Issuu

WCB suppliers weigh up offers PAGE 5

VERSATILE PERFORMER

Telehandler takes all jobs PAGE 32

SEASON ROLLING Sheds, pits filling up PAGE 20

NOVEMBER 2013 ISSUE 42 // www.dairynewsaustralia.com.au

CAUGHT SHORT Will future fodder demand be met? PAGE 3

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

NEWS // 3

Mick and Ben Holloway with 60,000 shares in WCB, have been keen observers of the WCB bidding war. PG.05

Southern Australia is enjoying a good hay and silage season but production needs to be doubled to cater for future demands, says Feed Central managing director Tim Ford.

Brett and Judith Gledhill have increased conception rates since switching their herd to calving four times a year. PG.18

Winter fodder shortfall prompts call for change RICK BAYNE

Anthony and Wendy Eccles can now irrigate 100ha of their western Victorian farm since installing a new effluent and irrigation system. PG.29

NEWS ��3-13 OPINION �� 14-15 AGRIBUSINESS �� 16-17 BREEDING MANAGEMENT ��18 MANAGEMENT �� 19-23 ANIMAL HEALTH �� 24-28 EFFLUENT & WATER MANAGEMENT �� 29-31 MACHINERY & PRODUCTS �� 32-34

AUSTRALIAN DAIRY farmers might be enjoying what seems a bumper hay and silage season but they still won’t have enough for next winter’s needs, says a national hay marketing company. Feed Central managing director Tim Ford has called for a re-think in attitudes to hay production. “We need to double production,” Mr Ford said. “There is no reason why we can’t, except for organisations sending the wrong message to growers.” Mr Ford said the quantity and

quality of production this season are around normal levels but still would not be enough to cover winter shortages. “Over the past 20 years Australia has made about 10 million tonnes of hay each year. We’ll probably do about the same this year. Everyone is saying we’ve got a good year and there is a lot of hay around, but we’re right in the middle of the season and it is highly normal for a lot of hay to be made this time of year,” he said. Despite the good growth, Mr Ford said the trend over the past 10-15 years was for farmers to experience shortages during winter and he expected that to continue in 2014.

“The reality is that the domestic and export markets have grown but production hasn’t changed. We’ve never addressed the problem and each year farmers are facing shortages.” Mr Ford said dairy was one of the agricultural industries that is sending the wrong messages to hay makers. “The signal is that there is a lot of hay at the moment, don’t make much more because you won’t be able to sell it at a good price. Nothing could be further from the truth. “There is pressure from industry to keep hay prices down and as a result we are not making enough. It’s the wrong pricing signal to send

to growers. “Every single shed and silage pit was empty two months ago. If farmers have an opportunity to fill up now that’s fantastic, but they need all their sheds full with hay stacked outside as well.” Mr Ford predicted vetch and lucerne prices could increase by $100-$150 per tonne by August. “There will be acute shortages like every other year…that’s the trend.” Feed Central, which has more than 10,000 registered buyers, had received calls about frosted crops but these represented less than 1% of the market, he said. “My advice to farmers is grow more. Good hay will always pay off.”

DAIRY NEWS AUSTRALIA NOVEMBER 2013

4 // NEWS

Fonterra buys Tamar Valley Dairy FRESH FROM its purchase of a 6% stake in Bega Cheese,

Bega’s bid to takeover WCB has been approved by the competition watchdog.

Bega gets green light BEGA CHEESE has been given

the green light by the competition watchdog to takeover Warrnambool Cheese and Butter, but Canadian processor Saputo and Murray Goulburn are still waiting for approval. The Australian Competition and Consumer Commission (ACCC) would approve a Bega takeover, saying there was limited overlap between Bega and WCB in relation to the acquisition of raw milk in the dairy region in southwest Victoria as well as areas of northern Victoria. However, ACCC chairman, Rod Sims, has said it has concerns over Murray Goulburn’s proposed acquisition. MG, which withdrew from its takeover bid of WCB three years ago after the ACCC released a preliminary report outlining issues of concern, has chosen to bypass the ACCC this time.

It will seek formal merger authorisation through the Australian Competition Tribunal, in a process which could take up to six month, which applies a net public interest test in contrast to the ACCC’s focus on competition. However, the ACCC will remain closely involved. The tribunal does not have its own permanent staff and the ACCC will be required to submit a report detailing its views and any concerns about impacts to competition. Saputo sought approval from the Foreign Investment Review Board for its proposed takeover but had not heard from it at the time of its initial offer. Although Bega has official approval, it must ultimately win the approval from shareholders for its proposal. Its original offer for all WCB shares at a price of 1.2 Bega shares

plus $2 cash for every WCB share continues to rise as its share price does. It leapt 26% in the week after it gained ACCC approval and Fonterra bought a 6% stake. Although share prices have been changing daily since Saputo made its intentions known, the Bega price remains very much in the ballpark. Even if Saputo and Murray Goulburn win official approval, they must overcome similar hurdles. Saputo is seeking 50.1% of WCB and 46% is owned by its competitors, Bega, MG and Lion, which bought 10% of WCB for $51 million. MG must convince shareholders to accept its bid, which at time of press was $7.50 cash, compared to Saputo’s offer of $8 cash a share. The competition has pushed WCB’s shares from $2.50 12 months ago to $8.50 earlier this month.

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Fonterra has bought Tasmanian dairy manufacturer, Tamar Valley Dairy, six weeks after it was put into the hands of administrators. The co-op paid an undisclosed amount for Tamar Valley Dairy, based in Launceston. The family-owned company has been making cheeses, yoghurt and milk drinks since 1996, and its yoghurts have won industry awards. The sale will be finalised later this month. Under the agreement, Fonterra will acquire the processing equipment, the related services, and intellectual property and trademark for the Tamar Valley Dairy brand. The plant will be fully integrated into Fonterra’s Tasmanian and Australian manufacturing footprint. “Fonterra is a long-standing partner of Tamar Valley Dairy, and has supported and worked closely with the administrators of the family-owned business during what has recently been a difficult period for the Tasmanian business and its founders,” Fonterra Australia managing director Judith Swales said. Fonterra plans to invest further in the business and said its yoghurt business would strengthen its position in the chilled dairy segment in Australia. Fonterra manufactures under the Nestlé SKI brand in Australia. Fonterra already operates two manufacturing facilities in Tasmania - at Spreyton and Wynyard - and is responsible for processing over half of Tasmania’s milk. Judith Swales Fonterra collects almost 500 million litres of milk from almost 260 dairy farms each year, and employs 220 people. Over the last two years Fonterra has invested $20 million in these operations.

Murray Goulburn makes WCB pitch MURRAY GOULBURN would seek shareholder permission to change its name to “Murray Goulburn Warrnambool” if its bid to merge with Warrnambool Cheese and Butter is successful. It would also maintain production of all current WCBF products under the WCBF brands. Murray Goulburn made its bid of $7.50 cash for WCBF shares last month, saying it was in the best interests of the Australian industry. However, the WCBF board has continued to align itself with Saputo, which raised its bid to $8 a share following the MG announcement. Mr Helou said he believed the merged company, with forecast annual revenues in excess of $3.2 billion, would make it Australia’s third largest food and beverage company. It would also place the combined business among the top 20 global dairy producers. The combined milk supply of Murray Goulburn and WCB is forecast to be more than four billion litres in the 201415 financial year. Mr Helou said the offer was fully funded with MG having secured additional debt facilities from its existing financiers (NAB, ANZ and Westpac).

The new company would deliver more than 4 billion litres of milk to nine processing sites annually. Mr Helou said MG could not force current WCB suppliers to join the company, but he and MG chairman, Philip Tracy, held supplier meetings in southwest Victoria following the announcement. “A combination with WCB is something we have been considering for a long time and we believe is in the best interests of WCB shareholders given the compelling strategic benefits that would be delivered to farmers, the dairy industry and local communities,” Mr Helou said. “We believe the formation of an Australian cooperative controlled by both Murray Goulburn and WCB suppliers provides significant benefits to all stakeholders, keeping profits onshore, maximising total farmgate returns to farmer shareholders and increasing the capacity for significant investment in the domestic dairy sector and individual communities.” Mr Tracy said the merged company would retain the primary objectives of a cooperative in maximising farmgate returns for farmer owners.

DAIRY NEWS AUSTRALIA NOVEMBER 2013

NEWS // 5

WCB suppliers weigh up options RICK BAYNE

FOR NEARLY 50 years the Hol-

loway family has farmed with the Warrnambool Cheese and Butter factory on the horizon of their Allansford property. Now the Holloways are reaping the rewards of staying loyal to their local producer as its share price rockets amid a takeover bidding war. Father Mick and son Ben are swaying towards Saputo’s bid but they are enjoying the increasing cut and thrust of interest in WCB. “This is only going to happen once in a lifetime so we need to make the most of it,” Mick said. “When there are two or three bidding for it, it tells you the company is sought after and being run well.” The Holloways, who milk about 430 cows on 370ha just 5km as the crow flies from Allansford, have about 60,000 shares in WCB, bought for an average of 82 cents. As the share price zoomed past $8 they have been tempted to sell to retire some debt after a tough two years for the industry. “Of course that depends on having someone to buy at that price,” Ben said. “Our main priority from whatever happens will be the milk price that farmers get. “Whoever buys it will have to stay competitive to keep farmers but there’s no magic bullet to put up the price for farmers.” While Mick admitted his heart was with Murray Goulburn to maintain Australian investment, he said the Saputo bid had appeal. “I think Bega and Murray Goul-

Tony Rea

Saputo good for competition LONG-TIME SHAREHOLDER Tony Rea of

Mick and Ben Holloway own 60,000 WCB shares, bought for an average of 82 cents.

burn will come back with another play at it,” he said. “But Saputo is a massive company and can invest in technology and find new markets. They say they will let it run as it is.” Ben is supporting the Saputo bid at this stage because of the cash share offer, but he predicts “there’s still a fair bit to be played out”. “Bega and Murray Goulburn say there could be cost savings to be made while Saputo says it will stay the same. We’ve had to make cuts in the past few years because of the tough season so if there is any fat, they should have to cut as well,” he said.

Regardless of who wins the bidding war, the Holloways expect to stay with the new owner. “Except for three months a few years ago we’ve always been with Warrnambool Cheese and Butter since 1964 and they have always matched the milk price,” Mick said. Allansford farmer Sam McCluggage said he remained undecided. “I think there is a bit more to play out,” he said. “The Saputo bid is a compelling one but I guess the big question is foreign owned or Australianowned. I attended the Saputo forum and they had a very professional presentation and vision for

WCB, MG raise farmgate prices MURRAY GOULBURN and Warrnam-

bool Cheese and Butter have revised their forecast full year price range. WCB has revised its range to $6.15 to $6.30 per kilogram of milk solids, with MG changing its to $6.10 to $6.30kg/MS. WCB’s opening milk price, announced in June, was $5.65kg/MS with a forecast full year price range of $5.90-$6.10kg/MS The company also announced a step up for the current season of 16c/kg of fat and 40c/kg of protein. This payment is retrospective and applies to milk supplied from July 1, 2013 This takes the weighted average milk price to $6.05kg/MS, the company said. The payment will be made with October 2013 proceeds during November 2013

to current milk suppliers. MG’s opening milk price was $5.60kg/ MS, with an initial forecast of $5.80 to $6. The co-op also announced a step-up late of 9c/kg of fat and 19c/kg of protein. This takes the weighted-average available price to $6kg/MS. Murray Goulburn managing director, Gary Helou, said since the opening price the international dairy market for key ingredients has remained strong, underpinned by strong global demand particularly for whole milk powder which continues to trade at high levels. The Australian dollar has traded at lower levels but has recently strengthened and remains a source of risk to current full year forecast, he said.

the factory. I’d hope to get a similar forum with the other bidders.” Mr McCluggage said the interest had put Warrnambool in the spotlight. “It’s good to know we have a strong asset in our community. The interest is a really positive thing,” he said. The WCB milk supplier and shareholder said the impact on milk price was more important to him than the rise in the share price. “I hope the eventual buyer doesn’t have to pay too much because I wouldn’t want that to have a negative impact on the milk price.”

Warrnambool is backing Saputo’s bid and says his main priorities are maintaining competition and protecting the interests of milk suppliers and the staff at Allansford. “I think we need to keep competition in the area. We would still have a cooperative in the district with Murray Goulburn, and Saputo would bring great expertise to the local dairy industry,” Mr Rea said. “Saputo is in a brilliant position to take advantage of emerging markets south of the equator.” Mr Rea said he was impressed that Saputo wanted to maintain the existing Warrnambool Cheese and Butter operation at Allansford. “They would bring a lot of overseas capital into the Warrnambool area and I think they would be the best company to retain the workforce at Allansford. Warrnambool has always had a wonderful relationship with Kraft; there is no need to worry about a multi-national, especially a good one like Saputo. “The share price isn’t my greatest concern; I’m more concerned about the long-term interests of the people milking the cows and the workforce at Allansford.”

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

6 // NEWS

Five farms create Greener Pastures reducing chemical synthetic fertil- to learn about each farm through a 2-3 minute story. rian farmers have launched a new isers, insecticides and herbicides. The five families met with Coles The launch was accompanied environmentally-friendly labelled by a full-suite of promotion and this year and their product is now milk through Coles stores. Green Pastures milk will be explanatory material online includ- stock in Coles stores in SA, Victosold through 400 Coles stores ing videos of the five farms around ria and NSW. The families are proacross Victoria, NSW, the ACT and SA. The farmers The farmers have all adopted moting their commitment to reduce chemical and peshave all adopted a sustain- a sustainable composting ticide use, although they are able composting program program on their farms, neither organic nor biodyon their farms, which had reduced their use of fertil- which had reduced their use namic. A survey of 1018 consumisers. of fertilisers. ers conducted by ResearchThe milk is selling for a premium price of $2.49 a litre and Camperdown, west of Colac, and Now showed: ■■ 89% of people worry about $4.79 for a two-litre bottle through the family businesses involved. It is marketed using the indiColes. The product is packed and what is in foods these days; vidual stories from the five south- ■■ 83% of people worry about processed by WCB. The families have dubbed their west Victorian dairy farm families where fresh produce comes milk “eco-conscious” and are pro- and their “sustainable and responfrom, how it’s farmed and moting their use of composting for sible” farming practices such as chemicals in our food chain; ■■ 66% are worried about the composting. fertilising. Each bottle has a photograph All waste on the dairy farms chemicals and additives in milk involved is recycled to create nat- of one of the families and a “QR and further 70% are concerned ural, organic compost for fer- code” that can be entered into an about dairy products in tilising, replacing and greatly smartphone app so the consumer general.

A GROUP of five Western Victo-

Another of the farmers, Tim McGlade, said the farmers had taken some pretty big risks over the last five years to change the way they farm completely. “Now to see us come together and be able to put our milk on your kitchen table, it’s been a big challenge,” he said. The group produces 22m litres of milk each year and hopes the move into their own milk brand would help them ride the industry pricing peaks and troughs. The farmers’ increased use of composting and effluent was inspired by Green Pastures founder, Craig “Reggie” Davis of Cobden. In 2008, he embarked on an ambitious five-year farm conversion plan. Home-made compost replacing traditional fertilisers, an upgraded dairy effluent system, an extensive soil testing program and extension of a centre pivot irrigation system helped Davis achieve his goals.

