Dairy News Australia May 2015

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MAY 2015 ISSUE 58 // www.dairynewsaustralia.com.au

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NEWS  // 3

Midfield to build plants in SA, Warrnambool factory at Penola, which it bought State’s 260 dairy farmers, and six of Midfield Group will expand its milk last year. Midfield expects milk Australia’s largest dairy operations. “It will not only boost confiprocessing and storage facilities in processing will begin in Penola in Warrnambool and build a $60 mil- July, 2016, starting with 160 million dence and provide fresh opportunities in the Limestone Coast region, lion dairy processing plant near litres. The South Australian Dairyfarm- but it will benefit the entire State,” Penola, in South Australia. The company announced its deci- ers’ Association (SADA) welcomed Mr Basham said. “A new company sion to build in South Auscompeting for milk and tralia late last month, and processing it at Penola the next week had its plans “A new company competing for to expand its Warrnambool milk and processing it at Penola is likely to see new dairy established, and operation approved by the is likely to see new dairy farms farms existing farms expand Victorian Government. their operations to help It had taken 12 months to established, and existing farms meet demand. get Victorian Government expand their operations.” “It also means more approval. South Australian milk The new Warrnambool development will require an addi- the announcement, with its pres- can be processed in our own State. “With the closure of the United ident, David Basham, saying the tional 200 million litres of milk. Construction of the new cold investment would provide a major Dairy Power (UDP) plants at Murray strorage facilities at Warrnambool stimulus to the dairy industry in the Bridge and Jervois last week, most of our milk is now transported signifiwill start immediately but the milk whole state. Dairy farmers in the South East cant distances for processing interfactory will not be built until after region currently produce about 60% state. the Penola plant is constructed. “That is a logistical issue and conThe new plant will be built in of the State’s milk production. The the former McCain Foods’ potato region is home to about 90 of the siderable expense for processors, THE WARRNAMBOOL-BASED

Western Victorian farmers Jo and Bryan Dickson are fine-tuning their breeding program to improve profitability. PG.22

Tasmanian farmers Sue and David Walton are improving their irrigation and effluent systems, starting at the dairy. PG.28

and a lost opportunity for the local economy. This new plant will be ideally placed to reverse that trend. It will be able to draw supplies from western Victoria, and it is within easy reach of other SA dairy regions such as the River and Lakes, and Fleurieu Peninsula.” Mr Basham says the news is particularly welcome after the sudden closure of UDP, which bought 40 million litres of milk from 36 farmers, including several in the South East. Most of that milk supply was snapped up within 24 hours by Warrnambool Cheese and Butter, based at Allansford in Victoria. “The interest shown by WCB is an indication of the worldwide demand for dairy product. Prices tend to be cyclical, and at the moment we are at the bottom of that cyclical trough, but everyone is confident things are now trending upward,” Mr Basham said.

A new tractor and forage wagon has made work more efficient for Jason Farley, who works on Trevor Platt’s Gippsland dairy. PG.32

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Tongala farmer Tim Humphris and his son, Cameron, inspect the herd. Page 25

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DAIRY NEWS AUSTRALIA MAY 2015

4 // NEWS

Processors oppose GM pasture AUSTRALIAN PROCESSORS have outlined

their opposition to the use of GM pastures, effectively removing the use of this profitable technology from farmers. A statement from the processors was made by Australian Dairy Products Federation (ADPF) executive director Peter Stahl at last month’s United Dairyfarmers of Victoria conference. The ADPF is the representative organisation of the country’s processors. “At this point of time, all of our members have concerns about market place acceptance. The companies are in absolute agreement there is much more to do before they could unequivocally support GM pastures,” Dr Stahl told the audience. “Basically, that comes back to recognising the importance of research to date and we sup-

port the application of non-GM research outcomes to improve productivity and pasture species through techniques such as genome editing. “We also need greater confidence of support from domestic and international customers and consumers, thus requiring greater understanding of market place ramifications of GM being introduced to dairy pastures. “The member companies reserve the right to make their own decisions with respect to commercial aspects of GM and the federation respects that right.” Many farmers are keen to see GM ryegrass commercialised because of predictions of 15% productivity gains shown during testing of the product by the Dairy Futures CRC. This has been translated as an additional $250-$300 extra per hect-

are for dairy farmers. However, it would not be commercialised without processor support and Dr Stahl said introducing GM ryegrass into the supply chain could pose problems domestically and internationally. “The members of ADPF are conscious of the need to support innovation that increases the profitability of the industry and farmer stakeholders but we must also minimise the market risk both internationally and domestically,” he said. “One of the problems with GM is there are unfounded fears out there. We have to demonstrate customer and consumer concerns with regard to GM and thus the potential, the very real potential, for a negative reaction against it.” Dr Stahl said despite the science, politicians have a tendency to lean

High energy ryegrass (right) in a comparison experiment with two commercial cultivars. All plants started with the same tiller number and are being grown under summer conditions (when the observed differences are greatest) in a specially designed growth chamber. The GM ryegrass plant is expected to deliver more energy for a cow’s diet through a combination of increased yield and increased digestibility.

towards the precautionary principal if they feel some of their votes may be at risk. “This creates a business environment where the companies have a deep concern for the market risk if and when the industry engages with these technologies. “This concern is under-

lined by the opportunities for dairy companies and international competitors, particularly NZ, to derive market advantage by declaring GM freedom.” Dr Stahl said the industry needed to ask why issues like GM are contentious. “These technologies have the potential to

personalise the gain but socialise the risk.” Dr Stahl said one of the specific challenges of GM is that the research is incomplete. “The path to market is not yet defined and the issue is subject to well organised campaigns by anti-GM activists. “It’s regrettable that

supporters of GM don’t rally. “If we introduce GM, we’d have opportunity both domestically and internationally for companies and countries to take advantage. With trade, it provides an opportunity for non-tariff barriers against us.”

UDV rejects calls to promote raw milk THE UNITED Dairyfarmers of

Victoria have rejected a call by some of its members to lobby for the sale of raw milk. The West Goulburn branch of the UDV submitted two resolutions to the conference – that the UDV lobby to allow unpasteurised (raw) milk for sale; and to actively oppose the slur that “raw milk kills” and promote the fact it is “a natural and healthy product”. The resolution was voted down unanimously citing “significant safety concerns to the general public”. UDV president Adam Jenkins said: “we supported the State gov-

ernment and Dairy Food Safety Victoria’s management of the issue earlier this year that saw an unfortunate death of young child from consuming raw milk.” Daryl Hoey of Katunga spoke passionately against the resolution, concerned for general public safety. “Such a move could put the entire dairy industry at risk just like we have seen before,” he said. The Wannon branch moved that non-therapeutic induction of calves should be phased out within three years. Wannon branch member Chris O’Keefe said using calving induction as a herd management tool

had “probably had its day” and that it presented a very poor image and potential market risk. “Acting now, we can transition away from calving inductions on our own terms, rather than at the behest of animal activists or government intervention,” Mr O’Keefe said. They also said New Zealand has virtually phased out induction and could “easily use it to their advantage as a marketing tool”. The resolution was passed, however, the three-year timeframe was dropped, in line with the current stance of the Australian Dairy Farmers (ADF).

