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Australian Dairy Farmers Co-op opens at $6.53 Page 3 CENTRAL QUEENSLAND

Swiss Brown handle heat Page 14

FORWARD THINKING Reward for hard yards Page 4

JUNE 2014 Issue 48

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www.dairynewsaustralia.com.au

making a splash Tasmanian dairy in demand PAGES 4-5

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Dairy NewS AUSTRALIA june 2014

news  // 3

New player opens with $6.53kg/MS bid THE BATTLE for milk in south-

Numurkah farmers Peter and Diane Letcher inceased profitability when they switched to seasonal calving. PG.19

Western Victoria farmer Jess Fleming made simple, low-cost changes to her family’s calf rearing system with good results. PG.26

ern Australia continues to rage, with Australian Dairy Farmers Co-Operative announcing an opening price of $6.53kg/milk solids, which it will lift to $6.81kg/MS if its opening price is matched during the year. The Australian Dairy Farmers Co-operative is an offshoot of the Dairy Farmers Milk Co-operative (DFMC), whose members supply Lion. It has signed a long-term deal to supply dairy company Bulla with 120 million litres of milk. ADFC chairman, Scott Sieben, said they wanted to be one of the first companies to announce an opening price for the 2014/15 season. Mr Sieben said he feels it is a solid opening price and that the flat milk pricing model would also appeal to farmers. Dairy Australia industry analyst,

John Droppert, said as a new player, ADFC had to offer attractive terms in its bid to secure milk. “However, the offer of a flat, guaranteed minimum price does tap into some key themes in the farmgate market at the moment,” Mr Droppert said. “Farmers are looking for simpler payment structures as well as tools to manage risk. A lot of farmers have also given ADFC credit for announcing its pricing so early.” Mr Droppert said all processors want more milk and many have introduced new schemes as a form of value-adding. “If this payment structure is visibly successful, it will be a helpful demonstration of another way to overcome the perennial conundrum of securing milk supply.” Mr Droppert said the industry needed a new approach to invig-

Gippsland farmer Darryl Light has upgraded to the latest model of Whoppa Choppa, 21 years after purchasing the first. PG.33

News�������������������������������������������������������3-9 Opinion����������������������������������������������������10 Agribusiness������������������������������������� 11 markets��������������������������������������������12-13 management�������������������������������� 14-15 breeding management������16-19 animal health�������������������������� 20-25 calf rearing������������������������������� 26-31 Machinery & Products�������������������������������������� 32-34

Contented cows on the Clews family farm at Rossmoya in Central Queensland. See page 14 for more

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orate national milk production, although it was too early to say whether ADFC’s pricing structure would change the industry. Rabobank senior analyst, Michael Harvey, said processors are looking to add to their service in a bid to secure milk but “ultimately it is about milk price”. “Murray Goulburn has its Next Generation package, Bega is putting money aside to help farmers grow, it all shows how concerned processors are for milk. “Until the milk supply grows, it’s always going to be a battle. They all get milk from someone else.” Mr Harvey said the current shortage of milk makes it difficult for new entrants. “It’s a tough environment to come out with an opening price,” he said.   ADFC and Bulla held public

information sessions for farmers at Colac and Camperdown earlier this month. Their ideal suppliers would be based closer to Colac but Mr Sieben said recruiting quality farmers was the first priority. Mr Sieben said farmers are looking for stability in their milk price. Farmers can sign either 1, 2 or 3-year contracts but ADFC only has a 12-month milk price at the moment. “Ideally in future, we’d like to implement longer term base price to milk contract,” Mr Sieben said. “They don’t like peaks and troughs in milk pricing. Hopefully we can offer a milk price that’s stable over the longer term.” Bulla chief executive officer, Reg Weine, said Bull wants to encourage farmers to invest and in doing so, increase production and the Australian milk pool.


Dairy News AUSTRALIA june 2014

4 //  news

Like selling ice to Eskimos TASMANIAN

Matthew and Lyndal Luck.

Brimming with confidence DAIRY CONVERSIONS and diversification, particularly in the non-dairy areas, create excitement, but the traditional dairy regions of north-west and north-east Tasmania are also brimming with confidence. This confidence was easily detected in the National Dairy Farmer Survey published by Dairy Australia as part of the 2014 Situation and Outlook Update Report. Turns out dairy farmers in Tasmania are more confident about the future of their businesses than any of their interstate colleagues. ‘Rises in farmgate milk prices and improved profitability have nearly doubled positive farmer sentiment in Tasmania to the highest level since 2008 with 91% positive about their business this year compared to 50% last year,” according to Dairy Australia’s Norman Repacholi. “Tasmania’s dairy farmers are reaping the benefits of high international commod-

ity prices brought about by the Asian dairy boom and they are among the most likely to be in an expansion phase,” Mr Repacholi said.  “The survey shows that 68% of Tasmanian dairy farmers made a profit in 2012/13 and 84% expect to make a profit this year: 66% of those expect to receive higher profits than their five year average.” The survey also reveals that 45% of DairyTas farmers intend to invest in their business in the coming year and that milk production is anticipated to increase 9.2%. Share farmers Matthew and Lyndal Luck farm at Riana, near Burnie in the north-west. The couple are 50:50 sharefarmers with brothers Andrew and Matthew Radford, milking 250 cows on 110 hectares, and supply Cadbury. “The last 12 months couldn’t be better,” Mr Luck said. “Twelve months before that, it was super tight.

“We have gone from one end of the scale to the other with milk prices.” Mr Luck said Cadbury, like all processors on the state, wants more milk so the option to expand is there for all farmers. “If you want to go up 50 cows there’s no worries. Five or 10 years ago you needed permission. Now, everyone is chasing milk.” Riana is located in a traditional dairying district, populated with family farms. Mr Luck said rainfall is consistent and they don’t have climatic extremes, which reduces stress. DairyTas executive officer Mark Smith said Tasmania expects to increase milk production by 15% this season because of the improved conditions. The 2012/13 season was particularly tough, with a 4% drop overall. Farmers have had better feed and cows have been in better condition as a result, he said.

DAIRY

farmers will head to New Zealand’s largest field day, Mystery Creek, this month in a bid to recruit Kiwi farmers across the ditch. One of the biggest impediments to Tasmania’s ambitious growth plan is a lack of skilled workers, share farmers and managers. Up to 200 new people a Mark Smith year will be needed at all levels. DairyTas executive officer Mark Smith said Dairy Tas, Dairy Australia and the Tasmanian government were collaborating on the scheme. The promotion will include a stand in the Fonterra pavilion and include NZ farmers who have proven successful in Tasmania, Into Dairy project manager Steven Jarman, and real estate and bank representatives. When asked whether Fonterra had a conflict of interest – taking farmers from its largest supply base to its second – Mr Smith said it wanted more milk in Tasmania. They chose New Zealand because of the skilled workforce and because of the comparable climate to Tasmania. They will dangle the carrot of cheaper land and good return on assets. They will also be appealing to share farmers and managers. Mr Smith said potential recruits could buy a farm for two-thirds of the price of a similar property in NZ. The currency advantage was also significant. The Mystery Creek campaign will include a competition with a prize of a trip to Tasmania to look at farms.  The move follows a similar recruitment drive earlier this year, when Australian dairy, banking and investment interests travelled to New Zealand to recruit workers. Andrew Radford, a director of ATR accountancy and owner of two Tasmanian dairy farmers, two Rabobank rural managers from Tasmania and Victoria, and Rabobank senior analyst Michael Harvey travelled the country in March.

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news  // 5

Welcome to a new Tasmania STEPHEN COOKE

THE IRONY was obvious to all those sitting in Clarke Hall at the Campbell Town Showgrounds. The meeting was called to investigate expansion, diversification and investment opportunities in the Tasmanian dairy industry – and it was being held in the heart of wool country. On the walls were portraits of former Campbell Town Show presidents, and stud Merino sheep were in a shed a stone’s throw away, waiting to be judged. Welcome to a new Tasmania, where dairy is the word on everyone’s lips. Livestock agency Roberts organised the meeting in conjunction with DairyTas and 100 people attended. Local conversions by mixed farmers have garnered more interest and the meeting was organised to provide further information. Local dairy farmer and DairyTas chairman, Grant Rogers, chaired and his enthusiasm swept up those in the room.

Ouse dairy farmer Grant Rogers.

Rogers and his wife, Melanie, moved to Tasmania in 2003 and purchased their farm at Ouse, in the Derwent Valley, because of the excellent water availability, the land price, proximity to Hobart and similarity to their former home of Canterbury, in New Zealand. Mr Rogers believes dairying can change the face of the Derwent Valley as access to irrigation water and demand for milk push the industry into new regions. He believes sheep and cropping areas, such as the Midlands and Derwent Valley, could soon be running thousands of dairy cows. He told the forum that with access to reliable irrigation water, anything was possible. “There are massive areas of potential,” he said. “We could milk 20,000 cows in the Derwent Valley without too much difficulty.” Mr Rogers has seen firsthand the impact of a thriving dairy industry in Canterbury, which is one of many dairy strongholds in New Zealand. Canterbury had few dairy farms 20 years ago and local communities are thriving

The Campbell Town Show, the longest running show in Australia.

now as a result. “The thing that I saw happen in Canterbury is also happening here as well and that’s what it can do for the local communities because of the jobs it creates, not only on-farm, but offfarm,” he said. Fonterra, the state’s biggest milk processor, has just started collecting milk from the Derwent Valley, which Mr Rogers said was critical for the region. Potential returns from diversifying into dairy have captured the imagination, but two developments have driven it – massive capital improvements by all processors on the island, and the new irrigation schemes being developed across the state. The state-owned Tasmanian Irrigation company has built nine irrigation schemes across northern and central Tasmania for $310m, with five more costing another $192m planned if the federal government will chip in $110m. Water started flowing down the Midland scheme early this month, with 38,500 megalitres of water delivered into the three valleys of the Macquarie, Isis and Jordan rivers. The water will generate enough power to drive the Midlands scheme’s water pumps and provide power to at

least 5000 homes, before reaching 68 farms downstream, where extra water has rarely been available. It will enable former wool farms to grow the pasture required for highvalue dairy operations. Farmers have contributed two thirds of the cost of this scheme from their own pockets. However, that only gets the water to their farm gates – and water is currently trading at $1140/ML. Tasmania has seen unprecedented investment in dairy processing capacity over the last two years. Fonterra recently completed $11.5 million upgrades at its Wynyard and Spreyton manufacturing sites; Tasmanian Dairy Products (now owned by Murray Goulburn) invested $75 million in a milk powder plant at Smithton; Lion has almost completed a $150 million expansion at Burnie, a project which consolidates all soft cheese production in Tasmania to build on the state’s ‘Clean, Green’ brand opportunities. Cadbury is another significant investor in the State. DairyTas executive officer, Mark Smith, said the current expansion in processing capacity has unlocked the potential for a major expansion of the Tasmanian dairy industry by 350 million litres per annum, a 40% increase.

“The Tasmanian industry has achieved 3% per annum growth over the last decade and DairyTas is seeking to accelerate growth over the next five years,” Mr Smith said. “The Into Dairy – Sustainable Dairy Development project (formerly Filling the Factories) is a $1.5 million project, supported by industry and government, which targets the attraction of new investment and skills and promotes industry growth.” Under this project, DairyTas not only looks to attract investment, but funds approved applications for dairy conversions in the State. The goal under the project is to increase Tasmania milk production to 1150 million litres by 2018. To do this it requires 67,500 more milking cows, around 30,000 more on existing farms and 37,500 on new farms; 550 new jobs in the dairy industry, 450 on-farm and 100 in processing and service sectors; and farm investment of $600m. It’s a big goal but with processors demanding more milk and some of the state’s best farmers (across all commodities) seeing dairy as a worthwhile investment, the state’s dairy leaders are confident.

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6 //  news

MG wants proposal vote in January MURRAY GOULBURN is proposing to put its restructure proposal to a vote in January or February next year, with a positive response seeing the structure implemented two months later. The timeline was included in an updated capital structure proposal released last month. Among other changes, the co-op said it would not be compulsory for suppliers to be “shared-up” - own one share for each kilogram of milk solids supplied - from the first day of the proposed new structure. Those who do now “share-up” will stay on a share offtake arrangement similar to the current share offtake arrangement until they reach the required share amount. In the updated proposal, the co-op said undertaking a $500 million investment purely from bank debt funding would push the co-operative ‘very close to reaching its prudent and permitted peak borrowing levels’. The structure is designed to make Murray Goulburn less reliant on debt funding, and encourage reinvestment in the dairy industry. Murray Goulburn hopes the structure will also encourage new suppliers to join it, aiding its efforts to attract higher volumes of milk and ultimately, help to deliver a “sustainably higher farm gate milk price”. After taking feedback from the supplier meetings into consideration, the modifications were aimed at ensuring the model to be employed by MG is suitable over the long term “giving MG’s balance sheet the strength and flexibility to deal with changes in the market that MG operates in”. Under the proposed structure, suppliers will continue to hold shares in the co-op and capital will be raised by the

issue of units in a unit trust, which will be listed on the Australian Securities Exchange (ASX). The unit holders in the trust will not have voting rights in relation to MG’s operations and, as is the case today, only active suppliers will hold voting shares in MG. The second round of consultation meetings began last month. The board will then determine the next steps. There will be further supplier discussion and consultation before the board makes any final recommendation. The unit price of shares would not be determined until after the final capital structure has been approved by shareholders, regulators and the Murray Goulburn board. Former MG chairman and Yarram dairy farmer, Ian MacAuley, contacted ABC Radio last month to air his concerns at the proposed restructure. Mr MacAuley said the proposed restructure would provide capital but he questioned where the benefit of that extra capital would end up. “A true co-op will provide that to its members, a hybrid structure has a conflict of interest that is very hard to manage,” he said. “You have unit holders in this case who will be looking for capital gain and dividend, and on the other side you have farmers looking for capital gain and dividend on shares, but also looking for the best possible milk price.” Mr MacAuley said history shows hybrid structures other co-ops have gone into over recent years, very few have survived as full co-ops. They have been either fully listed or absorbed into some other business. “So the track record is not good.” Mr MacAuley said Murray Goulburn’s plan to remove A class shares had caused

Gary Helou

ex-farmers to contact him. “These shares have been offered at $1.25 per share to cancel the share. That will create some convenience to Murray Goulburn, but the concern is the value under capital restructure will be significantly more. “The current concern is it’s not fair to those who invested in the co-op over many, many years.” Mr MacAuley described the upcoming vote as the largest issue the industry has faced, not just Murray Goulburn suppliers. “It will be a huge change in what drives the industry. Over the last 20 years, Murray Goulburn has driven the industry into the modern world. “That will change with a hybrid structure. That will then impact the milk price for every Australian dairy farmer, because Murray Goulburn has underwritten the milk price for the whole industry. “Shareholders get to vote but people with the most to gain have most shares. So it will be interesting to see.”

