers are some of the best in the world and for many, it’s not just a business. It’s about generations of family commitment to an area, and way of life. “Celebrating and supporting strong sustainable businesses is not

only good for the industry, it’s good for our customers, good for us, and good for New Zealand’s future as a leading producer of world-class goods,” Mapu says. The New Zealand Dairy Industry Awards are supported by national sponsors DeLaval, Ecolab, Federated Farmers, Fonterra, Honda, LIC,

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DAIRY NEWS DECEMBER 7, 2021

18 //  MANAGEMENT

Farmers take action to reduce N SELWYN AND Hinds dairy farmers are taking steps to reduce farm nitrogen loss, according to a recent DairyNZ survey. It surveyed 235 of 450 Selwyn and Hinds dairy farms, with all reporting positive environmental changes on-farm, including improved irrigation efficiency, fertiliser use and new technologies. “The survey shows Selwyn and Hinds farmers are working hard to reduce their footprint,” says DairyNZ solutions and development lead advisor, Virginia Serra. “Taking steps now to reduce nitrogen losses will help improve water quality over time. We know it isn’t easy, but farmers are on the journey and support is available from DairyNZ, dairy companies and rural professionals.” Survey participants

PROJECT DETAILS ■

As part of the Meeting a Sustainable Future project, DairyNZ and partner farmers have hosted more than 20 field days and events to discuss options.

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Farmers nationwide can learn from the project about options on their own farms. Visit dairynz.co.nz/selwynhinds

years in a project to help farmers reduce nitro-

2013. A farm’s baseline is its average annual nitrogen loss over those four years. In Hinds, farmers have to reduce nitrogen losses by 15% by 2025, 25 percent by 2030 and 36% by 2035. In July, a new nationwide nitrogen cap took effect, capping synthetic nitrogen fertiliser applied to pasture at 190kg N/ha/ year. Farmers throughout the country are working hard to achieve this.

CHANGING FOR THE FUTURE

Virginia Serra, DairyNZ

reported: 81% percent of farmers have improved irrigation systems or management. More than 50% have changed fertiliser use and improved effluent management. Some farmers have

gen loss, while optimising profit and resilience.

The project, Meeting a Sustainable Future, is trialling options with 40 partner farms and shares the knowledge with local farmers through field days and events. The work is designed to help farmers meet Environment Canterbury and government rules, says Serra. Under Environment Canterbury rules, Selwyn dairy farmers must reduce nitrogen losses by 30% by 2022, compared to their baseline figure from 2009-

changed stocking rate, are using the grazing herb plantain which reduces nitrogen loss, or have made other changes to benefit the environment. DairyNZ has been working with Selwyn and Hinds farmers for three

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ton in Hinds are one of many local farming families working hard to reduce nitrogen loss. Phill and Jos Everest farm 750 dairy cows with their son Paul and his partner Sarah, and they work together as a family to meet their environmental goals and stay ahead of regulations. Phill and Jos are actively involved in DairyNZ’s Meeting a Sustainable Future project, which shares knowledge among local farmers to reduce nitrogen loss. Phill is a DairyNZ Climate Change Ambassador and says local farmers know they need to make changes for the future to protect the environment. “We’ve always focused on learning how to do things better. We’ve got to learn fast to make changes and keep contributing to our local communities.” The family’s changes include reducing nitrogen fertiliser by 35% – ahead of the national and regional deadlines. This resulted in a small reduction in milk production this season. Phill says they learnt from the changes and next season will adjust their approach and focus

Farmer Phill Everest (third from right) addresses the field day on his farm.

on improving pasture growth to lift milk production. “We developed an annual nitrogen application plan so we knew what our target application rates were each month to meet the new targets. We also used a coated urea product which reduces greenhouse gas and nitrogen losses,” says Phill. Among other improvements, the Everests have installed a variable rate irrigation system on one pivot irrigator. This is very water efficient and allows water to be applied in different amounts across a paddock, reducing drainage and nutrient losses. The farm team has carried out

22km of planting along drains and fence lines to improve water quality and provide shelter. Plantain and chicory have been added to their pasture mix, and additional plantain and clover seed is applied with capital fertiliser dressing. These changes help reduce nitrogen loss. Together with DairyNZ, the Everests hosted a field day in May on their farm near Ashburton, which 45 farmers attended. Phill says reducing nitrogen losses further to meet environmental requirements will be a significant challenge for their family and other farmers.