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DAIRY NEWS AUSTRALIA MAY 2015

NEWS // 5

MG forecasts final price of $6.05kg/MS RICK BAYNE

AUSTRALIAN DAIRY farmers have

for years called for consistency in milk prices and they look likely to get their wish with Murray Goulburn forecasting $6.05 per kilogram of milk solids for the full year 2015-16. Despite depressed global markets, the MG forecast would mean the third year in a row of prices at or above $6. Although opening price predictions remain sketchy, other processors are expected to be competitive and come close to the Murray Goulburn figure across the year. Dairy Australia analyst John Droppert said that competition and a lower Australian dollar were largely counteracting the weak world market. “Looking at the markets you’d expect a fairly conservative opening,” Mr Droppert said. “The markets are fairly depressed and there’s no immediate recovery on the horizon, though we know it’s going to happen at some point.” However, he said the extra dynamic in the Australian market with competition at the farm gate should keep prices healthy. “We’ve got processors looking to kick-start growth in milk volumes, and farmers have communicated clearly that they need a decent margin and they need to be fairly profitable to achieve that growth. “We are seeing the signal sent that farm gate prices, in the case of this announcement from Murray Goulburn, are going to be conducive to that.” Mr Droppert said other processors were trying to seek similar outcomes which would be good for farmers. “The other processors have been having the same conversations with

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their suppliers,” he said. Mr Droppert said most processors would likely wait to see the opening prices but in terms of a full season he expected prices to be fairly close “for competitive reasons”. He added that many agreements are based around the prices paid by bigger processors. “I think the outlook gives most farmers a fair bit to play with. Most farmers I’ve spoken to are fairly comfortable with that level of pricing,” he said. “The next thing is to see it delivered.” Mr Droppert added the lower Australian dollar had been an upside while the market remained down. Steve Spencer from Fresh Agenda hasn’t done a full analysis of the likely opening price but predicted a slow recovery for the world market. Mr Spencer said that while world markets remained weak and continued to be a big driver of the Australian industry, 60% of local milk stays onshore. “The domestic market provides a bit of a buffer to the harder movements being seen in world prices,” he said. “It tends to smooth out. We don’t get the bottoms of the troughs but we don’t get the peaks either.” Mr Spencer said he wasn’t surprised that Murray Goulburn was looking at a full year price of $6.05 and it was being helped by its business mix that isn’t purely exposed to the export market.

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and what tactics companies might use to position themselves,” he said. He added that the lower Australian dollar had helped the local situation but the international market was still weakening. “We have an over-supply, but I expect next year to see a recovery and the full year picture is probably going to be fairly similar to what we’re seeing at the moment. “It’s not too bad for local farmers.” Murray Goulburn has said its $6.05 prediction is subject to change due to external factors such as global dairy commodity prices and prevailing foreign exchange rates. The forecast also assumes that its proposed capital structure is implemented following a vote of shareholders on May 8. The forecast is based on the Australian dollar sitting around US76c.

DAIRY PRICES have fallen to the

lowest in over five years following the first Fonterra GlobalDairyTrade auction of the month. Prices fell 3.2%, making it the fourth decline in a row. The average price was US$2515 a tonne, compared to US$2620 at the previous fortnightly auction. AgriHQ dairy analyst Susan Kilsby said the fall in milk powder prices at the May 5 auction was the main driver behind the drop in the price index. The trade-weighted GDT Price Index is now at its lowest point since August 2009. This month Fonterra lowered its 2014-15 milk price from $4.70/kgMS to $4.50/kgMS; with an estimated dividend range of 20-30 cents per share, this amounts to a forecast cash payout of $4.70 -$4.80 for the current season. The forecast price is the lowest since 2006-7 when it was $3.87 (but with a dividend of 59c for a total $4.46), and lower than when the great financial crisis hit in 2008-9 when the total payout plus dividend was $5.20. NZ Primary Industries Minister Nathan Guy said the drop in Fonterra’s forecast came a bit sooner than expected for some farmers. Now they will be eagerly awaiting Fonterra’s opening forecast for the new season later this month. Last year’s record payout in NZ of $8.40/kgMS has flowed into this calendar year; the focus will be on the next season. Mr Guy also put out some aver-

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age payout figures. The average milk price for last the 15 years is $5.25/ kgMS; after Fonterra’s formation in 2002 the average payout for the first five years was $4.20. “Indications are next season will have some volatility but the outlook will be better than the current season; there’s a possibility of a $5.50, possibly $6 opening forecast.” Mr Guy, who owns a dairy farm in Horowhenua, advised farmers to watch their costs. “2015 will continue to be a challenging year, so they should focus and work closely with their banks and accountants and do line by line cash flow analysis to ensure they can get through the forecast period.” He said it’s very unusual to have the four big global milk producing regions – North America, South America, Australasia and Europe – awash with milk. “Everyone right now has more milk and for those areas to have all that happening at once is very unusual.” The Russian ban has also seen products displaced; milk used to make butter and cheese for Russia by European processors are being turned into milk powders and sent to our traditional markets. China is also buying less milk products as a result of building a high inventory; Guy says the inventory is reducing and China will be buying again “very soon”. • New Zealand dairy industry in shock, pages 10-11

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Dairy News AUSTRALIA may 2015

6 //  news

Dairy on front foot against animal rights groups Rick Bayne

The head of Australian

dairy’s animal health and welfare, David Basham, says the industry’s proactive stance is the right method to avoid potential attacks from animal rights groups. Mr Basham, the chair of Australian Dairy Farmers’ animal health and welfare group, said the industry is taking the proactive stance of trying to ensure it gives animal rights groups nothing to complain about by ensuring compliance with animal welfare standards. While it aims to avoid fanning the flames of attacks, the industry has also adopted protocols for responding when serious claims have the potential to escalate. It also keeps an open dialogue with animal rights groups.