Cobram, Koroit upgrades enhance export capacity MURRAY GOULBURN’S $19 million investment at its Koroit facility will increase its capacity to produce nutritional products destined for Asian consumers. The Koroit investment forms part of a larger $127 million capital investment, announced by managing director Gary Helou last month. The Koroit site – which is the largest dairy manufacturing facility in Australia – currently produces about $600 million annually of premium, mainly export destined, dairy products including powders for infant nutrition and bulk ingredients; retail butter, bulk butter, and retail milk powder. Mr Helou said Devondale Murray Goulburn had identified the growth of nutritional products, such as infant formula, as a significant opportunity to add value above commodity milk powders to customers in China and South-east Asia. “Among the products that are driving demand are nutritional milk powders, particularly baby and follow-on formula for toddlers,” Mr Helou said. “Global demand for infant formula is expected to increase by more than 4% cent in 2017. Follow-on formula is expected to grow by more than 6% and growing-up milk powder will exceed 7% growth.” The investment at Koroit will increase the capacity to produce these products by installing the necessary capability on existing production lines. It also secures sustainable,

skilled jobs in the region and current staff will be trained to produce the new, higher value-add products, he said. Work has already started on the project which is expected to be fully operational by May 2015. MG has also invested $91 million in its Cobram plant, delivering new technology for processing and packaging a range of dairy foods destined for Asian and Australian consumers. Amongst these investments will be a $74 million investment to build a world class cheese cut and wrap facility at Cobram over the next 12-18 months. He said investment in worldclass equipment and automation will increase capacity across cheese portions and slices, as well as shredded cheese. An additional $17 million will be invested in optimising capacity for nutritional products at Cobram. The investment will enable MG to produce a wider range of high value nutritional products. As a result of changes within operational processes and activities, the co-op has made 54 positions across the company redundant. The reduction in permanent roles is made up of 13 positions at Kiewa; 4 at Cobram; 23 at Leongatha; 3 at Rochester; and 11 at Maffra. All impacted staff will receive full entitlements, be offered counselling and career transitioning services.

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news  // 7

Positive despite price falls The fall in global

dairy auction prices may grab headlines but the immediate future still looks bright, according to Rabobank senior analyst (dairy), Michael Harvey. The global dairy trade auction has seen prices fall at eight events since February, with this month’s fall the most significant since April 1. With the average selling price peaking above US$5000 per tonne, the average selling price was US$3594/tonne for the first auction of June. The 4.2% fall in dairy prices on the Global Dairy Trade platform came as a surprise to many analysts and disappointment to farmers following signs the market slide was slowing. Westpac senior economist Anne Boniface admitted the extent of the fall, particularly in whole milk powder, wasn’t expected. “There can be some volatility fortnight to fortnight between GDT events. Perhaps what we’re seeing is a bit of seasonality,” she said. Mr Harvey said Rabobank also thought the market would have stabilised by now, but is confident there is enough demand in markets outside China to provide support. “Inventories are quite low in South East Asia markets and in this environment buyers wait to see if the market bottoms out before coming back in. “This drop will bring the buyers back. We

expected them to have re-entered the market already but they haven’t. We’re certainly not panicking.” The strong prices paid for global dairy products last year and the first quarter of this year was fuelled by China. Its current inactivity has seen market prices fall but Mr Harvey said buyers from China will re-enter the fray as early as July-September. “For 2013, prices were near record levels and stayed there longer than many, including us, thought they would,” Mr Harvey said. “However, commodity prices above $5000 are a two-pronged negative – it encourages too much milk to be produced, and it’s not sustainable.” “This year will still provide a price positive for most farmers, just not the boom milk price of 2013/14.” Dairy Australia industry analyst John Droppert was also surprised at the fall of the recent GDT auction. “The GDT result did surprise me, although the results aren’t as alarming as first indications would suggest.” Mr Droppert said price falls in certain categories affected the result. “WMP (whole milk powder) pricing did most of the damage, and I suspect that’s a function of the bullish expectations for yet another New Zealand season as well as the silence from China. “The Chinese bought

MG steps up MURRAY GOULBURN (MG) announced its sixth

step-up in the farmgate price for the current season early this month. Rises of 9c/kg butterfat and 19c/kg protein takes its weighted-average available price to $6.81/kg MS, according to the co-op. MG managing director, Gary Helou, said external factors including fluctuating international commodity prices and currency movements will influence the final season price. “Market demand for key dairy ingredients remains strong but increased milk supply from New Zealand, Europe and USA has led to recent declines in prices,” Mr Helou said. “Nevertheless dairy ingredients prices remain above historical average levels. “The Australian dollar continues to be stubbornly higher than we expect it to be and remains a source of risk to next year’s farmgate milk prices.”

up big in early 2014, and are still working through their stocks – the date of their likely return to the market keeps getting pushed back. “Most other buyers are purchasing hand-tomouth as they wait and see how far prices fall. “ I suspect we’ll see a bit of an uptick when

China starts buying more regularly again, and then perhaps a bigger boost as everyone else realises they’re about to miss a bargain.” Mr Droppert said ‘bargain’ is a relative term as prices are still historically high. In New Zealand, Fonterra has set an opening

milk price of $7/kg milk solids for the upcoming season and has revised down its forecast for the current season in response to weak international product prices. For the current season, Fonterra has forecast a milk price of $8.40, down from a previous forecast of $8.65.

Fonterra said the $7kg opening forecast matched the opening forecast provided 12 months ago at the start of the 2013/14 season. Fonterra has announced an opening price of $7/kg MS, the same as last year.


Dairy News AUSTRALIA june 2014

8 //  news - employment

Making farm jobs more attractive Tony Flett is one of a group of dairy farmers from across the country involved in the Dairy Australia pilot to make it easier to access overseas workers. Like other farmers involved, Mr Flett and his

wife, Tracey, who milk 500 cows on their Cobram farm, have trouble attracting and retaining farmhands. Mr Flett said finding farm managers is much easier than finding staff for milking and farm hand

roles. They currently employ one farm-manager and one permanent part-time employee, who works 2-3 days per week, but would like another full-time employee and 2-3 milkers that can be relied on.

“Labour has always been a big issue for us and I’m sure the lack of labour is suppressing people who want to expand. “It’s disheartening when you train a new staff member and get excited and then they’re gone. We

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Cobram dairy farmer Tony Flett says greater availability of milkers would make a huge difference.

focus on milking now with new staff, and if it looks like they’ll stick around, we invest our time in teaching them other skills, like driving the tractor. “If you could get reliable milking staff, 3-4 people, then that would free me up. Milking staff are the hardest of the lot to find. “Dairy farms are a challenge to staff, we have a lumpy workload, trying to cover 14 milkings over seven days.” Mr Flett, like other farmers, would be prepared to pay above the award to reliable workers, and said this and the flexibility that milking shifts provide could prove appealing. It’s a message he says farmers need to share. “I grew up on a farm, so it’s natural to you. If you

grow up in town, it’s natural to migrate to Safeway. We pay better than retail wages. “The full-time wage for a milker is $18 an hour and we pay more than the award. Milkers can get $25, while the pizza manager in town gets $17 an hour.” The flexibility of a milking roster could also suit mothers with primary age children, retirees and a host of others. Mr Flett believes the perception of the industry could be a problem. “When we advertise, we should be clearer with what people expect. “We should promote the flexible hours, the good pay, and remember that most of the population don’t see 5.30am to 6pm as normal. “When employees arrive, we need to ensure

we provide a clean, safe environment. If the position includes a house, make it something they want to live in.” Mr Flett is deputy chairman of Murray Dairy and said it was currently undertaking work to change perceptions of dairying in the community. There are relief milking courses held in Shepparton and the North East, which show people how to milk, but Mr Flett’s comments would suggest more work could be done to stimulate interest in the first place. “I’d like to see stalls in employment fairs and trade fairs in major cities, aimed at attracting tree changers and people wanting to top up a wage with an additional part-time job.”

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Dairy NewS AUSTRALIA june 2014

news - employment  // 9

Visa changes would ease skilled labour shortages DAIRY AUSTRALIA

has submitted an overseas labour agreement application to the Department of Immigration in a bid to address difficulties accessing overseas workers to fill chronic skilled labour shortages on farms. Dairy Australia policy strategy manager, Claire Miller, said DA undertook the initiative in response to growing frustration among farmers seeking overseas workers through 457 Visas, or backpackers on working holiday visas. “The 6-month limit on employment for the latter is disruptive for the business, while the former is proving timeconsuming, frustrating and inadequate,” Ms Miller said. “Compounding the issue is that many farmers do not necessarily want a university-qualified farm

manager, but rather are seeking skilled farm hands or production managers responsible for many daily operational tasks including milking cows, detecting/treating animal health issues and animal husbandry.” These positions are currently not recognised as skilled in the ANZ Standard Certification of Occupation (ANZSCO) list that the Department of Immigration relies on for eligibility for 457 Visas. Labour agreements may offer a solution, as they may allow recruitment of overseas workers with skills equivalent to the NCDEA (National Centre for Dairy Education Australia) certificates II, III, and IV. Labour agreements are generally effective for two to three years, and allow for temporary and perma-

nent visas to be granted. Ms Miller said DA is undertaking this initiative because it will benefit the industry as a whole, and few farmers have the time

or resources to attempt an application on their own. DA has submitted labour agreements on behalf of a group of farmers across the country.

Ms Miller said this would then help pave the way to an industry-wide template labour agreement with the minister. The farmers in the pilot

group filled in a pro-forma statement prepared by a consultant. The statement included evidence of advertising trying to find

suitable staff for full-time positions locally, with no success over time; a commitment to training staff; and a good record as an employer.

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in agriculture to 15 secondary students from the West Heidelberg area of Melbourne this week. The students, mostly Somali, from Charles Latrobe, Macleod College and Thornbury High, visited farms and spoke with farmers, educators and researchers. Sue Webster, of Agribusiness Gippsland, which organised the tour, said most of the students had never been on a farm before. “Some had never been out of Melbourne. They were a bit overawed by the size of the region, even though we only travelled as far as Wonthaggi,” Ms Webster said. There they visited the three-generation dairy farm of Ian Hitchens and watched the cows being milked. Mt Hitchens told his visitors – ranging from year nine to VCE – of how his family farm had grown from one cow to 250 cows and urged the young people to grab the opportunities offered in Australia, as his predecessors had done.

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Dairy News AUSTRALIA june 2014

10 //  OPINION Ruminating

EDITORIAL

Budget cuts harm agriculture’s future

milking it... Wage envy

Australian Farm Institute executive director Mick Keogh was talking dairy to a packed house at the Campbell Town Showgrounds in Tasmania last month. He was part of an information day for farmers wanting to diversify their farming operations – a hot topic at the moment. Mr Keogh was telling the crowd about the demand for dairy globally, and the success of the Swedish-Danish co-op, Arla Food, producer of the world-beating Lurpak butter. “This is a co-op having to pay the highest wages in the world, higher than even Australia,” he started. “Impossible!” shouted meeting chairman and local farmer, Grant Rogers, shaking his head in disbelief. Mr Rogers would go on to give advice of his own to the room. “Cash flow is crucial,” he started, “because nobody spends money like dairy farmers.”

Australia (missing) Post

You may remember we brought you the tale of an Australia Post decree that any mail with an “s” on the end of the street name would not be delivered. The correct family name, correct town, correct post code and most of the correct street would not be enough. Seems there isn’t just one rogue officious official making these bizarre decrees. We have since been informed of a parcel (containing a birthday present) that was returned to England because of the wrong suffix. You guessed it, correct name, number, street name, town and postcode, but the suffix “road” instead of “street” after the street name. The sender was originally miffed they hadn’t been told their family members had moved, before sharing a joke and a few unkind words at Australia Post’s expense.

Back to the bottom line

The Federal Government has pocketed $23.4m after all but three South Australian farmers of 48 who applied for low interest loans were knocked back. South Australia signed up to the Farm Finance Loan scheme late last year, with loans on offer at a reduced interest rate of 4.5%. It was revealed at the Senate Estimates hearings recently that most applications were refused. As a result of the low approval rate, only $1.6 million of the $25m allocated by the Federal Government was distributed, with the remaining money remaining with the Treasurer. Time to light up another cigar, Mr Hockey, and perhaps put on your dancing shoes.

Advertising Chris Dingle chris@dairynewsaustralia.com.au

Tall tale? Sadly not

Public interest in what happens on our farms is inevitable but sometimes unwelcome, especially when misperceptions colour the public’s view. In Nebraska, USA, a couple of unlucky farmers had to defend themselves all the way up the judicial system to the Nebraska Supreme Court. The charge? Growing corn taller than seven feet at an intersection, thus allegedly obstructing driver vision and causing a fatal accident. Common sense finally prevailed, the court finding in favour of the farmers, ruling that the drivers were negligent.

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

The Federal Government’s proposed budget cuts make little sense, and will harm Australian agriculture and regional communities. Never mind the applause it received on budget night from various farm groups for token efforts including $20 million funding over four years towards establishing a “Bio-security Flying Squad” or $8 million funding over four years to improve access to chemicals. Its decision to slash funding for research, as well as Landcare, defies all logic. The Government wheeled out clichés and platitudes (“we’re all carrying the load”, “age of entitlement is over”) but cutting funding to programs that pay back the investment many times over is nonsensical. Its decision not to fund the National Centre for Farmer Health in Hamilton, western Victoria, shows it knows the price of everything and the value of nothing. Healthy communities are productive communities and mental and physical health is clearly an issue in rural Australia, particularly amongst farmers. Agriculture was named one of the pillars in this Government’s five-pillar economy, and yet cuts to research and development will clearly affect its competitiveness. Agriculture needs R&D, which has been reinforced by government reports such as the Productivity Commission, the Asian Century report and the National Food Plan. Despite allocation of $100m to agriculture specific R&D over the next four years (designed to get a positive headline), it has cut $146.8m from the CSIRO, which will result in 500 job losses. Funding for the Co-operative Research Centres program will be cut by $80 million (20% of the overall program budget) and $11.5 million of funding was slashed from the Rural Industries Research and Development Corporation. One of the most disappointing decisions for many farmers has been the reduction of $483 million in funding for Landcare nationally over the next five years, despite farmers investing $5 of their money for each Government dollar spent. We’ll leave the last word to the President of the Victorian Landcare Council, Terry Hubbard: “The expectation there is that the farming community should do all the heavy lifting for the benefit of the community. “There is always a desire to increase and improve food production, there is always a desire to improve the natural environment, and those are things that are enjoyed by all people and yet the farming community’s expected to carry it.”