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DAIRY NEWS DECEMBER 7, 2021

MANAGEMENT  // 19

Southland farmers urged to plan for feed after challenging winter A CHALLENGING

winter for Southland dairy farmers has affected cow condition coming into mating, which may impact calving spreads next season. However, GrainCorp Feeds’ new territory manager in Southland, Annie Leadbeater, claims there is still time to do something about it, but sorting summer feed must be a priority. Leadbeater is a farm girl from the Waikato/ Bay of Plenty, but has made her way down south to be closer to family. Now in Southland, her job is all about helping farmers maximise the productivity of their herd and profitability of their farm business. And from what Leadbeater has seen this year, they could use the help. For Southland dairy farmers, 2021 has been a struggle. They’ve endured a terribly wet winter, with paddocks constantly under water and looking after stock in atrocious conditions, noted Leadbeater. “Little wonder many farmers went into survival mode during those months. Their cows did likewise,” she says. “Waterlogged grass is difficult for cows to harvest, and this winter’s pasture was low in energy and protein. That puts huge pressure on an animal’s metabolic

system. She has to eat more just to maintain standard functions, which is why many animals have struggled to gain optimal conditioning this winter. “You can see the effect when it comes to mating. The gap in pasture nutrition has meant that some of the girls haven’t had the energy to keep cycling. When this happens, there will be noticeable gaps in calving spreads next year. The challenge now is to get your summer feeding regime sorted to keep cows in milk for longer and improve their body condition.” While Leadbeater’s job is to give farmers advice on feed, she says her first priority is understanding what’s happening on the farm. She’s working with farmers now to identify any feed and nutrition gaps and help farmers bridge them with the right supplementary feed and custom blends. Accuracy is key. The more precisely she can define a herd’s feed issues, the higher the nutritional response she can help a herd achieve. To understand the feed gaps, she needs to get on farm. “Farmers are up to their necks in work right now. They aren’t happy when a product rep shows up unannounced, so I always call ahead to make sure it’s okay to come

over. I had a farmer on the line the other day who said, ‘Are you happy talking to me while I go round in circles on the tractor?’ So, we were able to chat while he worked.”

Annie Leadbeater, GrainCorp says sorting summer feed must be a priority for Southland farmers.

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DAIRY NEWS DECEMBER 7, 2021

20 //  ANIMAL HEALTH

DNA sequencing milk – the key to better cow health? CHRISTINE COULDREY

DURING THE past 18 months, the Covid-19 crisis has brought the power of DNA sequencing technologies into the news on an almost-daily basis. DNA sequencing however can be used for an extensive range of applications, and one potential application is to extract a wealth of information on animal health and farm status direct from vat milk samples (the same type of samples used to determine payment for fat and protein by the milk processors). DNA sequencing technologies allows the

milk microbiome to be sequenced, meaning all species present within the vat milk sample are ‘mapped’. This information can then be used to monitor herd health and allow for early intervention of disease. Although the term ‘microbiome’ was almost unheard of in mainstream media less than a decade ago, more recently there’s been increasing publicity through media and advertising channels covering ‘the human- gut microbiome’ (as a source of information on the health and history of people). While the samples between humans and cows are different, similar principles to the human

gut can be applied to milk, allowing the agriculture industry to tap into cow health and individual farm status. In addition to the somatic cells from cows, milk contains hundreds of different species (bacteria, fungus, viruses etc.). Some species can cause disease while others are likely to be beneficial to the cow. The species LIC is DNA sequencing from vat milk could have originated from inside the udder, the teat skin (and whatever might be on the teats when the cups go on), the air in the milking shed, and the milking plant itself. Early detection is a

LIC is DNA sequencing vat milk samples from across NZ in an attempt to provide farmers with an early-warning of animal health events.