Reggie Davis

Small milk brands increase market share SMALLER BRANDS are making inroads into the $1.4 billion fresh milk market, lifting their market share from 5.2% to 7% in the past four years. Brands like Norco and Warrnambool Cheese and Butter continue to hold a strong presence in their regions. However, family-based operations are also making an impact, according to Dairy Australia industry analyst, Glen Fisher. These include familiar family brands like Bannister Downs, owned and operated by the Daubney family in Western Australia, through to smaller operations like Little Big Dairy Co, recently launched by the Chesworth family in NSW. Little Big Dairy Co’s Emma Elliot is based 20km from Dubbo, NSW.

With an 800 cow herd producing about 8 million litres a year, Little Big Dairy Co is marketing its regular and flavoured drinking milks through IGA supermarkets in Dubbo and Orange as well as other local retail businesses in the region. “Recently also gaining attention is an extension or variation on the same trend: namely, small groups of farmers or farming families organising their own ‘farmer labels’,” Mr Fisher said. “Like the family behind Little Big Dairy Co, these groups of farmers are also keen to influence how their product is marketed and achieve sustainable returns from their milk. “These motivations are also being pursued by the farmers in the Manning Valley behind the Farmers Own label, and

the group of farmers around Cobden who have recently launched the Green Pastures label.” Mr Fisher said setting up a farmer label is a difficult task and recently launched farmer labels are using existing processors to process and package the milk, and using major supermarkets to retail it. “This is in contrast to the family-based boutique milk labels,” Mr Fisher said. Parmalat is processing the milk for the Manning Valley farmers, while Warrnambool Cheese & Butter is doing the same for the Green Pastures group; Woolworths and Coles respectively are putting the products on their shelves. The Bannister Downs product range.

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

NEWS // 7

SADA Fresh puts money into farmers’ pockets THE SOUTH Australian Dairyfarmers’ Association (SADA) has launched its own brand of milk – SADA Fresh – with 40c from every two-litre bottle sold going to a fund for farmers. The milk will be processed and packaged under a special licensing agreement by dairy foods company Parmalat at its Clarence Gardens facility and sold exclusively through Coles supermarkets across the State. Forty cents of the proceeds from every two-litre container sold will go to a new fund to finance projects that will help secure the future viability of the South Australian dairy industry, benefiting local farmers and their communities. SADA president, David Basham, said this approach could prove to

be a model for other agricultural industries looking for ways to fund research and development. “It will certainly encourage innovation and value adding in South Australia’s dairy sector, leading to new products and new markets, both domestic and export.” Initially, two products will carry the SADA Fresh brand – full cream and low fat milk. Parmalat has guaranteed that it will contain only South Australian milk, sourced by the company. Under the licensing agreement, Parmalat will pay SADA 20 cents per litre (40 cents per container) for every litre sold. The recommended retail price of the milk is expected to be similar to other mainstream brands available in South Australian supermarkets. While the label is being

sold exclusively through Coles for the first 12 months, there is potential in the future to make the brand available through other retailers, depending on its success in the first year and consumer demand. “The total amount of drinking milk sold in a year in SA is 220 million litres and we would like to hope that in the longer term we can secure 1% of the market, or 2.2 million litres,” Mr Basham said. A meeting last October involving SA state MP and Mount Compass dairy farmer Robert Brokenshire, Coles Chief Operating Officer, John Durkan, and SADA CEO Ken Lyons, was the start of the new brand. Lyons suggested creating a regional milk brand, similar to the Great Ocean Road label packaged exclusively for Coles supermar-

kets in western Victoria by Warrnambool Cheese and Butter. Durkan thought the idea worth investigating and agreed to further discussions. After working through all the practical issues involved in creating, packaging and distributing a new milk brand, SADA’s senior management and board decided that the best approach would be to work in conjunction with an established manufacturer, with facilities in South Australia. The primary aim of the new fund will be to support projects that benefit South Australian dairy farmers and ensure that their industry has a viable future. The fund will be run by a separate board appointed by SADA, and made up of directors selected for their

Farmers Nick Brokenshire and Rick Gladigau, with SADA CEO Ken Lyons (centre) at the launch of SADA Fresh.

expertise. The board will manage the fund to ensure it is invested in a way that maximises returns to the South Australian dairy industry. Final details are still being developed in consultation with SADA members, and expert financial and legal advice, however it is envisaged priorities will include:

■■

Developing new ‘valueadded’ products and seeking out new export markets for SA dairy produce, that will lead to farmers being paid higher premiums for their milk. On-farm research projects that focus on local issues and helping SA dairy farmers to become more produc-

tive and efficient, and reduce on-farm production costs. ■■ Encouraging new investment by the corporate sector in the South Australian dairy industry at all levels. It is envisaged that enough funds will have been raised to call for the first round of project applications next April.

David Basham watches the first bottles of SADA Fresh roll off the line.

0102_0513_OFSDairyNews_80x265AU_FA.indd 1

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

8 // NEWS

Japanese farmers want dairy off trade table SUDESH KISSUN

JAPANESE FARMERS, sceptical about a

free trade deal, are banking on the Government to exclude the sector from the Trans Pacific Partnership (TPP). The head of Japan’s umbrella dairy organisation says the industry is “really worried” about TPP’s impact on the rural sector where dairy farmers form an integral part of society. Hirofumi Maeda, senior managing director of Japan Dairy Association (J-milk), said the industry has made its views known to the Government. If dairy is to be included in the TPP deal, he expects the Government to negotiate with the industry. “We haven’t heard anything so probably dairy is not an item,” he told Dairy News Australia on the sidelines of the World Dairy Summit in Yokohama earlier this month. Speaking through

interpreter, Mr Maeda refused to say whether a TPP deal should be sewn up by the end of next month. Most of the 12 countries in the TPP negotiations – US, Australia, New Zealand, Canada, Mexico, Japan, Malaysia, VietHirofumi Maeda nam, Chile, Mexico, Peru and Singapore – Prime Minister Shinzo Abe are hoping to conclude a again pledged to fight for trade deal by next month. Japan’s trading interests. Japanese negotiaMr Maeda said as an tors are facing pressure to industry, it isn’t keen to make some concessions, particularly on farm prod- pass an opinion on TPP negotiations. ucts. However, the agri“We believe our Govculture sector is applying ernment is trying to secure pressure on the Governan appropriate position. ment to protect them. Therefore they know Japanese farmers what’s best for Japan. oppose the TPP, fearing “Whether it concludes the accord will wipe them out by triggering an influx quickly is entirely up to our Government. Howof cheaper imports. ever, we have made our Some Japanese media views known and the Govreports suggest the Government will be seeking to ernment knows what we want.” exempt agriculture - parJ-milk represents dairy ticularly rice, wheat, beef farmers, dairy processors and pork, dairy products and milk retailers from and sugar - from the pact. throughout the counLast month Japanese

Japanese dairy farmers want agriculture excluded from the proposed Trans Pacific Partnership.

try. Japanese farmers produced 7.6 million tons of milk last year. Of this 53% or 4m tonne was used as drinking milk and the rest went into cheese, butter and dairy product manufacturing. The local milk only meets two-thirds of the total demand so Japan imports dairy products from Oceania and China.

JAPANESE DAIRY AT A GLANCE ■■

■■

Production peaked at 8.6 million tonnes in 1996 but was down to 7.6m tonnes last year. One third of dairy products consumed are imported 70% of land is forest. Only 10% is farmland of which 60% are rice paddocks. Average yield per cow is 8011kg, one of the best in

■■ ■■

■■

According to Mr Maeda, the Japanese dairy is highly valued by its people. In rural areas, effluent from dairy farms is widely used as fertiliser by vegetable, rice and fruit growers. With an ageing rice farmer population, dairy farming is taking up land being given by the rice sector.

In many rural towns, dairy farmers are playing an active role in their communities, he adds. “In many rural communities, you can only see children and the elderly as young parents leave home to work in nearby cities. “In these circumstances, dairy farmers play very important roles in school parent teacher

associations, they serve as volunteer firemen and in some cases, take up politics at the local government level. “So everyone including the Government has a special feeling towards dairy farmers. If a free trade deal comes in and impacts our dairy industry, it will destroy rural communities.”

Don’t rush trade deal

the world Average herd size is 50 Liquid milk consumption has dropped from 5m litres in 1995 to 3.5m litres in 2012 Number of processing plants dropped from 2400 in 1995 to 620 last year.

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NEW ZEALAND’S Federated Farmers dairy chairman, Willy Leferink, who attended the World Dairy Summit in Yokohama, doubts the muchheralded Trans Pacific Partnership (TPP) can be concluded by the end of this year. Mr Leferink points out that the average age of Japanese farmers is around 68. Most of these wealthy farmers don’t want an open market to erode their wealth, he said.

“They strongly feel that opening up their borders suddenly is a dangerous thing to do. I can understand where they are coming from,” he said. “They are getting a huge milk price right now because of short supply and they don’t want to lose that under free trade.” Leferink believes there’s no need to rush into TPP. “It’s better to negotiate a good agreement, even if it means it takes a little longer.”

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

10 // NEWS

Basin buybacks capped at 1500 gigalitres MURRAY DARLING Basin buybacks will be capped at 1500 gigalitres (GL). The cap, which is a Coalition pre-election commitment, was confirmed by the Parliamentary Secretary for the Environment, Senator Simon Birmingham. President of ADF, Noel Campbell, welcomed the news and said it would be reassuring for farmers and farming communities across the Murray Darling Basin. “ADF welcomes the government’s confirmation that it will implement its pre-election commitment to cap buybacks at 1500GL,” Mr Campbell said. “We have said consistently that buybacks are only a small part of the solution, and that there needed to be a greater focus

on upgrading inefficient irrigation infrastructure. “By focusing on upgrading infrastructure, we can return more water to the Murray Darling system without burdening irriga-

tors at the same time. “A report commissioned by Dairy Australia (DA) “Cost Benefit Analysis of Farm Irrigation Modernisation”, which was released earlier this year, found that farm

upgrades cost the Government around $3,700 a megalitre (ML) of water savings for the environment, while delivering gross productivity gains to farmers worth an average $9,800/ML of water savings. “Building on this, increased farm production generated additional regional economic activity worth $6,200/ML.” Mr Campbell said ADF was pleased the Federal Government had committed to phasing in the buybacks over six years, rather than the original plan of four, and that spending under the Murray Darling Basin Plan (MDBP) will be focused on infrastructure projects that deliver improvements in water efficiency.

Fonterra dumps buttermilk on NZ pastures EXCESS MILK production in

New Zealand has caused Fonterra to dump buttermilk for 4-6 weeks. Fonterra has been dumping the buttermilk from several plants in Waikato and Bay of Plenty as it grapples with massive extra production caused by spring growth. Milk production is up 10% on average and Fonterra’s processing and normal disposal systems are not coping.

However, it has been told not to dump any more buttermilk at a Atiamuri property in Waikato. The Waikato Regional Council is investigating the “authorisations” for the buttermilk ‘lake’. Environment Waikato’s compliance and education manager Rob Dragten said it is now reasonably satisfied the material poses no significant risk to the environment. But Fonterra has been told

to desist, he adds. “Milk by-products are produced year-round by processing plants and a range of companies have resource consents to spread this material as fertiliser on land,” he said. “It has nutrients useful for farms growing grass so spreading on land is a good way to dispose of it.” Fonterra chief executive Theo Spierings said Fonterra was not

spilling milk, just some products, including buttermilk, not being processed. “Processing is at capacity because it is a very big year – much bigger than the first half of last year before we had the drought,” he said. The co-op is storing some buttermilk to be used as calf feed. The peak is expected to last four to six weeks.

Reversal of fortune THE GLOBAL dairy industry is seeing a reversal of for-

tune; after a lacklustre 2012, this year is shaping up to be an exceptional year, according to the International Dairy Federation. In its World Dairy Situation report released last month, the IDF says weather is playing a crucial role and 2013 seems to be a “reverse portrait of 2012, with a sluggish start and a dynamic finish.” “First in 2012, adverse weather conditions were concentrated mostly in the second half-year, while conditions were rather favourable during the first six months,” it says. “Unlike 2012, the New Zealand first half of 2013 was not a bonanza time.” production rose Many countries 8.5% last year, in Europe were still while Australia’s recovering from fell 3%. adverse weather conditions and this affected the forage quality given to cows. The animals were also released to pasture a month later than usual in most European countries. The report says a severe drought in New Zealand earlier this year resulted in “massive culling and a severe milk production decline” compared to the first half of last year. While the report stops short of predicting the weather for the remainder of this year, it says the July to September period appears to be more favourable than 2012. Cow’s milk still represents 83% of the total world milk production. The 2012 milk yield grew 2.1% compared to 2.7% the year before. India, the world’s biggest milk producer, and Pakistan helped Asia lead the way with a 4.4% increase in production. Oceania was a mixed bag; New Zealand’s production rising 8.5% and Australia’s declining 3%. “Weather remains a key driver of variability in milk supply,” it said. The long term prospects for dairy products are encouraging and driven by demand out of Asia, Middle East and Latin America. But they warn that while dairy commodity prices have recovered, farmers are under pressure in many regions due to rising input costs.

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NEWS // 11

Season hits Dairy Australia coffers DAIRY AUSTRALIA invested $58.2m on

research, development and industry services last financial year despite recording a $2 million loss. Tough seasonal conditions had an impact on Dairy Australia’s finances. Although the higher milk levy saw funds rise $1.7 million on last year to $32.8 million, low milk production saw only a 5% increase from this revenue on the previous year. The milk levy makes up nearly 60% of Dairy Australia’s total income. As a result, DA suffered a 3% drop in total revenue.

The 10% increase in expenditure forced it to draw $2.08m from reserves. The drop in revenue was due to a one-off $2.8 million payroll tax refund granted to Dairy Australia in 2011-12 for a charitable status. Dairy Australia invested $58.2 million on research, development and industry services to support the future of dairy for milk producers in 2012/13, 10% more than in the last year. Of the $58.2m invested DA spent $23.7 million on farm productivity and delivery programs – 13% more than last year.