 

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Dairy NewS AUSTRALIA june 2014

agribusiness  // 11

New Camperdown investors target China Rick Bayne

A NEW EXPORT dairy producer based at Camperdown in south-west Victoria aims to milk 10,000 cows to serve a booming international market. Camperdown Dairy International has been formed after agricultural investment management company EAT Group combined with resource development company MCG Group to buy an infant formula blending and filling business, the Camperdown Cheese and Butter Factory and local farms. The arrangement will be the first farm-to-distribution supply chain operation in Australia. It aims to process 100 million litres of milk in the first year of operations with the target to supply both bulk whole milk powder and infant formula powder to Asian markets, primarily China. The plans include a new $120 million spray drier at Camperdown. Camperdown Dairy International chief executive Phil McFarlane said the business plan was based on supplying a premium product in high demand by consumers in international markets and selecting the right assets to meet that demand. “Our business is very much about bringing the whole supply chain together to bring value, ensure efficiencies, keep control of costs by investing in both the farm gate and supply chain assets,” he said. “We didn’t think it was sustainable to leave the farmer out of our business plan; that is the key difference in our model.” Mr McFarlane said traceability was demanded by Asian markets, particularly in China. “Manufacturers need to demonstrate where their produce comes from. Our business represents traceability

from the production plant right back to the farm gate. “That’s one of the advantages of owning the farms. That is a real credibility tick along with ensuring the quality and the volume that those markets require.” Mr McFarlane said the company had acquired some farms in the area and aimed to buy more. He would not reveal specific details of the purchases. “We have acquired some farms and are accumulating more. We have a target of 100 million litres of milk under our management portfolio. We will work to build up our own farms as well as contracting milk from existing farmers who may want to be part of our supply chain,” he said. WestVic Dairy chair, Lisa Dwyer, pictured on her farm with her “There’s no point us stealing milk husband, Eddie, says: “Anything that Murray Goulburn or Saputo is getthat demonstrates confidence in the future of dairying in the ting. region has to be positive.” “We need to develop our own supply and we need to develop bigger farm “It’s not about trucking milk in from and volume because we’ve got our foot enterprise systems. We have to select farms that we can expand via capital other parts of the state. It’s basically on costs and efficiencies. The bottom line will tell its own story. We need them investment that can double or triple getting control of the milk source.” He added that farm acquisitions took to stay and we need them to grow.” production. It is hoped the new $120 million “It comes down to managing herds, time to negotiate but local farmers had spray dryer at Camperdown will come managing replacements, breeding and been very receptive to the idea. “We have built our business from the on line by the end of next year. “That’s inputs. We also want to integrate grazing and grain producing enterprises so customer end first. We have started at not stopping us securing farm gate milk supply now and trading it as the farm system becomes selfwe build to our targets,” Mr supporting. McFarlane said. “We have 40,000 litres and “Our model is very different. He said the company could aim to reach 100 million litres You can’t expand unless you work with the majors but by the end of next year. We added that “we’re not trying want to milk 10,000 cows so invest in the farm and tie that to we need to build to that level. the supply chain asset and open to be Murray Goulburn or Saputo”. It won’t be overnight but it up new international markets.” “Our model is very differwill come from our internal – Phil McFarlane ent. You can’t expand unless breeding strategy, managing you invest in the farm and tie the genetics and the health of that to the supply chain asset the cows.” The first phase of the project will the front door to come to the back door. and open up new international marinvolve farms in Western Victoria and We hope that by opening up new inter- kets.” Aussie Farmers Direct’s CamperSouth East South Australia but proper- national markets we won’t be talking to ties in northern Victoria and New South farmers about what’s the price of milk. down Dairy will also continue to operRather, we will be talking about quality ate from the site. Wales may be future targets.

WestVic Dairy chair Lisa Dwyer welcomed the announcement as a show of confidence in the local industry. “We are very pleased to see a project that demonstrates a sense of confidence in the future of dairy in south-west Victoria,” she said. “Our focus at WestVic dairy is assisting dairyfarmers to have profitable enterprises now and into the future, and anything that demonstrates confidence in the future of dairying in this region has to be positive.” Ms Dwyer said south-west Victoria produces 23% of Australia’s milk. “We are critical to Australia’s dairy industry. We have had some difficult times so it is nice to see more positivity in the outlook and a lot of talk about potential investment. “However, most farmers are sitting back rather cautiously until they see more sustainable milk prices and some stability, rather than one good year,” she said.


Dairy News AUSTRALIA june 2014

12 //  markets

Co-op funding evolving For the past few years dairy has been

a good news story for global agriculture and trade. The rise of China as a serious dairy consumer and importer, steady demand from SE Asia and the Middle East, the increasing needs of Russia, fed by increased supplies from NZ and the US have resulted in a significant expansion in dairy trade. With the likelihood of continued demand growth, and parts of the EU gearing up for post-quota exporting strategies, dairy trade will expand in coming years. For a number of reasons, Australia hasn’t played a major role in this good news story. Flat-lining milk production and a strong currency have hampered our ability to grow our exports in line with an expanding global dairy market – our share has declined from around 17% in the early 2000s to just 7% in 2013, placing us fourth behind the ascendant US industry as a dairy trader. As a result, there has been relatively limited local investment in processing capacity, as dairy companies have focussed on right-sizing capacity, with limited ability or requirement to invest in new stainless steel. This has not been the case with our competitors. Freshagenda has analysed overseas dairy investments as part of our Global Dairy Directions analysis for clients. Our estimates indicate that completed and planned investments in dairy processing by our export competitors between 2012 and 2017 totalled well over US$6 billion, as they attempt to

fresh agenda jo bills seize opportunities offered by expanding dairy trade. Cooperatives lead in terms of processing investment, accounting for about 48% of expenditure across the major dairy exporting regions (New Zealand, EU, US and South America). Fonterra alone has invested or will invest close to US$1 billion in additional capacity. EU-based cooperatives Arla and FrieslandCampina have also invested heavily in processing infrastructure, while completing a number of cross-border mergers within the EU. While much of the New Zealand investment focus has been on building plants to cope with the growth in output, more of the focus in EU investments has been to extract greater unit value from milk solids. All of these cooperatives have much larger membership bases than our own in Australia, but even that has not been sufficient to provide the capital required to fund the investments required. All have had to evolve their structures to

access to capital well beyond the capacity of their current membership base. In the case of Netherlands-based FrieslandCampina, the cooperative owns 100% of the shares in the company Royal FrieslandCampina NV. Capital instruments are tradeable amongst the 19,000 suppliers as well as former suppliers, and there are arrangements in place to ensure a high level of profit retention to enable the company to maintain a permanent and building capital base. The Danish giant Arla has 12,000 members across six countries. To supplement the contribution of its members, Arla issues external bonds to access funds. It has also sought to significantly expand its membership base through acquisitions, and also retains a high level of profits to ensure it can fund its investment requirements. The structures of these two large entities have slowly evolved, with the benefit of EU’s soft competition laws which favour farmer-owned aggregations. With a smaller membership than its EU competitors, and a growing need for expansion investment, New Zealand’s Fonterra established Trading Among Farmers and the Fonterra Shareholders Fund in 2012 after several earlier steps to facilitate change to a more flexible cooperative model. The scheme was designed to reduce redemption risk to the cooperative, allow non-members to invest in investment units listed on the Australian and New Zealand stock

exchanges but retain full farmer control of the cooperative’s assets. This has arguably been the most revolutionary change to a cooperative structure that is designed to retain farmer ownership of all assets into the future. It has required – by law – the development of a number of instruments designed to increase the transparency of price setting and discovery for farmers and investors alike. Each of these cooperatives has had to adapt its approach to evolving its ownership and governance structures against backdrops of different policy and market settings each faces to ensure it is able to continue to pay a competitive milk price, retain farmer control and access sufficient capital to invest, compete and grow. No specific model works in all cases, nor can be generalised as a preferred approach. Given the speed with which com-

petitors are arming their businesses to compete in the future, the current discussions back here at home around Murray Goulburn’s structure and capital structure are vital – not only to the cooperative and its members, but to the wider Australian dairy industry. It is in everyone’s interests to engage in these discussions openly, and understand what is proposed and what is at stake. One thing is certain, the strictly traditional cooperative model where “revolving” capital is provided by members is unlikely to be up to the demands of the expanding global market for high value dairy products – change is inevitable. • Jo Bills is a director of Freshagenda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.

Cheddar cheese prices, dollar hold their ground

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In addition however, now that prices for milk powders and butter are 20-25% lower than their peak, we might see a few of the larger buyers of dairy commodities from the developing world come back into the market to stabilise things for several months. That would be a good outcome – demand growth for dairy products in domestic markets of Europe and the US is sluggish, pushing most of their production growth into exports. The index is a lead indicator of average export returns based on spot prices, currency movements and export mix. The index measures current market sentiment, but in reality it takes 3 to 6 months for prices to translate into actual returns, depending on the timing of contract negotiations. It was set to 100 in January 2000. For weekly updates, visit http://www.freshagenda.com.au/

DE

Freshagenda’s export index has essentially marked time over the prior month. While milk powder prices have continued to slide, losing 5-8% in the past month, cheddar cheese prices and the value of the $A have held their ground, keeping the index in line with the start of May Freshagenda’s Australian export index remains at around 200 points in early May, close to where it was a year ago. The market appears to be getting close to a stable position – falls on the Global Dairy Trade have been small in the past couple of auctions. With market prices a bit weaker, margins for milk production in the year ahead will be skinnier in Europe and New Zealand, with the uncertainty of the production effect of an El Nino event hanging over the market.

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Dairy NewS AUSTRALIA june 2014

markets  // 13

National milk pool to rise asExport farm margins contract demand remains strong Dairy NewS aUSTraLia june, 2012

agribusiness // 17

DAIRY AUSTRAWith season 2011/12 only a few released LIA’S recently weeks from ending, attention is now

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

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, with changes in diet and with increasing urbanisation - and also in conjunction with global population growth. Locally, domestic markethave is supported intheconfidence seenby a growing population and stable perAustralia’s milk produccapita consumption. Whilst the dairy market is currentlyfrom a challenging tion recover earlyplace to be a seller, all signs indicate that balseason sluggishness. After ance will ultimately return.

2012/13 milk prices as farmMay Situationfocused and on Outers consider strategies for the coming look report comes amid year. In some domestically-focused regions, renegotiated contracts incoranother year of intense gLobaL impacT porating lower prices and reduced ‘tier JohN DropperT change withinone’ theaccess industry are undermining farmer confidence and supply stability. For global impact and the broader economic private label Droppert contracts and promany farmers in export-oriented Shifts inJohn a lower price outlook relative to cessor rationalisation have seen milk environment.regions, Austraseason not only adds to the companies adjust their intake requirelia’s economythe iscurrent transichallenges of doing business, but seems ments and pricing to meet the changing demands of a highly pressured retail six regions is now at the positive medium these dairy term markets can deliver tioning from to a contradict prolonged outlook of Asia-driven dairy demand marketplace. Lower contract prices and 10-year highs. in the longer term. Strong period of intensive mining a lack of alternative supply opportunigrowth. flows. 2012 milk production ties presentsignals challenges in a market with Dairythe Australia’s indicative outlook pricing Improvements to sen- in the US those in south-east Asia and the Middle farmgate investment, while for southern farm gate milk prices – limited manufacturing capacity. Despite is up around 4% on 2011 for the year to East maintain consistently higher ecotiment have been more have been reflected in conglobal economic picture is published in the recent Dairy 2012: Sit- these challenges, the underlying domes- April (leap year adjusted), whilst early nomic growth rates that support and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. Howfidence levels across most subdued in Queensland broadly betteruation than even opening price range of $4.05-$4.40/kg ita dairy consumption and a growing finished the March 2012 quota year up ever, the surge in supply has outpaced northern South regions in Austra12 months ago. 2.3% on theNew previous year. New Zealand demand growth in the market. population providing a degreeand of cerMS and a full year averagedairy price range This situation has seen the scales between $4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish Wales (Subtropical Dairy), lia: according to the latest The dairy industry’s In the seasons following the 2008 this season up 10% on last year - a huge tip in favour of buyers in dairy marreport considers the wider market picmarket influence given 95% of NZ milk kets, with commodity prices retreatfinancialFarmer crisis and subsequent comture and summarises the many factors Dairy and Western Australia National corporate landscape is at play; the key theme of the current sit- modity price recovery, farmers in is exported. Argentina is also enjoy- ing steadily over recent months. Butter (Western Dairy). AccordSurvey (NDFS), farmer also changing:uation thebeing sales that of re-balancing in the export-oriented regions have seen solid ing solid production growth, but a sig- prices are down some 30% from their whilst powder nificant supply gap in Brazil growth (see chart) - with dairy supply chain. ago 2011 haspeaks, bolstered the prices out-have ing to the 2014 NDFS, 33%prevents confidenceglobal hassupply improved of Warrnambool Cheese In regions of Australia focused on higher-cost competitors in the North- much of this additional milk from leav- lost more than 20%. Farm gate prices look for many farmers. and 60% of farmers in significantly in most and Butter, United Dairy have subsequently been reduced in producing drinking milk, many farmers ern Hemisphere amongst those expand- ing South America. most exporting The average Despiteare wider economic ing output as their face a re-balancing in the formover In 2012/13, 57%regions. of farmthese regions now feel- uncerthe last 12margins increased. Power and Harvey Fresh marketregions of renegotiation of supply contracts This season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France ers reported making an 32 Euro ing positive, respectively. months. Seventy-five perhave proven once again and reduced access to ‘tier one’ supply. ditions have further enhanced milk as importing countries like China and for example, dropped 12% from several months of strong operating profit, whereas Having less of an export cent of farmers are now the level of investment growth, 2013/14 output the latest data reveals exposure, low farminterest that exists. As the positive about the future is now expected to finish 79% expect to do so in of the dairy industry, com- gate milk prices remain a short term expansionbetween 9.1 and 9.2 bilthe 2013/14 financial year. key source of negativity pared to a low of 43% this ary cycle of global supply lion litres, a modest lift In turn, confidence to amongst farmers in these time last year. Big jumps catches up with growth in austraLian DairY, ASEAN-Australia-New Zealand FTA seen (AANZFTA). and wine exporters tohave from Dairy Australia’s increase on farm investtwo areas, along with cost been in six of demand, dairyricecommod“Protectionist sentiMalaysia are the biggest last production estimate, ment has increased notapressures and the ongothe eight dairying regions, ity prices are winners transitioning ment over agricultural in a free trade goods rife and70% grow- of farm(FTA) signed with and roughly on par with ing impact of supermarket bly since 2013, with 62% atisleast from a periodagreement of nearing across the globe, so to provide portion pack between the two counaustraLian FooD 2012/13. now feeling confident milk pricing strategies. ersin in each now feeling record highs.tries last month. this context it is pleas(200-330ml) configuracompany Freedom Foods ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a Looking ahead to compared to 42% last year. At the national level, positive about the future. Nevertheless, the curto forge an agreement seven years of negotianew milk processing plant ucts. Malaysiaby thatthe has NDFS, The NSW are location will tions, allows a liberalised Aswith to cash in on growing 2014/15, margins likely Improved margins, improved profitability gauged rent season has reminded dealt with some sensiprovide access to the most licensing arrangement demand in Asia. to be leaner as easing better weather and a boost compared to 12 months positive sentiment in many of the rewards that tive agricultural issues for Australian liquid milk The plant, to be built in sustainable and economic

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

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

not effectively covered by AANZFTA,” says Fraser. “While under the AANZFTA agreement most of Australian agriculture’s key interests had tariffs bound at zero, dairy and rice are two sectors where incremental market access improvements have been negotiated under the Malaysian FTA. “This trade deal was also particularly important for sectors such as dairy that have been facing a competitive disadvantage in Malaysia 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-

southeast Australia, will be the first Australian green-

source of milk. Pactum has strong links to the Austra-

Australia will run the plant. Some of its products will be sold in Australia. The company says given Asian consumers’ rising incomes and improving diets, demand there will grow for quality dairy products from low-cost production bases such as Australia, whose milk is well regarded. The new plant will 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

plant will increase scope for Australian milk supply – value-added, sustainable and export focused. Initially the plant will produce 250ml and 1L UHT packs from a process line capable of 100 million L. The processing and packaging plant will emit less carbon, use less water, and be more energy-efficient than equivalent 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.