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better protection. Typically, LIC is finding 100-400 different species present in each vat milk sample that is analysed. The aim is to use this information to develop ‘early-warning systems’ which will allow farmers and vets to manage and treat animal health events more efficiently through understanding: ■ exactly which pathogens are present in the animal and on- farm; ■ how virulent they are (similar to COVID sequencing, letting us know which strain of the virus is present), and; ■ whether they are resistant to antibiotics. This knowledge should make it easier to select the correct treatment the first time, possibly before clinical symptoms are

even observed. It’s a case of finding a match. Using this approach, farmers and vets can move away from testing for a single species when a cow is suspected to be sick. No assumptions about the cause of the illness need to be made. For example, rather than testing for Johne’s disease, we could instead monitor all species known to be detrimental to cow and/or human health, as well as species that are new to New Zealand (biosecurity information). We can tap into an international public database for sequence information to find a match. The database most scientists use (to store genome sequences) is hosted by the National Institute of Health in the

USA, which currently contains more than 63,400 bacterial species alone (with a variety of strains representing each species). The milk microbiome team within LIC is working towards making this a reality, not just in the lab, but on farm. Over the past two years, lab processes have been developed to extract DNA from milk samples and generate reliable DNA sequence data. So what’s next? The second phase of this project has recently started; analysis of vat milk samples from a wide range of farms across New Zealand. The aim of this phase is to gain an understanding of what species (and what levels of these species) are typically present in vat milk samples on

New Zealand dairy farms, and how this varies across location, farming systems, and time of year. Once we understand the vat milk microbiome, we have the opportunity to provide farmers with animal health indicators with little (or no) extra effort on-farm. This should also help protect the dairy industry by minimising detrimental effects experienced when new species slip through New Zealand’s biosecurity net. This work is part of the Resilient Dairy research programme, which is being led by LIC with investment and support from the Ministry for Primary Industries (MPI) and DairyNZ. • Christine Couldrey is LIC research leader @dairy_news facebook.com/dairynews


DAIRY NEWS DECEMBER 7, 2021

ANIMAL HEALTH  // 21

Good for the herd, environment ment Act set into law a domestic 2050 target: Net- zero emissions of all greenhouse gases (other than biogenic methane) by 2050. There is also an increased awareness of animal welfare issues centred on bobby calves, polled, and heat-resistant genes. While there is a tremendous amount of research going on to enable farmers to achieve the future goals that focus on environment and animal welfare, there doesn’t appear to be many tools in the toolbox in the here-and-now. However, an oftenoverlooked tool that has a big impact is the fundamental principle of genetic improvement. Not only does this have a positive effect on farm profitability, but it contributes greatly to a better environmental footprint. Breeding from your best animals is easy to do and it’s available in the here-and-now. As reported in LIC’s recent inaugural sustainability report, 30 years of breeding by dairy farm-

GREG HAMILL

WHEN SOMETHING

looks insurmountable, you need to break it down into manageable pieces for the outcome to be achieved. Unfortunately when it comes to what dairy farmers need to do to comply with environmental requirements, it’s not that easy to break down into chunks: Nobody really knows exactly what is required or by when – we just know it’s coming. Dairy farmers are likely to face significant changes in the next few years that are going to impact the way we farm. The unknown can be quite daunting. He Waka Eke Noa: We know that by 2025 all farmers will be including in their plans commitments to ‘climate change mitigation’ and ‘adaptation in their farm business and environment’ – which essentially means farmers will be calculating net greenhouse gas emissions and be incentivised to act on climate change. In 2019, the Climate Change Response Amend-

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Greg Hamill, LIC genetics business manager.

ers using LIC genetics has netted a 13% drop in methane emissions and 16% less urinary nitrogen per kilogram of milksolids produced. High genetic merit animals are more environmentally efficient because they partition a greater proportion of their feed eaten into milksolids and less into waste. The report also states that for each additional $10BW advantage, an animal typically has 2g less enteric methane and 1.7g less urinary nitrogen per kilogram of milksolid production. So while the environmental pathway may look daunting or even insurmountable at present, we can all focus on the first step and chunk it down into what we can do now.

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A focus on herd improvement through use of premium genetic choices is a key piece in solving the environmental footprint puzzle.