Free trade in Asia a priority A FREE trade agreement with our Asian neighbours should be prioritised to capitalise on strong interest from Chinese businesses in Australian dairy. A high-powered agribusiness investment round table was held in Shanghai as part of the Victorian government’s recent trade mission to China. The round table was attended by executives from the likes of Bright Group, ChemChina, Dalian Fortune Group, FOSUN, Shanghai Tangjiu Group, China State Farms, Xian Evergreen and Wahaha. The Australians in attendance included Federal Trade Minister, Andrew Robb; Victorian Premier, Denis Napthine; and Victorian Minister for Agriculture, Peter Walsh. Mr Walsh told media after the briefing that dairy was a big topic of discussion in the context that major Chinese corporations want to invest in the supply chain. They want to make sure they have got continuous supply, he said. Australian Dairy Farmers president, Noel Campbell, has called for the Federal Government to fast-track negotiations for an FTA with China, Japan and Korea. He capitalised on Mr Walsh’s comments that “‘there was a lot of interest around dairy, particularly around formula”. “From a dairy industry perspective, we were very pleased to see Minister Walsh’s remarks following the State Government’s recent trade mission to China,” Mr Campbell said. “We know that China’s rapidly growing and increasingly affluent middle-class is generating substantial demand for dairy products, including infant formula. “The challenge for government as well as the industry is to translate this positivity into concrete action and secure a Free Trade Agreement (FTA) that delivers value to suppliers as soon as possible.” Mr Campbell said every added delay hands a further competitive advantage to trade rivals like New Zealand, who after securing an FTA with China in 2008, have seen a six-fold increase in the total volume (tonnes) of their dairy exports. “If New Zealand can secure an outcome that delivers a massive exports-driven boost to their bottom line, then there’s no reason why we can’t do the same.” Mr Campbell said ADF would continue to strongly press the Federal Government to fast-track negotiations for FTAs with China, Japan and Korea.

Spending on industry promotions was doubled to $3.7 million and spending on industry people and capability programs rose by 79% to $3.3 million. Matching government payments for research related expenditure rose 3% to $19.2m in the same period, although the external contribution from the Victorian Government was down from $1.1 million to $184,000.

DA chairman, Max Roberts, said Australian dairy is driving activities and improvements that not only address current needs, but also take account of a longer term vision. ”Like all agricultural sectors, the pressures for dairy to compete both domestically and internationally continue and this year was one of the most challenging due to seasonal conditions, softening milk

prices and tight margins,” said Mr Roberts. “Dairy Australia has been assisting levy payers to cope with challenges through practical solutions, direct action programs and on-the-ground support. This focus has seen strong return on investment for industry stakeholders. “More than 70 major projects are now in action for dairy farmers.”

Additionally, the Regional Development Programs, financially supported by Dairy Australia, leveraged $8.3m external funds and in-kind services bringing support to farmers in their regions. The AGM will be held in Melbourne on November 29. Mr Roberts said it provides DA members with a chance to see how their levy has been spent, as well

as the opportunity to vote on recommendations for change in the organisation’s constitution. These include an increase of farmer representatives on the board from three directors to four, and a limiting of Directors’ tenure to a maximum of three three-year terms. Download a copy of the report at www.dairyaustralia.com.au/annual-report

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

12 // WORLD DAIRY SUMMIT

Food safety top priority for Chinese THE HEAD of one of China’s largest dairy compa-

Lactose-free milk tastes success SUDESH KISSUN

FINNISH

DAIRY

processor Valio’s experiment with lactosefree milk 12 years ago had sceptics, even within the farmer-owned cooperative. Some employees asked whether it was the right thing to do, said Valio export manager Maritta Timonen at the recent World Dairy Summit in Yokohama. But speaking on the use of technology and innovation to communicate the benefits of dairy to consumers, Ms Timonen said the ‘Eila (shortened version of ‘No Lactose’ in Finnish)’ brand of lactosefree milk drink – twice as expensive as conventional milk – defied all expectations. Valio launched the world’s first lactose-free milk drink for test marketing in Finland in 2001, targeting first year sales of one million L, which was reached within the first two months. Sales hit 12 million L in 2002 and topped 70 million L in 2010.

ABOUT VALIO ● Owned by cooperatives with 7900 farmers ● Processes 1.9b litres of milk every year with net sales of 2 billion euros ● Has 18 processing plants and employs 4600 employees ● Has subsidiaries in Sweden, Baltics, Russia, the US and China.

Today Valio’s Eila lactose-free milk drink is one of its most popular domestic products with net sales for the lactose-free range amounting over 150 euros in 2012. Containing less than 0.01% lactose, Eila is the world’s first dairy product to give people who cannot tolerate lactose the chance to enjoy the taste of fresh milk again, and reap the nutritional benefits that come with it. In Finland, the Eila product cannot be sold as milk but as a milk drink because one part of the lactose is removed and rest is hydrolysed using a lactase enzyme. Ms Timonen says this makes the milk drink lactose-free while allowing it to retain the “milk taste”.

iDAIRY®

Valio had low-lactose milk in the market prior to Eila’s launch but consumers complained it was too sweet. “But lactose intolerant consumers liked the no-lactose milk drink and we’re happy to get milk back into their diets in Finland,” she says. Marketing has been a key to Eila’s success. In Finland, Ms Timonen says, consumers were told what is lactose-free milk. The first targets were lactose intolerant individuals and their families. Then the company moved into the food service sector promoting the use of lactose-free ingredients in cooking. “We explained that all good

nutrients are present in lactosefree dairy products and taste all the same.” Today, Eila products are sold in 12 markets – Finland, Sweden, Estonia, Latvia, Lithuania, Russia and Ukraine. Valio’s technology licensees sell their brands in Spain, Switzerland, The Netherlands, South Korea and Norway. Valio supplies 40 different lactose-free products including for example milks, yoghurts, creams, quarks, cheeses, butter and milkpowders. Ms Timonen says with social media, marketing has become much easier compared to the launch 12 years ago. Ms Timonen says like other countries, Finland is also experiencing a declining trend in milk consumption. “However, the lactose-free milk drink has helped to get new milk consumers and helped buck the trend,” she says. • Sudesh Kissun attended the 2013 World Dairy Summit in Yokohama, Japan with the assistance of the Asia New Zealand Foundation.

nies says Chinese consumers place a higher priority on product quality over country of origin. Mengniu Dairy chief executive Yiping Sun said consumers’ trust can only be won by delivering high quality dairy products. She was speaking at the recent World Dairy Summit in Yokohama. Mengniu is the 15th largest dairy company in the world, with 75 million Chinese consumers drinking its products every day. “China is a big market. It does not matter if you are a foreign company or a local company, as long as your product quality is high, you can win consumers’ trust.” Ms Sun outlined how Yiping Sun Mengniu was tapping into global resources to improve the Chinese dairy industry. European co-op Arla Foods is a shareholder and its products are sold in China through Mengniu’s sales network. The two companies have set up Sino-Danish Dairy Product Technology Cooperation Center. Sun says it promotes Danish dairy technology to Chinese farms. “We believe as the leading dairy in China, it’s our responsibility to make sure the whole Chinese dairy industry improves,” she said. Mengniu has begun a partnership with AsureQuality, a commercial biosecurity company owned by the New Zealand Government, to set up a third party independent certifying company. The cooperation will help Mengniu bring world leading food safety standards to China which cover the complete chain of the dairy industry including pasture and production process management. “It will also help push forward China’s dairy industry to be in line with world dairy development,” she said. Mengniu has no immediate plans to invest in New Zealand but Ms Sun said it is exploring opportunities “as long as the cooperation helps us to produce better products for consumers”. – Sudesh Kissun

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WORLD DAIRY SUMMIT // 13

Asian middle class drives liquid dairy demand SUDESH KISSUN

DEMAND FOR liquid

dairy products is growing, fuelled by a rise in the middle classes in developing countries. Milk packaging company Tetra Pak says demand for liquid dairy products is set to grow 2.5% in the next three years; consumption is forecast to increase from about 287 billion litres this year to about 309 billion litres in 2016. Tetra Pak group president and managing director Dennis Jonsson says a growing middle class in China, India, Indonesia and Brazil is driving demand for liquid dairy. Economic growth in other parts of Asia, Africa and Latin America and consumers increasingly seeking products which meet specific health and lifestyle needs also boost demand. Mr Jonsson told the recent World Dairy Summit in Yokohama that in many of the poorest developing countries milk is consumed as the essential nutritional element of people’s diets. “In mature markets milk has long been part of people’s daily diets. So growth is slowing or flat while it is growing rapidly in the developing markets. “And, to a large extent, it is ambient dairy products that will drive growth as consumers of ‘loose’ milk – in countries like

India and Pakistan – convert to packed milk. “That switch is due to growing awareness about the health benefits, safety and convenience of pack-

aged milk.” By 2014 packed milk is set to outsell loose milk for the first time in developing countries. Tetra Pak has identified about 2.7 billion consumers in developing countries living on US$2-US$8 a day. These consumers represent a golden opportunity for our industry, he adds. “Today’s low-income consumers in developing countries are tomorrow’s middle class. And these consumers have aspirations to buy the brands that today are unaffordable to them. This creates opportunities for brand owners to develop products differently, pack and distribute them differently and sell them. Innovation is needed to be able to offer the right product in the right size at the right price.” Demand for health-oriented products and ‘on-

Say cheese! CHEESE PRODUCTION is growing in almost all

regions of the world, according to the 2013 World Dairy Situation Report. Cow milk cheese production rose 2.2% last year. With a few exceptions like Egypt, everyone produced more cheese including the EU where milk production was down. The report says cheese is getting more and more popular around the world. Whole milkpowder and skim milkpowder production also grew 3.5% and 5.25 respectively. Dairy companies produced 4.5m tonnes of WMP and 4m tonnes of SMP last year. WMP output in New Zealand rose almost 10% and China increased its output by 5.2%. World output of butter and other milk fats grew 3.3%.

the-go’ products is on the rise, said Mr Jonsson. So is demand for products and packaging suited to the specific needs of ageing populations.

”A growing demand for healthy products such as energy drinks and probiotic drinking yogurt is forecast to grow at a compound annual growth

rate of 8.5% from 2013 to 2016.” To take advantage of this trend companies like Fonterra offer a range of products specially for-

mulated to help adults maintain optimal bone strength. Mexico-based Alpura has a fortified milk to maintain heart health and avoid premature

ageing. • Sudesh Kissun attended the 2013 World Dairy Summit in Yokohama, Japan with the assistance of the Asia New Zealand Foundation.

L A I C E P S T R O REP NEXT ISSUE: DECEMBER 2013 TECHNOLOGY Businesses in every imaginable industry are boosting their productivity by using information technology (IT) to do much of the heavy lifting: crunching data, weighing and scanning, even opening gates. In the next issue of Dairy News Australia we have a special report on the latest tech developments and how farmers can extract maximum benefit from them. BOOKING DEADLINE: November 27 MATERIAL DEADLINE: December 3 PUBLISHED: December 10 CONTACT: CHRIS DINGLE T: 0417 735 001 E: chris@dairynewsaustralia.com.au

DAIRY NEWS AUSTRALIA NOVEMBER 2013

14 // OPINION RUMINATING

EDITORIAL

Saputo not the answer

MILKING IT... UDV should get in the ring

There was a sigh of relief from many within the industry when Murray Goulburn made its bid for Warrnambool Cheese and Butter. Those wanting industry consolidation, particularly from a cooperative, were pleased when MG signalled its intention, fearing Saputo’s bid was too strong for Bega to compete with. However, we found a press release from the United Dairyfarmers of Victoria somewhat odd. “It’s great to see MG join the battle,” UDV president Kerry Callow is quoted. “If WCB is sold to overseas interests it diminishes our ability to build an Australian-owned multinational dairy industry player.” And many lines like it. Why didn’t the UDV just come out and say what they meant - that they want MG to succeed? Why not issue a public statement to the Government that such a move is good for the Australian industry? The UDV would then be in the fight, instead of watching passively from the sidelines.

Rags to riches

On the subject of Murray Goulburn, it’s hard to believe it’s the same co-op that paid hundreds of thousands of dollars to former managing director Stephen O’Rourke’s wife for years. Under managing director Gary Helou, the co-op has expanded its international operations, embarked on an aggressive domestic processing deal with Coles and has now made an audacious bid for WCB. It’s fair to say it’s having a crack. Yet it was the same co-op by name that paid Michelle O’Rourke - the wife of managing director Stephen O’Rourke – undisclosed remuneration of $331,918 in 2009-10 and $438,203 in 2008-09. Payments had been ongoing throughout Mr O’Rourke’s 12-year tenure and the co-op went on to say its failure to disclose the information until late 2010 was “an oversight”. Like chalk and cheese.

Tweets

Hunter Valley dairy farmer David Williams had a good response on Twitter to the news Coles is trying to stop people not paying for grocery items through its self-service check-outs. “I see Coles are trying to combat self-service thieves. Now they know how I feel every time the milk tanker drives out the gate,” he said. Fish Creek farmer Graeme Nicoll made his feelings clear on Twitter when he noticed yet another article on the world’s worst jobs, with dairy farming joining gastroenterologist, plumber, crime scene clean-up technician, slaughterhouse worker and oil rig worker. “Apparently my job is one of the six crappiest jobs, I think writing pointless crap like this would be far worse.” We agree.

Advertising Chris Dingle chris@dairynewsaustralia.com.au

A kick in the…

DOZENS OF men in a town in India were nursing bruises after being trampled by cattle as part of an annual ritual to encourage God to answer their prayers. In the centuries-old ceremony, men lay on the ground and allowed decorated cows to walk on them. While the ceremony can be painful, “there has never been a case where a person has been injured seriously or died,” Bhadar Rathod, a tribal chief in Garbada, said. The ceremony in Garbada, some 200km from Ahmedabad, has become well known and is now something of a tourist attraction. “It is believed that if a cow’s feet touches a person, his problems will be reduced,” a district official said. Something to think about next time you come second best to a cranky cow.

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Editor Stephen Cooke 03.9478 9779 or 0427.124 437 editor@dairynewsaustralia.com.au

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Publisher Brian Hight Production D ave Ferguson Becky Williams Sub Editor Pamela Tipa

Dairy News Australia is published by RNG Publishing Limited. All editorial copy and

NEW ZEALAND dairy co-op Fonterra is the envy of many in our fragmented dairy industry - one cooperative able to use its economies of scale to return the best price possible to its suppliers. The sale of Warrnambool Cheese and Butter provides a rare chance for the Australian industry to consolidate and reduce the number of processors. Bega Cheese’s hostile takeover bid in September was a step in the right direction for many – industry consolidation with the added bonus of maintaining WCBF in Australian hands. Canadian dairy company Saputo appeared to have the front running when they made their cash bid as they had the endorsement of the WCBF board. A good deal for WCBF shareholders but it seemed a chance gone begging for industry consolidation. Until Murray Goulburn announced its cash offer of $7.50 a share. A merged WCBF-Murray Goulburn, with forecast annual revenues in excess of $3.2 billion, would make it Australia’s third largest food and beverage company. It would also place the combined business among the top 20 global dairy producers. The combined milk supply of Murray Goulburn and WCB would be more than four billion litres in the 2014-15 financial year. Those economies of scale used by Fonterra in New Zealand could be applied. The merged company would have the production to underpin MG’s recent push into new Asian markets. WCBF said it would consider the offer but quickly told its suppliers to accept Saputo’s raised bid of $8 a share when it was announced soon after. WCBF shares, sitting at $2.50 12 months ago, climbed past $9 when Kirin bought a stake in WCB. It’s still too early to say how this will play out, Saputo needs approval from the Foreign Investment Review Board, which has been very quiet. Murray Goulburn needs approval from the Australian Competition Tribunal. However, if Australia is going to compete against the big boys from New Zealand, we need consolidation, which requires a successful bid from Bega or MG. And if we’re going to compete with the world’s biggest and best, we need a dairy processor in the world’s Top 20, which a merger between MG and WCBF would achieve. If Saputo succeeds with its bid at the expense of both, then it’s business as usual, and our industry isn’t in rude enough health for that to be an option.

