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DAIRY NEWS AUSTRALIA JUNE 2016
NEWS // 3
Floods wreak havoc on Tassie dairies CAMERON WILSON
HUNDREDS OF dairy cows have
Milk sales claims under fire. PG.09
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Korean tractor catches the eye. PG.32
NEWS ......................................................3-13
been killed and farms across Tasmania have been severely damaged in the worst flooding many farmers have ever experienced. Major dairy regions around the state’s north-west coast and midnorth coast were amongst the worst hit, with Merseylea dairy farmer Luke Bloomfield losing more than 300 cows. “We’ve been breeding the cows up for quite a while on the farm ... it is heartbreaking for me. I’ve put a lot of time in,” he told the ABC. The Tasmanian Farmers and Graziers Association (TFGA) estimates that up to 1000 head of beef and dairy cows may have been lost around the Latrobe area. While farms near Meander, Launceston in the north-east and Ouse in the south have also suffered significant damage. A preliminary assessment by DairyTas indicated between 50 to 80 dairy farms have been severely hit by the flooding, with many more reporting some level of damage. TFGA dairy council president Andrew Lester escaped major damage on his Winnaleah farm, but said others have not been as lucky.
“We got out of it with only a few fences buggered but other than that we’re good, but when you get out to Latrobe it’s a different story,” he said. “There’s a group of farmers there that have been seriously devastated. They’re milking in different spots. One bloke’s dairy, the water went straight through that, so that’s no longer operational. “Another fella that lost most of his cows, his dairy is still alright but he’s only milking what he’s got left.
“One bloke is still watching his cows through binoculars, they’re standing on an island out in the middle of nowhere, so that’s a bit of a bugger.” Many dairy farmers are preparing be cut off from milk collection for an extended period as more than 100 roads were closed immediately after the flooding and dozens of bridges were washed away. While animal health and feed shortages are expected to become
major problems for the industry, Mark Smith from DairyTas said the immediate priority was to asses the extent of damage and prepare a case for state and federal government assistance. Tasmanian farmers needing immediate help are being encouraged to access the Rural Relief Fund through Rural Business Tasmania. Donations to the fund can also be made at www.ruralbusinesstasmania. org.au/Relief-Fund
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WORLD NEWS .................................. 14-15 AROUND THE REGIONS ............. 16-17 MARKETS ...........................................18-19 OPINION ............................................. 20-21 MANAGEMENT ...............................22-23 ANIMAL HEALTH .......................... 24-25 CALF REARING ............................... 26-31 MACHINERY & PRODUCTS ...................................... 32-34
SOUTH-WEST VICTORIAN dairy farmer Jessa Fleming is hoping to raise $30,000 for flood affected Tasmanian farmers. Ms Fleming began a ‘gofundme’ campaign after seeing photographs of stranded cows and damaged farms on social media. “I saw a lot of the images on Facebook of herds of cows being taken by the floods and knew I couldn’t get down there to help but couldn’t do nothing either,” she said. “I’ve been to a lot of these areas and I’ve vis-
ited a lot of these farmers, so it was quite emotional.” An aerial shot of stranded Jersey cows on Geoff and Ann Heazlewood’s farm at Latrobe (pictured above) was one of the images that triggered Ms Fleming to act. She has since followed up the fortunes of the cows pictured and said most survived and are now being cared for by the owners of Calthorpe Holsteins next door. Ms Fleming initially hoped to raise $10,000 but revised that up after receiving two donations of
$1000 within an hour of opening the campaign. “I had no idea it would have this kind of response, I thought if we got a couple of thousand dollars that would be great.” Half the money raised will be donated to Shout a Mate, a group that offers grain for farmers, while the remainder will be spent on veterinary care administered through the Rural Relief Fund. • At the time of press the campaign had raised nearly $13,000.Donations can be made at www.gofundme.com/286bqnpw
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DAIRY NEWS AUSTRALIA APRIL 2016
DAIRY NEWS AUSTRALIA JUNE 2016
OPINION // 19
4 // NEWS
LETTER TO THE EDITOR
to now for ACCC the best Where the dairy industry? Time independent review of hopefor foranchange Dairy Australia’s value to farmers says Joyce Dianne Bowles, farmer, Meade, Victoria
“I’M A fan of the floor price proposal that people are
ON BEHALF of Farmer Power, which JEANETTE SEVERS represents dairy farmer members THE Prime in theDEPUTY south-west Minister and Federal of Victoria, we Agriculture Minister Barnaby applaud the stand Joyce says the ACCC is taken by Senator the best option for farmDavid Leyonhjelm ers seeking improve- in opposing changes ments to thethe relationship to the five year poll between producers, pro-of the dairy cessors andlevy.* retailers. In anare exclusive interWe concerned view with News that this Dairy is just the late lastillustration month, he reclatest of ommended dairy farmhow Dairy Australia ers apply to the ACCC fails to represent to investigate collusion the interests of dairy between dairy processors farmers and is an on price indicators. attempt “Thoseto areeliminate the mechafarmer’s democratic nisms available to farmers, rights to onus haveisaon say. where the provpanel ingThe truth,” Mr Joyce said. “We appointed a very that developed goodproposals Commissioner in the Mickchanging Keogh to investigate for the issues in the agriculture levy process was sector.” dominated by He rejected calls for people who are not any return to regulation, independent of Dairy saying changes such Australia and as a floor price orwho levy therefore have a would not get political
putting up because it gives people certainty. I would also love to see unity in the dairy industry occur. “We have a critical mass of people providing a product that is in every household and I think we could be very powerful if we got our sh*it together. trend levels while the Productivity “Ithe don’t think there is one answer.The Whatcurrent I would like profit margins of Commission for a for farmers exit to see is a bit of turnover and renewal in dairy leadership because a lot oftopeople the manufacturers that have been the voice of dairy been thereview voice of dairy a very long trulyhave objective thefor industry (bytime. “If people are unhappy, theyofshould up and and be counted. It’s no good whingincrease. Dairystand Australia selling their farms ing andhas complaining behindthe the value scenes it about everything your hat in the This led delivers to –toput other producers And hopefully what hasfarmers happened encouraging toring. significant asiswell as the that.”
farmers to a single in which milk financial interest in meeting! production has fallen the outcome. Since its formation, from 11 billion litres The last levy poll, Dairy Australia has to just over 8 billion which reportedly received around litres (while New cost Dairy Australia $500 million from Zealand’s production around $750,000, or converting to government. resulted in only more profitable beef John Droppert, Dairy Australia What farmers an estimated 600 “WE”VE COME from a traditional milk pricing production) should “What farmers witness are their funds witness are their dairy farmers system that was based on cooperatives and the stepfor ring alarm bells funds (typically attending workshops being spent on lavish events and offices, up system and the system isn’t the dominated by co-ops government, $5,000-$7,000 nationwide. annual forecasts consistently predicting anymore. So there isper an argument that the system but instead Dairy farm)reflect beingthe spent Australian Dairy doesn’t market as best it should in terms of improved milk production with no spreads lavish events Farmers, who a)on providing returns to farmersAustralia and b) providing the the strategies for achieving this, and a message that all is production incentives and offices, annualthat they need but also in terms contacted all licensed failure to advise the government about of risk management. We’veforecasts had two step downs in the lastwell. 6 or 7 years and it’s consistently dairy farmers calling the true state of the industry.” fair to say there is appetite in the industryimproved for more ability forAs farmers to manage the number predicting for farmers to risk. But in the same way you can choose to lock in fixed or variable interest rates milk production support these change, of farmers declines I think there is an appetite out there for farmers to be able to lock in milk prices with no strategies for further, Dairy did so with limited has doubled over the disillusionment Gippsland MPaDarren Chester compulsory levies on and we’ve seen milk companies experimenting with that. I think that’s one area with Agriculture Minister Barnaby achieving this, and a budget of around farmers in addition same period) and amongst Australia will to where thethe industry has a lot of scope to mature – giving farmers the option Joyce at Heyfield last month. failure to advise the $3,000-$5,000, which to around $300m the number of dairy remaining dairy presumably need to manage their risk.” government about elicited a response in government farmers has shrunk farmers about how recommendations of firm endorsement. said. continually ramp up the true state of the from only a small funding (withand noflat from 23,000 to for 6,500. their industry is run, Joel price forecasts “I wouldn’t get sup“We’ve known Fitzgibbon, the levy even more industry. Minister for Agriculture, minority of National farmers. price structures. port from my some time thereof were Shadow direct financial The board as is well illustrated in order to secure its “We’ve spoken with the Dairy Party nor from inequities in the relationAustralia’s dairy Wecolleagues, believe they do contribution from Australia by the fast declining ALP own survival. ACCCmanufacturers in the context that the Liberal Labor dairy ship between farmers and membership of the “THE GOVERNMENT should join Labor in comexports used to not reflectParty the or views appears to be heavily Chris Gleeson, they’re pursuing an inves- influenced Party the lower house Murray Goulburn and mitting to review the use of ‘claw-back’ provisions in account for about of theinmajority, and or despite their presence by dairy Australian Dairy Crossley VIC tigation into the fairness Senate,” Mr Joyce said. Fonterra. Ultimately we’ll agricultural commodity contracts and how limiting or 50% of milk produced the results are tainted on the board). manufacturing Farmers as well as The United Dairyfarm- of the supply agreements be looking at agreements restricting their use could improve price transparency On behalf of but this has fallen by a failed process. Far from advancing interests, and has state bodies. and the status of those ers of Victoria (UDV) with all dairy processors. for farmers. Farmer Power to around 25%, and Farmer Power, which the interests of watched the farmgate We repeat our agreements to enable the confirmed it is pursuing “We’d welcome “The dairy farmers affected by the current crisis have *Ed note: The changes dairy farmers, price for milk previous calls made Australia could well has no funding companies to claw back an investigation by the strongly flat price strucbeen caught out by contract provisions that had rarely been passed Dairy AustraliaUDV has being at well to the Minister for be aexercised net importer of and have base, their payments,” ACCC.has been able tures inkept the dairy indusbeen in the past, whichsince few realised overseen an industry below sustainable Agriculture and milk in 10 years’ time. into law. to attract over 600 spokesman Vin Delahunty try. We’re hoping that the Expectations include could lead to them being saddled with hundreds of thousands of dollars in debt.
GOT SOMETHING ON YOUR MIND? GOT SOMETHING on your mind about the latest issues affecting our dairy industry? Put your pen to paper or your fingers to your keyboard, and let our readers know what you think. Don’t forget to put your name and address. Note: Letters may be edited. (Names can be witheld from publication on request.)
LETTER TO THE EDITOR EDITOR@DAIRYNEWSAUSTRALIA.COM.AU
ACCC and ASIC investigations will result in more transparent price signals for all farmers [dairy, grain], including early indications of seasonal prices. “Dairy farmers make production decisions 12 months in advance and basically they’re getting retrospective pricing – that’s not healthy in the long term. Price signalling needs to be firm and early.” Early indications of the farmgate price were supported by dairy farmers. “We’d appreciate openness about what they’re quoting on,” said Alan Clyne from Upper Maffra. “What’s our opening price? That’s what we’re on edge about.” Mr Joyce also recommended diversity in agriculture for farmers during the current crisis. He was in Heyfield to announce a scheme supporting agroforestry EMAIL as another means of cash flow on farms.
“Australian farmers producing other agricultural commodities are also potentially exposed by the use of these provisions, which shift the cost of dealing with sudden price falls from huge entities to individual family farms. “Their use should be reviewed with a view to getting a better balance of protections for producers and growers.”
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“THE REALITY is that the government is not going to throw hundreds of millions of dollars at processors to prop them up so asking for that is a waste of time. Likewise they have three years ago rejected the proposed levy of 50 cents per litre on fresh milk sales. Farmers need to unite nationally and stand as farmers in a great industry fighting for all of our futures, not against each other. “A National Milk Pool is a trade based solution that can deliver real change for the industry at the farm gate. “This would in essence form a single desk collective bargaining arrangement whereby all milk produced would be sold through the milk pool to the processors at a price determined to be sustainable to the producer and indexed to cpi. “This would give control of the supply element back to the producer while still maintaining competition from processors for access to that supply.”
Adam Jenkins, President, United Dairyfarmers of Victoria “WE CAN’T continue to have this sort of volatility
and ups and downs and the farmers wearing the supply risk, as many of them have. “Some key acknowledgement from major stakeholders and the ACCC may deliver some tangible things that we can then say, ‘ok, we can now move forward.’ “This ability at the moment to overstate the market
Malcom Evans malcolm@evanscartoons.com
TO PAGE 12
DAIRY NEWS AUSTRALIA JUNE 2016
NEWS // 5
‘We don’t need government loans’ JEANETTE SEVERS
Wage subsidy ‘cheaper than benefits’ A WAGE subsidy could assist farmers retain skilled
A GROUP of Gippsland dairy-
farmers have suggested alternative recovery measures to those announced by the Federal Government, in a bid to better support dairy businesses to increase cash flow and continue trading. The suggestions came at a meeting of Macalister Irrigation District (MID) farmers, United Dairyfarmer of Victoria representatives and government and banking officials. There are 500 dairy farmers in the MID, based in Wellington Shire. The priority suggestion was to subsidise interest rates on existing mortgages and business loans, rather than expect dairy farmers to swap their debts to a government concessional loan scheme. Their argument was that utilising the government concessional loans scheme would impact on a farmer’s business relationship with their existing bank. Rural Finance, which is administering the government concessional loans scheme, would also require the farm’s title documents as security – their existing bank would be unlikely to release title documents they hold against current loans. There were serious concerns expressed that many farmers caught in a growth or establishing phase of their business would be unable to access the loans scheme because their bank debt was more than $1 million. Of the assistance packages recently announced by state and federal governments, other concerns included eligibility to the concessional loans scheme based on length of tenure in the dairy industry; assistance applicable only to Australian citizens; and drawing on Farm Management Depos-
Denison farmer Brad Missen pictured with children Nicholas and Zara. PHOTO: JEANETTE SEVERS
its without tax penalty, to help some farmers through their current financial crisis. An interest rate subsidy on their existing farm debt would be an enormous help, according to Nambrok’s Brett Matthews and Jason and Casey Bermingham, dairy farmers with young families. “We’ve already lost our profit for this year and next year and we’re now facing 18 months of pain knowing we’re running at a financial loss. An interest rate subsidy that you can tie to existing farm and business loans would help a lot,” Mr Matthews said. “And whatever package is offered should be based on the same eligibility criteria for everyone – not just Australians and not only dairy farmers tied to Murray Goulburn and Fonterra.” Mr Bermingham said subsidising the interest rate by 2.5% would make a huge difference. “It would mean we could go back to basics and buy more fertiliser, grow more grass. It would
support feed costs and give us so much more flexibility in the business,” he said. “We’d definitely be able to buy more fertiliser and keep grass growing. “We don’t want to move our loans to another bank – we want to retain the existing relationship we have with our current bank – that’s what’s going to help us in the long term.” Tinamba West’s Alistair Clyne said young farmers need the interest rate subsidy. “I think that will help a lot of people,” he said. Denison farmer Brad Missen emphasised industry participants were each other’s strength. “We are resilient and we can help each other – borrowing dairy platforms, helping each other with harvest and milking,” he said. “It’s up to us to come up with the solutions that will work for us in the next few seasons. Interest rate subsidies and assistance with retaining farm workers would free up cash flow which would help keep
a lot of dairyfarmers in the industry.” Both Mr Missen and Heyfield dairyfarmer and Genetics Australia (GA) board member, Trevor Henry, called on Dairy Australia to provide levy relief for farmers. GA had already offered levy relief to farmers, based on a guarantee of 80% of herd size against breeding commitment. “GA is a farmer cooperative and has a strong asset base so the Board decided it was a way we could support our customers, relieving their AI cost and ensuring they could still go forward with decent replacement heifers,” Mr Henry said. “While it’s an offer only available to shareholders, it can be taken up by new shareholders. “I think every organisation if they can afford to, should use their reserves in a similar way – Dairy Australia could provide similar levy relief to dairy farmers and help free up cash flow. “We want everyone to have a sustainable income.”
farm workers, many of whose ongoing employment was currently at risk. Concerned farmers raised issues about retaining those skilled workers in the district versus trying to train replacements in the future when finances improved; that some farm workers were from overseas and may not be eligible for standard assistance. Denison’s Brad Missen, who organised the gathering in the Macallister Irrigation District in Gippsland late last month, said lack of cash flow was the most common reason to reduce a dairy farm’s workforce. Paying a wage subsidy to retain workers on farm rather than pay them unemployment benefits would be better for the workers and the farmers. “We have 500 dairy farms in the MID – if we extrapolate that across Victoria, there is at least 4000 in the state. Most employ farm workers,” he said. “We’ve all got our own cash flow problems, but if we can keep our farm workers we will. Losing them is a critical skill loss that is a significant cost to agriculture.” The density of farm workers within a small area was apparent. “There are 10 farm workers who have been put off in an 8km radius of our farm,” said Denison farmer, Adrian Whitaker. Three of those farm workers were from his dairy farm. His neighbour, Jason Bermingham, also supported wage subsidies to keep his two farm workers employed on farm. “Labour support to help keep our two workers – it’s not just about the issues of rebuilding trust and retraining if they go – it’s also about supporting our own mental wellbeing and family life in the next 18 months,” he said. A Wellington Shire Council spokesman said losing a potential 300 farm workers from the Macalister Irrigation District would cost $46 million in lost business to the region. That would have ongoing financial ramifications for many small and medium sized rural businesses. “We need to keep them here for those reasons but also because it will relieve the stress our dairy farmers are under,” he said. Federal MP (Gippsland) Darren Chester agreed that supporting retention of farm workers was a financially cheaper option and better strategic decision for the government than those workers moving onto welfare assistance packages. He undertook to raise the issue with his colleagues. “A lot of Commonwealth resources go into supporting them when they’re unemployed,” he said.