For example, with LIC’s Premier Sires Forward Pack teams having a breeding worth advantage over its traditional Daugh-

ter Proven contemporaries of between $18BW and $30BW, if you were to elect Forward Pack you’d be committing to making

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DAIRY NEWS DECEMBER 7, 2021

22 //  MACHINERY & PRODUCTS

The range is made up of biodegradable products.

Letting Dirty Steve do the cleaning! MARK DANIEL markd@ruralnews.co.nz

DIRTY STEVE is a new range of automotive cleaning products designed to bring maximum shine to utes, 4WDs, side-by-sides, ATVs, tractors and farm equipment. The range includes a foaming wash, foaming degreaser and, for boat owners, a marine engine flush salt elimination

wash – all using products that are biodegradable. And, as a bit of fun, the products are infused with a range of unique scents for an enjoyable washing experience, for instance, the Foaming Wash comes in a banana flavour, so that it not only lifts and removes dirt and other contaminants from external surfaces with little effort, but smells great too, plus it leaves behind a ceramic (hydrophobic)

layer of protection. To remove stubborn surface contaminants, such as oil, grease and grime, the Foaming Degreaser comes in a strawberry flavour and is said to be ideal for removing heavy-duty oil, grease and grime. It is particularly suitable for use on farm bikes for removal of chain lube residue, stubborn oil and grime, particularly under trailers, 4WDs, utes and farm

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Hydrogen power to cut emissions

equipment. Designed to be applied directly to surfaces prior to rinsing with water, this innovative formula sticks to grime, activates and breaks down contaminants to be easily rinsed away with water. Dirty Steve has designed special applicators that click onto a water hose for easy application of both the Foaming Wash and Foaming Degreaser.

WHILE THE automobile industry heads full tilt down the electrification route, heavier industries such as trucking and construction appear to prefer a hydrogen-fuelled future. UK-headquartered JCB is currently evaluating a Loadall 542-70 prototype, offering 4.2-tonne lift and seven-metre reach, burning hydrogen instead of diesel. JCB notes the “green machine” – as well as ditching the more normal JCB yellow for a lime green similar to a competitor – does everything that would be asked of its diesel-powered equivalent, with the benefits of zero emissions and a lot less noise. Developed by engineers at the JCB engine factory in Derbyshire, the reengineered 4.8-litre (94hp/75kW) four-pot block is said to be far less complicated than a hydrogen-powered fuel

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cell and lends itself to incorporation into all types of traditional powertrains. The same 4.8-litre hydrogen block has also been installed in several other JCB machines, including a backhoe loader, with the fuel stored in a variety of locations – not always in the engine compartment – providing sufficient capacity for the machine to undertake a full day’s work. Moving forwards, JCB is investing £100m on a project to produce what it calls “super-efficient hydrogen engines”, with a team of 100 engineers already working on the development, with another 50 being recruited. At this stage, the company is targeting late-2022 when the first hydrogen powered machines will be available for sale, incorporating a new block that is expected to cost roughly the same as a diesel equivalent. – Mark Daniel

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DAIRY NEWS DECEMBER 7, 2021

MACHINERY & PRODUCTS  // 23

Press screw separator MARK DANIEL markd@ruralnews.co.nz

PROBABLY BEST

known for its chopping units that form an integral part of many manufacturers’ umbilical effluent spreading and injection systems, Vogelsang have always recognised the importance of retaining and evenly reapplying nutrients that have passed through livestock during feeding – a process that is particularly relevant as we see skyrocketing artificial fertiliser costs. This has led to the company adding to its existing ExaCut distribution heads with the addition of the ExaCut ECC, a unit, according to Vogelsang, that does not require air suction and ventilation hoses, yet boasts a high degree of distribution accuracy. Integral to the ECC, a new rotor design ensures the liquid manure is fed into the hose outlets evenly, where formerly a small quantity of liquid manure escaped from the air suction, a trait that can no longer happen within