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

OPINION // 15

Strong US domestic market helps fund export subsidies Let’s face it: dairy farmers in this country who is little or no profit margin left in this value to ours, it still works out to be well domestic milk and dairy in excess of 56c per litre at farm gate for ues to lose farmers and milk volume, supply the world market, with all its problems country’s all their milk which can be and is promarket to fund anything. United States dairy industry has again This is because the domestic milk duced on a cheaper cost seasonal supply used its brains to keep its industry a and inequities, are by far the most profitable market in this country has had so much basis. step ahead of ours. dairy farmers in Australia. This compares to a tier 1 price of value squeezed out of it over recent Over recent years, the dairy indusyears by the market dominance of the little more than 50cents per litre paid try in the US has been put under preslarge retailers and their store branded to farmers in this State for milk that sure to remove subsidies, industry again and Australian farmers will just milk and other products, combined is contracted with compulsory higher assistance and regulation in addition their new and emerging markets. with the ongoing supermarket milk cost, all-year-round supply conditions This is building the industry and have to do the job cheaper still. to complying with World Trade Organand a tier 2 price of about 30 cents per In fact, the Americans have not out- price war. increasing volume produced and isation (WTO) rules. Let’s face it: dairy farmers in this litre or less for all milk produced over sold, while keeping smarted Australia. Rather, the AustraNow a new prothe domestic market lian Government and industry chain country who supply the world market, that level. gram in the US called And that difference is even before with all its problems and inequities, are have out-dumbed themselves. strong. Cooperatives Working the high cost of water, In fact there really should Because it is not Together (CWT) looks electricity, and labour Government mandated, have been no reason, if it to help its dairy exportThe Cooperatives Working is added to Queensland it seems the program is wanted to, that the Australian ers, while staying clear Together program helps US farmers’ books. allowable under WTO industry could not have done of WTO rules. This shows the sheer rules and does not cost something similar itself. The initiative, which exporters without breaching stupidity of government In fact, prior to the year a cent of US taxes. was originally designed WTO rules. policies which have This of course will 2000, the Queensland dairy to assist with the huge allowed large supermarallow US product a industry was accused of doing cow culling program, OPINION by far the most profitable dairy farmers kets, for their own gain, to turn what competitive advantage virtually the same thing. has been transformed BRIAN TESSMAN should be our industry’s most profitable Some people have said that the Aus- in Australia. against other countries’ into being a US$60 milDairy farmers who have no option milk market into what is little more than product, including Aus- tralian domestic market is too small lion privately-funded compared to exports to work this at present but to supply the domestic a ball and chain on our nation’s ability tralia’s. export subsidy scheme. market are not only struggling but are to grasp export growth opportunities, While the international dairy market scheme. What I understand the scheme does, which would build wealth and employThe real situation in all but two of leaving the industry in droves. put very simply, is participating dairy is going through an enormous boom at This difference was emphasised ment for our nation. companies in the US voluntarily take present, the effect of this scheme could the states in this country is that the The Government needs to follow a small piece of their profit margin on be felt in Australia if world dairy prices domestic market is much bigger com- recently when huge New Zealand based pared to production than it is in most processor Fonterra released its latest industry recommendations to change their domestically sold milk and dairy fall some time in the future. this - and soon - otherwise the rest of farmgate prices for milk in NZ. Most of the people involved in Aus- parts of America. product and create a fund to subsidise While there is a little variation con- the world will have left us behind for The real reason this initiative could the product that participating com- tralian dairy exports and this issue tell panies are exporting, particularly into me the Americans have outsmarted us not be done in Australia is that there verting their payment system and dollar good.

WHILE AUSTRALIAN dairy contin-

Climb on board agriculture, it’s the next growth wave FIVE SUPER-GROWTH industry an additional $25 billion to Austrasectors worth an extra $250 billion to lia’s GDP over the next 20 years. That the national economy over the next 20 is a boost of about 1% to our economy, which is turning over years hold the key to Aus$2.6 trillion in today’s tralia’s future prosperity, dollars. according to a new report Deloitte says the from business consultants, first place to look for Deloitte. sectoral growth is in The report, entimarkets that can be tled Positioning for Prosexpected to grow faster perity? Catching the next than the global econwave focuses on business omy as a whole. Their imperatives for a prosperOPINION analysis shows that we ous Australia. JAN DAVIS have a 16.2% comparaDeloitte used a surfing tive advantage in agrianalogy to explain that, while the mining wave continues to culture. (The Australian average is 5.2%; deliver prosperity for Australia, albeit and the next nearest sector is mining at at a declining rate, it has now past us 13.3%.) On this basis, they have identified agriculture as Australia’s ‘forgotand is heading into the shore. They have identified that the next set ten hero’ – the sector which offers the of super-growth waves we need to ride greatest potential for economic growth are agribusiness, gas, tourism, interna- amongst the five top spots. Why is agriculture top of the list? tional education and wealth manageThe Deloitte report explains this by ment. The report suggests that exceptional pointing to the trend to higher protein growth in these five sectors could add diets in rapidly westernising countries,

and the expected fall of the Aussie dollar back to around US$0.80 in coming years. We have half of the world’s population living just to our north. Come what may, they will always demand food. They are a ready market for those countries that can produce beyond the needs of their own domestic population. In Australia, we are well placed to meet some of that demand. On average, each farmer here produces enough to feed 600 people – 150 here and 440 overseas. Although we live in a challenged continent, we have become adept at adapting our agriculture to the challenges that our climate presents. If we are to achieve this clear potential - at state or national level - we must all do our bit to ensure that this sector remains productive, profitable and sustainable. First up, the report recommends encouraging consolidation of mature and declining industries, and winding back poorly directed subsidies. They

The mining industry continues to deliver prosperity for Australia but at a declining rate.

note that specifically directed government help will often miss its intended mark. This advice echoes other assessments that urge governments to return to core business and away from their ever-expanding involvement in areas that are better left to market forces. Instead, governments must work closely and co-operatively with industry to deliver an environment in which farming businesses can operate efficiently without unnecessary regulation and cost.

Governments also need to ramp up investment in innovation, research, development and infrastructure. We need to develop a strong national focus on achieving improved market access and eliminating trade barriers. And Australians generally need to support and value their farmers as the national assets experts are now confirming they truly are. Only then will we be able to ride the next wave and avoid being wiped out. • Jan Davis is the CEO of the Tasmanian Farmers and Graziers Association.

DAIRY NEWS AUSTRALIA NOVEMBER 2013

16 // AGRIBUSINESS

Smaller milk brands grow fresh milk market share Export demand remains strong Dairy NewS aUSTraLia june, 2012

agribusiness // 17

PER CAPITA consumption of liquid milk is still on the rise in Australia, according to Dairy Australia’s recent Australian Dairy InFocus 2013 (available late November). The current estimate puts per capita consumption of drinking milk at around 107 litres, growing strongly over the last two years (it was 106.1 litres in 2012) and at high levels compared to many countries, including key dairy export destinations. This continued growth of drinking milk consumption owes much to steady population growth and the relentless expansion of the ‘coffee culture’ in Australia during the last decade. Alongside the growth in domestic

Sales figures for 2011/12 only a few boutique weeks milks from ending, attention is now focused on 2012/13 milk prices as farmand farmer labels ers consider strategies for the coming year. In some domestically-focused suggest consumers regions, renegotiated contracts incorporating lower prices and reduced ‘tier are interested. one’ access are undermining farmer With season

confidence and supply stability. For many farmers in export-oriented regions, a lower price outlook relative to the current season not only adds to the challenges of doing business, but seems to contradict the positive medium term outlook of Asia-driven dairy demand per capita consumption in drinking growth. milk there has been continued growth Dairy Australia’s indicative outlook for southern gate milk the prices – in packaged milk sales farm through published in the recent Dairy 2012: Sitsupermarket channel. While the uation and Outlook report, is for an range of $4.05-$4.40/kg big established opening labelspricefrom the two MS and a full year average price range dominant drinking processors betweenmilk $4.50 and $4.90/kg MS. The report considers the wider market picLion and Parmalat, along with private ture and summarises the many factors play; the key theme of the current sitlabels from theatmajor supermarkets, uation being that of re-balancing in the dairy supply chain. In regions of Australia focused on producing drinking milk, many farmers face a re-balancing market in the form of renegotiation of supply contracts and reduced access to ‘tier one’ supply.

incremental change in milk production (year-on-year)

gLobaL impacT JohN DropperT

GLOBAL IMPACT GLEN FISHER

Shifts in private label contracts and processor rationalisation have seen milk companies adjust their intake requirements and pricing to meet the changing demands of a highly pressured retail marketplace. Lower contract and still dominate that prices channel, there has a lack of alternative supply opportunibeen an increasing share of total sales milk production in the US those in south-east Asia and the Middle ties present challenges in a market with flows. 2012 is up around 4% on 2011 for the year to East maintain consistently higher ecolimitedand manufacturing capacity. Despitefrom value volume coming outside these challenges, the underlying domes- April (leap year adjusted), whilst early nomic growth rates that support the established major processors over tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. Howita dairy consumption and a growing finished the March 2012 quota year up ever, the surge in supply has outpaced recent years. population providing a degree of cer- 2.3% on the previous year. New Zealand demand growth in the market. This situation has seen the scales Just at the production available is widely expected to finish tainty beyondlooking the current adjustments. In the seasons following the 2008 this season up 10% on last year - a huge tip in favour of buyers in dairy martreat our cows how they need to be supermarket sales data for the $1.4 financial crisis and subsequent com- market influence given 95% of NZ milk kets, with commodity prices retreating steadily over recent months. Butter is exported. is also enjoymodity (retail price recovery, - and pay ourselves a sustainable billion value)farmers freshinwhite milk:Argentina as treated export-oriented regions have seen solid ing solid production growth, but a sig- prices are down some 30% from their price.” With an 800 cow herd producing the chart below shows, A2 is the most prices have global supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder lost more thana20%. Farm gate prices much ofbut this additional milk from higher-cost competitors North8 leavmillion litres year, Little Big conspicuous actorininthethat growth; so about have subsequently been reduced in ern Hemisphere amongst those expanding South America. Dairy Co is marketing its regular and too has the ‘Other’ group, which back in Despite wider economic uncer- most exporting regions. The average ing output as their margins increased. price for milk in France tainty, demand resilient basic farm gate This season, favourablefor weather Fairtrade-accredited flavoured drinking 2009 accounted justcon4.6% and 5.2%has remained ditions have further enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro

cents/litre in March (AUD 41c/L) to 28 Euro cents/litre (AUD 36c/L) in April. Profit margins are under pressure in the US, and in NZ Fonterra has announced the final payout for the 2011/12 season has been cut from NZ$6.75-$6.85/kg MS to NZ$6.45-$6.55/kg MS (AUD$4.96$5.04). Effectively, global dairy markets are rebalancing. Lower prices will both slow production growth and stimulate demand, and as this occurs we will ultimately see a price recovery. Key factors to watch on the global scene will be the rate at which milk production overseas slows in response to lower prices, the impact of the current financial worries on consumer confidence, the path of China’s economic growth, and the value of the Australian dollar. Demand for exported dairy products remains a positive and will continue to grow with the middle class in large emerging markets such as China, small-scale processing plant or seek with changes in diet and with increasing urbanisation and also in conjunction out the- necessary partners, funding and with global population growth. Locally, expertise to get their product to market. the domestic market is supported by a growingLooking population at andthese stable perrecently launched capita consumption. Whilst the dairy farmer labels, one key market is currently a challenging placedifference is that to be seller, all signsto indicate that balina contrast the family-based boutique ance will ultimately return.

shares (AZTEC, MAT 27/09/09) - now in milks through IGA supermarkets in milk labels, the farmers involved are still 2013 represents 5.7% and 7% shares of Dubbo and Orange as well as other local looking to existing processors to do the actual processing and packaging of the total fresh white milk volume and value retail businesses in the region. Recently also gaining attention is milk, and the major supermarkets to do (AZTEC, MAT 22/09/13). Among the ‘Other’ group are an extension or variation on the same the retailing. ASEAN-Australia-New Parmalat is processing the milk trend: namely, small groups of farmers relatively Zealand FTA (AANZFTA).smaller but well-established “Protectionist sentimanufactures, often with strong or farming families organising their own for the Manning Valley farmers, while ment over agricultural presences and histories in their ‘farmer labels’. Like the family behind Warrnambool Cheese & Butter is doing goods is rife and growing across the globe, so to provide pack the same forportion the Green Pastures group; groups of FooD local regions, such as Norco and Little Big Dairy Co, these austraLian in this context it is pleas(200-330ml) configuracompany Freedom Foods Woolworths and Coles respectively are farmers are also keen to influence how Warrnambool Cheese & Butter (WCB). ing Australia has managed tion for beverage prodGroup Ltd is to build a to forge an agreement new milk processing plant ucts. putting the products on their shelves. their product is marketed and achieve But more recent inclusions into with Malaysia that has The NSW location will to cash in on growing dealt with some provide accessthe to the most demand in Asia. Perhaps most important milk. the sensiOthers group are much smaller sustainable returns from their tive agricultural issues The plant, to be built in sustainable and economic similarity is that, beyond the planning, These motivations are also being still, family-based operations: from not effectively covered by southeast Australia, will be source of milk. Pactum has AANZFTA,” says Fraser. milk’ players with some track to the Austrafirst Australian greeneffortstrong andlinksnegotiations required to pursued by the farmers in thetheManning ‘boutique Sealing the deal: Malaysian trade minister Mustapha Mohamed “While under the fields expansion in UHT in lian dairy industry and will with Australian counterpart Craigowned Emerson after signing the deal. get the product processed, there is Valley behind the Farmers Own label, record like Bannister Downs, AANZFTA agreement expand its arrangements 10 years. most of Australian agriwith dairy farmers for whollythe marketing challenge. And that is around and operated by the Daubney family in and the group of farmers Freedom’s but also through technical Despite the compleers through streamlining culture’s key interests supply of milk. The new owned subsidiary Pactum provenance, Cobdenorwho launched to newcomers so calledhave ‘behindrecently the tion ofsuch this agreement, of rules-of-origin dechad tariffs Western bound at zero,Australia, will increase scopefarming practice Australia will run thewhereplant much remains to be done border’ restrictions.” dairy and rice are two sec- laration processes and plant. Some of its products for Australian milk supply and processing method have all been the Green Pastures label. as Little Big Dairy Co recently launched The FTA was signed on for Australia’s farmers to improved marketing tors where incremental – value-added, sustainable will be sold in Australia. May 22as in Kuala tap South into the full potential role.focused. arrangements for certain market access andaexport Yet just withLumpur farmers looking at saysplaying The company by improvethe Chesworth family in New Australia’s Trade and of the Asian region and commodities. ments have been negotiInitially the plant will given Asian consumWhile it is early days yet, the sales setting by up a boutique, single-source Wales. Competiveness MinisThe Malaysian market beyond. ated under the Malaysian produce 250ml and 1L ers’ rising incomes and ter Craig Emersonup and a hisfarmer He says will about A$1 bilFTA. UHT packs from a process improving diets, figures for boutique milks and farmer operation, setting label isdemand As Emmais worth Elliot from the Little Bigthe NFF Malaysian counterpart now throw its attention lion in Australia agricul“This trade deal was line capable of 100 milthere will grow for quallabels suggest that not going to be for everyone. As with any Dairy Co, 20km out of Dubbo explained: towards ensuring agricul- Mustapa Mohamed. tural exports – including also particularly imporlion L. The processing and consumers are ity dairy products from Emersonare saysdifficult Australia questions ture remains and its fourth-largest tant for sectors packaging plant will emit low-cost production interested. there to bases “Wesuchstartedbeing processing our own milk frontbusiness, centre in completed FTAs will be as well-positioned sugar export market and as dairy that have been less carbon, use less water, such as Australia, whose • Glen Fisher isenergy-effiindustry analyst with ask, considerations and factors to think because we really loved our cows and in the Malaysian market fifth-largest wheat export with South Korea, Japan, facing a competitive disand be more milk is well regarded. as Malaysia’s closest tradChina and Indonesia as market. advantage wanted in Malaysia to remain than equivalent new plant Australia. before running off toTheorder a willDairycient dairy farmers and through