Dairy Australia’s initial forecast for 2014/15 Sealing the deal: Malaysian trade minister Mustapha Mohamed fields expansion in UHT in lian dairy industry and will is for national volumes to reach 9.3 to 9.4 with Australian counterpart Craig Emerson after signing the deal. expand its arrangements 10 years. billion litres,Freedom’s an increase of around 2% on the with dairy farmers for wholly expected 2013/14 season total. but also through technical Despite the compleers through streamlining supply of milk. The new owned subsidiary Pactum of rules-of-origin declaration processes and improved marketing arrangements for certain commodities. The Malaysian market is worth about A$1 billion in Australia agricultural exports – including being its fourth-largest sugar export market and fifth-largest wheat export market. 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.

tion of this agreement, much remains to be done for Australia’s farmers to tap into the full potential of the Asian region and beyond. He says the NFF will now throw its attention towards ensuring agriculture remains front and centre in completed FTAs with South Korea, Japan, China and Indonesia as 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

or so called ‘behind the border’ restrictions.” The FTA was signed on May 22 in Kuala Lumpur by Australia’s Trade and Competiveness Minister Craig Emerson and his Malaysian counterpart Mustapa Mohamed. Emerson says Australia will be as well-positioned in the Malaysian market as Malaysia’s closest trading 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.

016-017.indd 17

international commodity returns see a moderate reduction in farmgate milk pricing, along with the possibility of El Niño-induced weather challenges keeping pressure on input costs. Measured growth in milk production across southern regions (led by Tasmania) will be partially offset by continued challenges in northern areas. Dairy Australia’s initial forecast for 2014/15 is for national volumes to reach 9.3 to 9.4 billion litres, an increase of around 2% on the expected 2013/14 season total. More rapid growth is possible should the current level of positive sentiment continue, margins remain more profitable than anticipated, and if the current expansionary trajectory has carry-over effects for next season. Similarly, several factors could see the outlook deteriorate. These include

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further significant falls in international commodity prices with flow on effects to farmgate pricing and margins. Non-irrigated pasture production, purchased feed costs and reduced on-farm investment could all suffer from the effects of an El Niño weather pattern (although a strong outlook for irrigation allocations provides some mitigation potential). Ongoing developments in the Ukraine and Thailand add a further level of uncertainty to the outlook for global dairy, grains, energy and currency markets. In any case, most of Australia’s dairy farmers will finish the current season in a much stronger position than they started it, in both sentiment and financial terms - good foundation from which to tackle 2014/15. • John Droppert is industry analyst with Dairy Australia.


Dairy News AUSTRALIA june 2014

14 //  management

Irrigated corn cuts grain use GORDON COLLIE

A CENTRAL QUEENSLAND farm-

ing family is taking proactive steps to ensure a viable future in dairying for the next generation. Ray Clews said he was hopeful that higher milk prices would eventually flow through, but in the meantime the family was putting the business on a better footing with a modified farming system to reduce costs and improve yields. Ray and his wife Ailsa have just enacted their succession plan with sons Aaron and Michael taking over the business. But they will continue to be closely involved, helping out with milking. Ray’s family operated a traditional cream dairy for years when most of the Rossmoya district north of Rockhampton was dairy country. They switched to pork production, building up a 100 breeding sow enterprise, before deciding to recommit to dairying in the early 1990s with a future for their family in mind. They invested in a new 15-a-side herringbone dairy, bought milk quota, and built a 300 megalitre ring tank to provide irrigation security. The storage cap-

Who:

Ray and Ailsa Clews Where:

Rockhampton What:

Irrigated corn

tures runoff-from the local catchment and they also pump overland flow after heavy rain. “We can get dry spells, although in recent times the problem has been too much rain. We’ve had more than a metre in the last three months.” The continuous wet poses herd health challenges and has disrupted their farming program. The milking herd has been built up to 290 cows all either Swiss Brown or infused. “We are right on the Tropic of Capricorn and we have found the breed is best adapted to handle the climate,”

Ray said. They have a two million litre contract to supply the Parmalat processing plant in Rockhampton which needs all the milk it can get with farmers leaving the industry. “The factory is pulling milk from a wide area, but it has no certain future. They really need about 30 million litres a year, but at the moment they are getting more like 20 to 25 million,” Ray said. Their herd is continuously calved to help flatten the year round production cycle. With an automated calf feeding system they raise all their own heifers. This gives them growth options if and when milk prices pick up and in the meantime they are culling heavily to improve overall herd performance. A computerised milking and herd management system with automatic cup removers was installed two years ago and this has been a big help in monitoring performance on an individual animal basis. To improve their feed security, the family have extended their irrigation with three centre pivots covering 10 ha, 25ha and 50ha. They have traditionally relied on winter ryegrass with clover and chicory

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for strip grazing from about June until the middle of October before switching to tropical summer grasses with some silage made from dryland dolichos pasture. Aaron Clews who is focused on the farming side of the enterprise, said the family had been doing some pad feeding for several years, with a mixed ration containing up to 5kg of grain. About 1.4kg of wheat is fed in the bails at each milking. Aaron said the family was moved to step up the pad-fed ration, growing corn under the pivots for silage. “The heat and sunlight is good for growing corn and we’ve had some very heavy yielding crops which are harvested at the milky grain stage.” Moisture probes placed at different soil depths help make optimum use of irrigation. They have pit storage capacity for about 3500 tonnes of silage and are TH1584M 19/3/2014

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building up reserves for feed security. “We hope to get to the stage where our grain ration is nearly cut in half, replaced by the starch in the corn silage.” The cattle will still have access to ryegrass grown under pivot for night grazing. “We will be able to start managing our summer pastures better. Tropical pastures grow quickly in the heat, but there is a small grazing window before they get too rank.” They plan to try double cropping corn under their large centre pivot with August and January plantings. Cover crops of barley or triticale will give them the flexibility of making silage or green manure, depending of seasonal conditions. “Our total costs will be reduced under the modified feeding system and we hope to improve our milk yield up to 22 to 23 litres a day,” Aaron said.

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Dairy NewS AUSTRALIA june 2014

management  // 15

Shelterbelts prove worth DAIRY MILK produc-

tion can increase by 17 to 30% in areas with native shelterbelts, a new report shows. The report compiled by the Basalt to Bay Landcare Network in south-west Victoria demonstrates potential improvements in crop yields of 25% and pasture yields by 20-30%. The report brings together more than 30 years of local, national and international research into the benefits of native shelterbelts. It shows that on a 27°C day unsheltered cows have 26% less milk production than shaded cows. Basalt to Bay Landcare Network Facilita-

tor Lisette Mill said the report shows heat stress can markedly reduce stock fertility and milk production and increase mortality of calves. The report cites one study that found over the 40-60 year lifetime of fencing and shelterbelts, total dairy production would increase by 30%. This would be achieved through 20% improved pasture growth and 10% improved milk production. Another study found that the use of trees could reduce summer heat load in cows by 50% and prevent heat loss in winter. The report said this was more cost effective than

using electricity-driven sprinklers and fans. Milk yields are depressed by cold at a rate of 1.34kg per day. Mrs Mill hopes documented proof of the productivity and biodiversity benefits will prompt more farmers to plant native shelterbelts to change the landscape and agriculture for the better. “This report provides proof which should convince landholders of the economic benefits of implementing shelterbelts,” she said. Mrs Mill said all evidence in the 10-page E report was backed up by references, including electronic links. Many of the

links connected readers to industry research and case studies located on other Australian websites. The report was initiated after Mrs Mill started work with the network two and a half years ago and found that farmers wanted proven “facts and figures” about why they should do revegetation and Landcare works. Consultation with local farmers found they were keen to consider native shelter belts but needed more information about what and where to plant,

Photo: Marian Macdonald.

costs, and how it would financially benefit their businesses. “There was a very clear directive – we need to provide the proof and the gamechanging information that would convince farmers and industry of the commercial advantage of planting shelter belts, just like inoculating your animals and purchasing proven semen/seed is an

investment for the future of the farm.” The report describes how shelterbelts work; the benefits for different agricultural industries including dairy, wool, meat, cropping and horticulture; biodiversity benefits, and shelterbelt design and maintenance. Mrs Mill also hopes the report will prompt an increase in the investment by industry in programs

to encourage farmers to plant more shelterbelts. “If there was a program for landholders to receive rebate support and information about what to plant and how to plan belts the uptake of such a program would be high”. The report is available online at www.basalttobay. org.au and will be updated with new research and links to stakeholders every six months.

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CONTACT: CHRIS DINGLE | T: 0417 735 001 E: chris@dairynewsaustralia.com.au


Dairy News AUSTRALIA june 2014

16 //  breeding management Ian Noakes at the Dura Betail AI centre in France inspecting the Montbeliarde sire Valfin. Ian has ET calves on the ground by this nationally acclaimed sire.

Report influences HAVING A top-rating

Australian Profit Ranking (APR) dairy herd is nothing new for the Noakes family from Warner Glen, but a report tracking their efforts in building higher breeding values, is. Four generations of Noakes’ live on the undulating 300ha partially irrigated farm. Ian and Helen Noakes dairy with their two sons Steven and Brad, Ian’s father Eric still lives on farm, and Brad’s newly

minted son Gordon, born earlier this year, make their business an ongoing family affair. The 580-head Holstein and Holstein Cross split-calving herd has an average production of 550 kilograms of milk solids. Feed is pasture and a mixture of pellets and grains. Grain and silage is fed out on the feed pad. The property, which includes some leased land, has 100ha irrigated

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through lateral irrigation, and a 36ha centre pivot installed two years ago has proved an important and labour-saving decision. Joining occurs in autumn (April-May) and spring (NovemberDecember), for split calving in February-March, then August-September. Cows are dried off in June-July, with some going to their Karridale property or other leased land. Bull calves are also raised and fattened to steers off farm. Some heifers are also raised there, making it a busy part of their operation.

Who:

Noakes family Where:

Warner Glen What:

Mastitis resistance

upward trend. We believe the Fertility Index, introduced (by ADHIS) a few years ago is going to make a big difference to fertility in our herd. As an example, we know the Genetics

“We saw our herd’s Genetic Progress Report for the first time last year. It confirms that we are heading in the right direction.” The Noakes’ ongoing national success, calculated through herd recording and reported back though the Australian Dairy Herd Improvement Scheme (ADHIS) is further traceable, following the introduction of Genetic Progress Reports from the ADHIS. The Noakes’ latest Genetic Progress Report, which shows their herd as ranking 337 out of 2293 herds Australia-wide holds no surprises for Ian Noakes, rather it confirms positive breeding decisions and reinforces areas that may need adjustments. “We saw our herd’s Genetic Progress Report for the first time last year. It confirms that we are heading in the right direction. Looking at the results, I can say I am happy with production and happy with the way mastitis resistance is turning around,” he said. Fertility The Noakes have been looking at improving fertility for some time, and the Report’s Fertility graph is reflecting their work in this area. “Fertility had been an issue for us. The graph says we are average in this area, but I’m not happy with average. “We have always tried to use better bulls, particularly from the Good Bulls Guide to work on higher breeding values and now we are on an

Australia bull Bullbar has a well above average fertility index – and we have proven Bullbar progeny get in calf easier than anything else. “We won’t use Holstein bulls if they are rated average for fertility. These genetic reports will tell that story in a few years’ time. I believe our fertility statistics will improve rapidly,” Ian said. Mastitis resistance Ian believes his herd’s graph for mastitis resistance (pictured) is an accurate monitor of their work in this area. “About five years ago they (ADHIS) bought out an index for mastitis. We have stopped using bulls that are below average for mastitis resistance and had an immediate response,” he said. Genetic production for fat and protein The Noakes’ excellent report results in Production Fat and Production Protein show their herd tracking extremely well in these areas. Ian says this is simply a result of picking better bulls. “These days we don’t worry too much about type, but we do have set requirements. We look more at udders, in addition to fertility, mastitis resistance. We look at reasonable milking speed and good temperament. Feet and legs are also important because we have hills,” he said.


Dairy NewS AUSTRALIA june 2014

breeding management  // 17

selection of genetic herds

Survival ABV

Overall Type ABV

Cross breeds and jerseys in these areas as well as The Noakes’ dairy herd Longevity. includes Jersey, Reds and Monbeliardes Montbeliarde breeds. Ian’s interest in crossResponding to the frustrabreeds, in particular the tion some years ago with very good high production French breed Montebeliarde, has Type led to his first cowsGenetic that lacked strength Progress for Genetic Progress for Longevity crop of purebred Montand fertility, Reds and beliardes calved this Montbeliarde cross progNational Avg month Your through Holstein herd National Avg Your Holstein herd Your Holstein X herd the use Your Holstein X herd eny are producing as much of embryos purchased as their Holstein counter105 105 from France and from all parts and performing sig104 104 reports, they are looking nificantly better in the 103 103 excellent. fertility stakes. Despite never having In 2011, 18 Montbe102 102 a desire to be a stud liarde cross cows were 101 breeder, he says the ‘Moncalved and101 of those, only ties’ could prove a bit three are not going to 100 100 calve for the fourth time in of fun in his retirement. 99 99 Until then, the business February March 2014. Ian of choosing good genethas found the Holsteins 98 98 ics and running the high can slip back six months 97 97 performing dairy herd is after three to four lactaBrad, Steven, Eric, Ian and Gordon Noakes96 the primary focus for the tions. 96 at their Warner Glen property. Noakes family. The Noakes’ also 95 95 • This2004 article 2005 was first pub-2007 2008 2009 2010 have a number of2001 cows2002 2003 2006 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 lished in Farmwest News and has been reprinted with from a Red bull, which Year of Birth of 613 (Holstein) & 172 (Holstein X) cows Year of Birth of 861 (Holstein) & 282 (Holstein X) cows (www.farmwest.com.au) permission. are performing very well

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Genetic Progress for Mastitis Resistance National Avg

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A B S F O R F E R T I L I T Y, Genetic Progress Fertility TYP E A for ND PRODUCTION

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2009

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2010

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Genetic Progress for Production - Fat National Avg

Your Holstein herd

2003

2004

2005

2006

2007

2008

2009

2010

Genetic Progress for Production - Protein

Your Holstein X herd

National Avg

Your Holstein herd

Your Holstein X herd

10

Production ABV (Protein kg's)

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2002

Year of Birth of 881 (Holstein) & 297 (Holstein X) cows

15

5

0

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-10

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2009

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www.absglobal.com/aus l abs.au.info@genusplc.com l Ph: 03 8358 8800 Year of Birth of (Holstein) & 297orders (Holstein X) cows Fax:865 03 8358 8888 l Semen only, freecall 1800-ABS-BULL

Published by ADHIS Pty Ltd. This report is for your information only. It is generated with due care and attention to accuracy but ADHIS


Dairy News AUSTRALIA june 2014

18 //  breeding management

NZ wants higher fertility THE NEW Zealand dairy industry is embarking on a new seven-year research project in a bid to produce higher-fertility dairy cows. The aim is to lift the sixweek in-calf rate from the current industry average of 65% to 78%, which would boost industry profitability by $500 million. The research study also

seeks to help farmers take advantage of the cows’ better genetic makeup. DairyNZ senior scientist and project leader Dr Chris Burke said the study requires 700 purpose-bred Holstein-Friesian heifer calves with low and high fertility attributes, created from selected contract matings in spring 2014.