the new distribution head. Also mindful of the value of both liquid and solid components of effluent, the company has also launched a new press screw separator for farmers and plant operators who are looking to separate the liquid and solid fractions of the effluent. With the solid digestate from XSplit press screw separator containing as much as 40% dry matter, the process allows farmers to relieve the pressure placed on total storage tank volumes, although a separate storage area is needed for the solids produced, with an eye to contain any run off. Vogelsang has rethought the process of solid-liquid separation and has brought a new approach to the screw press technology behind it. Unlike conventional screw press systems, the major difference of the XSplit separator, is that the drive is located at the solids outlet end and not, as is usual, at the inflow point of the raw material. This layout offers the advantage of ensur-

ing liquid cannot get into the drive system, removing the need for a shaft seal, in doing so reducing maintenance and operating costs. In addition, a QuickService concept enables direct access to the screen and screw press for cleaning and repair. The mechanical layout

sees an elastomer sealing disc, against which the screw works in the separation area, said to promote reliable plug formation, without extra aid and greatly reduced initial leakage. This combines with the adjustable press area, to deliver dry matter content in the solid fraction.

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Rauch is testing a prototype unit for depositing fertiliser in row crops to depths of 10 to 25cm The DeePot 25.1 centres around a 2500 litre hopper, the same unit supplied to the manufacturer Kuhn for its Megant drill. The layout behind the hopper sees four fertiliser delivery points carried on a folding coulter-bar that can deliver 300kg of ground pressure. Support wheels can be adjusted to suit varying row widths, while also managing depth control of the parallelogram-action linkage. At ground level, entry is achieved with a leading disc that in turn is followed by a narrow blade assembly to part the soil. Granular fertiliser is delivered by the Turbo-S fan unit to the coulter, before the “cut” is closed by a pair of sprung press wheels.

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DAIRY NEWS DECEMBER 7, 2021

24 //  MACHINERY & PRODUCTS

Next generation swathers CLAAS’ LATEST gener-

ation of seven, dual-rotor central LINER swathers are said to offer numerous innovative features and functions to ensure premium forage quality. The Grass Care rotor guidance system ensures that the rotors are actively suspended during operation and when lowered, the rear rotor wheels touch down first, producing a ‘jet-effect’ that prevents the tines from digging in and damaging the grass sward. The 2900 and 2800 BUSINESS models also incorporate Active Float rotor suspension and load-sensing hydraulics, functioning in a similar way to the suspension of the same name in the Disco Contour disc mowers. By adjusting the suspension pressure, the ground pressure of the rotor can be adapted

Claas’ latest dual-rotor swathers.

precisely to the forage quantity and ground conditions, allowing faster operating speeds and a reduction soil contamination. LINER 2600 and 2700 models use a simple pin-and-hole system to adjust the working width, whereas working and swath widths can be adjusted hydraulically on the larger models. Raking

height is adjusted by a crank handle on the rotors. The tine arms are firmly attached by a 20-spline shaft and secured with a PROFIX bracket, while an integrated pre-defined bending point provides optimum protection for the rotor housing in the event of a collision. Each tine arm is fitted with four 9.5mm thick dual tines, each pair offset by

10 degrees to create a 10mm long trailing end to help lift the crop from the ground. The twin rotors are mechanically driven via the PTO, increasing their raking force by up to 50% compared with hydraulic drives, with the shaft speed in the two Y-gearboxes reduced from 540 to 350rpm to protect the drivetrain.

The freewheel mechanism of the drive shaft is positioned directly inside the Y-gearbox, enabling the rotors to rotate freely in transport position. Each rotor is fitted with a four-wheel chassis for optimal ground-contour following, with wheels positioned close to the arc of rotation of the tines to ensure smooth rotor guidance and optimum ground-contour following, while the front two chassis wheels are steerable. The new models are steered by a wide, robust transport axle with zeroplay mechanical forced steering, with mechanical adjustment for steering response With the exception of LINER 3100, all models have a transport width of less than 3m and a transport height of 4m with tine arms attached.

SOLUTION FOR ROWDY CATTLE HAVING WALKED away with a Fieldays Innovation Award and a useful cheque back in June, Springarm Products has recently signed a sole marketing agreement with Dannevirkebased Metalform. Probably best known for its Tow and Fert system, the company will sell the clever product to farmers, landowners and lifestylers, who will recount many tales of dealing with broken water trough valves, caused by all types of livestock. In the case of the Springarm, as the name suggests, an integral spring in the float arm deflects rather than breaking, saving water, time, money and frustration. It was conceived by farm manager Ric Awburn while he was standing at an empty trough one evening watching the cows nudging the ballcock and ultimately snapping the arm. He thought, “if only the arm could give a little”. Fast forward to two years later to a durable and reliable ballcock arm that is easy to install on all types of valves and a savior to all livestock owners.