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Dairy News AUSTRALIA june 2016
6 // news
DAIRY NEWS AUSTRALIA APRIL 2016
OPINION // 19
Don’t forget the Kiwi farmers in Oz ndependent review of
Leongatha farmer Tanya Privatera started posting photos of products without dairy to get the message out.
lia’s value to farmers Jeanette Severs
farmer Adrian Whitaker, with his brother, have upwards of $15million in debt across dairymilk business, Whitakerlevels Farms.while the The current trend gle intheir which the Productivity They are also New Zealanders production has fallen profit -margins of Commission for a for farmers to exit of about 200 in litres Victoria – the and manufacturers the mation, from 11 billion truly objective review the industry (by brothers doubted their eligibility has to just over 8 billion increase. of Dairy Australia and selling their farms for many of the government’sThis new has led d litres (while New the value it delivers to to other producers funding offerings. om Zealand’s production to significant farmers as well as the or converting to “When we applied for assistance government. after the floods, we were ineligible more profitable beef What farmers because we’re not Australian production) should mers witness are witness are their citizens,” he said.their funds ring alarm bells for funds (typically nt on lavish events checking and offices, Consequent with the government, Centrelink confirmedpredicting eligible New $5,000-$7,000 per ecasts consistently but instead Dairy Zealand residents owning dairy farm) being spent milk production with no Australia spreads the farms in Australia can only apply for on lavish events for achieving this, and a up to six months of Farm Household message that all is and offices, annual dvise the government Allowance, if they fit otherabout financial forecasts consistently well. criteria. Other financial assistance ate of the industry.” As the number predicting improved was unlikely to be accessible. milk production of farmers declines Mr Whitaker (pictured with his with no strategies for further, Dairy ies on has doubled over the disillusionment son), who was at a meeting of dairy achieving this, and a tion same period) and amongst the Australia will farmers in Maffra last month, felt failure to advise the m the number of dairy dairy more strategic help was remaining needed, presumably need to government about focussedhas on farm businesses.farmers about how farmers shrunk continually ramp up He23,000 was in support of subsidising the true state of the o from to 6,500. their industry is run, the levy even more their employment interest rates of on loans, to as help all securing industry. would of our debt in a year ago; we probably The board is well illustrated in order toit secure its us need to renegotiate now, to see make a big difference. We need to dairy Australia farmers, but was concerned Australia’s dairy om Dairy by the fast declining own survival. because about eligibility because of his lack keep a fair workforce exports usedwe to through the next year or two. urers appears to be heavily membership of the Kiwis, Gleeson, we can’t access can’t afford to sell off our young of Australian citizenship. account for about “As Chris esence influenced by dairy Australian Dairy and much in the way “We have an annual $150,000 stock just to lessen the workload on subsidiesCrossley VIC 50% of milk produced manufacturing Farmers as well as assistance. water bill and that still has to be paid everyone. If we sell off our young of financial On behalf of Even if thistohas ancing interests, has if we could stateget bodies. stock, what’s thatbut going dofallen to we could apply for the $1 million – it would and be good Farmer Power around 25%, and watched the farmgate We repeat maximum concessional loan from our our genetics to and therefore some assistance subsidising that,” *Ed note:our The changes price for milk previous production? calls made Australia could well the government, banks have the he said. have since been passed has being kept at well to the Minister for be a and net with importer of on our farms and they aren’t “I spoke to our bank our titles “We’ve had to put three going to into wantlaw. to give them up.” ustry below and security, we locked a fair bit time. sustainable employees off – some help with titles Agriculture and milk in 10 years’
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M.AU
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Social media helping farmers, consumers connect SOCIAL media sites are changing the way farmers talk to each other and to customers, especially since the farmgate milk price crash last month. Dianne Bowles from Meade in northern Victoria started the ‘Show Some #dairylove’ page shortly after the farm gate step down was announced. “I was feeling down in the dumps,” she said. “As an MG supplier I was very angry because I felt lied to and deceived. And that does remain a little bit but I thought I just need to do something positive out of this because there is just so much anger and uncertainty and it’s just not healthy for anyone.” The group has tapped in to something because it quickly spread to more than 5000 members in less than a week. “I didn’t start it thinking I’d have five and a half thousand people on it, it was just a little thing for me to do, to give me something to focus on,” Dianne said. She said the group was focused on showing other farmers and the wider community the pride dairy farmers have for what they do. Dianne said she deliberately made sure the page was independent of any other groups and only includes positive posts about dairying. She said some political or negative posts have been removed, but “considering how many members the site has, there hasn’t been a lot of negativity”. The page also acts as a link between consumers and producers. “What’s amazed me through the page is I’ve had people messaging me saying ‘can I adopt a farmer, can I adopt I cow?’ People genuinely wanting to know what
to do to help.” Dianne said she now felt a huge responsibility to the #dairylove community. “It’s extremely overwhelming and it could control my life, but I’m also aware that I’ve created something really special and I’m trying to use it as a great opportunity to get in people’s faces and promote the positive stuff.” For Tayna Privatera, from Leongatha in Gippsland, inspiration for her #dairyincrisis campaign came out of a desire to do ‘something’. “I thought ‘I’m not going to get involved in the nitty gritty of China and why this all happened’, because I’m not someone that studies and follows that, but I thought, ‘what can I do to get the word out to everyone how much this is going to affect rural communities?’” The response to the #dairyincrisis hashtag was immediate. “It’s been nuts,” she said. “I’ve been up to 12.30 each night answering everyone’s questions on social media. It just took off,” she says. “I just couldn’t believe how people were updating their own status as well.” Her first posts included photos (pictured) of herself or her family trying to stomach meals and snacks – such as coffee and cereal – without milk. She also posts images of dairy products that pay farmers a fair price. Despite the benefits of social media in bringing communities together and raising awareness, Dianne urged all participants to be cautious about what they say to media and online. “Once it’s there and you’ve said something, it is there forever.”
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aUsTraLia june february Dairy News AUSTRALIA 2016 2016
18 // // news markets 8
Price pressed slump nottechnology unique to dairy Cold delivers raw milk to shelves
tHe world economy has veered into some difficult and dangerous waters, suggesting 2016 will be a long hard year of slow recovery in prices in global food commodity markets – including dairy. Rick TheBayne perfect storm has struck. Major food and oilseed commodity pricesBUSINESS are at low points in the IT’S as usual for cycle New with inventories high.Stuart It’s not just food South Wales farmers and Hayley of course,even oil and other they’re major metal Menzies though now commodities are atofprices not seen for the sole suppliers a product touted about decade.first safe-to-drink raw as theaworld’s On the demand side, China, the milk. largest economy in the world, Madegrowth By Cow Cold Pressed Raw has the brakes on. Milk uses a cold-pressed process to Thistheyear with little ensure milk isstarted safe and approved for change in OPEC’s production consumption but requires high stance, quality and little hope for collaboration given source material. newHowever, tensions the between Saudihaven’t Arabia had and suppliers Iran. to change much because Made By Cow The outlook suggests a Menzies’s sustained founder Saxon Joye said the petroleum glut, unless is aalready strong farm at Numbaa south there of Berry surge in demand – which I’ll come back produced exceptionally high quality to later. milk. This process is playing like a “game The is out an alternative to theory” case study. The OPEC cartel conventional heat pasteurisation and started atoprice dominate the designed retainwar theto taste of raw milk. global market technology in the third “Theenergy cold-pressed is quarter of 2014, fairly simple,” Mrsignalling Joye said.their intent to “We increase production milk our Jersey herdand – thedrive milk out straight competing alternate low-cost goes into our bottles and then technologies (suchunder as shale oil) high and we put those bottles our cold renewable production using corn and water pressure system to eliminate any soybeans. harmful bacteria or pathogens. So much for the planet! This is about “It’s a three-part system – in addishort-term painful price competition tion to the technology we rely on careful to knock out rivals,and and ensuremilking a finite herd management hygienic energy resource remains thea dominant practices because we need very high choice for industry andprocess.” consumers. quality milk to use our Prices have driven to levels Mr Joye saidbeen Made By Cow had not seen since dairies 2004,and well below looked at several chose the Menzies’s farm because of its milk qual-
ity and hygienic milking practices. “They monitor every cow to check how they are performing and get an enormous amount of data,” he said. “They know every one of their cows by name. The cows are all well fed on pasture. Jersey milk works beautifully with the technology.” Mrs Menzies ageNDa said they “didn’t fresh have to jump through hoops” to make sTeve speNcer changes to meet the quality demanded. “We haven’t changed too much,” she the “We supposed costs said. alwaysbreak-even insist on clean cups,ofa production of crude for most clean platform, cleanoilteats, and major clean exporters. people with gloves and aprons. Historically, has long been “We use a prethere and post teat spray a help closekeep correlation crude to the cows’between udder health in oil prices and the prices major good condition and we use for heat-time food commodities, including dairy monitors. ingredients andherd’s feed grains. “The whole sematic cell count On the side it makes sense is fairly lowdemand anyway.” – weak economic The only structuralactivity changesreduces needed demand fuel and weaken were thefor addition of can a second vatsome and food markets. second wash system. thebulk trends While the of the lines farm’smove milk uncannilyto together, it doesn’tMrs mean oil continues supply Parmalat, Menis behind changes and grain zies said itthe was hoped in thedairy raw milk proprices. duce would provide a solid alternative. Dairy prices have slumped lowitself due “We’re hoping it will pay for to excessive supply from abundant grass quite quickly,” she said. growth, low taken feed grain prices the “They’ve two lots so and far and loss of athe couple of big from the predict volumes willbuyers increase. There global market. has been a general shift in the public to Grains and milk oilseeds markets are buying branded so I think this sort well-supplied to good weather in of product withdue take-off.” most major regions – our enemy El “They wanted a nice thick layer of Nino tends to be kind to many Northern cream on top. “Because the milk is not
Stuart andto Hayley Menzies This points a bigger worry, that Low oil prices have combined Hemisphere producers. provide their Jersey milk to a milk economy will raw be adversely Low oil prices can be a friend to dairy with sanctions to weaken the Russian the world processor marketing milk. economy, and have made a bad financial affected by the slowing of China – more producers. than opportunities. the economists at the IMF and situation state Cheap fuel the can Jersey lower milk the costs it,”far heworse said. in Venezuela. homogenised, beingofa behind currently suggesting. The effect thesethe dairy markets will World “WeBank pay are a premium but have an milkhigher production, reducing “We had toinfind right time and bit in fat and proteinequipment is a good Metal commodity prices low be uneven and recipe hard totopredict, as the expectation we get a really highare quality and for energy costs as well as the cost of cold pressure bring to mix them.” largely because dependence on oil, equivalent productionto costs, we’re reallyconstruction happy and so activity are our fertiliser. something the milk; At this stage the farm is sticking to its market and industrial outputis there in China government buying activities and farmers. If the market we’d have conLowherd crude oil under prices300. also make safety of heatfood pasteurisation.” existing of just stalled. financial of oil economies interstate options.” biofuel production launchstates has created enormous sider Mr Joye has been inless foodattractive, manufac- theThe Lowmilk metal commodity markets can vary significantly. The has longer shelf life which potentially ensuring moreand feedmigrated supplies interest and Mr Joye expected the first turing for about 20 years harm several developed and developing Butto thesell developing including could lead to easier distribution around which helps support margins,foreven out withinworld two days. to the cold process technology the stocks economies, hasdone a number largeatdairy country. weakening investment when dairy hasdifferent certainly MENA “We’ve a smallofbatch this the benefits it prices bringsfall. toThis many and trickling affect buyerstothat alsomarket oil importers whose activity Mr Joye said the down cold to pressure been the case for Northern Hemisphere stage seeare if the is interested foods. household discretionary economies should benefit hadsentiment very little and effect on original suppliers. another option,” he said. from lower system “The Holy Grail for us was could we in spending. andcan’t energy costs. and flavour. oil prices mixed predict how much produc- colour takeHowever, raw milk low and keep all thehave good stuff fuel“We Post-mining-boom Australia prices also “It tastes the same as raw milkisbuta effects onitdairy tionWeak we willoil need. Timemeanwhile will tell if people but make safe markets. to drink,” he said. good example this. steps in there.” ensure low for palm oil, used we have all theof safety In Joye the said developed EU and raw US embrace the prices less-messed-with product Mr the cold-pressed The Menzies US is another, with analysis widely as athe competitor Mrs said Stuart supported economies, cheap fuel a improves so far response and has substitute been very milk and passed through rigorous but suggesting for dairy ingredients. that claim. that low oil prices are likely household budgets, freeing up NSW a bit positive.” review and was approved by the rather than help economy So on balance the to hurt “He says it tastes like that it’s just out of more Authority. cash for dining out. Initially launched– inwhat NSW,does Mr Joye Food if they future holdByfor oil would pricesconsider and the global vat”. stay lower longer, despite We’ve already US food service Made Cow inter- the “There is a lotseen of scientific rigour said lower costs of running SUVs and road grow strongly in 2015 soaking up more economy? One important but odd indicator of transport fleets. cheese and milk. The question is So dairy commodities are not alone whether it can keep that growth rate economic conditions is the Baltic Dry as bottom-dwellers – most hard and soft Index of shipping costs. surging in 2016. The index has long been a forward commodity prices are at historic lows, Lower fuel costs can improve economic prospects for countries indicator of the fortunes of the world for many reasons – including some that New research to tackle weed problem Farmer fined for poor recordkeeping dependent on fuel imports, lowering economy, and is now the lowest since are interrelated. The unwinding of this situation A NEW research project Development Corporaly invasive and damaging THE Fair Work Ombudsman visa-holders Gurmakh Dosanjh, a farmer at is in 1985. from disputes overall costs of manufacturing and its inception will look to find effective tion (RIRDC) $6.2 million weeds: African boxthorn, (FWO) isshipping conducting completed by the last the same Sandy NSW MidforBeach them on as itthe is for dairy. reflects theagency slowing transport, including anda na- This largely biocontrol solutions for to fund the four-year cabomba, prickly acacia, review of the wages and calendar year – an average of Northdemand Coast, for records of 60 Dairy will be stimulated improving thetional affordability of dairy of trade in and out of China as it 10 of Australia’s most project. sagittaria, silverleaf conditions of overseas workers $4317 each. casual employees which were with more affordable food and transitions toItacomes consumer-led economy imports. invasive weeds. The project aims to nightshade, fleabane, in Australia on the 417 working as a NSW blueber- limited to their first names goods. from one. employed doz- consumer On the other hand, visa thereafter are risks The project has improve the long-term sowthistle, mother-ofholiday receiving al-a trade-driven ry farmer who and how many buckets they Low milk prices will eventually been granted funding profitability of primary millions, giant rat’sfor taildairy demand, legations that operators of overseas backpackers picked. It alsoensreflects the build-up of as low oilsome prices through the Australian producers by developing grass and ox-eye daisy, exploiting to pick crop was Judge Altobelli supply found that production, will slow thehis promise thatpenalised China discourage can harm thewere economies in backpackers. some capacity with Government’s R&D for biocontrol solutions that which were selected after The Fair Work Ombuds$13,005 last month for seriousandDosanjh’s contraventions were stockpiles will reduce to normal major oil-producing regions which (and its hunger for two-way trade) Profit program which will reduce the ongoing extensive consultation man recovered more than $2.2 record-keeping failures. not deliberate, but that “his levels. would just keep are also large dairy importers, such as will provide the Rural costs of weed control. with industry and farmer million in underpaid wages Thegrowing. Federal Circuit Court culpability cannot be obviated, The sobering reality for dairy is that suggests demand side those in the Middle East, North Africa Industries Research and It will focus on 10 high- groups. and entitlements for 513 The index imposed thethe penalty against or mitigated, by ignorance.” (together known as MENA), Russia and of the oil market will be sluggish for these effects may take all of 2016 to develop and then some. some time. Venezuela.
in brief
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DAIRY NEWS AUSTRALIA JUNE 2016
NEWS // 9
Debate rages about impact of $1L milk DAIRY AUSTRALIA has come
under fire for playing down the impacts of the $1 litre milk in its latest Situation and Outlook report. The report says volumes of drinking milk have grown by 2.8% and 3.3% in the first two years slowing thereafter to the population growth rate and slightly further over the last two years. This is despite predictions the introduction of $1 litre milk five years ago would lead to an overall decline in retail value of drinking milk sales. The report also states that over the five years to the end of 2015, the total milk market has increased by an estimated $325 million in retail value to nearly $4.6 billion. Supermarkets have increased their market share by 4.7% in this time, which the report says is “substantially less than the assumed 10% shift from processor-branded to supermarket private label product”. Queensland Dairyfarmers’ Organisation president Brian Tessmann said the report was misleading. “The report presents the total value of milk sales increasing since the milk price war started in 2011, but fails to accurately disclose the more than $200 million per annum in losses sustained by branded sales to supermarket private label fresh white milk
leading to less money in dairy farmers’ pockets,” Mr Tessmann said. “The figures presented by Dairy Australia cover all milk sales including flavoured milk which disguises the impact in the fresh white milk category where the milk price war is occurring.” “The analysis also didn’t take account of discounting forced on the route trade.” Mr Tessmann said if flavoured milk was excluded and a representative trade route milk price was used, there would be a substantial fall in the value of fresh white milk sales in the last five years, particularly in the modified fresh milk category where supermarkets made the biggest cuts. “It’s time for Dairy Australia disclose the full impact of the milk price war.” He highlighted that since 2011 more than 170 dairy farmers have left the Queensland industry despite there being local demand. “Queensland will import some 180 million litres this year from interstate to meet the needs of Queensland consumers. This should not be happening,” he said. Australian Dairy Farmers also highlighted their ongoing objection to $1L milk, highlighting recent anal-
Milk sales - Australia ysis which suggests cheap private label milk transfers about $250 milEstimated retail sa lion a year from farmers and procesles value - $ millio n sors to consumers and supermarkets. “The effect of $1 per litre milk Year Total Market Supe Route and rmarkets on the dairy supply chain over the F&S* last five years has been profound. 2010 $4 26 0 Whether the retail sale value has risen $1940 $2320 2011 is irrelevant if the value is not being $4280 $1920 $2360 returned to the supply chain,” ADF 2012 $4 43 4 president David Basham said. $1996 $2437 2013 “ADF has lobbied hard since 2011 $4541 $2027 $2513 to advocate for a Mandatory Code of 2014 $4 54 0 Conduct and supermarket Ombuds$2054 $2486 man to prevent the extreme market 2015 $4584 $2046 power manipulation carried out by $2538 Ac tu al ch an ge in retail sales va retailer duopoly, Coles and Woollue – $ million worths.” ADF renewed its call for all politYear Total Market Supe Route and rmarkets ical parties to support an Effects F/S* Test in section 46 of the Compe2011 $2 1 -$20 tition and Consumer Act to assist $40 2012 the ACCC in taking a longer term $153 $76 $77 view of issues and discovering the 2013 $1 07 true impact for consumers, farm$31 $76 2014 ers and others of strategies under-$1 $2 6 -$27 taken by those with significant 2015 $4 4 market power. -$7 $52 The Coalition indicted it 5-year +$325 would support the introduction impact +$107 +$218 of an effects test prior to the elecRo ute an d Food service* assum tion. es route price is equal supermarket price to the branded Dairy Australia declined to comment.