Malaysia FTA benefits dairy Freedom austraLian DairY,

Smaller milk brands, like Bannister Downs, owned and operated by Sue and Matt Daubney, are growing greater market share.

rice and wine exporters to Malaysia are the biggest winners in a free trade agreement (FTA) signed between the two countries last month. The deal, signed after seven years of negotiations, allows a liberalised licensing arrangement for Australian liquid milk exporters and allows access for higher value retail products. It guarantees Australian wine exporters the best tariff treatment Malaysia gives any country. It also allows open access arrangements from 2023 for Australian rice with all tariffs eliminated by 2026. The National Farmers’ Federation says the trade deal will improve international market access for Australian agricultural goods. “After seven years of negotiation, the NFF is under no illusion of how challenging it has been to complete this FTA with Malaysia,” NFF vice president Duncan Fraser says. The FTA will fill a number of gaps within the

Foods plant targets Asia

compared with New Zealand which already has a completed FTA with Malaysia in place.” The FTA also signals some administrative benefits for Australian agricultural export-

With an annual economic growth at about 5%, Malaysia forms an important part of the ‘Asian Century’ story and the opportunity this presents for Australian agricultural producers, says Fraser.

immediate priorities. “These are all markets with enormous growth opportunities and where significant barriers to trade in agriculture still exist, not only through tariffs that restrict trade

ing partners in ASEAN, and in some cases better. The FTA will guarantee tariff-free entry for 97.6% of current goods exports from Australia once it enters into force. This will rise to 99% by 2017.

allow Pactum to meet growing demand for UHT dairy milk, and add to capacity for valueadded beverages at its Sydney factory. Pactum is expanding its capabilities at the Sydney plant

UHT facilities in Australia and SE Asia. Pactum expects site preparation to begin in October 2012 and start-up by mid-2013. Pactum makes UHT products for private label and proprietary customers.

VDL optimistic despite tough year 016-017.indd 17

The Van Diemen’s Land Company is optimistic about the future profitability of its dairy operations in north-west Tasmania, despite a tough year. Van Diemen’s Land Company chief executive Michael Guerin said despite a financial loss last year, the long-term outlook for the company was very positive. VDL’s New Zealand-based parent company Tasman Farms last month announced a $8.97m net after tax loss from continuing operations due to drought, lower milk prices and the Australia-wide drop in livestock valuations. Mr Guerin said the company continued to invest in growth and restructuring to take advantage of an expected upturn in Australia’s dairy industry and

“We have made significant gains the company’s 5 to 7% target producglobal dairy commodity prices. from improved farm and pasture man“This year we have brought two new tion increase for the 2013-14 year. “Notwithstanding the difficult con- agement, herd quality and animal welfarms, Cape Barren and Newlands, on line. The newest 460ha Newlands farm ditions last year we took a deliberate fare and productivity management and we expect further gains to will eventually milk 1500 cows continue and translate into at its peak.” Van Diemen’s Land Company ongoing sustainable profitMr Guerin said VDL’s 25 ability. north-west farms milked posted a $8.97m loss last “While we are focused 18,558 cows making it Austra- financial year. on changes to foster long lia’s single largest milk supdecision to maintain herd numbers and term sustainable profits, we have also plier. “We increased milk production by cow conditions – despite the increased greatly improved the health and safety 8% to 6.25 million kgMS in a year when feed costs – so we would be in a position focus and environmental management milk production in Tasmania was down to take advantage of the forecast upturn in the business. Mr Guerin said the milk price had 3.7% overall and the Australian average in dairy prices. Mr Guerin said the current produc- dropped to $5.09 kgMS, from $5.70 was down 2.7%,” Mr Guerin said. Milk production has already tion at Woolnorth was more than double kgMS two years earlier. VDL’s processor Fonterra had foreincreased 8% in the first four months the 3 million kgMS when Tasman Farms cast of an increase in the expected milk of this year and is on track to exceed took over VDL’s operations in 2008.

6/06/12 1:41 PM

price to over $6.20 kgMS in the coming season. “We are therefore optimistic about the current and future profitability of Tasman Farms,” Mr Guerin said. Mr Guerin said Tasman Farms was continuing its major capital raising initiatives to fund the Woolnorth dairy conversion program to bring more land into production to take full advantage of the growing worldwide demand for quality dairy products. In the meantime, VDL will continue to improve its existing dairy farm performance, use surplus land to become self-sufficient in feed supplement production and develop new dairy farms on existing beef grazing pasture as available capital permitted.

DAIRY NEWS AUSTRALIA NOVEMBER 2013

AGRIBUSINESS // 17

Arla launching Australian marketing blitz EUROPE’S SECOND largest dairy co-op Arla Foods is launching a marketing blitz to promote its butter and cheese in Australia and New Zealand. While the co-op has no plans to invest in milk plants, chief executive Peder Tuborgh says it will be push-

Arla is owned by 12,000 farmers in Denmark, Sweden, Germany, Luxembourg, Belgium and the UK.

O p Kn por oc tun ks ity !

ity n u rt ks! o c pp no O K

ing Lurpak butter and Castello cheese brands, which have seen good growth in the two countries. For the first time, an on-air campaign will be launched, Mr Tuborgh told Dairy News Australia at the World Dairy Summit in Yokohama, Japan. “We have for quite a few years through our partners and distributors seen Lurpak butter and Castello cheese

markets grow fantastically,” he said. “It is something we are keen to focus more on, but I cannot go into details at this stage.” But Tuborgh ruled out investments in stainless steel. “No investment in processing – there are others in Australia and New Zealand who are better in doing that. We will invest and expand in the marketplace, in logistics and distribution network.” Speaking at the summit earlier, Tuborgh noted a shift in Arla’s investment strategy – creating growth outside the EU. While it is developing core markets within EU, for the first time more than 50% of the co-op’s capital investment is either going outside the bloc or in facilities within EU but targeting foreign markets. “I can tell you crossing the 50% mark was unthinkable five years ago.” Arla, owned by 12,000 farmers in Denmark, Sweden, Germany, Luxembourg, Belgium and the UK, processes 12.5 billion kg of milk from its farmer owners. It also sources contract milk. Having a footprint outside EU is

important to the co-op, Mr Tuborgh says. “It’s important to be present outside of the EU and growing rapidly outside is one of core strategies. “The reason is population growth is happening outside the EU, the US and Oceania where everything is standing still, demand-wise.” Mr Tuborgh noted that a growing middle class in Asia, Middle East and Africa were driving growth.

But he cautioned that growing outside Europe had challenges. Dairy companies have to adapt to changing trends and new consumer tastes. Arla, with a proud 100-year tradition of developing dairy knowledge, cannot dump its products on consumers outside EU. “I must admit these new consumer trends are not the same as we are seeing inside Europe,” Mr Tuborgh says. • Sudesh Kissun attended the 2013 World Dairy Summit in Yokohama, Japan with the assistance of the Asia New Zealand Foundation.

Large Scale Irrigated Dairy Farm 1373 Acres – 901 ML Water “Hines Dairy” Kirkstall, SW Victoria Available as a Whole or in 3 Separate Lots LOT 1: 940 Acres (380 Ha) Milking Platform (Riddells Rd) • 60 unit rotary dairy, 42,600 litre vat, 700 cow yard, auto floodwash, auto cup removers, auto draft, triple feed head system, silos, feed pad, diesel backup generator • Modern colourbond/steel calf shed, machinery sheds, vehicle sheds, sundry shedding, cattleyards • Large 3 brm WB home, 2 brm WB home, 1 brm cottage • 901 ML irrigation licence – 2 bores, modern pumphouses • Approx. 507 Acre (205 Ha) under centre pivot irrigation • 810mm average annual rainfall, mild coastal climate • Extensive laneway system – good tracks, shelterbelts • Improved fertile pastures, 45+ main grazing paddocks • 2” water lines, 1,000 gallon troughs, 3 equipped bores • Located 36km from Warrnambool, 14km to Koroit • Herd and non fixed P&E available LOT 2: 107 Acres (43 Ha) Dairy Support Block (Riddells Rd) • Large 3 brm WB home, dbl garage, 2 bay machinery shed • 5 paddocks, cattleyards, bore, concrete troughs • Improved regularly fertilised pastures, shelterbelts LOT 3: 326 Acres (132 Ha) Dairy Support Block (Terka Rd) • 12 paddocks, central laneway, modern well built cattleyards • Two mills on bores, concrete troughs, shelterbelts • Improved regularly fertilised pastures, good fencing Conveniently located to schools, services and major milk processors. Irrigated dairy farms with scale, sizeable irrigation water licences and modern infrastructure are very hard to come by in SW Victoria. Opportunity not to be missed!

Tender

Closes 5.00pm Friday 6th December 2013 View By Appointment Tim Gladman 0418 131 638 tim.gladman@raywhite.com raywhiterural.com Web ID: 1029339

Ray White Rural Warrnambool

VR1763924

SUDESH KISSUN

DAIRY NEWS AUSTRALIA NOVEMBER 2013

18 // BREEDING MANAGEMENT

Calving four times a year boosts conception rate NANNEELLA FARMERS Brett and

Judith Gledhill have increased conception rates since switching their herd to calving four times a year. The a2 milk suppliers have changed their calving pattern to four times a year in a bid to flatten their milk supply, as well as easing the personal strain during calving. It has also improved farm management, according to Mr Gledhill. “When we started planning to calve four times a year we looked at the calendar to pick the best times to calve. The timing has been modified slightly and we are now happy with the time frame. We’re here anyway, so what’s the difference if we’re calving cows too, and you’re doing it in short bursts.” There is three calvings that are in a window of three weeks with the spring calving taking 6 weeks. The Gledhills are currently running 180 in the milking herd and plan to milk a minimum of 140 cows throughout the year and plan to build this to 200 milk-

ers, milking 150 consistently throughout the year. In February, May and November they calve on average 40 cows in each batch and in August they calve 80. Bulls are no longer purchased. Cows are inseminated and those that don’t get in calf are carried over to the next lot. “A cow may not be ready, so we give them another go.” The benefits continue when the calves are on the ground, with Mr Gledhill saying 20-30 calves receive more attention and therefore better care than 50 or more at once. Mrs Gledhill manages the breeding and calf rearing aspects of the operation. Robotic feeders have been used for the last five years to assist. Hair samples are taken from calves and tested for the a2 gene. Anything not a2 is sold. Calves are weighed every three months and are carefully managed to ensure they meet their targeted joining weight. When heifers are approach-

It has a been good season for hay and silage on Brett Gledhill’s northern Victorian property.

ing their first joining, they are weighed beforehand. Anything not going to make the target weight is moved down into the next mob. This is also credited to the rising conception rate. Holsteins must be 320kg and Jerseys 280kg at 12 months for their first joining. Calving rates have improved at least 10-15%, while conception rates have been 65%-75% after one round of AI. It was 2009 when the Gledhills first registered their interest in a2, attending

Brett and Judith Gledhill calve four times a year on their Nanneella property.

an information session at the Mulcahy family’s Kyabram processing plant. At the end of the session they had signed on to convert their herd. It was a slow process, as 32% of their herd were straight a2 – containing the a2 beta-casein protein – so they began breeding from a2 sires and culling non a2 cows. In May 2012, the 190 milking herd comprised 140 a2 cows. Mr Gledhill received a call from the Mulcahys saying they were short of a2 milk and could he supply some in two days!

“We had 50 cows left to cull,” Mr Gledhill said. They were culled very quickly. They bought some a2 cows – including about 30 Jerseys, but have now made the decision not to purchase anymore cattle but to breed up. There are 180 cows, with 100 head of young stock coming through. They are trying to build the herd by 20 cows each year. The a2 milk delivers a premium to the Gledhills for no extra cost. “That was the best thing, I didn’t have to spend extra money.”

Meeting own fodder needs THE GLEDHILLS produce all their own hay and silage for their herd and have been able to reduce the amount of grain required without a decline in milk production. Mr Gledhill had six Bale Up Hayfeeders adapted so they could be linked together, and has placed it next to the dairy. Cows have a feed of hay – usually for about 20 minutes – every morning and night after milking before making their way to the next paddock. The Gledhills produce square bales of hay and these can be placed straight in the hayfeeder. Six bales last a week and grain per cow has been reduced from 6kg to 5kg each day with no loss in the vat. The design of the feeders means no wastage as all uneaten fodder is caught at the bottom. The feeders can be turned upside down for cleaning and uneaten fodder is used for compost. “There was waste of feed previ-

ously and waste is a cost so we had to minimise that cost,” he said. Brett and Judith’s daughter, Lisa, helps on the farm with her husband Trevor, who is a hay contractor and who helps out with the hay. The Gledhills own two farms – including his parents’ farm – and lease a further 160ha. All are adjoining. The dairy block runs cows; young stock are run on a separate block; while dry cows are run on the leased block. Fodder is produced on all blocks. Mr Gledhill said the last few years have been good for silage and hay. They utilise an agronomist. “I have ideas and he’ll say yes or no, and we’ll put together a plan.” This has included planting 10ha of Lucerne, with another 10ha due to be planted in the next 12 months. They have 12ha of perennial pasture and the rest of the farm is annuals and cereals. Annuals will be shut down in mid-

Brett Gledhill with his Bale Up Hayfeeders, slightly adapted to meet the requirements of his herd.

December and watered again around late February-March until it rains. “During summer, cows go into a

shaded area and are fed silage and hay. We put them as close as we can to the dairy so they’re not walking too far.

We don’t want them using too much energy over summer or you’ll lose production.”