“[At least] 2800 contract matings will be required and we need the support of dairy farmers to achieve the required number of animals,” Dr Burke said. New Zealand genetics companies LIC and CRV Ambreed are supporting the establishment of the herd.

LIC is managing the contract mating, having first contacted 1000 dairy farmers last month. Dr Burke said lifting the six-week in-calf rate from the current average of 65% to 78% would be challenging. “This challenging target cannot be achieved using current knowledge and

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technologies alone,” Dr Burke said. “A biological breakthrough is required. “The research herd will help us unravel the underlying biology that differentiates genetically fertile cows from infertile cows. “Some of the best scientists in New Zealand and Australia will work

together with this research herd.” The biggest challenge is to reduce the apparent 30% of conceptions occurring in the first 35 days after insemination that are not sustained as a pregnancy. The magnitude, timing and possible reasons for pregnancy failure in commercially operated herds will be measured. This has not been done before. It will involve collaboration by DairyNZ, AgResearch and Fonterra. The project is also aimed at increasing the power to select

for improved fertility genotypes through use of novel phenotypes (new ways to measure fertility for selection purposes), improved recording and enhanced statistical analysis models. Dr Burke’s colleagues will include other scientists from DairyNZ and teams from AgResearch, University of Victoria-Wellington, University of Queensland, Cognosco (a division of Anexa Animal Health), New Zealand Animal Evaluation Ltd and genetics research company AbacusBio.

Survival ABV for cow longevity LONGEVITY AND milk solids are the two most

important determinants of a dairy bull’s genetic merit for profitability. “Survival – or longevity as many people call it – refers to a bull’s potential to produce daughters that last in the herd for many lactations,” Michelle Axford, of the Australian Dairy Herd Improvement Scheme (ADHIS), said. “Farmers can get regular feedback on the herd’s performance for milk solids through their milk supply company, but understanding survival involves looking a little further.” Ms Axford said farmers who want to place greater emphasis on improving survival can refer to the Survival Australian Breeding Value (ABV). “The best way to breed cows that survive and thrive in your herd is to select bulls from the Good Bulls Guide with a survival ABV of more than 100,”she said. The survival ABV is calculated from actual survival data as well as predictors of survival such as overall type, pin set, udder depth and likeability. Mrs Axford said that actual survival records were the best way to analyse survival. “However predictor traits are used, especially for young bulls whose daughters aren’t old enough to provide their own survival data. In younger bulls, this group of traits gives a pretty good early estimate,” she said. “As more actual survival data is collected, its weight in the survival ABV increases. This in turn increases its reliability.” Survival contributes to profitability in two ways. Firstly, if cows last longer in the herd, fewer replacements are needed. That means lower heifer rearing costs or greater income as surplus heifers are sold. Secondly having cows that last longer means the herd is more mature, and mature cows produce more milk than younger cows. “In Australia, the average age of most cows at their most recent calving is very close to 60 months, that is, five years. A third of herd-recorded Holstein, Jersey and Holstein/Jersey cross cows are at least six years old.” Herd-recording farmers can now monitor the genetic merit of their herd for survival. Available from herd test centres, the Genetic Progress Report shows the genetic trends for six traits, and the Australian Profit Ranking within an individual herd. “You can benchmark against the herd’s past genetic performance or the national average,” she said.


Dairy NewS AUSTRALIA june 2014

breeding management  // 19

Seasonal calving boosts profitability Milking over this past summer provided Northern Victorian farmer Peter Letcher with further affirmation that his switch to seasonal calving in 2002 was the correct one. Peter and his wife, Diane, who farm at Numurkah, purchased a farm at Strathmerton 18 months ago which operated a split calving operation. “I was milking over summer and it drove me nuts,” Mr Letcher said. “We were going to change the herd to seasonal calving over two years but we made the decision to do it in one hit.” The Letchers were share farming in Tongala before they purchased their Numurkah farm in 2002. They started seasonal calving the same year after an ultimatum. “Diane said: Go back to one calving or I won’t help,” he said. “I wasn’t joking either,” Mrs Letcher said.

They now calve in April and dry off in January. Although the seasonal calving pattern is less demanding for the couple than split calving, it has also proven more profitable, and provides flexibility to minimise financial damage in years of poor seasons and poor milk prices. The couple used to milk 253 cows through their 25 head swing-over dairy but have reduced this to between 190-200 autumn calvers on the home farm (with 270 on the new Strathmerton farm) and have lifted production, producing 6000 litres and averaging between 500-540kg of milk solids from perennial ryegrass pastured supplemented with 3/4 tonne of grain. They recorded components of 4.9 and 3.9 last year. They have also reduced costs, which has improved their profitability. “We are producing more good qual-

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PO Box 7538 • Shepparton • 3632 Victoria Phone (03) 5831 5559 • Fax (03) 5822 0005 info@wwsaustralia.com • www.wwsires.com

Peter Letcher

Who:

Peter and Diane Letcher Where:

Numurkah What:

Seasonal calving

ity grass and the herd costs aren’t there for most of the season. Cows harvest more but you don’t need to grow as much. “You also get that break at the end of the year. You can get some maintenance done, get some time off, everyone gets a break. I don’t think people put enough

importance on it.” Mr Letcher said seasonal calving also provides flexibility, which is particularly important if a tough season coincides with a poor milk price. “Under our system, production won’t be the same every year, it will be what’s profitable to produce that year. In the odd year we’ve had it, when it hasn’t been profitable to produce milk, you’re better to produce as little as you can, to minimise your loss.” The Letchers use LIC genetics for two reasons – crossbreds are the most profitable choice, according to Mr Letcher, and because of the seasonality of the New Zealand system. “They are very strong seasonal farming enterprises over there,” Mr Letcher said. Mr Letcher began share farming in New Zealand in 1990 when the predominant cow was Frieisan. He said there was a big shift to crossbred in 1995 and 60% of the NZ herd is now crossbred. “The evidence is too strong there, you can’t ignore it.” Jersey sires were selected to start their crossbred herd when the Letchers were share farming and in 1997 the crossbred bulls were introduced by LIC. “Back then, fertility was not as big an issue but it was becoming an issue,” he said. “We went for the highest fertility bulls we could, straight away.”

The Letchers utilise an 11-week joining period. “We get them in early enough to get them in calf again.” They PG 21 days before joining, join for a week, then PG again. Two full rotations are performed in 5 weeks, then the bulls are put out. It is estimated bulls impregnate 20-30%. They normally record a 6-10% empty rate and have consistently recorded 65% calves on the ground. Drying off at the end of January gives them eight weeks off over February/March. The use of scratchy stickers has been implemented and this has made heat detection much easier. The Letchers grow 65ha of irrigated pasture. This year they have had the best autumn break since their arrival.  Typically, perennial ryegrass pastures are sparingly irrigated over the summer months to assist their survival into the following autumn. The crossbred milkers are calved in autumn relying on fully productive perennial ryegrass pasture from early April till mid-January. The cows are then dried off from mid-January through to mid-March.  Perennial ryegrass pastures are usually sparingly irrigated through the dry summer period, more so to keep them alive and healthy rather than production, as the cows are dry during this time grazing run off pasture supplemented with hay.


Dairy News AUSTRALIA june 2014

20 //  animal health

Camera reveals cows in heat Infrared cameras

could hold the key to improving heat detection of dairy cows. FutureDairy postgraduate student Saranika Talukder, has studied the use of infrared (IR) cameras to detect changes in vulvar skin temperature, which can be related to

the period of heat or oestrus. This study was performed under the supervision of Dr Pietro Celi and Associate Professor Dr Kendra Kerrisk at the University of Sydney’s Camden dairy farm. “Heat detection is always a challenge. It is

time-consuming and the logistics can be tricky, especially with large herds or automatic milking systems,” Dr Kerrisk said. “Many herd managers would welcome an affordable and less subjective tool to assist in heat detection; and the IR camera has the potential

to be just that.” In a report submitted to the recent Australian Dairy Conference proceedings, Ms Talukder said infrared thermography (IRT) is a non-invasive technique that measures body surface temperature. “The period of heat or

Vulval image of a cow in heat (A) and a cow not in heat (B).

oestrus is associated with an increase in body temperature. The study was conducted to assess the potential of an infrared

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camera to detect cows in heat by monitoring the rise of body surface temperatures on the muzzle and vulva.” Twenty Holstein Friesian dairy cows were enrolled in the study. Cows were synchronized using a controlled internal drug release device (CIDR) and prostaglandin (PGF2). Thirty six hours after the PGF2 injection, cows were monitored at 4-hour intervals for any signs of heat until ovulation by visually observing them for changes in behaviour and colour changes of EstrotectTM. Ultrasound scanning was performed to detect the time of ovulation. While vulva and muzzle skin temperatures were monitored with an IRT camera, vaginal temperatures were also recorded with a digital thermometer. Out of the 20 cows in the study, 12 cows were recorded for ovulation and the IRT camera was able to identify 11 of the 12 cows (92%) in heat whereas only 8 of the 12 cows (67%) were observed or identified with an activated oestrotect. However, the IRT camera also identified five non-ovulated cows as positive for heat (i.e. false positive). “It is ultimately hoped that the IRT image capture might be automated if the accuracy of heat detection with the technology can be improved,” Ms Talukder wrote. “However, it is difficult to envisage automating the capture of vulva images particular as the hanging tail would need to be move sideways to ensure it doesn’t obstruct the camera view and it is expected that any manure on the vulva would limit the accuracy of the temperature measurement. “The head, the eye and the back of the ear are

likely to be less challenging for regular and automated data capture and it is reasonable to think that the technology could be incorporated into a feedbin for such an application. “Consequently, different body regions such as eyes and ears are currently being evaluated to determine whether they are more suitable.” The current price of the infrared camera is $21,000. “However, it is recognised that there is cheaper equipment available but that automating the equipment and the information reporting would add to the cost of the technology,” Ms Talukder wrote. “It will be important to conduct a cost/benefit analysis of the technology if it proves to have a sufficient level of accuracy to allow it to be automated and adopted on farm. “This technology would have even greater potential for adoption if it could also be used for the early detection of lameness and/or mastitis. In addition, IRT does not require any veterinary assistance to operate.” Ms Talukder said the results suggested the IRT has the potential to be a heat detection aid; but that the technology is not likely to be the silver bullet that will completely resolve the challenge of detecting cows in heat. Further studies investigating the potential to reduce the chance of overprediction by capturing data throughout entire 21 day reproductive cycles would be worthwhile, she said. This project was funded by the Dairy Research Foundation and four investors of the FutureDairy project; Dairy Australia, NSW Department of Primary Industries, University of Sydney and DeLaval.


Dairy NewS AUSTRALIA june 2014

animal health  // 21

Solving mastitis puzzle WESTERN VICTORIAN dairy farmers Ste-

phen and Tania Luckin were able to use a Mastitis Focus Report (MFR) last year to help rectify an emerging problem with mastitis. The Luckins detailed their problem and solution at the Australian Dairy Conference earlier this year. They milk 500 cows near Heywood, employing two permanent full-time staff and one relief milker. The Luckins milk on a 50-unit rotary dairy, fitted with DeLaval harmony clusters with 2x2 pulsation and automatic teat sprayers (on both cups on and cups off position). They do not have automatic cup removers. In the first few months of 2013 there were increasing numbers of clinical cases of mastitis and it was difficult for the herd to stay in the premium range (<250 000cells/ml).

The Luckins had organised two full plant tests by milking machine technicians and had reconditioned the pulsators without any effect on the bulk milk cell count (BMCC). They then engaged the services of John Penry to help them overcome the challenge. The farm team has excellent recording processes and this allowed the investigation to progress and swiftly move to improving the situation. To help with defining the problem, Mrs Luckin organised a backup file from EasyDairy (their dairy management software). This was then used to create a Mastitis Focus Report (MFR) to quickly give Dr Penry a sense of what cows were involved with the problem, as well as the scale of the problem. In this case the MFR provided excellent infor-

Who:

Stephen and Tania Luckin Where:

Heywood What:

Reducing mastitis

mation that was then followed up with two milking time visits. Samples were taken from cows with elevated ICC (individual cell count) and from cows with previous clinical mastitis, to generate critical information as to where the main spread of infection was occurring. Milking time observations included teat scoring and assessment; cow behaviour; milking times; completeness of milking; frequency of cup slip;

cluster alignment; assessment of milking hygiene; and routines and assessment of teat disinfection process. From observing two milkings, and reviewing the culture results, the Luckins and Dr Penry found: ■■ Strep uberis and other teat skin pathogens. ■■ Teat end damage (due to inferior liners and increased working vacuum) ■■ Poor teat disinfection coverage with automatic teat sprayer ■■ High challenge of mud and manure onto teats ■■ Some overmilking ■■ They were able to rule out Strep ag and Mycoplasma (using PCR testing). Once the investigation had taken place, some meetings were held with the Luckins and then the milking staff. The changes required for improving the milk

The Missing piece in The calf scours puzzle

Stephen and Tania Luckin at their dairy.

quality were discussed and tasks assigned to different people. Some time was taken to discuss the reasons why changes were being made to improve staff implementation. In this case, some of the changes included putting different liners in,

lowering the vacuum, moving the cups on position to 6-8 positions from the bridge, increasing platform speed, re-introduction of manual teat disinfection, shortening of dropper tubes to improve cluster alignment and changing the feeding prac-

tices to reduce the exposure to dirt and manure. Through this process, the Luckins and their staff were able to see how the information they had entered was being used and the way in which it can to page 22

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Dairy News AUSTRALIA june 2014

22 //  animal health

Drench resistance a growing problem for dairy farmers RESISTANCE TO deworming drugs is becoming a huge problem for many farmers and introducing new drugs is not a viable solution, according to Dr Stephanie Bullen of the University of Melbourne. Dr Bullen, speaking at the Australian Veterinary

Association’s annual conference in Perth late last month, said heavy reliance on drenching in livestock industries has led to parasites developing resistance to anthelmintic drugs, particularly in the dairy industry. “Preliminary results from a study currently

underway indicate that there are very high levels of resistance on dairy farms and more research into strategies specific to the dairy industry needs to be undertaken,” Dr Bullen said. “The ultimate goal is to be able to achieve a balance between reducing

the impact of parasites on farm profitability, while ensuring long term sustainability of current and future anthelmintics. “There’s an abundance of studies that demonstrate the importance of highly effective drenching drugs for dairy farm profitability. But for most farm-

ers, drench resistance is a secondary consideration following the production advantages gained by their use.” The widespread use of low-price drenching products has also meant they’re often used on animals even when parasites aren’t definitely present.