Milk production to take a 5% hit NATIONAL MILK production could
drop by as much as 5% next season taking the national output to levels not seen since the drought, according to Dairy Australia’s June Situation and Outlook. A dry season and the recent drop in farm gate milk price has also smashed farmer confidence, with a recent survey suggesting the number of farmers feeling positive about the industry has dropped below 50%. The survey finds farmer sentiment was already in decline prior to the April cuts (from 74% positive in 2015 to 67% in 2016). The report says farmers can expect the impacts of the deep and persistent trough in international dairy markets and the low farm gate price to be felt until at least the start of 2017 when it is hoped the global supply glut will start to ease. Despite more stable operating conditions and farmer sentiment, producers in northern NSW, Queensland and Western Australia are on high alert for flow-on impacts of the late season farm gate price cuts in southern Australia. Dairy Australia senior analyst John Droppert said the impact of domestic and international events on many farm businesses could not be downplayed. “There is little doubt that managing short term pressures to achieve longer term business plans will prove a greater challenge than usual in the months
ahead,” Dairy Australia senior analyst Mr Droppert said. The report predicts lower fertiliser costs and high cull cow prices could provide some relief. However lower international grain prices have taken some time to flow through to the Australian market and hay stocks remained tight. Mr Droppert said national milk production is expected to be down about 2% for the 2015/16 season to between 9.55 and 9.65 billion litres. The outlook for 2016/17 is heavily dependent on seasonal conditions, but with the pricing environment looking tough a further 2-5% fall in production is anticipated. “One to 2% is a conservative estimate, but 5% is a pretty substantial drop in production reduction so it’s at the negative end of the spectrum,” he said. Mr Droppert did not rule out a worse scenario but said: “We are looking at a season that by all accounts should be more favourable in terms of rainfall.” He said the reduced production would not impact domestic supply, but would be taken off export markets. Despite the gloom, dairy demand has recovered in most importing regions over the past 12 months, with the overall volume of dairy trade up nearly 6%. China has been responsible for a large proportion of this growth, with total exports to the country up 16% in volume.
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DAIRY NEWS AUSTRALIA JUNE 2016
10 // NEWS
Lifeline ready to help PETE SHMIGEL, LIFELINE AUSTRALIA CHEIF EXECUTIVE
IN THE past few weeks, we at Lifeline, the country’s largest crisis support and suicide prevention service, have been asking ourselves the same question as millions of Australians: what’s the best way to help? As part of dealing with more than one million interactions with Australians on the phone and online this year, Lifeline has decided to roll-out a dairy crisis “rapid response”. Our 4000 Crisis Supporter volunteers are not the full solution, but we believe we share responsibility with the overall Australian community to do what we can for our friends, neighbours and workmates on the land. In rapidly responding, it’s first important to clearly see things for what they are. There is real financial pain being felt by many farmers and the many others who are part of the dairying value chain. We’ve been getting the calls already, as well as outreach from our rural partners to our centres in places like Ballarat, Albury-Wodonga, Warrnambool,
Geelong and Gippsland. But at the same time, we need to stay measured. There are as yet no confirmed reports of suicide that are directly related to the crisis – and that is a blessing. Having said that, we do know that Australia is in the midst of an overall national emergency when it comes to suicide – with record high deaths in 2014. And, suicide rates in country areas can be twice as high as in city areas and middle aged men are particularly vulnerable. We also know from our own service experience and from evidence-based knowledge around suicidal behaviour that an additional financial burden, especially when people feel there is no way forward, can exacerbate an already fragile situation in their lives and fuel thoughts of suicide. A recent study that Lifeline participated in with the University of Melbourne and Victorian Coroners Court in southwest Victoria, a major dairy region, looked at 70 local suicides going back the last five years using the Victorian Suicide Register. It found that men working in the
agricultural labour pool – in contract and casual work – were especially noticeable in the statistics on suicide deaths. And, they can be the first ones to feel a downturn as farmers have limited choices about cutting costs. So we need to make sure the offer of help is made to all those affected by the dairy industry issues. Lifeline is there for the people who need our help. To that end, we’ve made sure our Crisis Supporters have extra information on the dairy crisis and its impact on those who may call us. We’re also spreading the word that through 13 11 14 we are there 24/7 for anyone who needs to talk. People need to know that having suicidal thoughts happens to lots of us during times of great personal struggle – including those with no mental health issues - and the best way to deal with them is to talk to someone. That sense of being overwhelmed and out-of-control, and a burden to others, very often passes if given the chance through the power of active listening and unconditional support that Lifeline provides.
We need to draw on community strengths – as resources that help prevent suicide. Let’s leverage the absolute strengths of country people: their sense of community. People in country areas still know their neighbours and still say g’day in the High Street. That sounds insignificant – it’s not. We can build on existing community strengths by starting more training for country community groups on mental health awareness and spotting the signs of suicide, responding appropriately and referring to professional help where necessary. Country people already take care of each other – and we can give them more knowledge and skills to do so in a way that further protects against crisis and suicide.
But, to be truthful, many people don’t need to be trained to see or hear when a friend or colleague is struggling. Their appearance might be different, or they might be withdrawing, or they might be going harder on the drink, or they’ll just say something. Know that it’s a myth that asking about suicide puts the idea in their head – the evidence shows that it actually helps them and relieves a huge burden for most people having the thoughts. Those on the land regretfully know what crisis means – be it drought, flood or commodity swings. They know we get through them by looking after each other. Lifeline will always be part of that and is now there for those who need us in the dairy community. www.lifeline.org.au
IF you think someone you know needs help: Ask if they are ok and listen to them Don’t worry about having the ‘right words’ – being there is enough Listen with love and care Refer them to 13 11 14 or another service for further help
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DAIRY NEWS AUSTRALIA JUNE 2016
NEWS // 11
Community support offers welcome relief
A new website will help farmers share their experiences with anxiety and depression. PICTURE: NCFH.
RICK BAYNE
Website to tackle rural suicide taboo IF YOU are a farmer, or
work anywhere in agriculture, you know, or know of, someone who has taken their life. Suicide is incredibly tragic and in most cases preventable. Too many families and friends of people who have killed themselves have had to survive the fallout. The ripple effect of such a loss tears apart the fabric of families and communities. Australia needs to turn the negative ripple of suicide and stigma into a tsunami of action and support, according to the National Centre for Farmer Health. Which is why it is about to launch a website to learn what is happening, and how regional communities are thinking about suicide. To be launched later this month, the Ripple Effect website will enable farmers to anonymously register and view other farmers’ stories of suicide, share their own insights and find out what they can do to support the wellbeing of others and themselves. “We are looking to help build the first, accurate, national insight into what is in the minds of our farmers, what are their stories and opinions – and get that to the people who can help make a differ-
ence,” the Ripple Effect’s Alison Kennedy said. She said if agricultural Australia is going to turn back the tide of suicide in farming communities it needs support – and it will not get that right unless it has the right information, accurate information. The Ripple Effect has been developed by NCFH, Deakin University, Victorian Farmers Federation, AgChatOZ, Mental Illness Fellowship North Queensland, Sandpit and Western District Health Service as part of beyondblue’s STRIDE Project (with donations from the Movember Foundation). “The cumulative stress of modern-day farming, juggling debt and volatile commodity markets, climate change, family pressures, illness and injury, and dealing with it all in the isolation of the average working day puts farmers at a higher risk of suicide,” Ms Kennedy said. “Everyone knows about it, for years everyone has danced around it, always too concerned to talk openly about it – you can die of anything except your own hand because at that point no-one really knows what to do next,” she said. “And that’s the problem – no-one really knows enough about anything.
“We are really hoping we can tap into the experiences of our farmers, everywhere across the country, and hear about the things they rarely, if ever, tell anyone else. “But in a few weeks they will be able to tell us, anonymously, on the Ripple Effect. “And every bit of anonymous information will be processed and
analysed so we can get it to everyone who can help. “So please help us help you, your family and your community by registering as part of the Ripple Effect as soon as it is launched on June 30,” she said. To register your interest in the Ripple Effect, visit www.therippleeffect.com.au.
THANKFUL DAIRY farmers have been reduced to tears as local communities rally to support them in the wake of the price crash crisis. Farmer relief drives in Gippsland, north-east and northern Victoria are connecting farmers with services they need and, in the case of Gippsland, providing welcome food aid packages. A website has been created for the northern Victorian relief drive and Facebook pages for the three regions and the organisers hope to arrange a similar page for western Victoria. The organisers say they are doing it to show that the community cares and to help keep farmers on their farms. Former dairy farmer Jenni Clark is facilitating the northern and north-eastern drives which she said aimed to take the pressure off farmers, their families and employees by providing links to services that can help them. “We decided to call it quits on our dairy farm during the drought,” she said. “Our biggest frustration was not knowing where to find information and now with this situation my farmer friends tell me they have the same worry. “We’ve got all the information in one spot so we can cover all their needs. We’re an information and referral service; we’re not accepting donations or goods at this stage but can put people in touch with the groups that are.”
Ms Clark said local service providers, councils and community groups were strongly supporting the service. “It’s the community helping community rather than people wandering around in circles looking for things or groups and we can help to stop duplication of services. “We can also help farmers to source information they need and we welcome groups providing information to us,” Ms Clark said. The Gippsland Facebook page was started around the same time by Melissa Ferguson. Ms Ferguson, a beef farmer and counselling and community services student, said small family farmers were particularly hurting. The Gippsland page is offering referrals to community organisations and services and also organising food aid. The volunteers are preparing and delivering food hampers to farmers referred to them. “Most of the farmers are so happy that they haven’t been forgotten,” Ms Ferguson said. “I’ve had a few in tears. They’ve been driven into the ground and it’s taking a while for them to believe that there might be change afoot.” Northern Victoria Farmer Relief Drive and North East Victoria Farmer Relief Drive are on Facebook or visit www.nvfrd.com Gippsland Farmer Relief Drive is also on Facebook or email Melissa Ferguson@outlook.com
DAIRY NEWS AUSTRALIA JUNE 2016
12 // NEWS
Farmers f
Where to now? FROM PAGE 4
Adam Jenkins, President, United Dairyfarmers of Victoria and call it an anomaly when the market has been coming off for three years, and then push the risk back down the supply chain, both MG and Fonterra, we need to remove that. “That may mean we need to be more conservative going forward, which is a tough call because farmers always more in their pocket upfront, but I think this situation so late in the season has caused major, major damage to trust. “(In the short term), farmers need to keep doing what they are doing – voicing their concerns, asking for change. We need to keep making sure we do get change, and the right change going forward.”
Ken Lyons, SA Dairy Industry Fund Executive Officer “FROM A business point of view, where Murray Goulburn are at the moment with half co-op and half company, and two masters and to serve, it’s probably not where they are going to end up. The choice is really either go back to a co-op or do as Wesfarmers did and go to a company. “What it needs is some people to stand up and provide that leadership. It’s such an important entity that nobody, no matter who you supply, it’s a bad look for the whole industry to see this happen to Murray Goulburn.”
MADELEINE BRENNAN
HUNDREDS OF dairy farmers across the country came together in solidarity on May 25, with one key message for governments, supermarkets and milk companies: give us a fair go. In Melbourne, a large crowd of farmers,
suppliers and supporters marched in the Farmer Power rally from Federation Square to the steps of Parliament and then to Treasury Place. A tractor, feed wagon, horse and carts, and Sary the Brown Swiss cow, owned Dingee farmer Ben Govett, led the crowd which included many families holding hand
made signs. Chants varied in volume and tone throughout the walk but included a message for the city dwellers passing by: “If you like a latte you need a farmer.” Scott’s Creek dairy farmer Alan Symons told the rally goers that federal government support – announced the same
Lucy, Simpson, Clare, Scotts Creek and Ellie, Simpson, shared their love for farming with the crowd.
Shaughn Morgan, Dairy Connect, CEO “ANY FINANCIAL assistance to industry is welcome but the Coles offer of a new retail milk brand with a 20 cents a litre surcharge to go to some producers or the 50 cents a litre surcharge suggested by some farmers on all milk sales are unsustainable. The real issue is pricing of drinking milk is unsustainable and these measures reflect that reality. A long term solution to realistic milk pricing is needed and all players should work together to develop a strategy for the future.”
Judith Swales, MD, Oceania “WE HAVE launched an Australian monthly global update which will give suppliers a
synopsis of what is happening globally that could in time impact on the price that is paid locally. It doesn’t stop there. We need to start working with retailers and with people across the board to say ‘how do we get people to consumer more dairy? And how do we get people to understand that consuming more dairy but also better quality dairy and more innovative products is actually good for your health and ultimately good for the industry? It happens on many levels, but it starts with giving clerarer price signals to farmers so that they can plan their businesses better.”
Robbie Radel, farmer, Biggenden “THE solution can’t be left just to farmers, it can’t be left just to politicians and it sure as hell can’t be left to just Coles and Woolies. “This has to be a united front from politicians, dairy farmers and consumers to tell Coles and Woolies that their glory days and power days are over. “One of them has got the prime opportunity to end $1L milk war and make it a sustainable price. “We need to not only put the pressure on the politicians to get legislation in every state to get a sustainable bottom price in the market, but we have to get that pressure put on to get Coles and Woolies to admit that they’ve done the wrong thing and make up for their mistake. “ A floor price of 65c/L would be realistic in Queensland I think. It’s still only giving farmers a small margin. An independent auditor could set it in each state. “And we need to make sure every contract when renegotiated, every year that price increases by at least CPI. Staff wages go up by CPI. Everything we buy goes up CPI. The only thing not going up by CPI is the farm gate price, and we slide further and further behind.” Sary the Brown Swiss meets some of her fans after the rally.
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DAIRY NEWS AUSTRALIA JUNE 2016
NEWS // 13
s fight for a fair go morning to include $555 million in Dairy Recovery Concessional Loans and $900,000 for additional rural counsellors among other initiatives – was misdirected. “If you really want to relieve farmer stress, stop the clawbacks. It’s wrong, they know it’s wrong. “We don’t need loans, it’s just kicking the can down the road,” he said. Also addressing the crowd was 16-year-old dairy farmers’ daughter Chloe Scott, whose petition to Barnaby Joyce to ‘save our farmers’ has attracted nearly 160,000
Farmers marched up Swanston St up to Parliament house.
signatures. Chloe said she had been humbled by the support for her petition and welcomed the announcement of support from the government. “It won’t fix all the problems but it is welcomed, especially the $2 million to establish a commodity milk price index.” A suite of politicians from minor parties – including Nick Xenophon, Bob Katter, John Madigan, Rob Donnelli and Ricky Muir – used the rally to urge farmers to “change their votes”. “If you keep voting for them, you’ll get the same result,” the man in the hat Bob Katter said. Nick Xenophon Gavin Broad, Lockington, Taylah Joyce, Melbourne Laurie and Gayle Clark, Katoundra West were ready with their signs early at Federation Square.
expressed his support for an emergency levy on milk “if need be it”, as well as reforms that improved competition and boosted corporate accountability. “We need to end the supermarket duopoly.” Rob Donnelli from the Australian Country Party told the crowd that impacts of the recent milk price drop were not the fault of farmers. “It’s the system, the system is broken and we have to fix it.” Speaking to Dairy News before the rally, former dairy farmers Maureen and Graham Baxter, who farmed for more than 30 years at Cobram in Victoria, said they were lending their support on the day because they were
very fearful of the future of the industry. “We’re very worried,” Graham said. “I can see us bringing powered milk in from overseas and that’s all we’ll have. We won’t have our own beautiful fresh milk. “Unless the farmers can get together and put their own price on the product, without milk companies and processors telling them what their price is, that’s the only way I can see out of it for the dairy farmer,” Maureen said. Gatherings in support of the Melbourne rallies were also held in Adelaide and Brisbane. More than 200 people attended the rally from across Queensland, which
was organised in just three days. “We were overwhelmed with the response we got, particularly as we only gave ourselves three days to organise it,” Biggenden farmer Robbie Radel said. “The majority (of the crowd) were dairy farmers but we had support from people who had travelled from the Gold Coast, and people who took the day off work to travel simply because they believe dairy farmers are getting a rough deal.” In Adelaide, around 50 protestors braved the rain to stage a similar rally on the steps of Parliament. More than a quarter of South Australia’s 250 dairy farmers supply MurrayGoulburn and Fonterra.