Mr Basham said the priority was ensuring “we don’t give anyone a reason to launch a campaign”. “If we can prove to everyone that farmers look after their cows and as an industry we are addressing welfare issues, to me that’s the best defence we’ve got.” Voiceless has been running a campaign against the industry this year. The animal rights group has issued The Life of the Dairy Cow, a consumer report into the welfare of Australian dairy cows that highlights their concerns about “a perpetual cycle of calving, milking and impregnation”. However, Mr Basham said the industry disputed a lot of the claims and didn’t believe the campaign was gaining much traction. “They are very

European based in their claims. They are not practices we have here in Australia,” he said. Mr Basham added that the dairy industry did not want to “engage in a slinging match” with the likes of Voiceless. “I don’t think it does any good, it just promotes concern from farmers as well as consumers and the general public if we go into those sorts of debates.” He said the main priority was ensuring all farmers adhere to safe animal welfare practices and reduce any welfare risks. “In the past 10 years there has been a lot of work done, initially identifying potential key issues and then progressing those issues to try to improve the welfare of animals generally across dairy farms.”

Five priority issues were identified - tail docking, mastitis, lameness, calving induction and disbudding. “As a good example, the industry has worked with regions that have tail docking, particularly Victoria and Tasmania, and now has a policy that it does not support tail docking and is supporting the government’s ban of tail docking in dairy.” Mr Basham said dairy farmers recognise that their cows are their livelihood and must be properly cared for. “Very much so – farmers love their cows. We just have to make sure that we don’t have a tail (of farmers not properly caring for their animals) and bring the whole industry along. “We don’t want to be left vulnerable by a few

who are not doing the right thing.” He said only a very small percentage of farms have problems. “Occasionally we do have farms that have a few issues. Sadly, it’s often tied to other problems on the farm, such as financial or mental health issues and farmers lose the ability to react like they need to. “I’m very proud of how the industry has made sure we work together to improve the welfare of animals generally.” Mr Basham said he believed the broader community had a positive perception of dairy. “I think the broad community likes dairy farmers and the way we look after our animals,” he said. “There is a vocal minority that doesn’t support the farming of any livestock and they

David Basham

will use anything they can to try and stop the production of dairy products, meat and animals products from farms, but I don’t think there’s any point in engaging in a slinging match with them. “To me it’s more about

talking about the issue generally, not tackling a campaign head-on. It’s about building up the reserve we have out there of people understanding what we do on dairy farms and how we are caring for animals in the best way we can.”

Issues response team monitors social media DAIRY AUSTRALIA monitors what

is being reported and said about the industry on social and traditional media. Dairy Australia media manager Mark Pearce said responding to negative campaigns depends on what the attack is and where it takes place. “A response in either the social or traditional media would be coordinated between Dairy Australia, Australian Dairy Farmers and Australian Dairy Industry Council,” Mr Pearce said.

“We don’t necessarily engage in debates based on gross inaccuracies or untruths. Our approach is to ensure the facts are made available in a format that can be easily found by the public. “However, we can and do respond straight away if an issue that has the potential to grow and confuse our consumers and farmers.” Dairy Australia issues manager, Julie Iommi, said the industry goal is to address community concerns as they

arise. Dr Iommi added that the industry has a well-rehearsed issues management framework in place and an internal group which monitors emerging issues and meets regularly. “If something is deemed serious enough, a rapid response team is initiated to manage the issue,” she said. “We also have a number of programs in place to ensure dairy farmers are meeting the required high standards

of care for their animals.” The Australian Dairy Industry Council has supported and endorsed the Dairy Australia Sustainability Framework which puts the proactive stance towards animal health in a central spot for promotion. New Australian Animal Welfare Standards and Guidelines for cattle have been developed and are well recognised by the vast majority of farmers. The standards and guidelines, yet

to be approved by government, create clear regulation based on current scientific knowledge, recommended industry practices and community expectations. They have been developed in consultation with animal welfare groups. The Legendairy communication initiative aims to raise the profile and reputation of the industry, and reiterates and echoes positive industry messages to the broader consumer and farmer audience.

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DAIRY NEWS AUSTRALIA MAY 2015

NEWS  // 7

The vote is in for Murray Goulburn Murray Goulburn is offering share units to investors.

MURRAY GOULBURN’S 2500

farmer shareholders finally cast their vote for the proposed capital restructure on May 8. However, unlike the scheme adopted by Fonterra in New Zealand - where the manufacturing and dividend-paying side of Fonterra in theory benefits from a low milk price because it means a lower input cost – MG says an improved farmgate milk price will remain its primary goal. The MG vote comes after 12 months of consultation and discussion with farmer shareholders. MG chairman Philip Tracy says its long history of higher farmgate the opportunity to pursue its growth and value creation strategy and at the the co-op has arrived at a historic returns for suppliers. “Together with our 2500 suppliers same time retain 100% supplier conmoment. “At stake is our ambition for MG to be a world-class dairy foods we have worked tirelessly to develop trol of MG. “We will use the capital raised to a capital structure that strikes the business for generations,” he says. right balance between invest in world leading manufacturMG says the recsuppliers and external ing and supply chain capabilities to ommended capital investors to maximise improve efficiencies and increase structure will ensure market reach in key growth categoreturns. suppliers retain 100% “Central to the ries including consumer cheese, dairy control while raising structure is a profit beverages and nutritional powders. capital for growth. MG “These initiatives will underpin sharing mechanism is seeking A$500 million which governs the rela- higher returns to suppliers over to support its growth tionship between FMP the longer term as we capitalise on and value creation stratand the dividends and growing demand for value-added egy to deliver sustainPhilip Tracy distributions paid to dairy food products in Australia ably higher milk payout investors. This mech- and Asia.” and earnings via higher Another feature of the recomvalue-add products, improved operat- anism retains FMP as the primary ing efficiencies and more innovation. measure of success of MG and aligns mended structure is that MG shares The company proposes to raise the interests of external investors will have a market value for the first most of its new capital in an initial and suppliers through increased div- time. All elements of the new capital public offering (IPO) of a unit trust idends as the FMP increases. “If approved by MG shareholders, structure are expected to be implewhich will be listed on the ASX. Unitholders will have an economic expo- the new capital structure will give MG mented by July 2015. sure to Murray Goulburn’s business but will not have voting rights in the co-op or its operations. The IPO will EXPANSION PLAN include a Friends of MG offer of units, providing priority allocation of units MURRAY GOULBURN plans to use $500 million raised from the to existing and former suppliers, MG IPO for: employees and local residents in ■■ Nutritional powders - increases capacity and enables proMG’s dairy regions. duction of infant/baby formulas that are more complex and The remainder of the capital would attract higher margins $260m–300m investment be raised through offers of shares ■■ Dairy beverages - reduces UHT operating costs and into MG suppliers called the supplier creases volume output and production flexibility to meet share offer and supplier priority offer. expected international demand $165m–190m MG managing director Gary Helou ■■ Cheese - reduces operating costs and increases producsaid the new capital structure would tion output and innovation capability in consumer and food be a milestone, its creation showservice cheese applications $125m–145m. ing the enduring strength of MG and

Tasmania farmers have reduced their power bills.