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DAIRY NEWS DECEMBER 7, 2021

FARM DAIRIES  // 25

Freedom for cows, farmer SOUTHERN STAR

Farms Ltd is a 456ha mixed farm near Waituna Lagoon, Southland, which runs 300 Jersey cows and 2500 breeding ewes. The operation is run seamlessly by husband and wife duo Joanne and Darrin Cracks. Joanne looks after the dairy side of the business, where cows are milked through four Lely Astronaut A4 robots, while Darrin looks after the drystock operation. The concept of robotic milking is said to be built around the cow, ensuring cows like to be milked, making it very different from conventional milking in many ways. One of the main differences, according to Lely, is that cows can be milked more in line with their natural behaviour. The Cracks’ operation enables their cows to be milked more than twice a day whilst still being able to graze when they like, utilising a 100% pasturebased system. Six years on from the installation of their Lely Astronaut A4 robots, Joanne says the main benefit of converting to robots was she would be able to look after 300 cows by herself, without any staffing issues. “Fewer staff needed; for me this is one of the most attractive aspects of having a robotic system. I can look after my 300 cows by myself. “I run our robotic dairy unit virtually on my own. I don’t need every second weekend off as it’s not physically demanding. I once broke a bone and wrecked the ligaments in my knee, [but] I was still able to run the robotic dairy unit, albeit much more slowly. “I wouldn’t have been able to milk in a conventional system. I do have help for calving and have someone to help with [feeding] the calves.” Discussing the upsides of their robots, Joanne says she doesn’t have to strip the colostrum cows. “Of the 300 cows we calve down each season,

not one is stripped unless the robot draws attention to the cow for mastitis or high somatic cell count. Of course, if I have a cow that is not milking out in a quarter, I will put her aside and check her. “This season I checked or stripped about five colostrum cows. I don’t use teat seal.” As well as this huge time saving advantage, the cows are always milked out properly. “This was always the biggest issue of the herringbone,” she says. “Nobody wants to wait for a slow cow. Robots don’t mind and they take the cups off each quarter as it is milked out. This is certainly not possible in a conventional system.” Joanne has found less mastitis in the herd, therefore has to use fewer drugs, doesn’t have to change out milk lines between cows, has fewer problems with sore feet, and gets a longer herd lifespan due to the extremely gentle treatment of all cows. “I find the heifers are able to compete with the cows in the robotic system far better than they ever did in the conventional system.” With no ambition to milk more than 400 cows through their current Astronaut platform, Joanne instead wants to improve milking times and frequency of robot visits. “I have found with robots that less is more in terms of cow numbers. “As I am able to increase the milking speed of my cows, I should end up with more free time… and therefore room to milk more cows if I want to. We have room for improvement without increasing cow numbers.” Spending just an hour in the shed each day, plus around 20 minutes setting up the four feed breaks for the day, Joanne now has the flexibility to get her jobs done when she wants to. “I don’t have to do my jobs at the robot shed at 4am or any other regular time. If I’ve got plans

for the day I do my jobs at a time that suits me. I’m often here at 7pm at night, but that suits me. “It’s rare for me to be at my robot shed before

9am, unless I’m going to be away for the day. There’s no need for someone to be there monitoring the robots. If they need me, they ring.”

Farmer Joanne Cracks says robotic milking has given them freedom.