Kay Laing from Poowong, in Gippsland, was lending her voice to the rally: “I’m very cheesed off. Who wants to work for a whole year for Jack? Supermarkets don’t say how much they screw farmers. Shame, shame, shame!” she said. Adam Waasdorp travelled from Waaia in northern Victoria to have his voice heard.
Retired farmers Maureen and Graham Baxter are very concerned about the future of the industry.
Singer Kayla Dwyer performed her own protest song for the politicans.
Ben Govett from Dingee with Sary the Brown Swiss cow who was a star of the rally.
DAIRY NEWS AUSTRALIA JUNE 2016
14 // NEWS
Dannon, Arla driving out GM feed from supply chains TWO GLOBAL dairy
giants are fast tracking moves to remove all genetically-modified ingredients from their supply chains. America’s leading yoghurt maker, Dannon, has committed to being
GM free over the next three years – including the feed for its suppliers’ cows - for three of its key brands, Danone, Oikos and Danimals. The brands represent 50% of the company’s current volume, but
Dannon said it would look to making all products GM free over time. The company said by December 2017 it will also declare on all product labels the presence of GM ingredients. Meanwhile, European
dairy co-op Arla has announced it will start to incentivise more farmers to convert to GM free feed. The co-op said the decision was on the back of recent developments in Germany, where
retailers are increasingly demanding dairy products from cows which have been fed GM free feed and are willing to pay for it. Arla said the trend is likely to spread to other markets so it wants to
L A I C SPE T R O REP
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capture this opportunity immediately. Chairman Ake Hantoft said Arla was wellprepared to meet the growing demand from the trans-European retailers for GM free feed. “Our Swedish farmers have always used GM free feed. This means that around 20% of Arla’s milk pool already meets this market demand. “There is commercial potential in this that we can capture and build on immediately by attracting more farmers who are willing to convert to GM free feed.”
profitable growth but are also acceptable to the consumer. “Why would we throw money at a particular thing, if we don’t think we are going to be able to get it up?” He suggested the industry could think more strategically about which initiatives and technologies were palatable to consumers and customers. “As farmer advocates we’ve got to say ‘where do we draw the line if stuff is really important to us, if the consumer or the customer is going to say
“There is commercial potential in this that we can capture and build on immediately by attracting more farmers who are willing to convert to GM free feed.” Mr Hantoft said the decision was based on the commercial opportunity and did not indicate Arla’s position on GM. United Dairyfarmers Victoria president Adam Jenkins said the changes reflected a similar shift in Australia. “There’s a number of processors that don’t say that they don’t like GM but the current climate that they are operating in is very much a dynamic environment and it’s very competitive,” Mr Jenkins said. “If Arla and Danone are looking to operate like that, who buy all over the world, then you would consider that would have an impact on Australia.” Mr Jenkins said the challenge for Australia is to embrace technologies that drive enough productivity to continue
no, where do we draw the line and say we just have to have it’? “Or is there something as close to using the technology that is just as good, that will keep us free of GM and free of diseases which may give us a competitive advantage overall?” Arla said the genetically modified feeds currently used are in most cases limited to soy, which on its farms covers between 0 and 10% of the total feed volume. All soy currently used at Arla farms is covered by certificates to support responsible soy production. Despite the fact that the cows are fed with these limited amounts of genetically modified soy feed, their milk is per definition GM free as the GM can’t be traced to the milk.
DAIRY NEWS AUSTRALIA JUNE 2016
WORLD NEWS // 15
Supply horizons brighten, brakes remain on farm gate milk price PAM TIPA
FONTERRA’S NEWSEASON forecast
farm gate milk price is “conservative” but the co-op expects the market to rebalance within 6-12 months, says Fonterra chairman John Wilson. Global milk production is at last responding to price signals, he says. The farmers were expecting a number like the forecast (NZ) $4.25kg/ MS – up 35c from last year, Mr Wilson told Dairy News. The milk price is just part of the payout. “Our focus is to maximise the total payout,” he says. Fonterra is required under New Zealand’s Dairy Industry Restructuring Act to forecast the milk price at the beginning of the season and it is important to give farmers that signal
for budgets. “However at the end of July we will update our forecast dividend for the year and that informs the total payout. Our focus is always on total payout and that will be announced at the end of July for the year ahead,” he said. Federated Farmers dairy chairman Andrew Hoggard says farmers were hoping for a figure more like (NZ) $4.50kg/MS and will be disappointed. But they are resigned to another tight season. He says the milk price is still likely to be below the break-even price for most farmers. On the positive side, Mr Wilson says global supply growth is really starting to come back. “New Zealand is down, Australia is down and forecast to drop quite a bit into the coming season, Latin American
Fonterra chairman John Wilson says the opening forecast is “conservative”.
milk production is down, US growth is now down to 1%, and the forecast for Europe is 1.2-1.4% growth higher than last year -- significantly down on the last few years and below global dairy demand growth which is at 2.3%.” Mr Wilson says NZ milk production is expected to come back again; it was about 3% down this year. “It has been a tough year with facial eczema
across much of the country, particularly in the North Island and even parts of the South Island,” he says. “Stocking rates are also forecast to be lower this season than they were last season.” He says they anticipate the market will rebalance over the next six to 12 months. “This forecast of (NZ) $4.25kg/MS is a conservative view for the
year ahead. The reality is that global oil price is low, grain price is low, there is global fragility in financial markets and importantly we still have a stubbornly high US/NZ dollar exchange rate(67.5c at the time of interview). That is having a big impact on our milk price announcement.” Consumer demand growth in China is strong and over the last three months Fonterra has seen ingredients demand rise 30-40%. But although underlying consumer demand is good, the situation in Russia is not changing and there has been a period of significant supply growth. “We have inventory levels up reasonably in Europe at the moment but globally we don’t see significant buildup in commercial stocks. These
are all the factors we look at when we are forecasting, with some caution over the next 15 months.” Fonterra’s total focus is how to get increasing volumes of milk into higher value products, he says. “We are doing that successfully and that will inform the dividend announcement we make at the end of July for the season ahead. Our focus is on total payout to farmers and how we maximise that.” Farmers are resigned to another tight season says Federated Farmers dairy chairman Andrew Hoggard. “Many were hopeful of a price in the vicinity of $4.50, so optimistic farmers will be feeling disappointed,” he says. “We have seen the opening forecast price change quickly as the
market has changed. Unfortunately it has changed for the worse in the previous two seasons. Hopefully with this conservative forecast we won’t see any further drops, especially as there are more positive signs out there in the markets presently.” Mr Hoggard welcomes Fonterra bringing forward the advance rate payments, however farmers are still dealing with a low milk price -- below the breakeven price for most. “The DairyNZ economic survey showed that in the 2014-15 season, average farm working expenses were(NZ) $4.07kg/MS and the breakeven price was $5.77. Figures are still to be crunched for 2015-16 but we can assume the breakeven price is now somewhere in the low-mid $5 range.”
UK farm profits fall by one third THE PROFITABILITY
of UK farming fell by a staggering 29% in 2015, a loss of over £1.5 billion, according the nation’s farmers’ union. It’s the biggest year on year fall since the millennium and latest official statistics show that farming profitability in the UK is at its lowest level since 2007, highlighting the cash flow crisis facing the agricultural industry. A cocktail of higher production around the world, subdued demand due to slowing economies, the strength of sterling in 2015 and over 24 months of falling farm gate prices across the sectors has led to plummeting profitability. Many UK dairy farmers faced further milk price cuts this May and June and the sector is experiencing the lowest average milk price for seven years. Major milk buyers such as Arla, First Milk, Muller and Dairy Crest have announced further milk price cuts for May and June. The average milk price for March stood at the lowest it has been since 2009 – with some farmers
across the country on milk prices well below 16 pence per litre. “These figures are alarming to say the least,” National Farmers Union chief economist and international affairs adviser Gail Soutar said. “They remind us that farmers up and down the country and across the majority of sectors are dealing with the impact of devastating cuts in the value of their products. “Lots of farm businesses find themselves in a loss-making situation. If prices and profitability don’t change, it is not just those farms that are at jeopardy, but our food processing sector, our rural communities and the environment. “The numbers must serve as a wakeup call to others in the supply chain and government. “We need everyone in the food supply chain to intensify their efforts to back British farmers. “For example, we need longer term relationships that deliver some certainty on pricing and give farmers the confidence that food
production can be profitable. “And we need government to do all it can including making sure that farmers don’t face the same crippling delays to farm payments that they have in 2015, with immediate action for those still waiting for 2015 payments to arrive.” NFU dairy board chairman Michael Oakes said even the most efficient dairy farmers could not survive at these levels. “There’s no question that this is the most difficult time many dairy farmers have ever faced with milk prices far below breakeven levels,” said Mr Oakes. He said processors and cooperatives needed to consider new ways for managing risk to support both themselves and their supplying farmers – continuing to follow the market down is not good enough. “We thank those retailer businesses that have stuck by their initiatives on liquid milk and cheese throughout this market downturn,” he said. “Retailer initiatives
can bring sustainability for dairy farmers. We would like to see all stakeholders within the supply chain take steps towards introducing sustainable principles into their own supply chains. This would give greater collaboration allowing for supply chain efficiencies and ensuring the UK dairy sector remains competitive on a global market.”
Confidence in the UK farming sector is low. Image: NFU.
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DAIRY NEWS AUSTRALIA JUNE 2016
16 // AROUND THE REGIONS
Western Australia
Brownes cuts four farmers off WA PROCESSOR
Brownes Dairy has further strained its souring relationship with suppliers after telling four farmers it will not continue to take their milk. The processor recently exercised its right to
terminate an existing supply contract with six months’ notice. WAFarmers dairy section president Phil Depiazzi said the decision could force the four farmers out of the industry.
“Unless we can get one of the other processors to pick up their milk then they are without a home and out of business as of October 1,” Mr Depiazzi said. “Our concern is that it’s unprecedented behaviour.
“In the past they have had excess milk and they have found ways to deal with it.” The state’s other two major processors, Lion and Harvey Fresh, have so far shown no interest in taking the 10 million litres produced by the four
L A I C E P S T R O REP AUGUST ISSUE HAY & SILAGE When it comes to Hay & Silage production, preparation and planning are as important as having the right gear. To help farmers prepare and maximise the conversion of grass into milk, therefore into dollars, Dairy News is putting together a Hay & Silage Special Report. This will run in the August issue of Dairy News, distributed free to all dairy farmers. BOOKING DEADLINE: August 3 AD MATERIAL DEADLINE: August 9 PUBLISHED: August 16
CONTACT: CHRIS DINGLE | T: 0417 735 001 E: chris@dairynewsaustralia.com.au
farmers. Mr Depiazzi said the global dairy downturn and the strong production growth in WA was partly behind the decision by Brownes. “Although 80% of our milk is sold domestically,
that last few litres has to be sold on the export market and with the cycle at rock-bottom no one is keen to grab that Springflush milk, which is the bit that’s causing a drama. “(WA production) grew about 5.5% last year and we’re running at about 7% this year, so we’ve got extra milk.” The hardball approach by Brownes has further damaged the processors standing in the West, which has been at-times strained since a change in senior management in early 2015. Some farmers were unhappy by Brownes lack of response after bush fire decimated a number of farms around Yarloop earlier this year, while the
processor’s pricing has also been criticised for being low compared with its two competitors. While the four affected farmers were receiving a relatively generous milk price, Mr Depiazzi said that did not justify the actions by Brownes. “Normally what would happen in the past is that if a guy’s contract was finished and the processor didn’t want to renew them, the processor would still collect that milk until the guys were able to find a home for that milk with another processor, but they wouldn’t leave them high and dry,” he said. Browns did not comment at the time of press. – Cameron Wilson
Gippsland
Flo the goose mooves in mysterious ways YOU’VE HEARD about Babe the pig, now meet the real
life Flo the goose who wants to be a cattle dog. Flo has become a Facebook sensation after a photo of her cow-herding antics was posted by Legendairy, the communications initiative to raise the profile and reputation of the dairy industry. Owner Ingrid Jennings from Bruthen near Bairnsdale in Gippsland says Flo is “pretty amazing”. The goose has lived on the Jennings farm for about 12 months but just recently decided to join kelpie Bella in herding the cows on a daily basis. “All of a sudden in the last month or six weeks she’s decided she wants to be a cattle dog,” Ingrid said. “She buddied up with Bella, much to the kelpie’s disgust, and if Bella is doing anything with the cows the goose will come out with her wings in full flight. She just decided she was going to do dog stuff, particularly move the cows. She’s a bit bossy and wants to be involved in everything.”
Dairy NewS AUSTRALIA june 2016
around the regions // 17
Gippsland New South Wales Sub-Tropical Free legal advice for Stellar line up Better soil and Agribusiness conference victims of heavy rains nutrient VICTORIAN
agriculture
Minister Jaala Pulford will open this year’s Agribusiness Gippsland annual conference on July 28 at Lardner Park. Other keynoters include Fonterra’s managing director Oceania Judith Swales; Dr Christine Pit, general manager, Meat & Livestock Australia, Value Chain Innovation; Trafalgar born ad guru and philanthropist Harold Mitchell; Western Victorian dairy farmer Mark Billing, who will talk technology and profitability; and Maffra’s Hans Van Wees will explain precision farming.
There will be other speakers with hands-on farming experience, including insights into the newest Gippsland crop, medicinal poppies as well as on-farm aquaculture. Tickets $150 plus GST includes all the day’s refreshments plus free networking cocktails (50% concession for farmers/students) trade stands are $400 (plus GST). Booking can be made online at www.eventbrite.com.au/e/agribusinessgippsland-2016-roundtable-technologychange-future-tickets-20887163067
Murray Dairy High hopes for Connections ‘reset’ THE Victorian Labor Government has revealed details on how it hopes to generate further irrigation upgrades in the Goulburn Murray Irrigation District (GMID) under its controversial Connections program. A summary document of a PwC independent review of the financials shows that as of February 29 this year, there was $827 million remaining of the $2 billion project. This is made up of $439 million of funds already committed and $388 million available in uncommitted funds. Project options being considered
to ensure the remaining $827 million in funding is used efficiently include: A greater focus on tailoring solutions for individual channels; modernising channels that support the highest number of primary producers; replacing meters and modernising high water loss channels; and prioritising connections that support food and fibre production, the regional economy and jobs. A new roadmap was also prepared by the Project Control Group which was appointed by the Victorian Water Minister in March after GoulburnMurray Water’s management was removed from the project.
LEGAL Aid lawyers are avail-
able to give free legal advice to people affected by recent heavy rain and storms across NSW, Brenda Staggs, from Legal Aid NSW has said. “We have a dedicated team of lawyers who are specially trained to give legal advice to people affected by natural disasters,” she said. “Some insurers try to impose strict rules about how to document the damage, when to start cleaning up, and about what, when and how much they will
pay. Talking to one of our lawyers early can help people understand their rights and responsibilities, including getting temporary accommodation and the claims process. “Our lawyers can also help people who need to re-negotiate mortgage payments or credit card payments after they are hit by a disaster.” Contact LawAccess on 1300 888 529 or 9219 5093 or visit www. legalaid.nsw.gov.au/get-legal-help/ legal-help-for-victims-of-naturaldisasters
South Australia Tight times call for clever tactics DairySA is urging farmers to
take advantage of the information and support provided through the Tactics for Tight Times program. The Dairy Australia program assists farmers to understand their options, focus on the things they can control, the tactics that can be applied and the decisions that need to be made. Factsheets, tools and videos are constantly being updated and are available at: http://tftt. dairyaustralia.com.au/ DairySA has some workshops
in the pipeline and other activities which may include discussion groups and farm walks to give practical information and advice that farmers can adopt immediately to help manage finances, pastures, feeding, animal health, water and the people in your farm business. DairySA is welcoming suggestions for events or to get in contact if you need any information. Visit www.dairysa.com.au or phone (08) 8766 0127
JOIN Peter Beale,
senior land services officer (pasture) LLS Taree for a Dairying Better ‘n Better Soil and Nutrient Management Field Day/Farm Walk on June 23. Terry and Shannon Blasche’s farm near Casino has had a comprehensive soil testing and analysis plan completed as part of the project. Topics for discussion
include: Summary of local soils data; findings from the soil plan, including results of deep soil test; discussion on root depth issue; and strategies to improve pasture utilisation and fertiliser management. The field day will run from 10am - 2pm. Lunch is provided. RSVP to Sarah sarah@dairypage. com.au by Tuesday, June 21.
Tasmania Pasture management workshop THE Tasmanian
Institute of Agriculture (TIA) will host a number of farmer workshops focusing on pasture management. Dates are as follows: June 15 & 16, Deloraine; June 17 & 24, Smithton; June 23 & 30, Legerwood. DairyTas is also encouraging all farmers to seek good advice and participate in the range
of business related and social activities they have planned. DairyTas is also open to other suggestions where it might be able to help. Call DairyTas on 6432 2233. The TIA and YDN are also hosting an informal dairy situation dinner and drinks on June 22 at the Deloraine Hotel. Visit www.dairytas.com.au
Western Victoria
Leading dairy farmer joins prestigious honour board FROM being led along the path as a child by calves keen to get a feed, to leading Victoria’s dairy industry, Kerry Callow has seen dairy from inside and out. And despite a few bumps along the way, this Legendairy farmer from southwest Victoria remains committed to the industry. A former United Dairyfarmers of Victoria (UDV) president and the latest inductee to the WestVic Dairy honour board held on May 19, Kerry was raised on her parents’ soldier settler farm near Macarthur. “The only shift I’ve made is bedrooms,” she joked. Her parents, Ted and Nance Nunn, were always involved in their community and the industry and Kerry naturally felt the need to follow in their inspirational footsteps. “I think it’s just part of farming to understand what happens beyond your
farm gate, and not just in your local area,” she said. Kerry’s first brush with the industry was when her father co-opted her as the Macarthur Artificial Breeders Cooperative secretary. She joined the UDV when she turned 18 – her father was chairman at that time - and 40 years later remains a dedicated member. Kerry was elected UDV president in 2010 and held the position for more than two years. She cites as a highlight, her work with former president Chris Griffin to bring the UDV back to financial viability and to focus the policy council on the “nuts and bolts issues”. She was also involved with setting up DemoDAIRY, the Herd Test Association and WestVic Dairy’s ‘Down the Track’ project. “I never sought out positions; they tended to evolve,” Kerry said.