Power audit saves big bucks in Tassie TASMANIAN DAIRY farmers are said

to be saving money on power bills thanks to energy efficiency assessments on their farms. Between December 2012 and February 2015, DairyTas did 200 dairy shed energy audits (about 50% of Tasmanian dairy sheds) as part of a national Dairy Australia project funded by the Department of Industry and Science energy efficiency information grants scheme. Some farms are said to have saved thousands of dollars, and A$1 million more savings are possible, says Dairy Australia. The audits were done by tradesmen with practical knowledge of dairy sheds. They reviewed 12 months of billing data, visited sheds typically during milking and followed up with specific recommendations. Chris Whish Wilson, an independent refrigeration mechanic who did 120 of the audits said most savings could be achieved with regular and targeted maintenance. “We saw some big differences between sheds: in some thousands of dollars could be saved quickly with little capital outlay, and others running efficiently could still save money by switching to time-ofuse contracts or by removing unnecessary extra meters which have an annual charge. “Some sheds had efficiency and billing savings, and if farmers implemented

all the recommendations made, savings would average $3,000 - $5,000 per farm, totaling $1 million across 200 sheds.” Energy efficiency savings alone saved each audited farm an average of $1080 per annum. While Tasmanian electricity is largely sourced from renewable hydro energy with no greenhouse gas emissions, the focus on dairy shed energy efficiency nationally could hold down carbon dioxide emissions from coal fired power stations. Tasmanian project manager, Rachel Brown from DairyTas, believes there have been other benefits. “We now have some of the best energy use benchmarking data in the country thanks to the results from 200 shed assessments. “There were huge variations between sheds in all aspects: the average annual dairy shed bill was $21,131 but one shed was costing $72,046 a year in electricity. Dairy farmers pay an average of $10.40 in electricity for every 1000L milk out of shed and the most inefficient shed pay nearly three times that - $27.87.” Dairy farmers pay 23 cents/kWhr for electricity – with the cheapest power being 17 cents/kWhr and the most expensive power 28 cents/kWhr. The audit project focused only on dairy shed use as irrigation is typically the biggest part of the power bill for irrigated farms, depending on the season.

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DAIRY NEWS AUSTRALIA MAY 2015

8 // NEWS

UDP saga comes to an end PROCESSORS POUNCED on

facilities and extra supply while one former player returned to the fray as the UDP saga was finally resolved. As UDP suppliers waited to hear what their future, and that of their processor, would be – other processors released statements detailing what they had purchased from the UDP sale. On April 21, Murray Goulburn announced it had acquired UDP’s leading cheese brand, Caboolture Cheese, as well as some of its processing equipment. The following day, Burra Foods announced it had purchased UDP’s Poowong milk depot in Gippsland as well as many of their suppliers. Burra Foods CEO, Grant Crothers, said that the acquisition would enhance the company’s long-term future and its ability to meet the continued demand

for high quality dairy ingredients from its primarily Asian customer base. “The acquisition will strengthen our market position by providing greater assurance for a secure and stable milk supply and that will allow us to confidently grow and access new markets,” he said. Caboolture is a food service shredded mozzarella brand, mainly used in pizza restaurants. Murray Goulburn managing director, Gary Helou, said the strategic integration of the Caboolture brand into MG’s growing food service business would strengthen MG’s position in this segment. “The acquisition of the Caboolture brand forms part of our strategy to diversify our portfolio to higher value dairy foods, with the goal of providing sustainably higher farmgate prices to MG suppliers.”

UDP’s closure saw 52 suppliers (with 100 million litres of milk) in south-west Victoria and South Australia given three days’ notice to find a new supplier. Warrnambool Cheese and Butter attracted about 40 suppliers, giving them an additional 60m litres of milk. The founder of UDP, Tony Esposito, has re-emerged under the name National Dairy Products and has attracted suppliers from Gippsland. Mr Esposito hopes to secure more than 100 million litres of milk, which he would broker to other processors. Mr Esposito founded UDP and sold it to Hong Kong-based private investor William Hui in February last year. By November its parent company, Five Star United Food (Aust) Pty Ltd, was placed in receivership by Rabobank.

Government provides $7m for dairy R&D DAIRY AUSTRALIA

has received more than $7 million in Federal Government funding through the first round of grants under the $100 million Rural Research and Development (R&D) for Profit Program. The funded projects involving Dairy Australia are of three years in duration and will start this year. DA received $927,273 for the Mid-Infrared (MIR) spectrometry for Profit project. This will develop new tools to help dairy farmers manage and select the most profitable cows by using technology to scan milk samples for genetic, health and production information. The results will inform breeding decisions to improve the genetics gain of the national herd. It received $1,595,000 for

the project, Co-innovation, to increase the profitability and productivity of dairy. This project will research methods of increasing private extension services to primary producers in order to increase producer uptake of new technology and profitability. The project will identify user needs, demand for services and barriers to using these services. Tools and an online portal will be developed to support extension and make sure R&D results are available. The project will build professional extension capacity in the private sector. It received $4 million for the project, Smarter irrigation for profit. This is a partnership between the major irrigation industries of cotton, dairy, rice and sugar led by the Cotton Research and

Development Corporation (CRDC) in conjunction with Dairy Australia, the Rural Industries Research and Development Corporation (RIRDC), Sugar Research Australia and other research partners. The project aims to improve the profit of each individual irrigator enterprise across the four industries by $20,00040,000 per annum, with the support of 16 R&D partners and up to 19 farmer-managed learning sites. It received $862,693 for the project, Waste to revenue. This project will find ways to turn agricultural waste into feed, fertilisers and soil conditioners reducing on-farm costs, enhancing sustainability and providing producers with new opportunities to generate income.