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DAIRY NEWS DECEMBER 7, 2021

26 //  FARM DAIRIES

Failing to change liners can impact milk production Getting liners in line

A DAIRY farmer’s first

and best defence against mastitis and teat-end damage comes down to one decision. Industrial chemist Hamish Hunt says blowouts in bulk milk cell count (BMCC) are most heavily impacted by how often producers change their milk liners. Industry best practice is to change liners every 2500 milkings. Pushing that deadline out – even marginally – to 3000 milkings, will have a 7% negative impact on milk quality and production. And, in addition to the production losses and rising BMCC, come the veterinary and/or drug costs, the indirect impact on herd fertility, and the frustration, extra work and worry for the producer. Liners the heartbeat of successful dairies The liner – less than 2mm thick in the barrel – spends its entire life under tension and is

Eight ways to get the best out of your liner

expected to handle 2500 milkings (or 1.5 million closures). It is also exposed every day to environmental challenges. “What we often forget

is that the liner is the centrepiece of the single most complicated piece of equipment from a foodharvesting point of view,” Hunt said.

“The liner is also the sole direct point of contact on a cow’s teats, so it plays a big role in controlling mastitis and teat-end damage. “As the liner ages, its surface becomes like sandpaper. So using overly aged liners causes abrasion on the surface of the teat end. This promotes hyper-keratosis and mastitis issues.” He says milk, detergents, sanitisers, milkstone removers, ozone, UV light and variable temperatures also play their part in ageing liners. “Over time they cause them to harden and that accelerates cracking in the liner structure – particularly in the heavier rubber areas – which means it’s becomes a host point for long-term bacterial infection.” Hidden wear Skellerup’s national sales manager, Mark England, agrees, saying that by the time the triggers to change milk liners become obvious, it is often like trying to close the stable door after the horse has bolted. “Liners are hidden inside the cups, so you can’t see what happens to them when they wear out,” England said. “The first thing you might instead notice is a

Make sure the liner tailpiece is the right size for your claw.

Check the claws for sharp edges. Sharp claws may cause impact damage on the short milk tube. Use emery paper to take off any sharp edges.

Always remove the liner from the jetters after cleaning, otherwise you’ll get mouthpiece distortion. (It also lets air circulate through the system.)

When fitting the liner in the shell, ensure the indicator markers are aligned so the liner isn’t twisted in the barrel.

Clean with approved chemicals as per manufacturers’ instructions and use water at the recommended temperature. Cold water does not remove the butterfat!

Release the liner tension in the shell at the end of the season if the liners 2500 milkings are not up.

The sun and ozone has an effect on rubber, protect your liners as much as possible.

Remember: Change your liners after 2500 milkings.

cow kicking the cluster off, damaged teat ends or a surprisingly high BMCC on the milk docket. “Our customers, who change their milking liners at the recommended 2500 milkings, routinely report an immediate reduction in teatend damage, cup slip, a lower BMCC, and faster milk-out times. “It also helps save power, labour and animal health costs and it can increase milk solid yields, while minimising the risk of penalty grades.” Proof in the pudding Several New Zealand farmers proactive about changing their liners say the documented science matches their experience. Ben McKerchar is operations manager for the 1600-cow Larundel Dairy Partnership, at Rangiora, North Canterbury. Larundel Dairy changes liners in its 70-stand rotary dairy every two months, because small issues such as split or worn liners quickly escalate into herdhealth challenges. “For us, it wouldn’t be just half a dozen cows with mastitis,” he said. “It would be 20, or 30, or more. “Once we hit that 2500-milking mark, if we don’t change the liners it

will only be a matter of days and we’ll start seeing split liners. “It’s just not worth it. We’re better off staying ahead of the problem.” As a result, Larundel Dairy’s BMCC average sits comfortably between 180,000 and 220,000. Small changes for big results And in Waikato, Graham and Rebecca Barlow have been equally proactive on their 350cow autumn-calving herd at Gordonton. They engaged PureMilk consultant and vet Adrian Joe to refine their BMCC, which was close to industry averages at 190,000 to 200,000 in their 40-a-side herringbone dairy. By making some small changes, including moving to manual teat spraying (instead of the existing walkover system), switching milk liners and replacing those liners every 2500 milkings, they dramatically improved teat-end health and dropped their BMCC to a comfortable 130,000 to 180,000. Spending to profit Milking speed and financial gain was the positive spin-off of addressing liner life for Bruce and Carol Collinson-Smith. They sharemilk two