“Generally I had the support of the farmers I represented; they seem to like to volunteer you for jobs.” Her habit of “expressing my views” may have encouraged that, and occasionally got her into trouble, but she didn‘t mind and encourages others to get behind the UDV and the broader industry. While understanding farming is more pressured today, Kerry said farmers would benefit and understand more about the organisations if they got more actively involved in the UDV and Dairy Australia programs. “Dairy Australia runs some brilliant programs that offer great tools to young people coming into the industry, and Legendairy is a direct response to farmers asking Dairy Australia to do more to promote the industry. “Organisations don’t run on fresh air; they need arms and legs to run them.” Kerry said her inside involvement has
Kerry Callow
given her valuable insights, although the honour board recognition was a surprise. “You don’t do this work for recognition; you do it because someone has to do it and I’ve got a lot out of it. “I’ve seen a side of the industry that most people are unaware of and met a lot of great people.” Kerry remains a committed dairy farmer and enjoys the daily challenge of running her 94ha, 160-cow property. She said farming is much more complicated and professional today compared to when she started.
Kerry admits to being “pretty gutted” by the recent retrospective milk price cuts but plans to stick it out and says the long-term future of the industry remains positive. “While the dairy industry has always dipped, it seems to be dipping more frequently in recent years but you’ve got to keep things in perspective and ride through it. “We’ve got to try to get rid of the speed bumps that happen, but sometimes you just have to keep putting one foot in front of the other.” – Source: Dairy Australia
Dairy News AUSTRALIA june 2016
18 // markets
Silver linings? Consumers weigh in on dairy crisis farmers doing it tough. THE month has been It has no doubt been challenging for the dairy heartening to see images industry in this country. of supermarket fridges Price revisions emptied of branded from the two largest product, while private companies have impacted label products were left a large proportion of the on the shelf. southern industry in the A widely reported, short term. fresh agenda although small survey The sudden jo bills of 260 people by realignment of local market researcher IMI farm gate prices with the realities of a depressed global International found 78% believed commodity market will see low milk selling $1 per litre milk at Coles and prices impact a growing proportion of Woolworths had played a role in the current dairy pricing crisis. dairy producers in the new season. Further, 74% said they were aware As the media picked up and ran with the story the narrative almost seamlessly dairy farmers were facing a crisis and inevitably moved from Murray after large manufacturers reduced the Goulburn, Fonterra and commodity price they are willing to pay their milk markets to evil supermarkets and $1 suppliers. The survey found 66% of people are per litre milk. For those of us called on as “experts” “prepared to pay more for their milk if to shed light on the hardships facing it helps our local dairy farmers”. For the major supermarket chains, dairy farmers there was that awkward moment when two barely related issues caught in a downward price spiral of intense competition, it has been a were collapsed into one. In the monologues and sound bites strong message from shoppers. People were not simply choosing the that followed in the ensuing weeks, as the search for “the villain” has moved cheapest, they were choosing products from dairy companies to retailers, that – they believe – will deliver more these nuances have become lost and dollars to dairy farmers’ pockets. Could this force a rethink and a the community has become more interested in “what we can do to help”. backing away from a strategy that has This has been encouraged in no been entrenched – and let’s face it, small way by grassroots social media successful from Coles’ own business efforts from dairy farmers themselves. perspective - for the past five years? Time will tell. Certainly Coles The message has gotten out to consumers – buy branded products, badly misjudged the situation with pay a little extra and you can do your bit. their announcement of a new brand In the age of the quick grab, it’s pretty to deliver an extra 20c per litre into an industry support fund. tough to say much more! The move has been condemned as If there is a silver lining in this dairy crisis it has certainly been the a cynical PR stunt, although similar groundswell of consumer support for initiatives have been proactively sought
Consumers have responded to the dairy crisis by avoiding private label milk.
While retailers and $1 per litre milk fact whether they buy dairy at all. and welcomed in South Australia and A positive engagement with have not, by any stretch, been part of the Western Australia. On this occasion, apparently without “solution”, neither are they the whole consumers who are motivated to send a message of empathy and validation any industry collaboration, it was a problem. The reality that this current situation to dairy farmers through their purchase definite fail. On the flipside, a concerted effort brings home, is that this industry is part decisions has been a wonderful thing. However, manufacturing fresh to buy branded milk, even over an of a global market for dairy products, extended period of time is unlikely to with a limited ability to insulate itself crises to garner attention and keep the have a material impact on the current from the realities of demand and supply. sympathy rolling is clearly not the way forward. financial situation facing The industry has an dairy farmers – mostly in opportunity to put choices southern regions – that While retailers and $1 per litre milk in front of consumers that have been affected by have not, by any stretch beem part their demands for the farm gate price cut. of the “solution”, neither are they the address healthy, innovative, ethical Will realising this products. cause some observers whole problem. Consumers have and consumers to demonstrated, not only in question what they have Volatility in farm gate prices is this instance but in their response to been told? Consumers are responding to nothing new for dairy or any other products like A2 Milk that it isn’t always about price….they will pay more, over attributes of farmers they admire and exporting sector. As Murray Goulburn has shown, it an extended period of time, if they value – authenticity, dignity, salt of the can’t be completely traded away – and feel they derive a benefit from doing Earth! Care needs to be taken to it won’t be regulated away either, even so. If shoppers want it and value it, and acknowledge and encourage consumers in an election year! There are no walls around our the industry can deliver it - retailers making the choice to spend more on products like milk, while not misleading domestic market, consumers here and have no choice but to respond. them as to the cause – or the cure - for around the world have choices about • Fresh Agenda is a specialist food the hardship dairy farmers are feeling. which dairy products they buy – or in consultancy based in Melbourne.
Dairy troubles hang over Victoria’s agri sector AFTER starting the year on a high, Victorian farmer confidence has declined, weighed down by a sober outlook held by the state’s dairy farmers, the latest quarterly Rabobank Rural Confidence Survey has shown. Dry conditions throughout summer and early autumn were also behind the more subdued rural sentiment in the state, however weather concerns have recently been alleviated, with a widespread break in the season from early May. The survey – completed last month – found after lifting strongly last quarter, Victorian farmer confidence has moderated, with the net confidence index now sitting at one per cent, down from 16 per cent previously. Overall, 25 per cent of the state’s farmers had a positive outlook on the year ahead (down from 33 per cent in the previous survey), while 24 per cent
expected the agricultural economy to deteriorate (up from 17 per cent). A total of 45 per cent expected similar conditions to the last 12 months. Rabobank state manager for Victoria Hamish McAlpin said while overall confidence had been weighed down by a pessimistic outlook in the dairy sector at the time of the survey, it would be even lower now, due to the recent cut in milk prices – announced just days after the survey was conducted. “The retrospective pay cut, announced by two of the major processors to $4.75- $5.00 per kilogram of milk solids for the 2015/16 season, has dairy farmers across the state reeling from the news,” Mr McAlpin said. “But what is really tough is the timing of the cut, with farmers unable to pare back this year’s costs of production at this late stage of the season.”
Mr McAlpin said while there has been no announcement regarding the opening milk price for the 2016/17 season, many in the sector were expecting the processors to err on the conservative side and open at the low end of their price ranges. Mr McAlpin said while on-farm investment was strong across the grains and beef/sheep sectors, it had now been “shut down in the dairy sector”. “Dairy farmers have put their expansion plans on hold,” he said, “as they batten down the hatches to get through the coming season,” he said. Commodity prices were the dominant concern for farmers in the state – 59 per cent of those expecting conditions to worsen over the coming 12 months citing commodity prices as the reason for their subdued outlook. This was particularly high among dairy farmers, at 76 per cent.
This was closely followed by concern about dry seasonal conditions, nominated by 58 per cent of respondents as cause for their negative outlook, during the survey period. In line with the decline in overall confidence levels, Victorian farmers also lowered their income expectations for the coming 12 months. The percentage expecting gross farm incomes to increase fell to 31 per cent (from 41 per cent in the previous quarter), while the proportion of respondents expecting lower gross farm incomes stood at 28 per cent, up from 16 per cent. However, the majority (39 per cent) expected similar incomes to last year. Reflecting longer-term confidence in the sector though, farmers still had strong investment intentions, with 86 per cent planning to increase or maintain the level of investment in
their farm businesses over the coming year – compared with 92 per cent in the previous survey. Of the 21 per cent looking to up their level of investment, on-farm infrastructure and, to a lesser degree, increasing livestock numbers were the key priority areas. A comprehensive monitor of outlook and sentiment in Australian rural industries, the Rabobank Rural Confidence Survey questions an average of 1000 primary producers across a wide range of commodities and geographical areas throughout Australia on a quarterly basis. The most robust study of its type in Australia, the Rabobank Rural Confidence Survey has been conducted since 2000 by an independent research organisation. The next results are scheduled for release in September 2016. • (Source: Rabobank)
DAIRY NEWS AUSTRALIA JUNE 2016
MARKETS // 19
Exporters look to new opportunities in Iran Export demand remains s
Da
agrib
for imports. Furthermore, financial conclusion of negotiations restrictions limited access and the lifting of nuclearto short-term traderelated sanctions on season Iran With 2011/12debt, only a few incremental change in milk production (year-on-year) credit financing, as well has been greeted as a weeks from ending, attention is now as shipping insurance for welcome piece of news focused on 2012/13 milk prices companies wishingas to farmby major dairy exporters, ers consider strategies for the coming trade with Iran. with many exporters Consequently, Iranian hoping thatyear. the return In of some domestically-focused imports of consumer incorIran to the regions, global stagerenegotiated contracts GLOBALimpacT IMPACT goods fell. will represent a new gLobaL porating lower prices and reduced ‘tier LAURIE WALKER Following negotiations opportunity. JohN DropperT access areandundermining the conclusion offarmer the Iran is aone’ large, middle in meeting demand, whilst environment of postLooking to the future, high tariffs and Iran deal in October 2015,For short-term. income country, with an and confidence supply stability. sanctions Iran, with incomplete cold-chains the Iranian market offers restrictions on foreign Whilst efforts have sanctions were lifted, overwhelmingly young many farmers in export-oriented Shifts in private label contracts and propotential for SMP exports and distribution problems managing director of trade, with a range of been made to improve with Australia removing (the median age is 25) rationalisationquotas haveand seen milk regions, a lowerall price outlook relative to thecessor global ingredients Kelvin have seen the volume in addition to butter. approval foreign investment unilateral trade population of about 80 companies adjust their intake not only adds tointhe climate Wickham stating,: “We growth of long-life milk Liquid milk systems in requireplace. in Iran, the restrictions against Iran million. the current season outpace that of fresh milk. know how to do business consumption has grown ments environment and pricing to meet the changOil revenues, which challenges business, January 2016. but seems regulatory Importantly, it has a of doing in Iran”. This represents at around 2.7% on average, aboutretail 80% of taxdemands treatment foreign However,medium optimism term anding well-established tradition the positive of a highlycomprise pressured to contradict Danone also has a an opportunity to albeit from a relatively Iran’s export revenue, companies face remains must be tempered with of dairy, which comprises outlook of Asia-driven dairy demand marketplace. Lower contract prices and presence in Iran, through supply ingredients for low-base, due in part to unpredictable and subject are depressed due to low a realistic appraisal about 40% of average a lack of alternative supply opportunigrowth. a collection of subsidiaries reconstituted products nation-wide school milk global prices. to political interference. about the challenges of Iranians’ daily protein those in south-east Asia and the Middle 2012 milk productionfor inpopulation the US centres ties present challenges in a market Dairy Australia’s indicative outlook and local partnerships programs and growing Given these with economicflows. Iran is ranked 118th in doing business in with intake. within Iran. without of the difficulties, it appears that in the World Bank’s Iran: Some financial Cheese,for yoghurt and East maintain consistently higher ecois upawareness around 4% onbenefits 2011 for the yearlocal to dairy manufacturing capacity. Despite southern farm gate US milk prices – thelimited For new entrants production. commercial milk. affordability may be an Aprilof(leap Ease of Doing Business sanctions against Iran sour milk products are year adjusted), whilst early nomic growth rates that support published in the recent Dairy 2012: Sit- these challenges, the underlying domesGiven the difficulties of into the Iranian However, local dairies immediate issue for many report. remain, and many all popular traditional increased dairy consumption. Howdata suggests EU-27 milk production tic market is stable, with steady per-capuation and Outlook is for market, re-exports via doing business with Iran, have experienced difficulty of Iran’s consumers. financialreport, institutions are an Iran also maintains products amongst the surge in supply outpaced uphowever, ita dairy consumption and a growing finished the March 2012 quota $4.05-$4.40/kg intermediaries in has the UAE it isyear unclear quickly wary ofof falling foul of consumers.opening price range (Iran’sin largest source of Western dairy companies theseaverage by doing business With theMS opening of year demand growth the market. Zealand and up a full price range population providing a degree of cer- 2.3% on the previous year. New imports) may represent will be able to exploit in Iran. the Iranianbetween market, hopes This situation has seen the scales $4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish the most straight forward any opportunities in the Furthermore, the are high that the Iran will tip in favour of buyers in dairy marthis season up 10% on last year a huge In the seasons following the 2008 report considers the wider market picstrategy of gaining Iranian market. re-imposition of sanctions mature into a large, highkets, commodity milk there ture manythe factors financial crisis and subsequent com- market influence given 95% of NZ in the prices Iranian retreatHowever, is with exposure removedthe following value market for and dairy summarises withoutmonths. some of Butter someenjoyexisting foreign ing steadilymarket over recent nuclear of deal, orcurrent new the sit- modity price recovery, farmers in is exported. Argentina is also exports. at play; the key theme the attendant withinprices Iran, most possible sanctions such Until recently, was that are down somerisks. 30% from their but a siguationIran being of re-balancing inasthe export-oriented regions have seen solid ing solid production growth,presence Whilst Iran’s re-joining significantly New Zealand, those imposed after Iran’s a sizeable dairy importer, global supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have dairy supply chain. the global community is which has averaged ballistic missile tests in particularly of butter and lost more 20%. Farm gate prices from leavIn regions Australia focused welcome news, significant 55% of imports by than October 2015, remains a on higher-cost competitors in the North- much of this additional milk around Skim Milk Powder (SMP). of have subsequently been reduced in ing South America. ern Hemisphere amongst those expandproducing drinking milk, many farmers volume, 90% of which was challenges remain. real possibility. Although the Its importance butter. Wider regional impositionface of sanctions by regions. may The average Despite wider economic uncer- most exporting a re-balancing market in the form ing output as their margins increased. have been over-hyped Fonterra has publicly instability is also a the USD and EU did not of renegotiation of supply contracts This season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France by a dairy industry eager welcomed Iran’s opening, problem, and will likely target food trade, Iran’s for example, 12% from as importing countries like China and confidence and reduced access ‘tier one’ fordropped any good news when 32 Euro and expressed make to Western firms supply. ditions have further enhanced milk export earnings and local facing an otherwise fairly in its ability to navigate cautious about engaging exchange rate tumbled, Picture: ©ILO/J. Huguet depressing outlook. the complex business with Iran, at least in the reducing its ability to pay THE SUCCESSFUL
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Malaysia FTA benefits dairy Freed
Global Dairy Trade expands offering
ASEAN-Australia-New rice and wine exporters to Zealand FTA (AANZFTA). “Protectionist sentiMalaysia are the biggest ment over agricultural winners in a free trade GLOBALDAIRYTRADE (GDT), tor financial markets at OM Finan- listings, with Fonterra Cooperative goods is rife and growagreement (FTA) signed owned by Fonterra, is set to expand cial and member of GDT Events Group confirmed as the first seller. ingBoard, across the globe, so the and twodigital coun- Oversight The June 1 GDT auction saw a Nigel Brunel said. its role inbetween online trading in this context it is like pleastries last month. “GDT Marketplace acts a 3.4% rise in the price index with services. front to connect buyers 24,046 MT traded. In addition to the current twice ing Australia has managed The deal, signed afterglobal shop However, the flagship whole and sellers and allows transactions monthly seven GDT auction, the service to forge an agreement years of negotiawill include a new 24/7 dairy trading of any dairy product, at any time, milk powder price dropped 1.7% to with Malaysia that has tions, allows a liberalised platform and a subscription service with no minimum quantity con- US2200/tonne. dealt with some sensilicensing arrangement Skim milk powder was a big (GDT Insight) offering round-by- straints. tiveplatform agricultural issues winner, rising 12% to US$1867/tonne. complements round and frommilk “This forpost-event Australiandata liquid which continues to bebyButter milk powder trumped it with GDT Events. not effectively covered exporters and allows GDT Events, “The introduction of GDT Mar- best suited for trading large quanti- a 14.2% rise. AANZFTA,” says Fraser. access for higher value Cheddar prices rose 7.8% to ketplace will expand the quantity ties of standard dairy products,” he Sealing the deal: Malaysian trade minister Mustapha Mohamed “While under the retailonline, products. US$2669/t. of dairy traded offering flex- said. with Australian counterpart Craig Emerson after signing the deal. AANZFTA agreement It guarantees AusThe next GDT auction is on June GDT Marketplace will offer prodible 24/7 access to a broad range of fixed of price or closed tender high quality dairy wine products,” direc- ucts viamost Australian agri- 15. tralian exporters but also through technical Despite the compleers through streamlining culture’s key interests the best tariff treatment or so called ‘behind the tion of this agreement, of rules-of-origin dechad tariffs bound at zero, Malaysia gives any counmuch remains to be done border’ restrictions.” dairy and rice are two sec- laration processes and try. It also allows open austraLian DairY,
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company Freedom Group Ltd is to bui new milk processin to cash in on growi demand in Asia. The plant, to be southeast Australia the first Australian fields expansion in 10 years. Freedom’s whol owned subsidiary P Australia will run th plant. Some of its p
DAIRY NEWS AUSTRALIA JUNE 2016
20 // OPINION RUMINATING
EDITORIAL
It’s a matter of trust
MILKING IT... Battle against flatulence INDIA IS doing its bit to fight global climate change: government scientists are working hard to reduce carbon emissions by making cows less flatulent. Consider the numbers: India has some 280 million cows and 200 million more ruminant animals like sheep, goats, yaks and buffalo. According to an analysis of satellite data from India’s space programme, all those digestive tracts send 13 million tons of methane into the atmosphere every year; and pound for pound, methane traps 25 times more heat than does carbon dioxide. So reducing animal flatulence might do some good; scientists at the Cow Research Institute in Mathura are tinkering with cattle feed, seeking a formula that will cause cows to belch less gas. That is how most of it is released; much less comes from farting, the scientists say.