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DAIRY NEWS AUSTRALIA MAY 2015

10 // NEWS – NZ PRICE FALL

More financial pain, lower expectations PETER BURKE

THE FINANCIAL pain for dairy

farmers will hit home early in the coming season, says Federated Farmers dairy section head Andrew Hoggard. Mr Hoggard said it will be a challenging season, likely extending well beyond this time next year because retrospective payments will be low. Many dairy farmers will never have experienced a situation where the payout has gone from such a high to a massive low. DairyNZ’s forecasts that most dairy farmers will be in overdraft for all next season and beyond resonates with his own situation, he said. “For next season we had done our budgets on the basis of a $4.70 payout and based on that we were able to get through next season budgeting on what we guessed was a $5.50 final payout. “That got us through without any borrowing, having looked at various things to cut and at management

Andrew Hoggard

strategies for how we were going to change things. “But when we did the budget after they took 20 cents off the payout, that effectively meant for us $57,000 out of the budget in the coming spring and added a lot more complexity to it. “Obviously we will need to get short term borrowing or look at other options for reducing costs. It changes things for us and it makes next season even more challenging

than it already was.” Mr Hoggard said at the start of the current season farmers received some large retrospective payments which helped their balance sheets. But this won’t happen later this year and that’s when the pain will hit. A lot of people believe things might come right towards the end of the new season, but he said the market is so volatile that anything could change overnight. Many farmers new to the industry had not experienced sustained financial problems like those that exist at present, he said. He recalls as a young single sharemilker he lived on baked beans and worked hard when the payout was at a low of $2.70. But now he has a young family whose expectations are not geared to the tough times ahead. “Over the next year my daughters are going to have to realise that just because something is new they are not going to be able to get it. They are going to have their expectations reset much like me.”

Low price expected for next season ASB’S RURAL economist Nathan Penny predicts Fonterra will initially pitch next season’s forecast payout low, with some farmers having to exit the industry if low returns persist. “This season the one group doing it tough will be those new to the sector. If you have come into the sector in the last year you’re going to be struggling. “The same will apply to those who run higher debt or are higher leveraged than the sector average. “The one counter to that is that interest rates are very low and have the potential to drift even lower over the next year or so.” Mr Penny said farmers are already cutting spending on-farm and looking at things they can control like fertiliser spend, feed, maintenance and capital expenditure. “Obviously that has implications for the wider rural sector and we expect to see less activity in the rural supply businesses around the country. “We also expect land prices to reflect that. They came off the boil towards the end of last year and we expect that to continue into this year.” Mr Penny said retail sales in rural areas are likely to be “softer” as the spending power of dairy farmers declines. This has implications for the whole country: lower

export receipts and tax take. “Finance minister Bill English has announced they will not hit their surplus target in this fiscal year. And the dairy story is part of, but not the only reason for tax revenue being down $4.5 billion over the next five years. “So it does have wide implications and we are expecting a tough period ahead for the sector as whole.” Mr Penny said he believes many farmers paid off a lot of debt when the pay-out was $8.50 and that they were “restrained” in their spending. He said ASB will work with farmers to manage cashflows, set budgets and discuss their requirements. “Our medium and long term view of the dairy sector is very positive. This is based on emerging markets’ demand for protein and the growing incomes in those countries. “We see this as a long term positive story. We don’t think anything has changed there so in that regard it’s about managing proactively with farmers over the next 12-18 months.” Mr Penny said the present situation is quite similar to what happened when there was a good payout in 2008, then a huge drop in the following year then a price recovery.

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NEWS – NZ PRICE FALL // 11

Low payout ‘starting to hit home’ for NZ farmers New Year. “But looking at the cashflows this year, not many, if any, will come THE DROP from a out of overdraft for the payout of $8.50kg/ entire season. milk solids in 2013/14 “This depends a little to a recently revised on what figure Fonterra forecast of $4.50kg/MS sets for the payout next this season (14/15) is causing angst throughout season but based on where we think things are the New Zealand dairy at the moment, including industry. the GDT, there is nothing DairyNZ says its to indicate the year will modelling shows that be exceptional. for the coming season “Maybe a few will have the vast majority of dairy positive balances but the farmers will have to live in overdraft for the entire majority will still be in overdraft this time next 12 months from June 1, 2015 and possibly longer. year.” Mr Bell said this is Wade Bell, DairyNZ based on the regional proposition leader, that the says the average cost drop from Even if structure on a payout farmers can a dairy farm of $8.50 trim their is about to $4.50 is $4.30kg/MS. massive, costs they But he so his will still said if a organisation farmer has is focusing need $5kg/ on helping MS or slightly an average level of debt farmers sort more to of about out their break even. $20kg/MS cashflows, that will as posted on add another its website. $1.20kg/MS Mr Bell of debt servicing, putting said they have done an the cost up to $5.50kg/ ‘average’ cashflow for MS. owner operators and Even if farmers can sharemilkers for the next trim their costs they will 12 months and the news still need $5kg/MS or is not good. slightly more to break “You would normally expect farmers to be into even. “This is just to pay the overdraft by Octoberfarm working expenses November and come out and interest – there are of overdraft early in the PETER BURKE

no living expenses or anything else. “It’s a crisis and that’s why a lot of commentators are saying farmers can possibly manage one year with the banks being supportive. But if it goes beyond that it would become a major concern.

“This is a very serious situation and it will obviously have flow-on effects into the wider community and the nation as a whole.” Mr Bell said it’s hard to tell whether dairy farmers on high input systems are more vulnerable than those on

low input systems. But he says it’s well known that farm profit is closely linked to farm working expenses and what typically happens is that higher input systems have higher farm working expenses. It’s likely that those on high input systems

will respond to the lower payout by cutting out expensive items and perhaps changing their type of feed to cut costs, he said. “But there is a limit to what they can do given the infrastructure they have, the stocking rates and the machinery they

own. “But I don’t think we are going to see farmers chop and change from one system to another. “Irrespective of the system a farmer is running, if he has a high cost structure he is very vulnerable at the moment.”

IN BRIEF Season winds down THE DAIRY season is now well into wind-down mode, says DairyNZ regional leader Wade Bell. Most regions are at the stage they would expect to be at this time of year, and doing well in feed pasture and cover. Cow condition in Waikato is a little lighter than would normally be the case, Mr Bell said. “Overall in most regions cows are drying off or close to it. “Two-three weeks ago about 80% were still milking and I would have expected that number to have come back considerably over the past weeks.” The effects of the drought are still being felt in North Canterbury, where there will be major winter feed shortages. Crops are much below normal.

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12 // NEWS

SADA president David Basham with the SADA Fresh label as South Australians know it, and (below) the new blue label for China.

SA dairy farmers send first shipment of milk to China IN AN exciting break-

through for South Australian dairy farmers, the first commercial export shipment of SADA Fresh milk was exported to China last month.