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PAL1105_DN_260x187_V01.indd 1

“It’s easier and cheaper in the short term to drench rather than address underlying problems such as nutritional deficiencies or subclinical diseases to reduce parasite susceptibility. Then when drenching fails it’s common to blame drench resistance. “It’s also seldom recognised that once resistance develops, it’s virtually irreversible even after the use of a different class of drug. “And earlier recommendations such as application of anthelmintics at

set intervals and drenchand-move to safe pasture have been identified as promoting resistance. “History suggests that without modification of these high-risk drenching practices, new drugs will not be a sustainable option in the medium to long-term. “It’s a complex problem. Many cattle producers don’t see drench resistance as a significant problem on their farms, which highlights the need for more active veterinary support.”

Solving mastitis puzzle from page 21

be used for monitoring milk quality in a proactive way. Continuously enforcing correct milking procedures with keeping the platform moving and excellent post milking teat disinfection have been instrumental in maintaining results. The Luckins are continuing to regularly generate Mastitis Focus Reports, also utilising the Countdown app (in particular using the test assessment calculator), herd testing and their computerised herd management system. Through using these tools they are able to monitor milk quality more closely and keep it as a focus of their business. The herd’s New Infection Rate is now at 2.4%, well below the trigger point of 5% average. BMCC for December was less than 160,000 and teat health has improved markedly from 24% rough or very rough teats to 13% rough or very rough teats. The Luckins were happy their information recording systems had allowed Dr Penry to quickly investigate and improve the situation but noted engaging him earlier would have led to less clinical cases of mastitis and less culling of cows. • This article was first published in the 2014 Australian Dairy Conference program.

CHECK OUT THE LATEST NEWS AND INFORMATION AT www.dairynewsaustralia.com.au

2/06/2014 11:39 am


Dairy NewS AUSTRALIA june 2014

animal health  // 23

Heifer check for future cheques ee cheng ooi

Keeping a close eye on

your heifers now prevents fertility frustration later, and investing a few hours of your time today can mean saving days and dollars tomorrow. Your heifers need to reach 65% per cent of their mature weight by the start of joining, which means you need to know the weight of your mature cows. This target is critical to the future reproductive success of your herd. The onset of puberty is linked to bodyweight: larger heifers reach puberty sooner, are joined earlier, are younger at their first calving and are easier to get in calf at their second joining. Under-sized heifers also struggle during the calving period. If their pelvises are too small, they have a dramatically increased risk of needing assistance at calving. For you, this leads to lost sleep, more vet bills and, potentially, the loss of calf and/or cow. For the heifer, it increases her chances of calving-related problems, such as retained foetal membranes and endometritis, which in turn lead to delayed cycling. To make matters worse, poorly grown heifers find it harder to compete for feed, are more likely to be culled, and produce less milk in their lifetimes. To prevent this, heifer monitoring needn’t be excessively time-consuming. Here are some handy tools and tactics that can help to ensure that your heifers are fulfilling their growth potential. Visual monitoring is the most basic way to keep an eye on your heifers. Any animals whose backbone looks like a sharp, bumpy ridge is under-conditioned and any that are completely flat between hip and pin are too fat. It is hard to visu-

ally assess weights, but you will be able to tell if your heifers appear short, which may be a result of insufficient protein for frame growth. Girth tapes are a handy and inexpensive way to estimate weights if you don’t have scales. However, many people find that once they have gone to the effort of bringing heifers in, it is easier to weigh them and they appreciate the greater accuracy. Hip height is a useful way to monitor growth, and can be very simple. Once you have figured out your target heights (search ‘wither height table’ at www.dairyaustralia.com. au), you can fix a measuring stick to the side of your crush or race and easily identify those animals that are too small. Weighing is the best way to monitor heifers, as it allows you to accurately determine whether they are reaching their target weights. Dairy Australia has produced target weight charts which are easy to print and keep on hand as a reference (search ‘heifer growth’ at www.dairyaustralia.com.au). They also have customisable charts and calculators, which make it easy to tailor targets to your individual farm situation. Before you start weighing, it is a good idea to work out your target weight and the weight below which you will take action. The InCalf program recommends that you assess heifer growth every 3 months. At the very least you should aim to assess your heifers at 5 months, 10 months and at joining (based on a 15 month joining). Finally, act on your findings. If you do have some heifers that are underweight, then something needs to be done. Preferential feeding is the most logical way of correcting poor growth.

This extra cost will pay dividends when it comes to milk production and reproductive performance. • Ee Cheng Ooi is a member of the DEPI dairy team at Ellinbank, Victoria. This article was first published in How Now Gippy Cow.

Watch for pain signals According to Dr Kiro Petrovski, University of Adelaide, pain relief in cattle is not always given the priority it deserves. Dr Petrovski, spoke at the Australian Veterinary Association’s Annual Conference in Perth last month and said that livestock practitioners should be more proactive in pain relief. “There’s a widespread belief that cattle are relatively insensitive to pain. This is because they’re prey animals and will mask signs of pain as part of a survival strategy to divert the attention of predators away from the sick and injured. “So identification of pain often goes unnoticed until a disorder is quite advanced. “Pain in cattle is an animal welfare issue and increasingly a

consumer concern affecting marketability of dairy and red meats. For these two reasons, increased attention towards the relief of suffering in production animals is so important.” Dr Petrovski said that it takes a whole-of-industry approach to improve animal welfare with respect to pain in cattle. “Public perception of what is painful for livestock is continually changing. It’s strongly influenced by the environment in which the society operates. In Australia, societal pressure for pain relief in production animals is increasing. “It’s a matter of educating farmers and the community regarding the physiology of pain and its relief in cattle patients. Some painful husbandry procedures are carried out

to reduce aggression and improve identification, handler safety and meat quality. But livestock practitioners also have a duty to educate their clients on all available options to prevent and manage pain in cattle.” Pain relief should also address livestock comfort including access to food and water and nursing care. It also includes: * Provision of soft bedding and  a non-slippery surface to make pain more bearable * Reduced walking distances to food and water to avoid excessive movement. “Timely recognition of pain, the use of pain relief and providing adequate levels of comfort will improve animal welfare and productivity and improve the image of the industry.”

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Dairy News AUSTRALIA june 2014

24 //  animal health

Protocols can save calf losses The successful

rearing of calves is an area where your veterinarian should be one of the key members of your team, yet often we are called in, like the fire engine, to put out blazing problems when the losses reach some critical (yet often entirely random) threshold. The fact is that your

veterinarian could have used his or her skills to help to prevent many of the calf rearing problems from occurring in the first place. Calf rearing success is all about having a strategy and system that identifies areas where problems can occur, and how we can prevent or treat those

problems. I have written before, and will continue to do so, that a calf induction protocol is a very worthwhile thing, especially on farms where multiple people may be responsible for aspects of that calf’s care. A good calf induction protocol will include aspects of colostrum man-

animal health rob bonanno

agement, umbilical care, timely removal from the mother and attachment of a permanent ID and also some record of the ease of calving etc. Identifying the calf is critical for the integrity of the pedigree information, but also allows a calf health record to begin for the animal.

Hello? Anybody out there to Care for me?

Don’t worry little fella…. we’re coming. Watch this space.

A calf can have its colostrum volume, quality and time of feeding recorded so that a written record exists that confirms that the colostrum feeding protocol was followed. In addition to this, if any quantitative testing (like blood protein or IgG levels) is being done to actually measure whether the passive transfer of immunity has been successful, it can also be recorded on the calf health card. Treatments or signs of illness can also be recorded for each calf in the pen which can help other workers to know whether there is any relevant health issues to monitor and also to maintain compliance with treatment plans and withholding periods which will reduce the risk of antibiotic or other residues. Rearing healthy calves is all about ensuring that their basic needs are being met. It is essential that after managing the transfer of antibodies to the calf via the colostrum, that the other critical requirements are also met. Calf housing is a huge variable that can influence the success or otherwise of your calf rearing enterprise. Broadly generalising, the aim should be to provide a warm, dry, draft free environment, with sufficient bedding to maintain cleanliness and allow for normal behaviours. Air quality issues must be addressed to prevent respiratory disease But having good (or bad) facilities alone is not always the most significant factor. I have seen farms that have spectacularly good results in what I would consider quite poor facilities and others with good facilities that have poor calf rearing outcomes. The critical difference is often the “care factor”.

This includes things like hygiene, feeding consistency, feed quality, attention to detail and early recognition of illness, making a thorough diagnosis and following up with the appropriate treatment or prevention strategy. As I write this, one particular client of mine springs to mind. She is absolutely fastidious with her calf rearing and is extremely invested in the outcome of every calf. She monitors the health of the calves very closely and reports and reacts quickly to any calves that skip a meal or look unwell. For that reason, she often worries that she has more calf diseases than “other” farmers. What I pointed out to her is that she might treat more calves than some others, we might diagnose some pretty out there issues in her calves, but guess what? They lose about one calf per year. Some farms have losses that exceed 10% and yet if you asked them if they have a calf rearing problem they would probably say no! Keeping your calf rearing in perspective, and monitoring the morbidity (sickness) and mortality (deaths) and benchmarking that against your previous results and those of other farms of similar size is a very useful exercise. Developing protocols that ensure vaccinations are given at the right time, weaning is done in a smooth and consistent manner and heifers are monitored to ensure that they are hitting all their targets are all things that your local dairy veterinarian can help you to develop to ensure the best results with your calf rearing. • Rob Bonanno is a former president of the Australian Cattle Veterinarians Association and is a director of the Shepparton Veterinary Clinic.

GET SOCIAL WITH DAIRYNEWS READ THE LATEST STORIES FROM ANYWHERE CHECK OUT THE LATEST NEWS AND INFORMATION AT

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Dairy NewS AUSTRALIA june 2014

animal health  // 25

Maintaining diet of ‘elite athletes’ Dianna Ferguson describes her cows

as “elite athletes”, and like any elite athlete, they need the right diet. Dianna and her partner Steve Shipton milk 180-200 Friesians on their 263ha farm at Coolagalite, near Cobargo, in NSW supplying Bega Cheese. They have been involved in dairying full time since 2000 and remain passionate and committed to the industry. “Steve loves growing grass, I love seeing the cows kept in good order,” Ms Ferguson said. Her great grandparents started milking on the farm about 70 years ago. She and Mr Shipton started working on the farm in 2000 and bought into the property in 2004, firstly through purchasing cows, plant and equipment and then buying the property in 2010. They milk off less than half the dryland farm, the rest is used for dry cows and heifers and some cropping. Ms Ferguson grew up on the coast at Tathra and studied and worked in Canberra for six years before meeting Mr Shipton, who was a diesel mechanic and had come off a beef farm. From age eight most of her school holidays were spent at the Cobargo farm. “Some of my fondest memories are there,” she said. In 2000, the couple was returning to the farm to help out which solidified their passion. “That became our number one. We both love the cows and the land and work well together,” she said. “Whether it’s the cows and their genetics or a passion for working with the soils, there is a lot of reward in what we do on the dairy. It gives you a lot

revegetation works. “When it rains and you’ve got grass and cows

in good order, it is very rewarding. That’s what keeps you going,” she said.

Dianna Ferguson

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Who:

Dianna Ferguson and Steve Shipton Where:

Cobargo What:

Herd improvement

of fulfilment.” Since taking over the farm they have concentrated on increasing production. The farm today has a strong in-calf rate and a peak of 33 litres per cow in spring and averages of 28-29 litres across the year. “When you work hard and get cows in calf and produce milk like that, that is one of our proudest moments,” Ms Ferguson said. “We like to maintain their condition and have good feed throughout their lactation,” she said. The farm uses some purchased high quality tested concentrate and fodder feed, but aims to make as much home-grown feed and silage as possible depending on conditions. She admits the intensity has been challenging but at the same time rewarding. Dairying remains the predominant farming practice in the region, with about 80 local farms supplying Bega, and Ms Ferguson is confident about the future. She represents her area on the Far South Coast Dairy Development Group which likewise has gained momentum in recent years as optimism grows in the industry. Their farm has been involved in succession planning and an environmental program with Bega Cheese that has led to new laneways, biodiversity areas, creek crossings and

Ben McKenzie – Cobden, VICTORIA “Since using this product I have almost totally eliminated mastitis at calving and effectively removed mastitis issues from my herd… I have more than saved the cost of the Teatseal, antibiotic dry cow therapy and associated application labour by the massive reduction in lost milk, medical costs, time and culls.”

Mark Williams – Toolamba West, VICTORIA “The use of Teatseal is now an integral part of my herd management. The initial cost is far outweighed by the time and money saved treating clinical mastitis. Less stress on cows, staff and in particular management.”

Peter & Jeanette Clark – Korrine, VICTORIA “250 cows treated with Teatseal costs approximately $4,000. Milk from each cow saved - 7,000L at 35cents/L equals $2,450. So in our case, two cows saved [from being culled] more than pays for the Teatseal.”

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3/05/13 9:51 AM


Dairy News AUSTRALIA june 2014

26 //  calf rearing

Simple, low-cost changes accelerate calf growth RICK BAYNE

JESS FLEMING likens her calves to babies and like any proud mum she is determined to give them the best possible

upbringing. The Flemings’ Gorae West farm in south-west Victoria already had a low sickness and death rate but Jess wanted to strive for even better results. With husband Geoff

and his parents Peter and Gloria Thomas, Jess called on Gemma Chuck from The Vet Group to tighten their routine and introduce an accelerated calf rearing program. The changes included

Who:

Fleming family Where:

Gorae West What:

Accelerated calf rearing

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a stronger cleaning and hygiene protocol, new flooring in the shed, vents in the back walls and plans to add whirly gigs in the roof for increased ventilation and more natural light. There has been particular focus on feeding and although the program was introduced only this calving season, the benefits are already clear. “The calves are big and strong,” Jess said. “We’ve got one-month-old calves that look like they’re two months’ old. They drink their feed and then it’s straight into the hay. We’re topping up the hay and grain at a record rate which is brilliant because they are developing this lovely healthy rumen which is what we want.” Overall calf health is better and the Flemings expect to see more improvements as further changes are implemented. “We weren’t financially able to build a new calf shed and do a com-

plete change; we had to work within our financial restraints and make small changes. We were doing things the right way but just not 100%,” Jess said. The changes were designed to improve calf health and growth, introduce labour efficiencies and reduce the weaning time. “The average weaning age was about 16 weeks, based on weight. We had calves still in the shed when we had the next lot calving. It was getting messy and drawing out,” Jess said. “We had heifers on milk for a long time and were weaning at big weights, 120-160 kgs. We were looking for ways to tighten that up and to reduce the time we spent lugging buckets,” Jess said. The accelerated calf rearing program of putting powder into whole milk is labour intensive but having good results. They are also using Perfect Udder colostrum storage bags imported from America and they test the colostrum with a refractor meter to ensure it is top quality. “With the nozzle at the top, all you have to do is connect the tube feeder and feed directly from the bag, preventing cross contamination and handling. It’s reducing the risks.” Jess is a strong advocate of refractor meters – even going as far as buying two as birthday presents for friends and

Be one of the FIRST Australian dairy farmers to try these excellent calf rearing products. The first 50 farmers to email calfwise@thevetgroup.com.au for more information will receive a FREE Perfect Udder sample kit For more information contact: 1300 838 700 www.thevetgroup.com.au calfwise@thevetgroup.com.au

Geoff Fleming at calving.