A Gouda idea A DUTCH dairy farmer has begun a 3D printed cheese business in response to the global dairy glut. Taking inspiration from chocolate makers, who have also embraced the technology, Michaëla van Leeuwen tried the technique as a way to value-add. She makes a soft fresh Gouda cheese and prints a variety of shapes and objects. Ms van Leeuwen said she started to think about diversifying after she and her husband were forced to relocate their farm. She can use the printer to make custom cheese shapes. “If you want to give your husband for a Valentine yourself as a sculpture, then you can say to your husband that you are delicious,” she said. “You can have a sculpture of your husband in Gouda cheese.” A niche product indeed.
An age old tradition
Farmers paying attention
NEW research has found that dairy farming in the European mountain ranges of Alps may have begun as early as the Iron Age over 3,000 years ago much earlier than previously thought. Dairy farming has long been an important tradition in the high Alps, but little is known about when and how the practice originated. Researchers from the University of York in the UK found evidence of dairy fats present on fragments of pottery from ancient stone structures high in the Alps suggest that people were dairying, such as heating milk, earlier than had been previously shown. Alpine cheese-making continues in the region to this day.
FARMERS who may have been watching the Channel Ten show ‘Have You Been Paying Attention?’ last month may have done a double take when they saw an image of what host Tom Gleisner described as a ‘grumpy dairy farmer’. The ‘grumpy’ farmer in question was none other than Queensland Dairyfarmers’ Organisation vice-president Ross McInnes. Ross said it must have been a file picture on hand from an old news story, because he no longer wears the moustache that sat above his top lip for 30 years. The story was about the recent price cuts, of which Mr McInnes was, as it happened, very grumpy about.
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IN 2014, industry stakeholders from across the supply chain gathered to outline a vision for the industry to 2025. The statement reads that the industry will be innovative; responsible; preferred; unified and valued. If this exercise is to be anything other than rhetoric, then the industry must address a few hard truths exposed since Murray Goulburn announced its second step down in seven years, more than a month ago including: Australia is lagging behind its competitors in terms of milk price transparency and sharing risk across the supply chain (see opinion, p.21). Without reform, we stifle growth and farmers wear the burden of risk. The events of the past month have also damaged a relationship of trust between farmers and processors, especially at Murray Goulburn and Fonterra, that may take years to repair. Bega chairman Barry Irvin said it well at the Situation and Outlook briefing earlier this month: “Trust is built by your actions. It’s not built by rhetoric. It’s built by actually doing things and understanding the impact of those things on those that indeed do trust you, that rely on you.” Bega chose to wear the cost of the dairy market slump, holding its farm gate milk price at $5.60kg/MS through May and June, because that was its commitment to suppliers. It’s an approach to business that goes beyond the balance sheet. And it will pay off. The actions of MG should signal a wake-up call for all farmers and members of the co-op. Know your budgets, check them regularly, and always know what you are signing. Speak up. Ask questions (even dumb ones) and share information. Consider collective bargaining options. Seek out independent advice. Because as the dairy industry becomes increasingly competitive across the globe, so too will the ruthlessness with which some operators try to do business. They will always be bigger and richer but that doesn’t mean you always lose. The recent rallies in Melbourne, Adelaide and Brisbane have shown dairy farmers can mobilise to fight for a fair go. They are also mobilising online, although not in a particularly coordinated way as yet. United Dairyfarmers of Victoria president Adam Jenkins agrees farmers can use recent events to build farmer advocacy and avoid this situation happening again. “Farmers need to understand whether it be advocacy, supplier shareholders, whatever, those decisions will be made by the people who turn up in the room. And if you’re not there you can’t whinge and complain. You need to start turning up.”
Editor Madeleine Brennan
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DAIRY NEWS AUSTRALIA JUNE 2016
OPINION // 21
Our milk pricing scheme must change CHRIS SCARLETT
THE MILK pricing system in Austra-
lia, with its lack of transparency and risk mitigation tools across the industry, is holding back expansion of dairying in Australia and needs to be improved. This latest round of events in Australia does not auger well to grow Australia’s milk output, which has been in decline. At Ausfine, I have been fortunate to gain a global dairy perspective - we deal with suppliers of product from every main producing region, and export to every major market. The Australian industry is competing for a dwindling pool of milk and seems reluctant to change. Is the industry simply shuffling the deck chairs on the Titanic? Or should it change the tune the band is playing, and change course now? The out-dated milk pricing model which exists in Australia needs to become progressive and attractive for investment. Currently, given the opening price and forecasted price are calculated based on forecasts of volatile commodity prices and foreign exchange rates, they are basically out of date as soon as the ink is dry. Step-ups or step-downs are usually retrospective and can get back calculated on all milk supplied since the start of the financial year. This means farmers are either receiving cash flow well after they needed it to grow production during the year when prices were high and supply was needed; or, they are left with the potential for clawbacks, which in the current scenario will be paid back over the next three years. The inflexibility of the system poses as many issues for buyers of milk as it does for the sellers.
iDAIRY
In the past we have seen some manufacturers borrow to either prop up milk prices to farmers when the prevailing market cannot support it, or invest in new production capacity to chase higher returning markets. That can only work if the debt can be paid back on the next “bounce” in commodity prices – or if “value-add” efforts are fully realised. If prices and returns don’t rebound quick enough, and the banks aren’t willing to keep on lending, then the music stops. This pricing system harks back to the days when majority of milk was supplied
Many of our competitors have more transparent milk pricing models, as well as commodity futures exchanges trading dairy, where market participants can efficiently hedge their risk and take signals from futures to make more informed decisions of future market trends. to cooperatives who owned the processing assets. However, the Australian dairy industry has changed considerably. The historical model where the co-op also owns all the processing assets is no longer the majority. Coupled with this are unique and complex milk pricing models offered by co-ops and processors, based on geographical location, seasonality, milk composition, etc. There are also other incentives and deterrents for farmers to stay, or switch, unique to the current party they contract their milk to. It would take a panel of advisors (knowledgeable in milk composition, contract law, cost accounting and dairy seasonality) weeks just decide what is the best deal for each unique farmer - let alone a farmer milking the cows twice a
can use; farmers, processors, investors and buyers of Australian dairy products and ingredients. Many of our competitors have more transparent milk pricing models, as well as commodity futures exchanges trading dairy, where market participants can efficiently hedge their risk and take signals from futures to make more informed decisions of future market trends. Futures signals are a collective and somewhat unbiased view of the total market. This view of the market can be used by participants, coupled with their own views and other views from management, to make informed decisions. The USA has the most liquid and sophisticated dairy futures market, based around national milk price transparency and a suite of CME (Chicago
Is the industry simply shuffling deck chairs on the Titanic? asks Chris Scarlett.
Mercantile Exchange) dairy futures. Many “Dairymen” in the US use futures, often via the manufacturer or co-op who contracts their milk, in order to protect their margin and provide banks and lenders with comfort over their capital. Processors in the US largely remove price risk from their “things to worry about” and focus on improvements in efficiencies, scale, technology and product development to gain an edge in the market and achieve success. Buyers of US finished product can also use CME tools to hedge out price fluctuations and provide their customers or consumers with long term flat pricing which is particularly important when dealing with retailers or food service customers. This can often provide an advantage for US producers when negotiating longer term deals with retail and food service buyers who need fixed long term pricing. New Zealand launched Dairy Futures on the NZX a number of years ago. Europe is also active in developing dairy risk management across the value chain – there are dairy product futures on the EEX (European Energy Exchange) which are being used by manufacturers to give fixed milk prices to their farmers. Liquidity on the exchange and risk TH1848M 25-8-15
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management will become more sophisticated and continue to grow. Cooperatives and processors in Australia which I have raised my views with have countered that they can mitigate the risk for their farmer suppliers through value-add and product mix. But value-adding ultimately does not remove one from the global supply and demand trends in milk pricing. It is not a short term solution, it is not without its own risks, and it is not a risk mitigation for pricing volatility. Rather than lagging the rest of the world with regards to transparency surrounding milk pricing, Australia has the opportunity to turn the negative course of recent events into a positive and become one of the more progressive global dairy suppliers. Sure, open transparent markets with futures exchanges do not stop the inevitable supply/demand boom/bust commodity cycles, but they do allow the risk to be spread from solely farmers, to other market participants. If Australian dairy farmers could access that information and see the forward view, even better; take commercial advantage to lock in a premium price in the future if it suited their circumstance, it may assist them through tough periods. • Chris Scarlett is managing director at Ausfine Foods.
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day and running a dairy farm. Due to this lack of transparency on milk pricing and its retrospective nature, the ability for the industry to hedge price risk “end to end” is largely lacking. Dairy farmers remain the “risk mitigants” for the Australia. The industry needs to be developed where companies and new entrants can grow new milk. New investment can be partly achieved by promoting transparency and developing some real risk management tools such as exchange traded futures contracts, which all participants
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DAIRY NEWS AUSTRALIA JUNE 2016
22 // MANAGEMENT
Adapting to variable climate RICHARD MEREDITH
EX-KIWI DAIRY farmers Gary and
Sheryl Van Der Drift bought their dairy farm at Myalla in north-west Tasmania 20 years ago. Back then they added 10ha to the original 60ha dryland operation and milked 140 cows. Roughly 10 years later they started introducing irrigation and building bigger dams. By 2007, they had 70ha under irrigation and were milking 240 cows. With further land purchases and clearing, by 2012 they were milking 500 at the spring peak. Numbers are down to around 430 at present, producing 1.75kgMS/cow. The Van Der Drifts expect to produce 250,000kg/MS for the 2015/16 season, slightly up on the previous year. Tasmania has been hit by one of the driest spring and summer periods on record, and more recently, floods. Pasture and water management is currently the main game on the farm. The Van Der Drifts work to a whole farm plan and soil test regularly to optimise the cost of inputs. “Fertilising little and often has replaced blanket autumn and spring fertiliser,” said Gary. “We’re definitely making savings and it’s good to see where we’re going.” The farm has a two pond effluent system holding 80 days of effluent, which is spray irrigated onto pasture adding further to fertiliser cost savings. The Van Der Drift farm is participating in the Dairy Businesses for Climate Change project run by
WHO:
Gary and Sheryl Van Der Drift WHERE:
Myalla WHAT:
Irrigation drives growth
Dairy Australia. The project has been designed to estimate the best options for managing dairy farms under predicted future climate scenarios. Options for change It looked at three possible options for future management. They included higher intensification with higher levels of bought-in feed, medium intensification with more irrigation and moderate levels of bought-in feed and low intensification with a reduced stocking rate and low levels of bought in feed. The study indicated that for Gary and Sheryl, the medium level of intensification based around increasing irrigation was the best option for their farm under a variety of climate variability scenarios. Under that scenario the ‘model’ medium intensity farm would add a further 150ha under irrigation for summer production and use off-farm agistment to manage wet periods through winter. Gary found the project helpful in
Gary and Sheryl Van Der Drift in their fodder crops.
setting directions for the future. “It was good to chew the fat with other farmers,” he said. Already well on the road to increasing home grown forages, the Van Der Drifts grow 20ha of beet and kale fodder for winter feed. The fodder crops yield between 6-8kg/ha giving them 20 to 30 tonnes of dry matter if the wallabies don’t get it first. Twelve months ago, Gary installed 900m of 13 strand wallaby fence between the fodder paddocks and the bush.
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“It’s paid for itself already,” he said. “We were losing a metre of crop every night.” Thanks to the dry spring and summer, silage production has been around one-third of a normal year. Dam storages hold 500 ML. On 75ha of the irrigated area K-Line moveable irrigation lines are on a six day rotation, which has been a labour intensive task over the dry summer. Centre pivots cover a further 25ha and 25ha are under hard hose irrigation. Waiting for the break “We stopped irrigating when we had enough water for one week of irrigation left in the dam,” Gary said. Over irrigating in late summer can be costly in autumn as the soil can get too wet. In late April, the autumn break had not arrived. The cows are on a 40 day pasture rotation averaging 12.5 kg/DM per cow with 6kg of pellets fed in the bale. “We’re not doing a lot of feed budgeting now,” Gary said. “We have steps in place. We keep the rotations
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Gary said without investing in a wallaby fence, they were losing at least a metre of fodder every night.
going and it seems to take care of itself.” The cows are dried off in mid-June to calve in August. “We stopped split calving. There wasn’t enough money in it for it to be worth our while,” Gary said. With the additional irrigation and attention to pastures, forages and supplementary feeding, Gary and Sheryl are finding their management of changes in climate and weather patterns is fairly consistent with the findings of the Dairy Businesses for Future Climates study, which concluded that the volatility of milk price is more of a risk factor than climate variability. Every dairy farmer in Australia, especially over the last month, knows this to be true. Combined, changes in volatility and climate make it almost impossible to stick to plan. Controlling what you can - through good farm management, additional irrigation to cope with less reliable rainfall patterns and investing in people - are vital ingredients for future profitability.
DAIRY NEWS AUSTRALIA JUNE 2016
MANAGEMENT // 23
Zero-waste system transforms effluent into useful products A ZERO-WASTE system developed for spacecraft could be cost-effective on dairy farms, says inventor William Mook. The Zeecol system converts cow effluent into fuel, fertiliser, electricity and high protein feed, he says. Mr Mook is the founder of the New Zealand company and a Canadian subsidiary; he is based in Christchurch. A Mid Canterbury dairy farm is said to be committing to a Zeecol system. Though various system components are in use discretely in other countries, NZ is the first country where a complete system has been run onfarm. Elements of the system were developed for use in a space station where waste must be contained at all times – no leaks or build-up of harmful substances. The technology can displace conventional farm treatment and disposal systems, Mr Mook said. “We have the technology to costeffectively contain cow waste and increase
productivity. There is no odour, no impact on the environment; everything that goes in comes out in a useful form.” Pannetts Dairies in Mid Canterbury is committed to a Zeecol system, Mr Mook said. “Using barns enables Pannetts to achieve a profitable, humane and sustainable farming environment that is not possible on a grass fed system. Cows are more comfortable in a properly built barn, but won’t produce well if they are caged.” He forsees the ‘top’ 5% of New Zealand herds as being likely users of the system – chiefly farms with barns or feedlots where a high proportion of effluent can be captured. In barns about 90% of effluent can be contained. In a full Zeecol barn system, a farm is supplied with $9000 of equipment per cow – owned, managed and maintained by Zeecol. The farmer is charged for the facility’s output at a rate of 80% of the comparative fuel/ electricity/fertiliser/feed
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DAIRY NEWS AUSTRALIA JUNE 2016
24 // ANIMAL HEALTH
NPE chemical ban will affect us all ROD DYSON, DAIRY FOCUS
PHOTO: DE LAVAL
DICTIONARIES VARIOUSLY
describe the meaning of the word “residue” as being a “remnant”, or “something which remains after a part is removed”. Prior to July 1945, no human had radioactive residues due to nuclear weapons. However, the situation now is dramatically different - every human on earth has some level of residue in their body from the fallout of nuclear weapons. There are many different types of residues that can affect humans. Some residues are removed from the human body with time; others are never removed and can slowly accumulate over time with each added exposure. Residues can be especially pesky for food producing industries, as sometimes the situation with regard to any particular residue can change rapidly in the marketplace. In the not too distant future, all dairy farms in Australia will need to review their current teat disinfection program, as milk processors move to meet changing market requirements with regard to residues. In particular, teat disinfectants that contain Nonylphenol Ethoxylates (NPEs) will be disallowed by a number of processors, with some taking effect from July 1 this year. Market requirements for some dairy products have changed with respect to NPE residues, meaning
the use of these products cannot continue if processors wish to keep trading in these markets. NPEs have been included in many teat disinfectants as a surfactant, but not all current products have NPEs in them. So whilst there are some products already on the market that are NPE free, no doubt most manufacturers of teat disinfectants will move as quickly as possible to have products available in their range that do not contain NPE’s and will comply with supply agreements. So, what will farmers need to do? If you have not already been notified by your processor, you should check with them (probably via your factory field officer) what the situation is regarding NPEs in teat disinfectants and if changes are required, when will that change begin to apply. Ask your processor for an up-to-
date list of the products that do not contain NPEs and which comply with your supply agreement. As the number of NPE free products is somewhat limited at the moment, depending on the products that are available from your chemical suppliers and in your region, you may be presented with a number of alternatives to choose from. If the product you are currently using is on the list of NPE free products, no change will be necessary. If there is a direct replacement with a similar product, e.g. an NPE free iodine product to replace your current iodine product, the choice is easy. However, you may also have the choice of an alternative product that is different to your current one, eg perhaps an NPE free chlorhexidine product might be suggested to replace a non-com-
pliant iodine product. Perhaps a difference in the cost of replacement products may also cause you to consider alternatives. In making your decisions, the key factors to consider will be efficacy, risk, and cost. In common sense practical terms on the farm, there is little difference in the ability of iodine and chlorhexidine products to disinfect teat skin – they both do a very good job. Possibly the main difference in the practical application to teats is the ability to see how well teats are being covered with disinfectant; iodine products are generally easier to see on teat skin than most chlorhexidine products. Perhaps the main risk of change in efficacy would be if you moved from away from a Ready-to-Use (RTU) product to a product that is mixed on the farm. The beauty of RTU products is that they remove the relatively high risk of less than ideal water quality or inaccurate mixing affecting the efficacy of the final product. Given that post-milking teat disinfection is quite simply the most important mastitis control measure in the dairy, would you really want to risk a reduction in efficacy? Wouldn’t you want the best possible efficacy, albeit at the best possible price? If you find that you are unsure of the best choices, speak to your factory field officers, your vet and your mastitis advisers – an informed decision is always a better decision.