The shipment of 1872 one-litre bottles left Adelaide mid-April aboard a Cathay Pacific flight to Hong Kong. The milk was then loaded onto a subsidiary airline

for delivery to Nanjing in central eastern China, where it is being marketed to local retail outlets by a Chinese importer. SADA Fresh was launched 18 months ago

by the South Australian Dairyfarmers’ Association (SADA) to help secure the future viability of the State’s dairy industry and its farmers. “Using the milk brand to draw investment to South Australia and open up new markets for our dairy products were always primary goals of the enterprise, so this is a very exciting day for us,” SADA president David Basham said. “After the initial run this week, the Chinese importer has committed to purchasing one air pallet of about 3960 bottles per week for the next three months, and there are expectations that will double after that, depending on the market’s response. “Despite all the headlines recently about Chinese interest in Australian dairy products, and the new Free Trade Agreement between Australia and China, the reality is that it is very difficult to crack this market and convert the talk into actual sales. “Even though the initial shipment is relatively small, we hope this breakthrough will open doors for other South Australian dairy

brands and lead to greater opportunities for us all in the future.” Parmalat holds the licence to process, package and supply SADA Fresh wholesale in South Australia, where it is currently retailed exclusively through Coles. The milk destined for China is also being processed, packaged and exported by Parmalat, under a separate licensing agreement with SADA. Mr Basham understands about half the bottles in the initial shipment will be distributed as part of a promotional exercise to launch the brand to Chinese customers and help build market share. The milk will be retailed through conventional shops and supermarkets, as well as online grocery stores which are becoming increasingly popular in China, with consumers able to purchase two or more bottles at a time and even subscribe to receive weekly deliveries. Mr Basham said the first shipment followed a series of small-scale trial shipments carried out over the previous two

months, and something like six months of planning and negotiation. “The opportunity came about last October when Austrade (the Australian Trade Commission) held a food expo in Melbourne. Among potential export buyers attending the event was a Chinese importer looking for companies that could supply fresh milk, and I just happened to be in Melbourne at the time so I met with them,” he said. “The association helped set up meetings with Parmalat who negotiated a formal contract with the Chinese buyer in March. “In the meantime, trials were organised to fine-tune delivery and distribution protocols, and to make sure the milk meets stringent Chinese quarantine regulations and quality control specifications. “It’s been a far from straight forward process that has also involved developing a new label, not just to incorporate

Chinese characters, but to feature blue rather than the brand’s usual red or yellow, to meet a request from the importer.” Under the agreement, Parmalat pays SADA 20 cents for every litre of milk sold in South Australian supermarkets, with the proceeds going into a new South Australian Dairy Industry Fund. SADA will also receive 5 cents per litre for the milk sold in China. The fund was set up last year to finance projects that directly benefit the South Australian dairy industry and its communities. The first call for projects was issued in December, after sales through Coles topped the one million litre sales mark. Recipients are expected to be announced shortly.

DAIRY NEWS AUSTRALIA MAY 2015

NEWS // 13 OBITUARY

Industry loses herd recording visionary dairy industry has lost one of its legends with the death of MISTRO software founder Mike Larcombe. Dr Larcombe, 54, died peacefully at home in Sale on April 26 after a lengthy battle with motor neurone disease and just hours after finishing his latest software development for the herd improvement industry. Industry leaders have described him as a visionary “legend” whose innovations and programs will continue to help dairy farmers for years to come. Dr Larcombe leaves a lasting legacy for Australian and international dairyfarmers with software and computer systems that revolutionised herd recording and made life easier for farmers across a wide spectrum of programs. Despite his physical ailments that left him with no movement for the past nine months, Dr Larcombe continued to work until the day before his death by using eye tracking software. A qualified vet and former dairy farm owner, Dr Larcombe turned his interest and expertise into the development of a broad range of software programs for farmers. His MISTRO farm management software packages developed for Hico Australia have become the mainstay of Australia’s herd testing systems and are also used extensively in New Zealand, Brazil and Kenya. He also worked as a consultant to farmers across Australia and overseas. Dr Larcombe was widely recognised as Australia’s leader in the field. He graduated in Veterinary Science from Melbourne University and started his career at the Maffra Veterinary Centre. His interest in computers and statistics soon led him to work on a software project to build a system to analyse the breeding records of dairy cattle to

help farmers to understand fertility issues. In 1986 he started his PhD which led to the UDDER software program which modelled the inputs and outputs of a seasonal calving irrigation dairy farm. In 1989 he joined Maffra Herd Improvement Co-op, a forerunner to Hico Australia, as a consultant to give dairy farmers access to better advice and technology. He later developed a computer software program for managing semen stocks. In the early 1990s the need for a national herd recording system was widely recognised and Dr Larcombe filled the void with MISTRO being launched in 1994 and soon expanding well beyond Maffra. MISTRO Farm for farmers was released in 1996 as the first of a suite of products developed to make farmers’ lives easier, followed by MISTRO Finance in 2000. Around this time, Dr Larcombe and his wife Sue purchased a 450-cow dairy near Heyfield which inspired him to develop even more software products to provide solutions to help dairy farmers manage their operations – including automated drafting, ID and feeding. The Windows versions of the MISTRO herd recording, semen inventory and farm program were released in 2004/05 as use of the products spread nationally. Today MISTRO is responsible for processing 95% of herd testing information in Australia and is recognised as one of the most flexible and cost-effective herd recording software programs in the world. Dr Larcombe’s work continued with the development of a genomic database system for Australian Dairy Herd Improvement Scheme (ADHIS) for storing and analysing DNA profiles of animals for artificial breeding. In 2011 he was a recip-

ient of the prestigious National Herd Improvement Association of Aus-

tralia (NHIA) Meritorious Service Award, recognising the significance of

his achievements and his standing among peers. NHIA general man-

ager Carol Millar said Dr Larcombe “didn’t seem to be the kind of bloke who

wanted to conquer the world, but in his own quiet way, he did”.