DAIRY NEWS AUSTRALIA NOVEMBER 2013

MANAGEMENT // 19

Zone farm for best nutrient planning Nutrient planning – the 4Rs Responsible nutrient planning involves soil testing and nutrient budgeting to balance the requirements of the crop/ pasture while accounting for existing soil nutrient reserves. The benefits of this approach include potential monetary savings, increased productivity and a reduction in nutrients lost to the environment. Farmers should follow the International Plant Nutrition Institute’s 4Rs principles - the Right source of nutrient, at the Right rate, at the Right time and in the Right place. Farm management zones – what are they? Fertiliser costs typically rank in the top three farm working expenses on most dairy farms. On this basis, farmers should regularly assess soil nutrient reserves across their properties. The dairy industry has consistently used soil testing to assist with nutrient planning (ie fertiliser applications), but often the process used to identify where to soil test and how best to use all the paper records is ad-hoc. The Dairy Australia Fert$mart Program recommends farmers create Farm Management Zones (FMZs) across their properties to objectively manage key nutrient decisions such as fertiliser and manure applications. Farms often have a large number of individual paddocks, so it is more practical to soil test from a distinguished FMZ, than to soil test in every paddock. Initially, a farm could be mapped based on the following management zones: Different soil types may have different phosphorus buffering indexes, resulting in different amounts of phosphorous necessary for maintenance and capital applications. Soils may also have different baseline potassium and sulphur reserves, and exhibit different leaching potentials. Different manage-

ment practices such as day or night paddocks; areas where fodder is regularly cut or fed out; where effluent has been spread; and run-off blocks. New and old irrigation areas may have received higher fertiliser application rates than dry land parts of the farm. Using an aerial photo of the farm allows a colour scale to be applied to the mapped zones based on the soil analysis results. The different colours visually indicate the soil nutrient status of the specific zone. Typically dark red, purple or orange indicate zones of high fertility and light shades of yellow, blue and green represent zones of lower fertility. This provides the farmer and agronomist a simple method of visually assessing the baseline nutrient status across the FMZs and assists with planning fertiliser, manure and effluent applications. Farmers should also record where soil samples are collected (preferably using a physical marker or handheld GPS). The soil sampling locations can be marked on the farm aerial photo in conjunction with the FMZs. Benefits of more strategic soil testing The Accounting for Nutrients on Australian Dairy Farms project showed that dairy farms typically have high soil fertility levels in the paddocks adjacent to the dairy shed. This is due in part to the use of night paddocks, convenience of silage and hay feeding pre and post milking and effluent irrigation infrastructure not capable of reaching far beyond the sump or holding pond. Soil testing from each FMZ provides an accurate indication of whether paddocks have similar or highly variable soil nutrient reserves, compared to partial soil testing. Partial soil testing is where a selected number of paddocks on the farm are tested. This does not accurately reflect the potential nutrient variation across the whole farm and makes the assumption that all the other paddocks are of a similar nutrient status. The application of

FMZs at trial sites across Australia has: • reduced farm fertiliser costs; or • at least achieved an improvement in fertiliser efficiency because zones with a low nutrient status received an adjusted higher application rate, than those zones that had optimal or excessive soil fertility. It is unlikely there will be a pasture response from phosphorus inputs in paddocks with existing Olsen P reserves greater

than 20 milligram per kilogram. The fertiliser cost savings from paddocks with high Olsen P levels enable farmers to implement a liming program that may have otherwise been cut from the budget due to low milk prices. Liming can further decrease the fertiliser inputs as the pH reaches optimum range, maximising nutrient uptake by plants. The initial outlay of testing individual zones can be high, however it

can be offset by the reduction in the amount of fertiliser used. The ability to treat paddocks individually or as part of FMZ, rather than treating the whole farm or areas of the farm with a traditional blanket fertiliser application enables farmers to maximise fertiliser efficiency and reduce nutrient loss to the surrounding environment. It is recommended that FMZs be monitored at least every two to three years.

Initial outlay of testing individual zones can be high but can be offset by reduced fertiliser use.

• Mick O’Keefe is a dairy extension officer and Sue Briggs is a project officer with the Victorian DEPI,

based in Rutherglen. This article was first published in the October Mountain Milk Line newsletter.

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

20 // MANAGEMENT

Silage delayed in western Vic, but good yields elsewhere RICK BAYNE

SOUTH-WEST VICTORIAN dairy farmers are finally getting to making silage after a rain-delayed start to the season. However, they hope the high rainfall which kept them off the paddocks during October will convert to bumper crops. While rainfall recorded at Warrnambool airport in September was about 30% below average, deluges during October kept farmers off their land. Warrnambool’s mean rainfall for October is 60.8mm but this year the city recorded 129.2mm, its highest tally for the month in nearly 40 years. Farmers in the district have been keen to make the most of a good spring and replenish their fodder supplies after the poor returns of last year. Farm management consultant for DemoDAIRY at Terang, Paul Groves, said it had been too wet to make silage. “Normally we would make it during October but it’s the end of the month and we’re probably still a week away, but Hay production is in full swing in northern Victoria.

Gippsland farmer and fodder contractor Shelby Anderson says silage quality has been good, with quantity about average.

“The yield overall in South Australia is above average but they are having an exceptional season in the south-east.” – James Stacey I’ve been saying that for the past two or three weeks,” Mr Groves said. Most farms in the district were struggling to make silage due to aboveaverage rainfall. “It’s just too wet. The volume appears to be down but I haven’t seen that much done as yet,” he said. “The further into November we go it will have an impact on quality but we hope to make that up with volume.” Koroit farmer and Warrnambool UDV president David O’Connell said a lot of farmers in the district were starting to cut for pit silage at the end of October while others were cutting a bit for baling. “It is getting on a bit time wise but with all the moisture no one is complaining too much,” Mr O’Connell said. Some farms are predicting up to 5 t DM/ha this season, however Mr O’Connell said it was “a bit hit and miss”.

“Not all of it has gone to seed yet but a few farmers are saying they are going to be a bit short. Some cut it earlier and saw that wasted which was a concern.” Nirranda farmer and Wannon UDV president Bruce Vallance said volume was picking up in early November. “The last rain we had really made the season. The growth rates were a bit slow in August and September but it’s looking like a really good season now,” he said.

“It’s a bit later than normal but that’s a good problem to have. We have done some silage and are waiting a bit to do some more.” Dr Steve Cotton from Livestock Logic in Hamilton said many dairy

farmers had been “on the ball” and cut and wrapped silage during September. “The season has probably been delayed a bit for some but the silage we’ve received from around the coast has tested well,” he said. “What we’ve seen has been quite good quality.” The south-west Victorian experience is being emulated in other major dairy regions. Gippsland dairy farmer and contractor Shelby Anderson said the season was about three weeks later than normal but quality so far was good and quantity about average. Mr Anderson, from Trafalgar, said some farmers were worried about the potential impact on quality from the lateness of the season. “There are a few worried about the quality of their second cut and because it has been dry up north it could have an impact down here but what we’ve seen so far has been pretty good.” He added farmers were not worried about feed at this stage.

Farmers in south-east South Australia are looking to replenish run-down supplies. Contractor James Stacey said the region was having an exceptional season. “The yield overall in South Australia is above average but they are having an exceptional season in the south-east. They missed out last year and a lot of sheds were empty so it has been a great opportunity to replenish supplies,” he said. Mr Stacey added that most of the major hay making regions were just about finished. “It has been fairly normal timing for cereal hay and vetch. They are just starting to get into some silage now in the south-east,” he added. Tongala dairy farmer Merv Koch has produced more tonnes per hectare of silage compared to last year on a similar area due to a good start to the season. Mr Koch had produced 700 rolls of silage to the end of October, which were 200 more than the same time last year. “The season is off to a good start,” Mr Koch said. “Most farmers have made a reasonable amount of silage. It’s reasonably dry now, but that’s typical for northern Victoria. We’re well into irrigation season now, but there is water in the catchments so there’s confidence there we can grow grass and crops and things.” Hay baling was well underway in WA at the start of the month and average or better yields are being reported. Quality is varied this year due to high yields and unfavourable weather conditions. In the Bega Valley, NSW, overall silage production is estimated to be slightly down this year, largely driven by the patchy seasonal conditions and some growers trying to limit expenditure.

DAIRY NEWS AUSTRALIA NOVEMBER 2013

MANAGEMENT // 21

Farmers turn to classies FINDING GOOD workers

for dairy farms has always been hard work. To help solve the farm employment puzzle, GippsDairy’s Dairy Workforce Project has created a jobs classifieds web page to help match farmers with suitable employees. Longwarry’s John Versteden has recently employed a part-time worker to help with milking and general farm duties. Mr Versteden had previously sourced his employees through local networks, but found the free dairy classifieds page to be a far more effective process. “It’s about having a nice simple process that is easy to administer and doesn’t cost you anything but your time,” he said. After a previous parttime employee left unexpectedly, Mr Versteden

needed a replacement within a short time. By asking for a curriculum vitae and references, he was able to sort the wheat from the chaff and quickly found a quality employee in Chris Pallot from Warragul. “I only gave them a short window of opportunity for them to apply and asked them to forward a CV and three references and the whole process only took about a fortnight in total,” John said. “You can do it all without having to talk to each applicant. If they haven’t got a CV or three references you move onto the next one.” In Chris’s case, finding an employee who could work around his sporting and education commitments was all important. He said the dairy classified page had worked well

for him and was an easy way to keep working in the farming industry. Dairy Workforce coordinator Jeanette White said John and Chris were good examples of how the dairy classifieds can work. “Because we already have a large pool of farmers looking for employ-

ees and people looking for jobs, the chances of finding the right pairing is much better than when word-ofmouth was the best way to fill a vacancy,” she said. With the popularity of the dairy classified growing all the time, Ms White believes many farmers will no longer have trouble find-

ing quality employees for their business. “We know from people who have used it, that the dairy classifieds website can help solve employment issues that have gone on for many years,” she said. The dairy jobs classifieds page can be found at www. gippsdairy.com.au

John Versteden (left) and Chris Pallot getting to work among the cows.

Early ordEr Quality hay from start to finish.

Reach for the ESKi this summer DAIRY FARMERS can now reach for the ESKi to take the heat out of employment issues. Launched at last month’s GippsDairy AGM in Fish Creek, the Employment Starter Kit initiative (ESKi) offers dairy farmers the basic tools needed for attracting and retaining workers. Developed by Dairy Australia using direct feedback from farmers, ESKi is a folder containing all the mandatory requirements for employing someone plus plenty of extra information that ensures it is a positive experience for all involved. The ESKi folder also includes frequently asked questions, templates and examples. Speaking at the Fish Creek launch, Dairy Australia program manager for industry workforce planning and action, Bill Youl, said the kits would help provide better outcomes for both employers and employees. “The ESKi is a user-friendly employer kit that details all of the mandatory requirements for dairy businesses that employ staff, plus has some great ideas for improving the employment experience on-farm,” he said. “The kit has been built from The People in Dairy website which has easy-to-access ‘people management’ information and resources.” The idea for the kit arose from concerns expressed by dairy farmers about their ability to attract and retain employees. Research showed that one of the key issues in the retention of farm workers was the employment practices being used. GippsDairy’s Dairy Workforce Project coordinator, Jeanette White, said the ESKi had complemented GippsDairy’s Employment Pack which was well received by the region’s farmers. “WestVic and DairyTas groups then got together with Dairy Australia and took the idea a step further and came up with the ESKi, which is a great result for dairy farmers,” she said. The ESKi content is available on The People in Dairy website (www.thepeopleindairy.org.au). A free ESKi hardcopy folder is also available to dairy farmers and HR advisors to the dairy industry by calling GippsDairy on 5624 3900.

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

22 // MANAGEMENT

Robots roaming pastures soon a reality seems, with two designs in advanced stages of development. Hot on the heels of an article outlining a prototype developed by Pastoral Robotics, AgResearch

ANDREW SWALLOW

ROBOTS ROAMING

dairy pastures are set to take farm management to a whole new level soon it

Andrew Manderson with the robot, Mini-Me, which can take paddock measurements and possibly make applications.

in New Zealand put out a media release profiling its Agri-Rover project. Project leader Andrew Manderson said the media release was to gain farmer feedback on where the

work goes next in preparation for the next funding bid. “The feedback we’ve had so far has been absolute gold,” he said. Farmer input has already been instrumen-

tal in keeping the rover design effective, affordable and robust, he added. “It’s a battery and solar powered unit running four 240v gear motors that cranks along at about

NITRATE LOSS KEY TO MINI-ME THE FOCUS for Pastoral Robotics’ first roaming robot design, dubbed the Mini-ME, is preventing nitrate loss from urine patches using patented technology to spot and treat them immediately after grazing. “By the time you’ve got vibrant growth it’s too late: you should have been treating the urine patch five or six days earlier,” said Geoff Bates, who has built the Mini-ME with colleague Bert Quin. The Mini-ME is under 50kg fully laden and travels at 5km/h or less, so poses little risk to humans, animals or fixed assets. At 5km/h and

Geoff Bates, Pastoral Robotics.

covering 3m per pass it will cover 1.5ha/hour. Given that a herd of 600-800 cows would normally graze 4-8ha/ day that means it will easily

be able to treat the pasture grazed by the herd each day, said Mr Bates. It’s envisaged users will need to move the Mini-ME to each new paddock, starting it at a designated point for it to follow a preloaded route avoiding previously mapped obstacles such as troughs or trees. A launch at next year’s National Fieldays is planned, with a few pilot commercial models available for 2015/16. Mr Bates says where farms were spending $10,000/ year or more applying DCD, deploying the Mini-Me to do the same job will be

economic. A larger ‘XT’ version with an extra spray tank capable of applying liquid urea, trace elements and other pasture additives is envisaged, as is a much larger machine, dubbed the Maxi-ME, which would perform all the functions the Mini-ME does but spread effluent and other bulk fluidised fertilisers such as phosphate and potash. Mr Bates and Mr Quin presented their plans at last week’s Grassland Association Conference in Tauranga, New Zealand.

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5km/h, goes up and down 15-20° slopes and spins on a dime. “It’s tough as well. We accidently dropped it off the back of a ute and it fell on its lid. We just turned it over and away it went again.” AgResearch’s team first presented the Agri-Rover concept at the Fertiliser and Lime Research Centre conference in February and have had a functional rover out in the paddock since April. The concept is an allweather machine that can operate at any time, day or night, deploying from a central base station to independently navigate to a paddock to take measurements and possibly making applications before automatically returning to the base station for recharging and further deployment. A low profile means it can go under two-wire fences and gates so can move from paddock to paddock too if necessary. “It’s designed to be easy to operate, and will report results as needed to a cellphone or computer,” Manderson said. Ultimately farmers may be able to view images of cows, pasture or whatever they want the rover to

focus on, on their televisions, he suggests. The AgResearch team has used off-the-shelf technology to keep the rover affordable, the current model costing $40005000 to build. “The entire project’s operating budget is just under $20,000. The expensive part is going to be putting on the sensors.” Mr Manderson suggests optical pasture meters are likely to be the first tools deployed with robots such as the AgriRover, but electro-magnetic soil mapping to determine irrigation need/ scheduling, soil sampling for fertiliser decisions and urine patch identification are possible uses down the track. In due course such machines may be able to make applications too. “While we can tow a sizeable spray unit, it is too big a drain on current battery life.” Technology to identify and spot spray weeds – a tough task in the green-ingreen pasture situation – is also being looked at. To date the project’s been funded from AgResearch’s Curiosity Fund. Other AgResearch scientists are developing robots to herd cows in for milking.