Jess Fleming

family. “If I can encourage better colostrum management and healthy calves not only on my farm but others, that’s great,” she said. “It is very affordable and takes about 20 seconds to test colostrum to know that it’s good. People say it looks like good colostrum but you can’t tell by looking at it. “Geoff and I make a game out of it - we have a go at judging it ourselves before getting the scientific data from the refractor meter. “All anecdotal claims are out the window when you have the results in front of you.” Apart from one calf with a random e-coli disease that survived and is healthy, the only illness this season was identified in three calves that accidentally didn’t receive their colostrum. “There are 50 calves in the shed and the only ones that got sick didn’t get colostrum – that’s good enough for me,” Jess said. Jess describes good colostrum feeding as “calf care 101”. “A lot of people think they don’t have the time but studies show heifers that receive adequate amounts of colostrum grow better and we all know the old adage that big heifers excel…50kg extra weight at calving is 800 litres more milk over a lactation. It all ties in.” The farm has adopted a new cleaning and hygiene

protocol and used a mini digger to remove the previous floor and install a new bed of scoria, shadecloth and woodchips, along with vents in the back wall. “Straight away the calves seem to be happier,” Jess said. “Calves are born with no immune systems and giving your feeders a good scrub once a week isn’t enough. You wouldn’t feed your baby out of a bottle that was only cleaned once a week. They are valuable and you have to look at them like little babies and be very spot-on in sterilising and being clean and doing what you can, especially with the value of them at the moment. “At the end of the day we’re doing this because we want big happy healthy heifers that are going to milk well, get back in calf and put milk in the vat. That’s what every farmer wants.” The farm milks 300 cows and this year will have a full complement of about 100 heifers coming in. The Flemings also do some embryo transfer work, increasing the value of the heifers. “We go above and beyond to make sure even a calf from a pet gets its colostrum straight away. It feels really good to walk from giving that calf after giving the tested colostrum knowing that I’ve done the best I can to give that heifer a healthy life.”


Dairy NewS AUSTRALIA june 2014

calf rearing  // 27

Fresh water crucial to early calf development Zoe Vogels

WATER PLAYS a vital role in calf

health in several ways. The first is its effect on rumen development. Rumen bacteria are responsible for the fermentation of grain and the development of the lining of the rumen. These bacteria must live in a water environment. Without sufficient water, the bacteria cannot grow and rumen development is slowed. Ready access to water improves a calf’s grain intake and allows for earlier weaning. The second benefit of water is for calves that are sick and/or have the potential to become dehydrated (such as scouring calves, calves with pneumonia and recently transported calves). Let’s look at a 40kg calf that is scouring. Its daily fluid requirement consists of: ■■ Maintenance requirements (ie the amount needed to live) of 2-4L per day. ■■ The amount lost in the scour of 2–6L per day. This gives us a minimum of 6L of fluid required each day. In most cases this requirement will not be met by milk feeding alone and the calf will become dehydrated. If given free access to water, calves will drink it – for example at 15°C they will drink almost 2L each day, while at 30°C they will drink more than 3L each day. Offering water is easy to do and can have an immediate impact on calf health. If you’re not already offering your calves free access to clean water from day one of age, during all seasons

feeders should be at the right height to allow easy access and protection from contamination by faeces (of both calves and birds). If possible provide warm water in cold weather. If using buckets it is worthwhile to have extras that are rotated so that all the water buckets can be scrubbed and dried thoroughly every week or so. Can we improve water absorption? Yes! When calves are sick water absorption can be improved by adding oral electrolytes. These are a mixture of salts and glucose that help draw water into the bloodstream and also address the electrolyte imbalances present in sick calves. Your local veterinarian will of the year, it’s time to do so. be able to help you choose the best How to provide water? There are many different options product. An individual sick calf will need at for providing water to calves. What suits best will depend on the housing least 2L of oral electrolytes daily in system but examples include water addition to its normal milk diet and bowls, buckets and nipple drinkers. free water access. This can be given The key thing is to choose a system that in between normal milk feeds with an interval of 2–4 hours. A calf with a allows for: ■■ Water to be watery scour that disappears into the changed every day bedding will need (not just refilled). “Water must be ■■ Easy cleaning . 2L feeds each changed every day two day. Why is regular In some changing and - not just refilled.” – Dr Zoe Vogels situations it will be cleaning so worth supplying important? Viruses the whole pen with shed by sick calves can survive in water for weeks, while oral electrolytes pre-emptively. These bacteria such as E. coli and Salmonella situations include: can survive for months, infecting other ■■ When you have a scour or calves in the same pen or – if using pneumonia outbreak. communal troughs – calves in other ■■ As the first feed to bought in calves pens. after the stress of travel. Water feeders should ideally be ■■ In hot weather. located at the front of the pen where Oral electrolytes should be mixed as milk is fed, away from the dry resting per label instructions with clean, warm area at the back of the pen. Water water.

For calves that won’t willingly suck oral electrolytes or if there are many to treat, tube feeding oral electrolytes can help make the task more efficient. It is essential that you have training in how to tube feed calves as the outcome can be fatal if it is not done properly. If you are inexperienced or worried about this procedure your veterinarian will be able to help you. Clean water and oral electrolytes are readily available and cost effective.

Together they can make such a difference in calf health: increased starter intake, earlier weaning and reduced mortality. Every calf needs water – plain and simple. • Zoe Vogels is a dairy veterinarian at The Vet Group in Timboon with a special interest in calf health and management. She will be talking on water and oral electrolytes for calves at the World Buiatrics Conference in Cairns later this year.

LD RD GO DA lk N i s A ST r M cer

fo pla Re


Dairy News AUSTRALIA june 2014

28 //  calf rearing

UV makes calf feeding more efficient “The calves are doing well and it’s nice to know that the nasty bugs are being eliminated”, says Hayley Menzies of Nowra, NSW, about the innovative milk purification system that she and her husband, Stewart, installed at the dairy in August last year. Stewart and Hayley run Cairnsdale Holsteins and

Rivendell Jerseys, with their 580 cow milking herd comprising 50% Holsteins and 50% Jerseys with yearround calving. The calves are fed on milk that has been processed through their WestfaliaSurge UV Pure ultraviolet calf milk purifier, and so far, says Mrs Menzies, they have

used the unit for feeding between 200 and 300 calves. The UV Pure is a modular unit built around stainless steel UV turbulators. The UV lamp is inserted into a quartz tube allowing the light to penetrate the milk as it passes over the tube and into a separate 500 litre calf milk vat.

A hot water circuit allows cold milk to be brought up to feeding temperature. Waste milk from mastitis cows is often discarded, but if treated properly to lower bacterial or pathogen levels it can replace milk sources that calf-rearers would otherwise need to purchase. The ultraviolet light in the Westfalia-

Surge UV Pure system penetrates bacterial cells in the milk, destroying their DNA bonds, killing the bacteria and eliminating their ability to reproduce and grow. It kills the bacteria without affecting the nutrient value of the milk, and the immune factors and proteins remain

“WE FEED OUR CALVES SUPER P PELLETS. THEY HAVE A GREAT TASTE AND THE CALVES LOVE THEM.” STEPHEN SINCLAIR, STONY CREEK VICTORIA

Super P from Castlegate James is a high-protein pelleted stock feed specifically designed to supplement dairy cattle during times when pasture quality is poor due to dry conditions. It is very palatable with a protein level of 15% and a high energy formulation (M.E. 12.5 MJ/kg). The high fibre content of Super P aids in reducing acidosis and improves animal health when compared with traditional pellets.

A typical installation of a WestfaliaSurge UV Pure calf milk purifying system.

unchanged. Vitamins A, B6, B12 and C remain intact and there is even an increase in Vitamin D, which does not occur with traditional heat pasteurisation. The milk is never heated above feeding temperature, helping to preserve the milk’s beneficial immunoglobulins. Mrs Menzies oversees a couple of workers who look after the calf feeding. “The UV Pure keeps the milk warm, which is a big bonus; it’s the same temperature every day. Previously our calves were getting cold milk. The way our dairy is set up, often the plate cooler was cooling down the bucket milk by the time we fed the calves. “So now we are utilising more of our milk, we know the calves are getting good quality milk and we are not really dumping any milk at all. “We hadn’t really experienced problems with the calves, but we saw this as a

To contact your local representative and find out how this exceptional feed can assist the growth and health of your calves call 03 8311 2200. Castlegatejames.com.au

Quality Stockfeeds

AUSTRALASIA’S LARGEST AND MOST INNOVATIVE SUPPLIER OF CO-PRODUCT STOCK FEEDS Stewart and Hayley Menzies.

way to utilise more of our high cell count fresh milk and to keep it at a set temperature.” The WestfaliaSurge UV Pure is fully-automated with minimal training required for operators. It will start automatically at pre-set times and calculates the required process time for the amount of milk, reducing time and energy. It incorporates a fully automatic ‘clean-in-place’ wash process after every batch with the correct wash solutions to ensure proper cleaning. “We find it really simple and easy to use”, Mrs Menzies said. “We needed to be able to feed the calves after the morning milking, because our staff have kids that they need to drop off to school. “We add a probiotic to the milk which works really well. It’s a nice blend of the good bugs to help the calves.


Dairy NewS AUSTRALIA june 2014

calf rearing  // 29

Poor colostrum collection increases infection risk However, researchers continued to develop and refine the heat-treatment process and have established a method that kills the major pathogens in colosIT IS WIDELY known that feeding trum but also maintains antibody levels. good quality colostrum to calves as It is important to emphasise that soon as possible after birth helps prothis process is referred to as ‘heat-treatvide immunity to disease in the first 4-6 ment’ as opposed to ‘pasteurisation’ weeks of life. because the temperature and duration However, colostrum can also be a of treatment do not meet the specificasource of some major infectious distions of traditional heat pasteurisation. eases to calves such as E. coli, SalIndependent research has shown monella, Bovine Johne’s Disease and that compared to other processes, Mycoplasma. such as UV treatment, These pathogens can be heat-treatment of colosshed directly into colostrum Colostrum collection can be timetrum offers superior from an infected cow or can killing ability of E. coli, be a result of faecal contam- consuming and allows many Salmonella, E. coli, ination during the collection opportunities for contamination. Bovine Johne’s Disease and storage process. Daily washing of all collection (and and Mycoplasma and has significantly Along with the direct disease-causing effects of these pathogens, their feeding equipment) is vital to prevent less impact on antibody levels. A study in the USA showed that presence interferes with the absorption the accumulation of pathogens. Colostrum and milk residues should calves fed heat-treated colostrum had of colostral antibodies by the calf, thus be washed off with lukewarm water better transfer of immunity at 24 hours reducing their immunity to disease. of age compared to calves fed fresh, raw The hygienic collection, storage and first. Then add 60ml household bleach colostrum. The same calves had a sigsubsequent feeding of colostrum to newborn calves is a multi-step process. per 20 litres of hot water and a ‘squirt’ of nificantly reduced risk of scours or any This process is time-consuming and detergent and thoroughly scrub all sur- other illness in the pre-weaning period. A shortfall of fresh colostrum may allows many opportunities for contam- faces. Allow buckets and feeding equiparise at the beginning of calving. ment to dry upside down. ination of colostrum. Storage of colostrum, either in the Over the past decade, colostrum Typically on farm, colostrum is collected from freshly calved cows and and waste milk have been the topic of refrigerator or freezer, allows convemuch research looking to reduce bac- nient availability at all times but is not stored in buckets. But there may be many more steps terial content and improve transfer of without its challenges. Dairy farmers commonly say that before this colostrum is actually fed to immunity to calves. Various processes have been the collection of colostrum, transferthe calf such as the transfer to other buckets, smaller containers, tube feed- described from traditional pasteurisa- ring into a container, freezing, defrosting and then transferring into a tube tion to treatment with UV light. ers and teat feeders. In the early days of this research, feeder, is a slow and inefficient process. Research has shown that very little bacteria is present in colostrum taken traditional pasteurisation produced a All these steps increase the risk of conproduct that was thick in consistency tamination. directly from the udder. The Perfect Udder colostrum manIn one study, there was nearly four and too difficult to feed. In addition, the times the bacteria present in colostrum pasteurisation process destroyed anti- agement system allows colostrum to be transferred directly into one bag, from the dairy-floor bucket compared bodies to unacceptable levels. gemma chuck

to that taken directly from the udder. Possible sources of contamination include the teat skin, milking cup liners, hoses or the bucket itself. Sub-optimal cleaning of collection buckets will exacerbate this problem. When collecting colostrum, the first milk produced in the udder, it is essential that cups are put on clean dry teats. Stainless steel collection buckets are preferable to plastic ones as they are easier to clean and do not become scratched.

Gorae West farmer Geoff Fleming uses the Perfect Udder bag to feed colostrum.

which can then be refrigerated, frozen, thawed, reheated or even heat-treated before being fed directly to the calf. There is no need to transfer colostrum between containers, improving efficiency and biosecurity. The Perfect Udder bags are single-use and come in two sizes: 3 litre and 4 litre allowing colostrum to be delivered in a single feed for larger calves. Smaller calves may need this volume split between two feeds. Heat-treatment of colostrum can be done as a batch prior to filling the bags or within the bags themselves. The design of the bags allows rapid and efficient thawing after freezing.

innovation

innovation

All Dairy Tech pasteurisers are programmed with a “Thaw cycle” to further accelerate this process. Attachable teats and tube feeders are provided and these are the only part of the system that is reused. Heat-treatment of colostrum and the Perfect Udder colostrum management system are innovative ways to improve colostrum cleanliness and therefore enhance transfer of immunity to calves. • Gemma Chuck is a veterinarian with The Vet Group, based in western Victoria. Contact the Vet Group for more information on the Perfect Udder range and heattreatment of colostrum.


Dairy News AUSTRALIA june 2014

30 //  calf rearing

Feed your calves in half the time CHALLENGED IN 2011

to come up with a means of easily transferring, mixing anad pumping milk or milk powder, Stallion Plastics staff conceived a system that went through

seven versions and onfarm trials. The company’s MTF was born out of that process, says CEO Grant Allen, who owns a dairy farm in Manawatu, NZ.