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DAIRY NEWS AUSTRALIA MAY 2015

14 //  WORLD NEWS

Price climb will be slow recovery. “A greater number of variables are affecting the global market milk price, virtually all of which are uncontrollable. We will RABOBANK DAIRY expert Hayley see those prices move back up again; curMoynihan says the recovery in global rently they are not sustainable for anybody, wholemilk powder prices may be 12 for any export producers around the world. But it will take some time to get there.” months away. Ms Moynihan said one major scenario The global market is rebalancing in will be significantly less imports into China response to lower prices but it’s slow. Analysis shows that imports decline in 2015 versus 2014. “We expect to see exports down by when prices are above US$3800/t for whole about 50% versus last milk powder. Buyers year. ” are turned off; it “We expect to see On the supply side, happened in 2007Ms Moynihan said the 08 and again 2013- exports to China 14. Below that price down by about 50% quotas coming off in Europe would see about import demand and versus last year.” 4 billion litres growth trade grows. (This annually until 2020. Earanalysis excludes China which has so many variables it dis- lier modelling had put that growth at 10 billion litres, but growth had come eartorts the figures.) Combined with other factors includ- lier. Now milk prices are low, some couning increased cost of production, Rabo- tries have penalties on the last 12 months bank estimates a price point the market can increased production and the spring flush handle is between US$3500/t and $4000/t. hasn’t been good yet. Rabobank is picking (The early April WMP price on Global Dairy volumes from Europe similar to last year. After difficulties from 2008-12, the Trade was US$2450/t.) Ms Moynihan told the DairyNZ Farm- American industry is hitting its straps with ers Forum last month that Rabobank fore- lower grain prices, more investment and a casts it will take until March or April next reorientation towards export markets. They year to reach the bottom of that trading are getting 2-3% increases in milk producrange ($3500/t). “So it’s a prolonged recov- tion. “The mega dairies in the US are our main ery but medium to long term it will average somewhere in the $3500 to $4000 range,” source of competition. They are moving to the areas of the US which are less heavily she said. Only unforeseen events such as Rus- regulated and getting efficiencies that way. sian President Vladimir Putin deciding to They are more of a threat than the productake European product again or the situa- tion coming out of Europe in a post quota tion changing in China, would quicken the environment.” PAM TIPA

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China-led story is over THE CHINA-LED story about growth in dairy demand is likely over, says Hayley Moynihan, Rabobank’s dairy research director for NZ and Asia. Chinese imports could be down 50% this year than last. There may be “regulatory shenanigans” and “we will find out the true value of partnerships with Chinese buyers”, warned Ms Moynihan in her presentation to the Farmers Forum last month. In China the situation changed “dramatically” from product shortage in late 2013 to reports this year of product being dumped. Processors there are not necessarily collecting milk from smallholder farmers who do not have contracts. There is plenty of domestic milk and import stocks. “This was quite a change in 18 months; it illustrates the extreme of how that changed. That adjustment is

still happening in China. We still think there will be growth in consumption but nowhere near the levels seen in the past. “The market is maturing and the new investment in farms in China is coming on line which is improving the quality and the availability of raw milk in China.” High raw milk prices, flagging international prices and a growing industry could play out in a number of scenarios in China. Falling milk prices could push smaller Chinese farmers out, as could processors holding volume levels. Or the Government may subsidise to keep farmers in rural areas. Imports may go to a lower level. Some combination of the four options is likely. “We think one major scenario will be significantly less imports into China into 2015 [than during] 2014,”

Ms Moynihan said. “We expect to see exports down by about 50% versus last year. “So people who are expecting a very sharp increase in pricing because China is going to come back into the market – we don’t think so.” China’s consumption will grow long term but it will not be the primary and almost sole driver of trade growth as seen in the last 4-5 years. Growth will be broader based in regions like South East Asia, North Africa and other African regions. Moynihan earlier said supply is often discussed but consumption less so. Dairy consumption did play out as expected in 2014. High milk prices were passed on to consumers at the same time as economic growth slowed. Globally consumption grew 0.6% as compared to 1.8-2.4% in the past decade or two.

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FONTERRA HAS slashed its forecast farmgate milk price in New Zealand for the 2014-15 season to $4.50/ kgMS – down from the record $8.40/ kgMS last year. The dairy co-op says that, taking into account the previously announced estimated dividend range of 20-30 cents per share, Fonterra suppliers in New Zealand are facing a forecast cash payout of $4.70 - $4.80 for the current season. Chairman John Wilson said the reduction reflects the continuing and significant volatility in international dairy commodity prices caused by oversupply in the market. “We have confidence in the longterm fundamentals of international dairy demand, however the market has not yet rebalanced and GDT prices for products that inform our farmgate milk price have fallen 23%

gresses,” Mr Wilson adds. since February. Chief executive Theo SpierMr Wilson concedes the forecast cut will impact farmers’ cashflows, ings said geopolitical unrest in places such as Russia, and they will need to the Middle East continue exercising and North Africa is caution with onfarm impacting global dairy budgets. demand. “Our farmers are “Remote as they already managing are, events such as the very tight cashflows. flow of refugees from Although this reducLibya to Europe come tion is not the news together with factors anyone wants, it is like lower oil prices to important we keep soften dairy demand,” our farmers updated Fonterra chair Mr Spierings said. given the significant John Wilson Meanwhile, Fonterra’s latest estimarket uncertainty. “Given the reduced milk price mate of milk production for the curforecast we are also lowering the rent season is 1607 million kg MS. advance rate of scheduled monthly But this is based on recent growth conditions onfarm and will depend payments to our farmers. “We will continue to keep farm- on conditions for the rest of the ers updated as the season pro- season.

DAIRY NEWS AUSTRALIA MAY 2015

WORLD NEWS // 15

No rapid response to quota removal ANDREW SWALLOW

ANALYSTS IN the Euro-

pean Union do not believe there will be a rapid production response to the abolition of milk quota in Europe. That’s despite signs the ‘superlevy’ for 12 member states may have forced farmers to put the brakes on production in the three months leading up to the April 1 end of the thirtyyear-old regime. Exceeding annual quota incurs a superlevy of €28 per 100kg of liquid milk over the limit nationally, the equivalent of about NZ$5/kgMS. A dozen of the European Union’s 28 member states are expected to breach their national quotas for the year ending March 31, triggering penalties for any of their farmers exceeding the limits. Leading the likely fines table are Germany (€300m), Poland (€160m) and Netherlands (€140m). Farmers in Ireland, Austria, Denmark, Lithuania, Estonia, Italy, Belgium, Spain and Cyprus are also likely to be pinged, taking the penalty tally to €750m. However, superlevy fines for the final year of quota may not impact farmers as much as in previous years, says UK industry body Dairy Co, thanks to a European Commission ruling that member states may choose to stagger superlevy payments to ease cashflow pressure.