DAIRY NEWS AUSTRALIA NOVEMBER 2013

MANAGEMENT // 23

New Knight to conquer winter feed A NEW Italian ryegrass known as Knight has produced greater yields than the current market leading variety, Crusader, in trials across Australia. Available from January 2014, Knight is the latest diploid Italian ryegrass variety from Stephen Pasture Seeds, supplier of Crusader. Blair McCormick, Stephen Pasture Seeds, said it was a tall order to improve on Crusader, but Knight had been selected to replace it because of its rapid establishment capabilities and outstanding autumn and winter yields. “Graziers who are familiar with using Crusader to grow more winter feed will be pleased to know that Knight has out yielded Crusader by an average of 651 kg/ha of dry matter in 13 trials across Australia between 2008 and 2012,” he said. “Knight’s quick speed out of the ground means the pasture is up and

growing quickly to produce strong autumn and winter yields. “This speed of growth also makes Knight ideal for pasture renovation because it is such an aggressive competitor to weeds.” He said home-grown winter feed was often the most valuable feed, as pasture growth rates generally slowed in the cooler conditions and fodder stocks ran low in the leadup to spring. Results from 13 trials nationwide between 2008 and 2012 showed Knight produced an additional 844 kg DM/ha over the first winter compared with Crusader. “That’s worth up to $253/ha, if it can replace purchasing feed at current prices of around $300/t,” he said. Mr McCormick said Knight had a late flowering date which allowed for quality hay and silage production in spring.

“It also has good second year production with another season of strong winter growth in environments where Italian ryegrass is usually able to persist for a second year.” Mr McCormick described Knight as a durable and versatile variety for sowing as a straight

pasture or mixing with clover. “Before sowing an Italian ryegrass next autumn, ask how much winter feed the variety can be expected to generate in your area,” he said. “Knight is setting new standards in improving winter grazing opportunities, when every mouthful of feed counts.”

Graziers are being promised a ‘Knight’ in shining armour, with a new Italian ryegrass set for release in 2014.

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energy consumption assessed under the Dairy Australia scheme. This program has conducted energy assessments to identify opportunities for farm businesses to save on energy bills. Each has received a personalised assessment plan with recommendations to use energy in the most efficient and cost effective way. The plans target specific aspects of the dairy operation that, with alteration or upgrading, could be dramatically improved in energy efficiency. Taking up suggested improvements and researching the ‘energy smart’ equipment available can be a daunting task. Recognising dairy farmers are under time pressure, where do they go to gather the information? The first call will most likely be the dairy equipment supplier; however their expertise doesn’t necessarily cover all aspects raised in the energy audit. These could include: ■■ Milk cooling, including refrigeration equipment and pre cooling. ■■ Heat recovery to reduce energy consumed to heat dairy hot water. ■■ Solar hot water. ■■ Variable speed drives for vacuum pumps. ■■ Low energy consumption lighting. ■■ Generation of power by PV Solar or wind. There are companies who specialise in energy reduction, have a clear understanding of dairy operations and a history within the dairy industry. They can provide equipment choices with clear and achievable targets to ultimately reduce your energy consumption and improve your cost of production. • Colin Scott is director of Thermal Recovery Systems.

DAIRY NEWS AUSTRALIA NOVEMBER 2013

24 // ANIMAL HEALTH Bradley Turner, Julie Gerber and Kirsten Gerber, Lowood, Queensland.

Leanne Priebbrenow, Silverleigh, Oakey, with Shoof Queensland area manager, Deborah Curnock.

Farmers get on front foot to curb herd health issues A HIGHER awareness of preventing

cow health issues is showing up in the equipment buying patterns of northern dairy producers. “There’s a greater realisation now among farmers that prevention is better than cure,” said dairy sales specialist Jeff Russell, from Russell and Sons, Toowoomba. Mr Russell is a fourth generation member of the family company which has been offering engineering and supply services to the dairy industry since 1934. “It’s so important these days to focus on animal health to control somatic cell counts and get optimum cow production,” said Jeff. “There is a keen interest among producers in being pro-active rather than waiting for a problem to emerge which can cause real headaches.” Mr Russell said a lot of health problems stemmed from wet weather. “We had a serious drought in this

part of the world which went for more for a farmer event in Toowoomba on than 15 years. During that time there October 23. Shoof also has a long track record was a lot of consolidation into bigger of industry service, have been founded herds,” he said. “When the series of flood seasons by inventive farmers in New Zealand in came there were a lot of issues manag- 1974 on the back of an awarding winning ing animal health and keeping milk to an cow hoof protector boot. The company now sources and maracceptable quality standard. kets specialist animal “Problems continued on sodden prop- “There’s a greater health equipment and handling equipment erties right through realisation now and veterinary prodthe first half of this ucts from around the year until it suddenly among farmers turned dry these past that prevention is world. Shoof Australian few months.” better than cure.” sales manager Barry Dairy factory milk testing and penalty payments also Tossol had a selection of products on put pressure on farmers to pay much display including the Hoofmat, an alterstricter attention to somatic cell counts native to footbaths to treat cattle and keep their feet healthy. and keep on top of mastitis. The mat has a foam core and tough Some of the latest in product innovations for herd health and wellbeing poly fabric outer layers to hold a soluwere showcased when Russell and Sons tion which treats the hoof as the animal joined with equipment and product walks over it into the milking bails. Hoofmats come in standard and supply specialist, Shoof International,

Paul Saleem, Shoof, shows a milk quality tester to Robert and Veronica Cassells, Mt Sylvia.

heavy duty versions which can hold 50 litres of solution and have a life expectancy up to a million cow passes. “They are a good alternative to a foot bath because the treatment is pushed right into the claw when the animal puts hoof pressure on the mat,” Mr Tossol said. “The treatment gets a good chance to work into the clean hoof as the animal stands for milking. “The mats are easily topped up with a watering can and are very economical on the amount of active ingredient used, whether it be something like zinc sulphate or a proprietary solution. “Environmental issues of having a footbath full of treatment solution are also avoided.” Shoof also introduced its new hoof protection product Walkease, invented by the company’s product development manager Peter Griffiths. The block of flexible EVA material cushioning material provides protec-

tion while an injured hoof heals. The blocks which come in different sizes to fit all claws are marketed in a pack with glue designed to hold for seven to 14 days. Shoof also markets a range of products designed to provide early warning of a looming mastitis problem. The Mas-D-Tec is used to measure changes in conductivity, pH and the number of white blood cells. Mastitis occurs when white blood cells are released into the mammary glands, usually in response to an invasion of bacteria in the teat canal. The electronic tester provides a rapid reading of a squirt of milk from the teat, detecting elevated sodium and chloride levels. Providing a comparison between the four quarters of the udder shows up early potential problems. Conductivity testing is often the easiest way of detecting infected quarters that show no visual sign of infection.

Steve McCarthy, East Greenmount, with Jeff Russell, Russell and Sons, with a hoofmat.

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

26 // ANIMAL HEALTH

A good cattle crush keeps you both safe FRED HOEKSTRA

HOW DO you handle your cows individually? Can you restrain your cow so that she is comfortable and you are safe while her hooves are trimmed? This still seems to be an issue on dairy farms. There is a right way and a wrong way to restrain cows and some principles always apply: The cow needs to be comfortable. An uncomfortable cow will be unsettled. Although this is common sense, it is often overlooked. The operator needs to be safe at all times. The operator needs to be in control at all times. Consider the surface the cow is

standing on. Obviously it should not be slippery and it also should be level or sloping up. No matter what crush you use, a cow does not like facing downhill and having her back feet lifted. She will fight all the way. Purpose-built hoof trimming crushes have belly straps to support the cow when she loses her grip and falls over. An added benefit of this belly strap is that it calms the cow down. Cows relax when you put pressure on their belly. That is why you always see a cow hanging in a sling rather than standing up. Some well-known crushes have two belly straps – one under the brisket and one just in front of the udder. The brisket strap is the best option,

because if a cow sits down on the second strap she will be very uncomfortable as there is no rib cage there to support her. All the pressure will go straight on to the gut. Cows tend to kick at it, but will not stand up to release the pressure. Most people like to have a leg tied up just above the claw against a bar. It makes the leg sit more rigid but should the cow go down for whatever reason, there is a very high risk of injuries, such as broken legs or dislocated hips. Lifting from the hock is much more comfortable for the cow, and because she can still lean on the raised leg, there is minimal risk of injury. • Fred Hoekstra is a hoof care expert with Veehof Dairy Services in New Zealand.

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Warning signs of mycotoxin illness PAM TIPA

MYCOTOXINS – a group of compounds produced by fungi or mould – have a number of negative effects on the dairy cow, says Canadian Professor Trevor Smith. They are also a potential food safety risk, says Smith, of Ontario Agricultural College at the University of Guelph. Dairies are becoming more exposed to them because of drier conditions and the move towards more supplementary feed. Smith was in New Zealand recently, as a consultant for Alltech which held a oneday summit on mycotoxins. Negative behavioural effects of mycotoxins in dairy cows include behaviour changes, reduced dry matter intake, loss of appetite and loss of muscle coordination, he said. Ingestion of contaminated feed produces an almost sedative-like effect. The animals are lethargic and want to lie down on the floor, not forage around. The second group of symptoms are various lesions in the digestive tract of the cow. These can lead to haemorrhaging or bleeding. Conditions such as haemorrhagic bowel syndrome, for instance, are made more severe. There can be an increased frequency of ulcers, blood in faeces and there’s damage to the villi of the intestine which means reduced nutrient uptake. The third group of symptoms related to mycotoxins’ suppression of the immune system. “This means the dairy cows can experience lingering disease problems, we can see animals that do not respond to medications. We can also see failure of vaccination programmes. “The overall effect is a deterioration of health status in the herd. We can see increased mortalities, and the challenge is the symptoms we see in the mortalities are not what we would call mycotoxin lesions – they arise from the organisms which took advantage of the compromised immunity. So it’s difficult for veterinarians to conclude conclusively that this was mycotoxin induced.”

The fourth group of symptoms involving contaminated feed is impaired reproduction, he said. “We see decreased fertility and increased frequency of abortions. This is because of a few of these mycotoxin compounds are estrogenic so they affect hormonal balance in the dairy cow.” Professor Smith said the other aspect of the mycotoxin challenge in the dairy cow is a food safety issues. The residues in fluid milk known as aflatoxins are carcinogenic – one of the most carcinogenic compounds we know of. The form of aflatoxin in feedstuffs is somewhat different than the form in milk which is called alflatoxin M1 – M for milk. Independent dairy consultant, Trish Lewis, says there are certain strategies for reducing the risk of mycotoxin issues: ■■ Remove any contaminated feed from the diet. ■■ Where this is not possible, dilute it with clean feed. Calves, transition cows and high yielding cows are the groups most vulnerable to mycotoxins so they should be fed the cleanest feed. Good silage management, use of a proven silage inoculant and clean storage of feeds can all help. Care is needed to ensure purchased feeds are not contaminated, particularly in years with difficult harvest conditions. ■■ Another strategy is to add a mycotoxin binder to the diet. Mycotoxin binders adhere to mycotoxins in the digestive tract and prevent them from being absorbed into the bloodstream. It is important to select a product well proven to swiftly adhere to a wide range of mycotoxins. Yeast based products such as Mycosorb can be fed at a lower feed rate than clay products and do not bind other nutrients in the diet. “Testing for mycotoxins is expensive and can be unreliable due to the difficulty in getting a truly representative sample,” Ms Lewis said. “Mycotoxin binders are frequently used as a diagnostic tool to check whether mycotoxins are affecting performance.”

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

28 // ANIMAL HEALTH

Captive bolt devices best bet for animal euthanasia LAST MONTH, I under-

went a training day on the finer points of euthanasia, also known as the humane destruction of livestock. Dairy Australia funded my attendance at this worthwhile day, which used industry levies to train myself and a handful of other vets so we can pass that knowledge on to farmers and farm workers.

Why, you may ask, does a vet need training in how to kill things efficiently? It was James Herriot who said that “you can’t call yourself an experienced veterinarian until you have filled a five acre paddock with bodies”. Well, based on this criteria, I must damn near be a specialist. But seriously, all of our livestock industries are

ANIMAL HEALTH ROB BONANNO under scrutiny from consumers, welfare activists

and trading partners, not only on how humanely we treat our animals while they are alive, but how humanely we can relieve suffering if they are injured or sick and do not have a reasonable prospect of recovery. It is essential animals are not allowed to suffer unnecessarily if they are diseased, unable to stand

or cannot be sold for whatever reason. It is essential all dairy farms develop a protocol that allows them to competently and humanely destroy animals when needed. A critical consideration also is how the bodies are disposed of after they are euthanased. In our small animal practice, we use a concentrated dose of anaesthetic

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to “put them to sleep”, but on farms this technique makes the disposal of the carcass problematic. The animal is not safe to send to a knackery, and must be deep buried in an approved manner to prevent secondary poisoning. The lack of a knackery service is also a real issue in a number of dairy areas around Australia now due to the declining economics of providing this service. Composting of carcasses is only possible on farm when a non-toxic method of humane destruction has been practiced. Other less toxic but lethal injection methods, if not adequately managed, can result in a very poor outcome and therefore are not compliant with the standards and guidelines, unless under supervision of a competent person. The firearm legislation in Australia (which I wholeheartedly support as it has undoubtedly saved many lives) has also meant it is virtually impossible for a vet to carry a firearm in their vehicle on a daily basis. There are also many farms that no longer have a licensed firearm or shooter present. When I talk to farmers, they say they are reluctant to have a firearm in their workplace. If they employ staff it is almost impossible to ensure compliance with the firearm legislation and to have a “communal gun” which all staff can use if an animal needs to be humanely destroyed due to injury or illness. Many farmers cannot be bothered with the costs of compliance and licensing. It is clear, as seen when the footage filmed in Indonesia hit the media, that the community absolutely demands humane killing practices. Poor on-farm practices of euthanasia could have severe consequences, with a consumer backlash or restrictions imposed by our trading

partners, let alone the fact that poor practice means that animals will suffer unnecessary pain. Captive bolt devices that were designed for use on livestock have recently become a cost effective option. They do not actually fire a free projectile, instead they fire a retractable rod that when used correctly will result in nearly instant brain death. This is therefore a safe and humane method of destruction when used by appropriately trained people. They do not require a firearms licence (everywhere except WA), nor are they required to be stored in a gun safe. This is an attractive option on dairy farms where multiple people may be required to access the device. Dairy Australia has developed a training package which will be delivered by the NCDEA to help farmers maintain standards of humane destruction practice that are consistent with the animal welfare standards and to comply with regulations regarding the disposal of carcasses. Training vets like myself in the correct use of captive bolt devices will allow us to in turn train our farmer clients in the correct methods of euthanasia of livestock. Talk to your dairy veterinarian about making humane destruction of livestock, when necessary, a priority on your farm. Seek the appropriate training to ensure it is done in a safe and compliant manner and ensure that our animal welfare and industry reputation is enhanced not damaged by managing this difficult to discuss aspect of livestock production. • Rob Bonnano is a past president of the Australian Cattle Veterinarians Association and a director of the Shepparton Veterinary Clinic.