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China drives phasing out of NPEs IODINE-BASED TEAT sprays containing Nonylphenol Ethoxylates, or NPEs, were once the standard throughout the dairy industry. As possible side effects of NPEs have become known, use has gradually decreased worldwide and now the focus has shifted to Australia. A ban by China on the use of this material in milk production products is prompting the component’s final days. “This is a trade issue,” explains Thomas C. Hemling, global manager of R&D for DeLaval Manufacturing. “It’s a change worldwide producers will have to make if they want to continue to export dairy products to China, and other markets.” That’s put pressure on processors to eliminate the additive or have their product rejected. The pressure rolls back up the supply chain to worldwide suppliers and producers. In some cases, compliance is expected within a short time frame – 60 days or less. Dairy processors in many parts of the world have already notified their producers to eliminate NPE from their teat sprays. Many Australian processors are taking the same steps, with the same short time frames. NPEs were once commonly used in commercial and household detergents, primarily degreasers and laundry detergent. They are still used in some dairy operations as external surface cleaners, where they do not come in contact with milk. But their use in teat sprays has come under recent scrutiny. Traditionally popular with producers, iodinebased teat sprays provide an economical disinfectant and skin conditioner. NPEs have been a key component in that compound, binding the iodine and keeping it in suspension. But unlike external equipment cleaners, NPEs in teat sprays can leave residue in milk. Use has declined over the past several decades TO PAGE 25
DAIRY NEWS AUSTRALIA JUNE 2016
ANIMAL HEALTH // 25
App delivers confidence boost IN A hard season it’s easy
to look on the negative side of just about everything around the farm. But for Sharyn Allott the Dairy Australia Body Condition Scoring app turned out to be a bit of a morale booster. “I wouldn’t have done it (condition scoring) if I’d had to use a pen and paper,” she said. “But with the app I just rolled out a bale of hay and walked along behind the cows and scored about 70 in one go.” And the morale booster? It turned out they averaged a condition score of 4.8. “You tend to look at the bad side when you’re going through a season like this so knowing the cows were in such good condition going into calving was a positive in a difficult season. “They were in a lot better shape than we thought.”
Dairy Australia’s feedbase program manager, Richard Romano, said the Cow Body Condition Scoring app helps farmers working with seasonal and split calving herds take greater control over their herd’s feeding. “The herd’s range in body condition score is as important as its average score,” Richard said. “It gives a quick view of what proportion of cows are too thin and too fat. These cows are likely to have reduced reproductive performance and milk production, and increased risk to their health and welfare, which can ultimately impact farm profitability.” It’s been a hard, dry season in South Gippsland, usually one of the most reliable rainfall regions in the country. Sharyn and Neil found some of their cows scored as high as 5.5 while a few of the poorer ones were
down around a condition score of 4. Designed in consultation with dairy farmers and advisers, the Cow Body Condition Scoring app is easy to use, featuring large graphics that provide a standardised measure of cows’ body energy and protein
reserves at critical times of lactation. “The app has been designed to make the body condition scoring process easier so farmers can realise the benefits in their herd’s reproductive performance and milk production,” Richard said. Herd results are pro-
vided instantly after each scoring event with suggested actions to consider. A results summary including a graph can then be emailed as a permanent record. The Allotts culled in October when they knew the milk price and the weather were going to go
against them. And they culled again in February for mastitis and high cell counts, older cows and empties. “We’re milking 88 now and we dried them off at the end of April. We’ve kept condition on the milkers by feeding 5kg of a 20% protein mix in the
You always want to do your best for them. They’re like family.
She says we’re like family.
China drives phasing out FROM PAGE 24
since the science began to show NPEs cause disruptions to aquatic life. “The effect mimics estrogen,” Mr Hemling says. In other words, fish take on “feminine” qualities that affect growth and reproduction – and in some cases lead to increased mortality. Use in household products and detergents was curtailed, and the dairy industry started to back away when it became aware of possible effects on infants and children. “They consume milk as a higher percentage of their weight and diet,”Mr Hemling adds. Dairy industry product suppliers have responded. NPEs were banned in Europe around 10 years ago, and DeLaval stopped using them in products there. The company has offered NPE-free iodine teat disinfectant products for more than 30 years in the US. Some of those same NPE free products have been on the market for 10 years in Australia. Non-iodine, NPE-free products are available, however in the harsh conditions Australian farmers face, there is no substitute for the bacterial killing power of iodine. -Source: DeLaval
bale.” Next season they’ll try to boost the numbers back up to 140. The Cow Body Condition Scoring app can be downloaded at www.dairyaustralia.com.au/BCS or visit the Google Play or iTunes Apple store. – Source: Dairy Australia
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DAIRY NEWS AUSTRALIA JUNE 2016
26 // CALF REARING
Top priorities for h SUCCESSFUL CALF
rearing with low morbidity (sick calves) and low mortality (dead calves) relies on the attention to detail in all aspects of the ‘calf rearing puzzle’. A shortfall in one area will mean that other pieces of the puzzle need to be optimal to avoid unnecessary disease and
losses. In a season such as this, we need to be mindful of the cost-benefit of management changes. Strategic decisions should be made based on evidence and circumstance, to avoid unnecessary expenditure without a compromise in animal welfare.
THE VET GROUP GEMMA CHUCK This article discusses some of the top priorities of calf rearing to achieve maximum benefit with minimal cost. PUZZLE PIECE #1: COLOSTRUM Of all the pieces of the puzzle, this is where it all begins. The temptation is to look for other ‘silver bullets’ to add to the feeding system but the very thing that is going to impact you the most is successful colostrum management. Colostrum is the very first milk produced in the udder. Milk from the second to eighth milking is called transition milk. Remember the three Qs of colostrum management: Quickly, Quality and Quantity. Quickly Pick up all calves from the calving twice daily and actively feed first-milking colostrum (by teat or tube) immediately. If only once daily pick up is available, store firstmilking colostrum with potassium sorbate in the refrigerator and teat or tube feed all calves as soon as possible after birth in the calving area. Keep a simple recording system (spray paint/ whiteboard) to ensure all calves are fed their two feeds of first milking colostrum. Quality Pick up all freshly calved cows from the calving twice daily and milk at both the morning and afternoon milking. Colostrum quality starts to decline at the point of calving and twice daily pick up and milking of fresh cows will allow collection of the best possible quality colostrum. Ensure all cows have a minimum dry period of six weeks. Colostrum production starts approximately 5-6 weeks prior to calving.
Cows with short dry periods will have compromised colostrum quality. Routinely measure all first-milking colostrum with a Brix refractometer (cost A$40). Separate colostrum into two ‘grades’: good and poor. Brix readings of 22% or greater are considered good quality colostrum: reserve this for the very first feeds to newborn calves. Brix readings of less than 22% are considered poor quality colostrum: feed this as a second feed where necessary. Only mix colostrum of the same grade: good with good and poor with poor. Quantity Actively feed (by teat or tube) all calves a suitable quantity of the best possible colostrum available as soon as possible after birth. The exact quantity to be fed will depend on quality: Good quality colostrum is available: feed 2L in the first 12 hours, followed by another 2L in the next 12 hours. In large calves 4L can be fed as a single feed in the first 12 hours. Poor quality colostrum is available: feed 3L in the first 12 hours, followed by another 3L in the next 12 hours. PUZZLE PIECE #2: ENVIRONMENT Calf sheds and pens come in all shapes and sizes but there are some basic rules that apply to any set up. All-in All-out system This system allows calves to be reared in batches, as a group of similar age and therefore immunity. There should be no more than seven days between the oldest and youngest calf in the pen. This system relies on filling a pen sequentially as calves are born. Once that pen is full, a new pen is started. Calves do not move from pen to pen through the shed as this allows easy transfer of disease. Calves stay in their pen until they are all moved out, as a batch. The pen is then cleaned prior to be used again. Although it is tempting to re-use the bedding,
DAIRY NEWS AUSTRALIA JUNE 2016
CALF REARING // 27
r healthy calves The temptation is to look for other ‘silver bullets’ to add to the feeding system but the very thing that is going to impact you the most is successful colostrum management.
this can greatly increase the risk of spreading disease from older to younger calves. Solid partitions If you have gone to the effort of rearing calves in an all-in all-out system, then the very next step is to separate pens with solid, non-permeable partitions. This helps prevent transfer of disease from pen to pen. If solid partitions are used and there is a ‘hiccup’ of disease in one pen, it can be contained to that pen. Mesh and gate partitions allow easy transfer of disease between pens via manure and nose-to-nose contact. Partitions need to be 1.5m high and made of a non-porous waterproof surface that can be easily cleaned. Materials include corrugated iron or tin. A cheaper and lightweight alternative is the use of corflute (the same material used for signs). This can be obtained in sheets at most large homegarden stores. Feeding systems
All calves should have access to ad lib, clean, fresh water from birth. This can easily be achieved using buckets in car-tyres or held in place with bungee cords. Ad lib calf starter (concentrate) from birth is also optimal to promote earlier consumption and rumen development. A minimum of 18% crude protein calf starter is suitable for pre-weaned calves. Milk feeding should be consistent with any changes occurring gradually. PUZZLE PIECE #3: HYGIENE All feeding equipment should be washed after each feed to prevent buildup of disease-causing pathogens. Collect colostrum into stainless steel buckets with lids. These can be washed much more efficiently than plastic ones. Wear gloves when handling all calves. This helps prevent disease transfer from calf to calf but also
from calves to yourself. You need to be feeling well to rear calves well! PUZZLE PIECE #4: HEALTH MANAGEMENT Aim to stagger stressful events such as disbudding, weaning, vaccination and turnout. Calves will cope reasonably well with small amounts of stress but one large stressor can predispose to disease. Ensure all staff know the early signs of disease so that sick calves can be identified and treated
promptly. This will ensure the best outcome for the calf. Many calf diseases are precipitated by stress, either from poor nutrition, housing or hygiene. Ensure calves are protected from the weather and fed appropriately for the season. Calves will use more energy from the diet to maintain their body temperature in colder conditions. Calf coats can help to keep susceptible calves warm.
DAIRY NEWS AUSTRALIA JUNE 2016
28 // CALF REARING
Preparation and care key to smooth calving season CALVING IS probably the busiest, most hectic time on farm. Couple that with poor weather, new or inexperienced staff and it can be a stressful few weeks. The key to minimising stress and ensuring a smooth, efficient calving season is preparation. The future of your herd begins with the calves that are born. Through the calving period it’s about getting right the factors that will influence the calves’ future fertility, milk production, longevity and therefore herd improvement. Set the cows up Preparing the cows for calving is key and this should be done towards the end of the season before and through winter. Make sure the cows are dried-off the previous season according to appropriate Body Condition Score (BCS) and their expected calving date. By doing this, the cows
that are already at target can simply maintain condition over winter while those below target should have sufficient time and feed allocation to ensure they remain healthy and calve down at the correct BCS. In accordance with your animal health plan the cows should be monitored regularly for ill-health and treated promptly, trace elements tested and topped up to the necessary levels and vaccinations to help protect against calf scours given at the appropriate time. Cows should be transitioned smoothly on to and off winter feed so the digestive system is able to cope with the high demands of calving and starting lactation. Remember your heifers. They should be brought back to the farm early and transitioned into the herd smoothly so they become used to the farm and the changes in feed in order for them to start their adult milking life in
the best possible way. Set up your feed plan Nutritional requirements are different for cows when they are dry, springing, calving and milking. You’ll need to have a good feed budget and feed allocation plan in place
and a process to make sure staff keep track of the numbers of cows in each mob as calving progresses. Set this up with your farm advisors, monitor feed supplies and demand as you go and adjust if necessary. Maintaining appropri-
ate nutrition over calving is very important for the cow’s health and subsequent production and reproductive performance. Set the records up Make sure that the records have been completed from the following
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season and cow numbers are all set up with no queries prior to calving. This means it’s easier to enter calvings and there is no confusion around records at the most stressful time of year. Keeping your records up to date through the calving period means you can keep tabs on how your calving is going as well as easily review the process once calving is finished. Set the scene up Having everything in place, ready to go makes everything much easier and no-one is scrambling around looking of equipment or trying to stock-up once calving has started. Have the first aid kit stocked with vet supplies sitting in a well-defined place. Ask a staff member to be in charge of restocking this regularly so in an emergency there is always the necessary supply there. Identify where the calving jack and ropes will stay and make sure these are washed after every assisted calving so they are ready to use immediately when needed. Make sure there are posters on the wall of important phone numbers, drugs that have been prescribed for that farm including dose rates and methods of delivery. Any other posters that will be useful to staff and make their jobs easier are great to have up on the wall such as flow diagrams to assist with decision making in an animal health scenario. Ask your vet to help you with these. Set the staff up Everyone knows that a good employee makes the calving season seem so much easier. Have your staff on the ground well before calving starts so you can find out how much training they need. Make sure they have had a break, though, and are coming into this busy period fresh and ready to go. Take the time to define their roles to them and ensure they understand what’s going to happen
and why. Train them, make sure they are up to the challenge and it’s more likely to be a good job done right from the start. If you don’t have time to train staff or are unsure how to, you may be able to access training from local providers such as vet practices, Dairy Australia and other industry bodies running winter workshops and employee calving season training. Follow protocols from the start to the end of calving and don’t drop the ball This is vital. It’s easy to do it right at the beginning and then as the stress continues and tiredness creeps in, shortcuts happen and things don’t go to plan. Make sure protocol is being followed, things are being put back where they belong, the cows are treated exactly the same towards the end of calving as they were at the start and hygiene doesn’t become a problem. With this in mind, it would be nice to get through the calving period with no slip-ups and high-fives at the end of it. Review and revise for next year After calving has finished and before the stress of mating occurs take time to review how the calving period has gone. This can be done by you, you and your team or invite your rural professional to become involved. The more you learn, the better you can perform in subsequent years. A review will cover all of the above, assess how it was performed and the outcome (good or bad). With this information, and try to collect as much data as possible, then you can make plans for next year based on experiences and outcomes of this season. Keep this review as a written record and by building up data and information over the years, you can fine-tune your farming practices to get the maximum outputs possible. • Jude O’Neill is a reproduction solutions advisor for LIC.
DAIRY NEWS AUSTRALIA JUNE 2016
CALF REARING // 29
Focus on calf comfort and health to reap the rewards MADELEINE BRENNAN
DARREN MERRITT
sees the calving shed as the heart of his operation. “It doesn’t matter how flash your milking set up is, this is the hub,” Darren said. “You’re setting them up for life.” A third generation farmer from Boyanup, WA, Darren says he enjoys animal husbandry and takes control of rearing the calves up until about two weeks of age - which may explain why he chose to invest in the calving shed first. “I knew it wouldn’t get done if I did the dairy first.” The new shed, which Darren designed, can house up to 120 calves and gives calves 1.8sq m each - over and above the required minimum of 1.5sq m. “Overcrowding and poor hygiene will turn your calf shed on its head overnight,” Darren said. ”The calf shed is not a place to try and save money. It’s a place you spend money on heifers, not save.” Darren designed the shed to support healthy calves, which is done yearround, and to make it easy to clean. It has 18 pens, nine on each side, with a generous space down the centre for ease of access for the bobcat. All up it’s a 22m x 36 m shelter with a 6m lean to on one side and a 4 x 4m
The calves are given ample space in each pen.
office. Concrete half way up each pen allows protection from the weather, while open air between the concrete and the roof supports good ventilation. Straw bedding is changed weekly to maintain good hygiene. Visitors to the Dairy Innovation Day in April, hosted at the Merritt’s farm, were impressed by the size and cleanliness of Darren’s operation. “After colostrum the next most important thing is hygiene and bedding and if you don’t have that shed easy to clean out, no-one will want to clean it out, or re-bed it out.” The shed has sliding doors at the end, “and the gates come around without a single spanner or pin, latch, nothing”. “The bobcat can come in and have the hay lifted in 25 minutes with not a single shovel or pitchfork lifted. “You can clean that side out, grab a bale of straw out of the hay shed, straw it, back out and you can the whole lot down in about an hour and a quarter.” He said the build, which the Merritts did a lot of themselves, took about seven months, in between running the farm. The difference between the old calf shed and the new is staggering. “We’ve left a couple of calves up in the old shed at the moment, holding them for a calf sale, and I was in there this morning, it’s a nightmare. I couldn’t put up with it now.”
The investment in the shed means his sickness rates in calves is virtually nil and his mortality rates are very low (less than 0.4%) And it’s a lot more pleasant for staff too. “People aren’t in the weather, it’s all concrete,
it’s easier on calves and on us.” He feeds calves twice a day to make sure they are in the best condition before they are weened. “Not everyone does that but I think it’s important for health and for temperament.”