“Everything we manufacture is tested onfarm for ease of use and durability. “The best ideas are borne from need.” Its 4-stroke Honda

MTF is about feeding your calves in half the time.

motor can pump 600L/m, it has a stainless steel mixing system inside the tank, and it can mix 800L of milk powder in just three minutes, Allen says. “When it’s 3oC in the morning, milk powder floats on top of cold water. We designed the MTF to force milk powder under the water and into the pump, similar to a giant milkshake mixer. You can mix anything you need to in three minutes.” If you’re using whole milk, this can easily be pumped into the feeder direct from the silo. It takes two minutes to fill the tanker ready for transport. Set it up and let it fill while you do something else, Allen says. Once at the calf sheds all you need to do is start the motor and run it on low revs. The 5m hose with dispensing gun is long

enough to reach to the back pens so does away with 20L buckets and back-breaking work. “We can feed the calves in half the time it was taking us before and no wastage.” After feeding, park the feeder in the shade to reduce the risk of the milk spoiling. The tank is made of food-grade white plastic to reflect the sun. The MTF60 system allows feeding in the paddock or at the shed and in the paddock. Cleaning is simple: half fill the MTF with clean water and turn on the pump. It self-cleans the tank first and then the mixing system. Switch the small ball valve on the manifold and it will clean the manifold and teats in no more than three minutes. Contact Australian distributor, Daviesway, on 1800 666 269.

Calf rearing tips The work of rearing a healthy calf starts before birth, according to Dr Gemma Chuck of The Vet Group. “Accurate pregnancy testing is essential so that all cows have an adequate dry period prior to calving. Shorter dry periods can compromise colostrum quality. “Strategic vaccination can be also be used to boost antibodies in colostrum if expected calving dates have been calculated. If vaccines are given too early, the peak antibody response will decline before the calf is born and if given too late, the antibody response won’t occur in time. “New calves should be collected from the calving area at least twice daily and fed colostrum immediately. An appropriate volume may need to be split over two feeds. “The calf trailer, used to transport calves from the calving area to the calf shed, should also be washed daily and have appropriate non-slip flooring such as rubber or straw. A dirty calf trailer can be the source of infection for new born calves.” Other recommendations: ■■ Solid partitions of a non-porous material, such as corrugated iron or tin, between pens. ■■ Bedding such as woodchips with adequate drainage to prevent accumulation of wet, soiled bedding. ■■ A passive ventilation system to allow fresh air to circulate at the calf level without direct draught. ■■ Fresh water at the front of each pen. ■■ An individual milk-feeding system for each calf to avoid competition from other calves. ■■ Raised grain troughs to help prevent contamination with manure. ■■ Thorough cleaning of calf pens between groups of calves.


Dairy NewS AUSTRALIA june 2014

calf rearing  // 31

Calving cows on camera CALVING COWS adds

extra work and stress in any dairy operation. The demands are intense in seasonal or split calving systems where large numbers of cows calve over brief periods. In year round calving systems, it’s an on-going chore. Dr Cameron Clark, from the FutureDairy team, will give a sneak preview of some technologies that could take the sting out of calving at this year’s Dairy Research Foundation’s symposium. One example is the use of a rumination monitor to

predict the day of calving by comparing day-to-day rumination levels. The monitors are commercially available for heat detection; FutureDairy’s work could add in a calving prediction mode, which would make them multifunctional. Another example is the use of an accelerometer to monitor cow activity. The FutureDairy team is investigating ways of monitoring activity levels to alert farmers to cows with calving difficulty or post calving health issues. The team has also investigated the use of

weatherproof CCTV cameras in the maternity paddock for remote monitoring of cows close to calving. A small number of Australian farmers are already using CCTV cameras in maternity sheds or calving pads to monitor calving progress from a home PC or mobile phone. The FutureDairy team is looking at their

To hear more about advances in technology for application on dairy farms, register for the Dairy Research Foundation

application for paddock calvings and the potential to use a process called ‘machine learning’ to enable the cameras to send an alert if a cow is having difficulty calving.

Symposium, to be held in the Hunter Valley on June 19-20, at www. drfsymposium.com or at 1800 177 636.

Technology such as weatherproof CCTV cameras (pictured) and collars to monitor rumination and cow activity could be used to monitor calving.

High protein pellets keep calf feeding simple AUTOMATION, TECHNOLOGY

and the KISS (keep it simple sir?) philosophy are the guiding principles for Stephen Sinclair in growing his dairy operation in Stony Creek, in Victoria’s South Gippsland region. The main farm, which has been in the family since 1916, covers 78 hectares, 66 of which are used for production, and they have a second property of 38 hectares. Mr Sinclair said that they always get a spring there. “Sometimes it’s short, other times it’s long but we also get something which means we can always make silage,” he said. “This season we made 1000 bales from the two locations. “Our cows are smaller-framed Friesian, Jersey and Friesian/Jersey cross; we aim to have our cows weigh

between 450 and 500 kilograms. Smaller cows are easier to manage, more efficient.” Mr Sinclair explained they have recently installed automatic calf feeders and two new silos, one for the calf shed and one for feeding dairy cattle during milking. “It makes life so much easier. I can get so much more done. The feeding system is so reliable. The feeders’ computers monitor the situation ensuring each calf is receiving their allotted daily feed. At the moment we are feeding powdered milk and Super P Pellets from Castlegate James. The Super P pellets have a great taste and the calves love them.” Super P is a high-protein pelleted stock feed specifically designed to supplement dairy cattle during times when pasture quality is poor due to dry

conditions. It is very palatable with a protein level of 15% and a high energy formulation (M.E. 12.5 MJ/kg). Castlegate James says the high fibre content (NDF%) of Super P aids in reducing acidosis and improves animal health when compared with traditional pellets. “We also use Super P pellets in the dairy,” Mr Sinclair said. “It is high in protein, so Super P pellets are fed during milking. The cows lick the feeders clean every milking. Our cows receive 6 Kg per day and could not be happier.” Mr Sinclair has a very pragmatic approach to feeding. “It’s got to be simple and cost effective. This season we started feeding pellets at a rate of four kilograms per cow per day and then our milk price increased so we went to five kilograms, and again the milk price increased some

more so now we are at six kilograms per cow. “Even at six kilograms the cows clean up; they leave nothing in the feed bin. The cows also receive pasture, hay and silage.

“Feeding Super P Pellets from Castlegate James means we can focus on growing the farm operation without having to spend time mixing feeds.” Tel. Castlegate James Australasia (03) 8311 2200.


Dairy News AUSTRALIA june 2014

32 //  machinery & products

New Case IH baler tackles the toughest crop conditions CASE IH has unveiled

a new generation of hay balers, with the Australian release of the RB5 Series round baler. Redesigned for the toughest crops and conditions, the RB5 Series features a superior bale shape and density.

With modern bestin-class styling, the RB455 and RB465 offer advanced features compared to their RB-4 Series predecessors. Geoff Rendell, Case IH product manager for hay and harvest, said the variable chamber round

balers are the result of three years’ rigorous worldwide field testing. “We tested the balers worldwide in a variety of conditions, and found that the RB5 Series has an increased capacity of up to 20% and a bale density improvement of up to 5%

over the previous RB4 series,” Mr Rendell said. The RB455 and RB465 produce bales of up to 1.5m and 1.8m in diameter respectively. Both models also feature a new dual cylinder hydraulic density system.

“After a month with ADF our mastitis cases dropped by two-thirds.” Darren Merritt, Western Australia

Automatic Dipping & Flushing The ADF milking system dips and flushes automatically so you can be sure you are targeting mastitis at the right time, every time.

■■ Rubber mounted Case IH has “The two cylinders repositioned the baler have 2000 psi, providing tynes for optimal augers so the crop is more force than a single performance. ■■ New endless belt fed into the centre line, cylinder at 2600 psi – increasing capacity. Since increasing bale density,” with a true spliceless the pickup guards are Mr Rendell said. design. ■■ Rotor feed and The enhanced five-bar the same height, there’s pickup reels feature rotor cut bigger, stronger configurations Farmers get more components. to choose from. consistent feeding, “By boosting the Both RB455 number of pickup and RB465 a more efficient reel bars from four balers feature movement of crop to five, farmers get a new ISOBUS from the pickup to the electrical more consistent feeder, and more tynes system, feeding, a more efficient movement granting greater to get all of the crop of crop from the control. picked – especially pickup to the feeder, They come short crops. and more tynes to standard with get all of the crop the AFS Pro 300 a better transfer of the picked – especially short touch screen, offering crop from the augers to crops.” better graphics, easier the rotor, Mr Rendell There’s also a new navigation and a touch two-metre wide overshot said. screen. Or you can use The balers include: rotor pickup, for more the new baler with an ■■ A new enhanced net aggressive feeding. existing virtual terminal “This eliminates crop wrap system, with easy on any ISOBUS-equipped hesitation, resulting in tractor. tractor hook-up. ■■ New optional twine a more consistent crop There’s also a new mat fed into the bale CAN-based electrical wrap system for chamber, giving an even system, with an H-Bridge greater accuracy . ■■ More durable endless bale formation. Plus, the used to control power to in-line augers handle the electric motors. The bale chamber belts. ■■ New in-cab controlled heavy thick windrows, solid-state design is more dramatically reducing the durable than mechanical drop floor for rotor chance of plugging.” relays used previously. unplugging.

Case IH’s new RB5 Series round baler offers greater capacity and durability with superior bale shape and density.

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Dairy NewS AUSTRALIA june 2014

machinery & products  // 33

Whoppa Choppa attacks silage bales with zest TWENTY-ONE YEARS after purchasing his first Whoppa Choppa, Darryl Light from Drouin South, near Warragul, in South Gippsland, has just upgraded to the latest model. Mr Light milks 120 Jerseys on a couple of Lely A4 Astronaut robots at Jadell Jersey Stud and he told us that he even bought his first Whoppa Choppa second-hand, to cut and feed out fodder effectively and efficiently. He was so impressed with its performance and longevity that when it had tired out he ordered another one through Graham Wood’s Machinery at Grantville, about 50kms away in South Gippsland. The old model now sits forlornly in a paddock near the dairy. Mr Wood said in the early 1990s he saw a need for farmers to be able to more efficiently feed out round-bale silage. So he designed a machine that could quickly and easily feed fodder without having to constantly leave the tractor. This led to the development of the Whoppa Choppa.  It has a patented chopping action which results in a variable chop size of 25mm to 125mm, the optimum length for maximum rumen intake and digestibility, with-

working clothes chris dingle out pulverizing the leaf. Regular farmer-driven upgrades have produced the latest advanced models. When we visited at the end of April, Mr Light’s new model Whoppa Choppa had been on the property for a fortnight. He is putting two round bales through a day – 30 bales in the fortnight. They take 10 minutes each to chop up. One round bale will usually stretch to form a 50 to 150 metre long neat windrow after being processed through the machine. “It chops everything, so cows get the most out of it. We get 25% extra from each bale,” Mr Light told us. “If the cows don’t need to chomp it up, they get into it quicker. It cuts it up nicely and makes it more palatable. “I put mostly pasture silage through. It does all types of bales.

Darryl Light with his new Whoppa Choppa.

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Mr Light said that maintenance is relatively low, mainly greasing the machine at regular intervals and occasionally sharpening the cutting knives.

Who:

Darryl Light Where:

Drouin South What:

Whoppa Choppa

We’ve had canola hay and at one stage corn stalks.” The Whoppa Choppa has height adjustable telescopic control to enable it to suit all types of tractors from 40 to 55 kW. It utilises a PTO-driven drum with rigid knife section blades for high speed positive cutting action, which means a lower power requirement. Hydraulically-operated forks lift and load a large square bale and also transport a second bale. The self-cleaning feed rollers move the bale onto the cutting drum knives which cut the fodder and discharge it in a neat narrow windrow onto the ground.

There is a side elevator on the new one that wasn’t part of the old one. “There are lots more operating options,” Mr Light explained. “It’s gone from one lever to three levers to operate.” The machine has three feed rollers with the bottom two operated by a variable speed hydraulic motor. Hydraulically operated rear loading forks and table door can handle round and square bales. There is a separate circuit for the top feed roller to operate independently of the bottom feed roller and an over-run clutch on the PTO shaft is standard. Mr Light chose to take the optional full width hydraulicallyoperated elevator to distribute the feed into a feed pad or trough. He operates the Whoppa Choppa behind his 83 horsepower David Brown 1490 which is a one of a number of collectible David Brown tractors which Mr Light has on the property, either completed or in a state of restoration.

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Dairy News AUSTRALIA june 2014

34 //  machinery & products

Backhoe the backbone of a dairy farm It’s been said at

various times that I have a single-minded obsession with tractors. That’s not true. Amongst other things, I’m a big fan of the humble backhoe. While even the best front-end loader is ultimately still an

This 1987 JCB 3CX backhoe gave good service, but ended up getting swapped for a load of cereal hay.

grunt

john droppert

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appendage bolted onto your tractor, a backhoe is built around its loader and hoe. They’re designed to shift things, and they do it well. In fact, I’ll go so far as to say that every serious farm should have one. Big call? Maybe, but in the early days of my parents’ dairy farm the backhoe was the first machinery purchase for the new venture. Granted there was a lot more development work to be done back then, but the usage it got never slowed. For every occasion where we thought we’d soon run out of things for it to do, there’d be a swag of new jobs pop up. So much so that the first one is long gone now, and a newer model has taken its place. The original was a 1987 JCB 3CX, bought well past its prime but with plenty of life left. It had a pretty basic Perkins engine, fourspeed manual gearbox with an electric forwardreverse shuttle, and four tyres of which no two had the same tread. It was 2wd, had none of the fancy 4-in-1 bucket, extenda-hoe or quickhitch features that are now virtually standard, and the air conditioner was ambitiously named at best. Turned out a working air-con would have been a waste anyway, since somebody didn’t lock the cab door properly for the trip from the dealer’s yard. At some point on the truck along the freeway, the door blew open and slammed into the window behind it, destroying the glass in

both. Nobody accepted responsibility, and the glass was never replaced. The old JCBs are a ripper of a machine. Ours dug, filled, backfilled, pushed, levelled, loaded gravel, unloaded hay, leaked oil and blew a lot of smoke. I jump started it more times than I care to remember. The fuel gauge didn’t work, but it never used much diesel anyway. Every so often a bearing would go and a front wheel would fall off; an hour later you were back up and running. Got bogged? No problem – you could dig yourself out. Got something else bogged? If you didn’t go for the backhoe straight away, you usually ended up wondering why you hadn’t. One day it just caught fire in the shed. We saw the smoke, chained it up to the tractor and dragged it out into the rain. The auto electrician came out later that week for a look and had the old Perkins motor re-wired in a couple of hours. Once a new air cleaner was fitted, it was back to work – scorch marks and all. The old 3CXs are unbelievably strong machines. You have trouble finding things they won’t lift. They’re simple, ugly, cheap and tough, though since they’re pushing 30 now, if everything works it’s almost cause for suspicion. These days you can pick them up for less than $20,000. Ours ended up getting swapped for a load of cereal hay. JCB make them a lot prettier now, but given how long the line has been around, they haven’t really had to change much. Not even the name. • John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.


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Dairy News Australia June 2014