DAIRY NEWS AUSTRALIA NOVEMBER 2013

EFFLUENT & WATER MANAGEMENT // 29

New effluent system boosts pasture RICK BAYNE

LIVING IN a farming area with solid annual rainfall has its advantages but too much of a good thing over winter can also create headaches. Anthony and Wendy Eccles from Purnim near Warrnambool faced such a dilemma when their two effluent ponds were failing to cope with excess winter water. So they came up with an option that has solved the overflow problem and given the farm even better pasture results. They modified the two existing ponds into one dam and built a new large 20-megalitre dam, and installed a second pivot. The set-up now enables the farm to prevent any waste run-off over winter while reducing the need for fertiliser and ensuring more home-grown feed is

Anthony Eccles and the 20-megalitre dam on his Purnim property.

produced during summer. The big dam also provides a home for dozens of ducks! It is a good outcome for a farm dedicated to quality, low-cost production. The farm is able to milk year-round with the number of milkers ranging from about 330-450 over the year. They produce more than three million litres annually. “We put in the new system because we could see the benefits of irrigation. Since we’ve been using more effluent water we’ve made more profit,” Mr Eccles said. “We get amazingly good quality grass. We’re rapt with the feed we grow.” The system has also given the farm more flexibility. “We have split calving and produce more than 45% of our milk out

WHO:

Anthony and Wendy Eccles WHERE:

Purnim via Warrnambool WHAT:

New effluent system

of season which means we get better milk prices. It flattens out the milk curve which is the best result for the farm and spreads out the workload.” The two pivots irrigate about 100ha of the 240ha farm. The effluent pond is used to irrigate the farm’s night paddocks. “It’s the only spot the pivot could fit but down the track we might look at trying to get it to other places,” Mr Eccles said.

Spreading the effluent has reduced the farm’s reliance on fertilisers. “The only thing we have to put on the night paddocks is a bit of urea. We did the DairySAT program and divided the farm into five different zones. We do soil tests every year to make sure we’re going OK. A few of the other paddocks get by without fertiliser now.” The better use of effluent through the centre pivot has meant savings and better grass growth results. “Instead of wasting water over winter we are now using it to make more productive feed and we’re still growing over summer,” Mr Eccles said. “We are growing more and better home-grown feed and don’t have to bring in as much over summer. The better quality pasture feed means better quality milk with

high protein. If you have to bring in hay and silage, the protein tends to drop.” If the dam gets low over summer it can be filled by a bore, but that doesn’t look likely to be a problem at the moment. “The effluent is well diluted by the rain in winter and the bore in summer,” Mr Eccles said.

The second pivot takes water straight from a bore. The system has been in place for about four years but the Eccles family continues to tinker with it and plan for improvement. Wobblers have been installed on the centre pivots, replacing sprinkler ends, to save water. “They

form a droplet, not a mist. We put them in because there is less evaporation and it is more efficient.” Next they will look at improving the system for collecting solids. “You’ve got to be at it all the time; fine tuning to get the best results but it’s worth the effort,” Mr Eccles said.

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

30 // EFFLUENT & WATER MANAGEMENT

A right royal flush in Tassie A LARGE DAIRY IN

Tasmania has installed an automated cleaning system for the holding yard that is proving highly successful in saving water and labour. Van Diemen’s Land Company’s ‘Newlands’ dairy, milking 1300 cows in the pristine northwest of the state, uses a ‘closed loop flush system’ designed by Houle and installed in March

this year by Irrigation Tasmania, based in Smithton. The arrangement uses a flush pump installed in a pit at the bottom of the holding yard to feed flush valves installed at the top of the yard. The cleaning water flows in a closed loop, so there is no limit on the flush cycle time. Because it is using recycled water, no matter how long the

flushing goes on, there is no call for additional water, resulting in major water saving. Good quality water is maintained because a second pump is installed in the pit mixing and transferring liquid out of the pit every day. To replenish the liquid removed, waste water from the dairy is added. There is a set requirement for the

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addition of this waste water each day, from water used in the operation of the milking system, such as jetters, general wash water, plant and vat wash, and the plate cooler. The system is automatically controlled with a purpose-built flush controller, ensuring minimal labour. The operator pushes a button and the yard is cleaned. The flush controller can be programmed to run the flush sequence to suit the needs of this particular dairy. The most popular flush programs include a ‘wet-down’ before cows enter the yard. This is a quick flush where all flush valves open together to wet the yard, to make it easier to clean after milking. The second most popular program is a

The closed loop flush system on Newlands, in north-west Tasmania, uses a flush pump installed in a pit at the bottom of the holding yard to feed flush valves installed at the top of the yard.

cleaning cycle where one flush valve opens at a time for a high volume flush to clean the yard one section at a time. Farm manager, Colin Maughan, said there is a huge time-saving involved. “We haven’t had to hose the yard since we started with this system. Everybody at the dairy knows what needs to be done, so it’s just a matter of pressing a button.” Each flush valve can clean up to a 5.5m wide strip. The flush valves are installed in a trench and mounted on 300mm pipe. Darren Wilson at Irrigation Tasmania, Smithton branch was responsible for the ‘Newlands’ installation. Tel. Irrigation Tasmania on (03) 6452 2255; GEA Farm Technologies on 1800 789 100.

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

EFFLUENT & WATER MANAGEMENT // 31

Test your effluent before spreading for best results SO THE time has come

to empty the effluent dam and the contactor wants to know where. Will you give them an informed answer as to how much area to cover and what rate to apply or let them decide where they can reach? As dairy farm fertility levels climb, so does the concentration of stuff in the effluent dam. And that stuff can be used to good effect or it can cause production and animal health issues. And the only way to know what’s in there is to test it. The problem with tests is a report comes back with a lot of numbers and to nearly everyone those numbers don’t mean much. But those numbers should mean something and your agronomist should be taking those numbers into account. So what is an effluent test? Pretty much as it’s called. Grab a sample of the effluent, analyse it in the laboratory in wonderfully named procedure called “inductively coupled plasma - atomic emission spectroscopy” and get the numbers. To most these numbers still won’t mean much, but we are looking at things like potassium, phosphorus, nitrogen, copper, zinc, salts and pH and we can start to calculate how much of these things are in the effluent dam. And that amount is going to go into your soil and grass and into your

elements can be added to the effluent before spreading, to correct the soil deficiencies. This might be through direct injection, sucked

into the slurry tanker, added directly to the effluent pond or even washed in from the yard. This can be particularly useful for crops like tur-

nips and rape which need good levels of trace elements to perform. To do this effluent and soil tests are essential. This needs to be man-

aged carefully to prevent toxicities and is a cheap and easy method of putting trace elements back into the soil. • Dean Suckling is an

agronomist and director of EnProve. Contact him on 0448 866 205 for information on effluent and soil testing, effluent use or trace element management.

DEAN SUCKLING

animals and maybe into your vat. Now, and with good advice, we can use effluent to good effect to improve production, replace fertiliser and protect our animal health. Effluent is generally very high in potassium and that dictates the spread rate. Potassium usually has between 400kg and 1500kg per megalitre in the pond. A standard 3 megalitre pond might have the equivalent of 3 to 6 tonnes of potash in it. Using that carelessly is going to cause weed infestation, animal metabolic disorders (tetany and milk fever) and possibly soil alkalinity. An effluent test with trace elements can also provide an indicator of general trace element levels (copper, zinc, boron manganese). If those trace elements are low or missing from the effluent this often means so is the soil, and the plants and the animals. To confirm this, plant and soil tests are still essential. And for those who want to be more advanced, trace

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

32 // MACHINERY & PRODUCTS

Versatility is the strength of Manitou telehandler “ONCE YOU get on the Manitou, you

wouldn’t go back to the tractor”, says Peter Musson of Macarthur in Victoria’s Western District. “I couldn’t tell you the number of times I’ve thought you couldn’t do that with the front-end loader”. Mr Musson is talking about his Manitou MLT735-120 LSU telehandler that he bought 18 months ago and which he says does a huge number of the jobs around the farm. Mr Musson and his wife Fiona came to this property from the UK 18 years ago where they were on a mixed family farm, with more dairy than anything else. The originally-leased property of 222ha has been added to now, covering 730ha. Starting with 270 cows, they have built up to 730 and Mr Musson said next year they will probably milk 800. With a Holstein foundation the herd has been crossbred the last four years in pursuit of calving ease, improved fertility and longevity. They milk on a 60-unit rotary which was installed nine years ago with retention bars, automatic cluster removers and now has ADF clusters. The milk is stored in a 30,000 litre vat. This is their third Manitou telehandler, all purchased from the Swayn & McCabe dealership, through either of their branches at Colac or Warrnambool. The Manitou MLT735-120 LSU had done 630 hours when we visited at the beginning of November. Mr Musson said that telehandlers are widely used in the UK. “Versatility is the biggest thing. You realise how much more you can do with it”. The farm has four full-time employees and everybody does all the jobs including operating the telehandler. Mr Musson says it is the most used piece of equipment on the farm and does all the jobs that you would expect; filling

WHO:

Peter Musson WHERE:

Macarthur WHAT:

Manitou telehandler

the feed mixer, moving bales or rocks, earthmoving, picking the silage out of the pit, and digging where needed. “It never gets stuck – you can always push yourself out.” Clint McKenzie a newer member to the team and to the Manitou said: “I’d never go back to a tractor, there’s not many things you can’t do with it. It’s easy to drive – really basic.” The MLT 735 is powered by a Mercedes 4.2 litre four cylinder turbo delivering 121 horsepower. It is coupled to a 6-speed Powershift and a 150 litres/min variable flow rate pump. The crane has a lift capacity of 3500kg and a lift height of 6.9 metres. A joystick at the right hand side of the seat enables the operator to control all movements with one hand: raising and lowering the boom, crowding and tilting, operating the attachments and the forward or reverse direction of travel. It means that one hand is always on the steering wheel. Safety is a big issue for Mr Musson, particularly for the employees using the machine. The crane is overload protected and a readout on the instrumentation shows if the load limit has been reached for the extension length. “The extension is very precise”, he

There’s not many things you can’t do with a telehandler, say Peter Musson.

WORKING CLOTHES CHRIS DINGLE says, “especially for jobs like positioning fence posts.” Mr Musson demonstrated that the brake has a switch option which allows it to operate with power still to the drive while braking or to completely stop the drive for ease of loading on slopes. “There’s not a lot goes wrong with the Manitou, given how much you use it. The only problem we’ve had is with a hydraulic hose and the hand brake sticking.” They rely heavily on contractors for spraying, cultivation, seeding, silage and haymaking, and have a Deutz Agrotron TTV610 tractor as a back-up for everything else on the farm. A 20 cubic metre Keenan mixer is

Peter Musson recently purchased his third Manitou telehandler.

powered by a New Holland TM150 and an old Fendt tractor ‘came with the farm’. The dairy has a feedpad at both ends of the milking shed; each with two concrete troughs and Mr Musson said if they put in quality feed the cows will eat it all out, with minimal cleaning out necessary. The telehandler fills the mixer, taking 10 to 15 minutes to fill and 10 minutes to empty – depending on the

ingredients. The Mussons mainly make pit silage, but also have 300 large square silage bales this season and aim for around 1200 squares of hay. “We use as much pasture as possible, mainly perennial and late Italian ryegrass, often double-cropping with a chicory-rape based summer crop. We usually average 7--71/2 tonnes/ha consumption.”

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DAIRY NEWS AUSTRALIA NOVEMBER 2013

34 // MACHINERY & PRODUCTS

Steam cleaner stops bacteria taking hold FARMERS KNOW the key to produc-

Hi-Spec bale strip.

One-person bale stripper stacks up THE NEW Hi-spec bale strip is designed to optimise efficiency, says its maker. Hi-Spec says the bale strip enables one person to quickly and efficiently remove plastic and net wrap from round bales, but then also break up the bale to reduce mixing time when using a mixer wagon, or for ease of feeding individual feeders. It comprises two hydraulic bale spikes, plus a unique claw arm mounted on the top of the handler. “On feed out wagons, a knife is added to the top of the

wagon to aid the cutting of the plastic. In operation, simply lift the wrapped bale, keeping the spikes near the bottom of the bale. “To strip and break up the bale, lower the claw arm to securely grab the plastic and net wrap; the two bale spikes are then hydraulically swung outwards, which acts to tear apart the film and net wrap. By continuing to move the spikes outwards this rips apart the bale allowing the silage to fall into the feeder while the net wrap and plastic

are held on top. “This eliminates any plastic or net being trapped by falling silage from going into the feeder. It can be used for any round bale of any size of silage, hay and straw.” The Hi-spec bale strip also acts as a ‘soft hands’ for stacking individual bales. This is done by placing two steel rollers over the tynes . The new Hi-Spec bale strip is suitable for use with all makes of telescopic handlers and tractor mounted front loaders.

ing safe, high quality raw milk is the attention given to dairy hygiene. One company, Australian Pump, has developed a purpose designed steam cleaner that cleans and sanitises without chemicals. The Aussie Super Indy Mk III steam cleaner operates at temperatures of up to 120°C. This high temperature cleaning prevents a biofilm of bacteria forming on steel, rubber and plastic surfaces within the milking plant. High temperature steam cleaning reduces the presence of spoilage enzymes and prolongs the life of dairy products. A reduction in microbial contamination, by using steam, assists in mastitis control. The Super Indy Mk III can also be used to wash down concrete surfaces in parlours, sheds and yards to reduce cross contamination. Tanks and tankers can be cleaned and sanitised. The Aussie Super Indy features ergonomic dials to provide infinitely variable temperature control from cold to 120°C steam. This steam function sanitises and shifts heavy grease and dirt efficiently, economically and safely. The new machines feature a heavy duty stainless steel cover that is hygienic and impact resistant. The cover is mounted on a robust, four wheeled, steel chassis with integrated front mounted bumper. The pumps are heavy duty Italian triplex design running at 1450 rpm for long continuous trouble free life. The range includes a 2.2kW single phase machine and 5.5kW three phase machine.

The three phase pump delivers up to 4785 psi EWP (effective working pressure) with turbo. Pump operating pressure is 3000 psi with flows of up to 16 lpm. The single phase version offers 2600 psi EWP with turbo (pump operating pressure of 1500 psi) and flows of up to 12 lpm. The Aussie Super Indy range offers timed “Total Stop” designed to shut the machine off after the operator releases the gun trigger. This reduces wear on the machine and saves power. Intelligent design features a “Micro Leak” control to shut the machine down if a leak is detected in the high pressure system. This maintains optimum performance and minimises breakdowns and subsequent downtime. Low water and fuel cut outs are also standard, providing state-of-the-art reliability. Tel. Australian Pump Industries on (02) 8865 3500.

New Aussie Super Indy Mk III steam cleans and sanitises without chemicals.

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