properties at Otorohanga. The businesses are run as one: the first milks 1100 cows through a 44-bail rotary dairy (in partnership with Bruce’s father), and the second, a 50-aside herringbone (in a 50/50 equity partnership). With the help of their local Skellerup representative, and PureMilk consultant and vet Steve Cranefield, they have turned around a history of mastitis and a BMCC that peaked at around 290,000. One of their key changes is to now consciously change their liners every 2500 milkings. Cranefield estimated they achieved an overall annual gain of $38,000 per farm. On one farm, they are listed in the top 3% of New Zealand’s herds for low BMCC – finishing grade-free for an entire lactation. Bruce said, “In the long run it’s really cheap, considering what we’ve gained.” You can calculate how often you need to change your liners based on herd and dairy size and milkings per day. Visit www.2500change. co.nz • This article first appeared in Getting the Basics Right 2020 edition.


What does 2022 hold for you and your farm? Whether you are looking to upgrade your whole milking system, or just looking to get your current system to work at a higher level, now is a great time to think about how you can make sure your milking system is optimised for the way you want to farm, and the way you want to milk – both now and in the future?

It’s not about machinery – it’s about you. Before you start thinking about any upgrade to your milking system it pays to start by putting yourself at the centre of the process. This means asking yourself some key questions about how well your current system works for you. •

What do you like about the current system?

What don’t you like about it?

What are your development limitations in terms of consents, the site, utilities and maintenance?

What would milking faster mean for you?

What would improving udder health mean for you?

What are your plans for the future in terms of herd size, volume and succession?

How many people do you want working on the farm, and in the dairy?

It also means collecting some key data so that you are making informed decisions and setting measurable objectives for any changes that you might decide to make.

The best place to start is with DeLaval The team at DeLaval are perfectly placed to help you work through these questions, and with some of their exclusive analysis tools they can measure the performance of your current system, even down to making sure your liners are the best ones for your cows’ teat characteristics, so that you set some objectives for any upgrades or changes you might wish to make.

One solution does not fit everyone Where you farm, how you farm, your objectives and your plans for the future are all factors that influence the development of the right farming system, and the right milking system for you. The good thing is that because DeLaval design, develop and build all of the key elements of a system themselves, you can be sure they will not be pushing you in the direction of a robotic solution, or a rotary just because that is the only type of system they have to sell. DeLaval support all the major systems and the cooling, storage, chemicals, liners and clusters, measurement, recording and management systems that work with them, which means that you can be sure that they will recommend additions, improvements or upgrades based on what is best for you and your system, not based on what they have to sell.

Whatever you need to upgrade your performance – talk to us •

Rotary Systems

Cluster and Liners

Robotic Systems

Recording and Measurement

Parallel Parlours

Farm Management Systems

Cooling and storage

Detergents and Teat Sprays

Cleaning and analysis

We’re upgrading the world’s milking vacuum technology 2022 is the year DeLaval will make it possible to break through a milking performance barrier that has held back milking speeds more than any other – the old, slow one-speed approach to milking vacuum levels. In 2022 we will be launching DeLaval Flow-Responsive™ Milking. This exclusive technology adjusts the vacuum level automatically for each cow, based on her available milk flow. To find out what this could do for the udder health of your herd and the milking speeds of your herd – talk to us about being amongst the first to get all the details.

GO WITH THE FLOW

If you only upgrade one thing for next year – make sure you look at your liners and clusters The most cost-effective and simplest upgrade to any milking system’s performance is typically getting the best liner and cluster combination in place. At DeLaval we have introduced three exclusive and multiple award winning innovations in the milking cluster and liner space – The Clover™ Milking Liner, The Clover™ Milking cartridge, and the Evanza™ cluster. These are not necessarily the right combination for you – but with our liner matching technology and full range of clusters we can make sure you have the right combination in 2022.

We’ve upgraded our Parallel Parlours 2022 will see the launch of a new parlour which will bring all of the work efficiency, safety and animal welfare advances we have made over the last few years to the parlour space. It also means that because upgrading an existing parlour will be faster, easier and more cost-effective than converting to a rotary or robotic system – you will have more options to consider depending on your objectives and budget.

Talk to your local DeLaval dealer or visit us at delaval.com and let’s talk about how we can help you upgrade your performance in 2022.


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