Darren rears the calves himself for the first two weeks.
DAIRY NEWS AUSTRALIA JUNE 2016
30 // CALF REARING
Successful calving sets up the season TO SET a dairy cow up for a long, productive life, she needs the best possible start. The information below provides some guidance. Prepare a portable calving kit
Having the right tools on hand will help reduce calving related health issues and losses. Check springer mob regularly Checks should be done at least twice every 24
hours, preferably every six hours, to provide timely assistance to cows having difficulty calving. All staff must be trained to observe calving cows so they can alert someone else on farm immediately if a cow
is having difficulty. Calve cows in a welldrained paddock Avoid pugged or muddy paddocks to help reduce the risk of mastitis and navel infections. Consider the need for shelter
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As a guide, if the calf presentation is normal, heifers should calve within two hours and cows within one hour from when they start active labour. If they take longer, or the presentation is wrong, the animal should be examined and assisted if required. or a contingency plan in adverse weather. Do not use effluent paddocks for springers, where pasture can be high in potassium and predispose cows to metabolic problems. Assisted calving As a guide, if the calf presentation is normal, heifers should calve within two hours and cows within one hour from when they start active labour (pushing hard). If they take longer, or the presentation is wrong, the animal should be examined and assisted if required. As a rule of thumb, if the cow is making progress and everything is normal, leave her to calve. If you assist too early, the cervix may not have fully dilated and you risk severe trauma to the cow and more difficulty in removing the calf. Down cows ■ Have a plan for managing down cows ■ Provide down cows with shelter and water. ■ Seek advice from your vet for any nonresponsive downers – especially after 24 hours (or humanely euthanise them). Dairy Australia has produced fact sheets and short videos to support assist farmers to manage the different aspects of downer cow welfare. Visit www.dairyaustralia.com. au/Animal-management/ Animal-welfare/Cows/Managing-downer-cows. Care of newborn calves Calf mortality is highest in the hours immedi-
ately following birth. Collect calves twice a day to give them the best chance of getting fresh ‘gold’ colostrum within the first six hours of life. Colostrum amounts for every calf Within first six hours: 2L of gold colostrum (as soon as they are at the shed or sooner). Within first 12 hours: top-up so each calf gets 10% of their body weight in colostrum. Golden rules of feeding colostrum: quickly, quality, quantity. Continue to feed colostrum or a colostrum substitute for at least the first four days of life. When collecting new calves, remember: ■ Mark or tag the calf ■ Record the date, cow number, sex of calf and calf number ■ Treat navels with iodine in the paddock. Calves must be handled with care and a trailer carrying calves should be clean and disinfected, not overloaded, and driven smoothly. Once at the calf shed, re-treat the navel, record at-risk calves and inform the calf rearer. Bobby calves It is important that all calves are treated well. Bobby calves need to receive the same care as replacement heifers. All people responsible for the handling and transport of bobby calves including farmers, calf buyers, agents, saleyards, transporters and meat TO PAGE 31
DAIRY NEWS AUSTRALIA JUNE 2016
CALF REARING // 31
Scours is a crappy issue JO WRIGLEY & DR LES SANDLES
HOW THE heck did that happen? I spent days cleaning the sheds, replacing the bedding and sterilising the feeding equipment…and the calves are still dropping like flies with scours. We all know the basic rules for calf rearing and do our best, but often that is not enough. Having a clean environment and clean gear, even with the most vigilant staff, we can still get caught with scouring calves. That first feed of newborn calves is more than critical: its life and death. We know it’s important that calves get good quality colostrum as soon as possible, but it doesn’t happen often enough. And sometimes it does but the calves still get crook, so what’s going on? The “3 Qs of colostrum” management answer that question. Calves need an appropriate QUANTITY (15% of birth weight) high QUALITY (thick, gooey and a rich yellow) colostrum from the very first milking of the cow QUICKLY (within an hour of birth) to have the best start to life. Dairy Australia has an excellent manual on colostrum harvesting that you can download for free. For further information, look up colostrum management in
www.dairyaustralia.com. au under animal management/calves. Of course, bugs that cause scours can be introduced to calves from all sorts of sources. Staff need to wash their hands frequently and in between handling of calves, particularly sick calves. But the fact remains, E.coli. is everywhere (Hmmm… didn’t you the know the E meant everywhere?) and they get a dose of this from mum during birth. Most people use colostrum just to wash this down. While staff should arrive at the calf shed in clean clothes and footwear each time they enter, or have a disinfectant footbath (that is changed regularly) and disinfectant spray that they can mist onto their clothes, it is far more important they diligently apply the 3 Qs. This means mum’s antibodies can get into the calf’s gut fast enough and in sufficient numbers to plug the holes in the newborn’s gut (called fenestra) and prevent pathogens setting up camp. Using a broad spectrum disinfectant is a good way to minimise introducing bugs, but it won’t touch scours if the colostrum is not sorted. Hygiene around newborn calves is a non-negotiable, but make it really clear to your people that colostrum management trumps that. I’ve done, that but I still
Successful calving FROM PAGE 30
processors must follow the Australian Animal Welfare Standards for Land Transport of Livestock. Everyone who handles calves must treat them with care and patience at all times and protect them from cold and heat. Calves must not be moved with dogs or electric prodders. It is now also a legal requirement for farmers to clearly communicate to transporters that bobby calves offered for sale are fit for transport. To help with this process, Dairy Australia has
developed a sign for the calf pen. To use this sign, just fill in the time that you fed the calves and the latest time for pick up (within six hours of last feeding). Provide your phone number in case the calf buyer needs to contact you. To order a free “Bobby Calves for sale” sign please contact enquiries@dairyaustralia.com.au or call (03) 9694 3777. For more information visit www.dairyaustralia.com.au/Animal-management/Animal-welfare/ Bobby-calves.aspx
have sick calves… Even with attention to detail on colostrum feeding and hygiene, it’s almost inevitable that at least one calf every season will still get sick. If you are absolutely certain you have perfectly managed colostrum management, identifying the cause of pathogens is always useful because it’s relatively rare that something other than E. coli is the primary cause. When it is, you need to know.
Knowing the foreigner can help identify the source and treat it appropriately. Testing kits can be bought through your vet or rural supplies store. Scours kills through dehydration and acidosis. It is essential you have restocked with fresh electrolyte prior to calving. At first sign of scours, the calf must have electrolytes. Always read the label before you buy your electrolyte and make sure it
has bicarb, dextrose, salt at minimum. Some vitamin and minerals can be useful too. Tube two litres of, at least, the recommended dose straight in, but make sure there is a gap of at least two hours since milk. Never ever mix electrolyte with milk. The calf needs the milk to continue for food, and electrolytes to replace the fluids it squirts out. Increase the number of feeds to three of electrolytes and two feeds of
two litres of milk each day, alternating between milk and electrolyte feeding. Remember that electrolytes are just salts, and that the calf still needs the carbohydrate and protein in milk or milk replacer in order to have the energy to fight and grow. Withholding milk, even for just one feed severely compromises the calf’s recovery, starving the calf of vital nutrients. Probiotics, prebiotics, natural remedies, antibiotics and literally hun-
dreds of products are on the market are all interesting, but won’t replace colostrum, food and electrolytes. Choosing products that will help your scouring calves is often more complex than first glance, and no product will never beat that first good feed of colostrum. However, before calving is a perfect time to contact your vet, review your systems and be sure you are on top of the game before calving starts.
DAIRY NEWS AUSTRALIA JUNE 2016
32 // MACHINERY & PRODUCTS
Korean brand catches a wandering eye… FARM WORLD 2016 seems a distant memory now; a time of relative affluence in the dairy industry, despite being a tough enough season already by then. It’s always been a dream of mine to travel to field days on business, and on those occasions when my day job doesn’t make that possible, I look to this column to turn idle window shopping into serious work. Unfortunately, my budget for this year’s campaign extended about as far as buying lunch, so the ability to pursue a personal quest was somewhat dampened. Fortunately, where business cases leave off, daydreams are usually there to take up the slack. In my case, the recurring question of how to replace the venerable
GRUNT
JOHN DROPPERT Deutz (should such an unimaginable eventuality ever come to pass). Of course, it’d probably be by purchasing something similar, ie second hand. But field days don’t go for second hand gear in a big way, so for the purposes of entertainment, new is the only way to go. Leaving aside the questions of whether they ‘make them like that anymore’, or a
horsepower-for-money ratio, there are a plethora of choices for the lifestyle farmer looking at a 50-100hp tractor, on a nominal budget. This segment also caters to the commercial farmers looking for a more basic ‘second tractor’ to perform simpler tasks (or keep the nice gear clean for the boss to drive). One brand that has caught my eye more than once in my travels is TYM. Korean Tong Yang Moolsan are a company that goes way back (to the 1950s). They are, however, largely unknown in Australia, and are most likely lumped by most prospective buyers into the ‘non-Western European, Japanese (nowadays) or North American’ category.
If QualiTYMatters you choose a TYM tractor apparently.
Whether they deserve this, I don’t know; in fact that only feeds my curiosity. Turns out, TYM manufacture a lot of tractors for other brands (including many of the larger Mahindra models), and according to some old guy on the internet, their
design lineage traces back to Iseki. Apart from a stoush with their now-former Australian distributor and the appointment of a new one (Inlon), there isn’t much to find online in terms of a local perspective. Digging a bit deeper,
the brand appears to be establishing itself slowly in parts of North America (depending on the competence and motivation of the local dealers), and most owners seem pretty happy. The machines are cheaper than mainline brands, but not the ‘cheap
and nasty’ product that can often be recognised by the worst paint jobs on display at Farm World. Am I still curious? You bet. And I’d love to hear from anyone who’s got a TYM. Can I afford one? Umm… • You can find John on Twitter @jd0054
Fetch me a beer while I seed the bottom paddock MARK DANIEL, RURAL NEWS NZ
AS AUDI, BMW, Ford and even Google talk about driverless cars in the next five years, a North Dakota company is marketing the idea for agriculture: autonomous tractors are coming to a paddock near you. The Autonomous Tractor Corporation recently demonstrated such a tractor, which combines diesel electric drive and a navigation and safety system called AutoDrive. But are we ready for such technology? Over the last decade we have learned to trust autosteer systems which allow much greater accuracy, in some cases down to 2cm. John Deere has perfected
an automated headland turn with its iTec Pro system; so what’s to stop you taking the tractor to the paddock, putting it to work, then going home for breakfast? Apparently not much. The Autonomous Tractor Corp demonstration machine was based on a JD 8760 nicknamed ‘Big Jim’, converted to run two diesel-engines, two generators and individual wheel motors – allowing precise control at each corner. The AutoDrive systems can be offered in four stages, to introduce users to the technology gradually and see them move up to succeeding levels of automation until they reach stage 4 and full autonomy. At stage 1, the operator manually drives the modified diesel-electric
tractor, before moving to stage 2 – advanced GPS guidance with two RTK transponders set up in the paddock and a further two units mounted on top of the tractor. These four navigation devices are said to ensure greater accuracy than current units which usually use a mobile unit on the tractor and another mobile RTK unit or a fixed transmitter. The system still has the potential for dropouts however, as the GPS can be affected by solar disruptions. At stage 3 a gyro-mounted laser steers the tractor but still uses the onboard GPS to confirm its course. At stage 4 a radio system is installed over the top of the GPS RTK and laser systems, giving full autonomy without the need for a driver, other than an
initial ‘teach-in’ where the operator trains the artificial intelligence for a particular task. Whether the industry is ready for it now, who knows? But it could be just
the thing in a Rugby World Cup year, when grass needs sowing and the ABs are playing the Springboks on the big screen. Fetch me another beer and a pie.
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Dairy NewS AUSTRALIA june 2016
machinery & products // 33
Don’t get hooked up on paint mark daniel
ANYONE WHO has
broken in a new plough will know the frustration of waiting until all the paint has come off, the mouldboards have ‘shined up’ and the soil has begun to run freely. Until this happens the resultant blockages can be extremely frustrating, so much so that many old-timers will strip off the paint before they go to the paddock, although the thought of attacking a new machine in this way will have others throwing a fit. So a new protective coating from the Kongskilde Group will
find favour with many would-be ploughmen. The Easy Clean treatment applied to the mouldboards is said to wear off 100 times faster than conventional paint, and tests show there is no less protection offered during transport or storage than with conventional paint. Originally developed to meet the high standards of the automotive industry, the two-layer coating is said to have less environmental impact and meets the EU ‘Reach’ Directive aimed at improving human health and the environment. The treatment is applied to all Kongskilde and Overum ploughs
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Tankworks Australia joins Kingspan TANKWORKS Australia has reached an agree-
ment to join the global building products manufacturer Kingspan Group, the world’s largest manufacturer of premium and high performance insulation and building fabric solutions. Tankworks is the leading manufacturer and supplier of steel based rainwater harvesting systems in Australia. Kingspan’s environmental portfolio offers solutions for wastewater, rainwater management, service and telemetry, solar hot water, energy storage and renewable energy generation. The companies say the acquisition will give Australian farmers access to an exceptional and unparalleled range of products and expertise. The business has been renamed Kingspan Environmental Pty Ltd. “This is a very exciting time for our business,” said Stuart Heldon, business unit director, commenting on the move. “Kingspan Environmental’s ambitious growth plans and their extensive sustainable product portfolio will offer our customers, and a wider market audience, an exceptional product choice and excellent customer service. “Tankworks has always held strong environmental and people values, as does Kingspan, and that gives me great confidence that we are heading in the same direction, the right direction for a sustainable future,” he said.
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DAIRY NEWS AUSTRALIA JUNE 2016
34 // MACHINERY & PRODUCTS
Making the most of maize MARK DANIEL
HARVEST SPECIALIST Claas developed the
first effective corn cracker system for its Jaguar forage harvester in the 1980s, paving the way for forage maize where the effective splitting (‘cracking’) of the grain kernels led to better digestibility and utilisation, resulting in increased yields or weight gains. The latest incarnation is a new design of crop processor called MCC Shredlage, which uses two LorenCut rollers, with 110 and 145 teeth respectively, running at a speed differential of 50%. Unusually, the rollers have a counter-rotating spiral groove, so as crop passes through the rollers it is
subjected to a sideways movement, which has the effect of splitting the material lengthways and removing the outer sheath of the stalk. The Shredlage system is licensed
MCC Shredlage crop processor.
through a US company of the same name, which adopted the work of two dairy nutritionists, Roger Olsen and Ross Dale, who recognised the need to
develop a better ensiling process for high ratio forage diets. The harvesting process sees the crop being cut at 32-34% dry matter, and with kernels showing a milk line at around the halfway point. A key difference is that the chop length is pushed out to a theoretical length of cut of 26-30mm rather than the more traditional 16-20mm range. The resultant material is said to be broken into ‘planks’ and ‘strips’ which increase the effective fibre and increase the exposure of the inner plant cells to more microbial activity, resulting in better breakdown and utilisation. In practice the increased surface area
stimulates rumen activity and reduces the need to added ‘stuffer’ products such as hay or straw to the overall ration. And the aggressive action of the processor breaks the kernels into quarter or eighth pieces, releasing more starch and increasing the energy value of the sample. Studies at the University of Wisconsin found Shredlage increases the structural suitability of maize silage for a ruminant and helps release the full starch potential of the whole plant. This resulted in an increase of milk production by around 2L/day, a general improvement in herd health, slightly higher daily intakes and a flatter lactation curve. The university also reported there were no apparent problems with ensiling and compaction, although there was a need to tighten processor clear-
Maize is broken into planks and strips.
ances as crops became drier. Greenline product manager for ClaasHarvest Centres, Luke Wheeler, said “Shredlage will allow
contractors to offer even better silage for livestock producers, and we suspect the process will be adopted widely, as in the US. None of our competi-
tors can produce this kind of chopped material, confirming Claas’ position as the leader in self-propelled forage harvesters.” www.claas.com.au
Workhorses $350m uplift retains all the best points MARK DANIEL
THE 80-100HP tractor continues to be the workhorse in dairy farms across the world. Hence designers at Massey Ferguson starting with a clean sheet and $350 million to design the Global Series with all
The 5700 models are sure to get fans excited.
the best points of utility tractors updated for the 21st century. Having seen the results of this project in the 4700 series in 2014, the imminent arrival of new 5700 models is sure to get the red and silver tractor fans excited. The new 5709 and 5710 offer 92 and 102hp from the 4-cylinder, turbo-
charged AGCO Power engines displacing 4.4L, and offering up to 410Nm torque at 1500rpm. These are mated to a 12 x12 transmission with six speeds, two ranges and a wet clutch / power shuttle operated by a lever under the left side of the steering wheel. As on the larger series this lever controls forward / reverse direction changes, and includes controls for aggressiveness of drive take-up, and a de-clutching action for making speed changes, all without using the the clutch pedal. Levers either side of the seat control speeds and hi-lo ranges, acting directly on the gearbox selector rails for simple, easy and reliable operation. 4WD front axles have 55 degrees of steering angle for tight turns, and a 100% locking differential
MF5710 baler in action.
means positive traction is ensured in the toughest conditions. Rubber takes the form of ‘meaty’ radial tyres of 540-65R34 at the rear and 440-65 R24 at the front. At the business end, a heavy-duty rear axle offers lift capacities up to 3300kg, and an open centre hydraulic system has flow up to 98L/min via twin gear pumps, the first powering the three point linkage and
two rear remote valves, the second taking care of power steering, 4WD engagement, diff-lock and PTO. A six spline PTO runs at 540 or 540E speeds. The package is further enhanced by electronic linkage control with a simple lever operation, radial tyres, folding ROPS frame and a larger fuel tank of 170L capacity. www.masseyferguson. com.au
Levers on either side of seat controls speeds.
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