Dairy Co notes that in January EU production eased 0.1% compared to January 2014, the first yearon-year monthly fall since June 2013. How much of that was due to producers cutting production in the face of falling farmgate prices – down nearly 20% year-on-year – or cutting feed inputs with the superlevy looming, is unclear. Feed wheat prices are down nearly 30% year-onyear, easing the milk price impact on margins. Germany, France, Netherlands and Denmark recorded 1-2% falls in milk output in January, while Ireland’s was down 15%. ASB rural economist Nathan Penny doesn’t believe that trend will be reversed overnight. “We won’t see the impact of quota coming off in the next few months but we will see it in the next few years,” he told Dairy News. The EU has been gradually increasing member states’ quota in recent years to phase out the system anyway, so it is not the constraint it once was and prices are more important these days, he adds. “With whole milk powder at US$2500/t it’s just not profitable for them, particularly as European producers are some of the most costly.” Westpac’s Michael Gordon also plays down the impact of the April 1 quota removal on the market. “It should have come

as a surprise to no-one. There is uncertainty as to how European farmers will respond to it but it is more of a long-term issue. The immediate pressure for now and next season is the milk price which is very low and that means the Europeans don’t have the incentive to crank up production…. The higher

Nathan Penny

cost producers are losing money at these prices.”

A big unknown is how many extra cows and heifers were mated in Europe’s summer last year, when margins were still good, in anticipation of quota’s abolition. The European Dairy Farmers Association told Dairy News Australia it doubted anyone in Europe would be able to answer

that question and Dairy Co wasn’t able to answer it either. But Dairy Co’s senior analyst Luke Crossman did say that for British farmers removal of quota is an “opportunity for growth and a chance to displace imports”. Processors would look to expand and a reduction

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IRELAND’S MINISTER for Agriculture, Food and Marine, Simon Coveney, says milk quota’s abolition is “the most fundamental change to Irish agriculture in a generation”. “Since 1984 the industry has operated within a quota environment but now the shackles are off and the sector can start to realise its full potential,” he told a Teagasc conference to mark the occasion. But Teagasc director Professor Gerry Boyle says expansion will not be for all. “In my view, we must clearly advise farmers that it is a case of ‘better before bigger’, efficiency before expansion, or ‘skill before scale’.” Nonetheless, Teagasc predicts the quota’s abolition could create 15,000 extra jobs nationally within five years with every extra job in dairy and allied sectors leading to another in the wider economy. Upgrading processing and onfarm infrastructure has already created construction jobs and milk collection businesses will need to expand considerably to cope with a target 50% increase in output, it says.

in imports would be welcomed. “Key to farmer’s successes in the future will be remaining competitive on the world stage and reducing the risks associated with price volatility. Britain is a net importer of dairy and 2003 was the last time it reached its quota limit.

DAIRY NEWS AUSTRALIA MAY 2015

16 // WORLD NEWS

No horsing around for Fred Global

production subdued

A LOVE affair that started with driving Clydesdale horses towing the milk cart, when he was 12 years old in his native Manchester, England, culminated in Fred Pilling winning – for the second successive year – the horse ploughing class at the 60th New Zealand Ploughing Association at Palmerston last month.

Fresh milk exports to China ‘exploding’ SUDESH KISSUN

DEMAND FOR New

Zealand fresh milk in China is “exploding”, says independent NZ processor Green Valley Dairy. However, limited air cargo space is hampering New Zealand’s ability to supply fresh milk, which fetches a premimum price in China. The South Auckland company processes fresh milk for six companies, supplying six major Chinese cities with 120 million people. The exporters include Agribusiness New Zealand, a company run by former Federated Farmers chief executive Conor English. The six companies export about 10

tonnes of fresh milk every week. Green Valley Dairy chief executive Corrie den Haring would not say how much each company is exporting, saying it was commercially sensitive information. But demand is growing in “triple digits”. He says the fresh milk export business will remain a small part of Green Valley’s business, which includes supplying fresh milk to the domestic market and third-party processing of butter and cream. “In relative terms, this will always remain a small portion, unlikely any more than 10%. Logistically it is not capable of being more than that; there is not enough air [cargo] space available to

send 60 tonnes a day – not enough aeroplanes.” But Mr den Haring says enquiries come in every day despite the product being expensive in China. Imported fresh milk attracts premium pricing in China: to air freight 1kg of product to China costs $2-$3; other costs are for the base product and import requirements. While Green Valley Dairy is processing only conventional milk for export to China, it is also looking at organic milk. Mr Den Haring says it is working with other parties on organic milk, which offers a value proposition out of New Zealand. “We believe organics will play a part…. more and more Chinese consumers demand to know

Two of the NZ fresh milk brands landing in China every week.

what products they are consuming; there’s a shift towards greater affinity with the items they consider important – product safety, knowing where it comes from and exclusivity. “If you are just selling ordinary milk from New Zealand, it could be from any farm, any tanker, any supplier; when you link it back to an organic base, it becomes a little more special and has uniqueness attached to it.” This will

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help justify the pricing of the end product. Green Valley is also discussing packaging and branding of organic milk to make it uniquely NZ. Mr Den Haring says the recent 1080 threat hasn’t affected its business with exporters to China. “It’s interesting to watch and talk to our customers; while a number of consumers were aware of the issue they did not see it as unusual, problematic or risky.”

IN AUSTRALIA, milk collection for the nine months to March 31 reached 100 million kg/MS - 6% higher than the same period last season – but milk production worldwide has been subdued. EU production in January was in line with the same month last year, the first month since June 2013 with no growth in milk production. Ireland had the largest decrease, down 14%. Only the UK and Poland grew production in January. US production in January increased 2% over January 2014. This increase was below market expectations and affected by reduced production in the major dairy states California, New Mexico, Texas, Washington, Oregon and Idaho. Argentina and Uruguay production data for January is not complete. Production in December decreased 1% over the same month last year. Australian production in January increased 1% over January 2014. In New Zealand, North Island collection in March reached 80m kg/MS, in line with March last season, but milk collection in the South Island in March was 7% below last season. The co-op collected 60 million kg/MS in the South Island; soil moisture remains low across most South Island dairying regions. “Scattered rain in March was not enough to ease the irrigation restrictions many farmers are still facing and extremely dry conditions continue to affect pasture growth rates,” Fonterra advised. Fonterra says rain in March, consistent with longterm averages, supported milk production. However, dry conditions remain across most dairying regions and follow-up rain is needed to hold milk production in line with last season over the coming months. Meanwhile, New Zealand exports in January increased 3% over January 2014. This was driven by SMP and AMF increasing 25% and cheese increasing 21%. But WMP decreased 10% to 137,000 tonnes. Australian exports in January decreased 3% over January 2014. Increases in most major dairy categories including SMP, fluid and fresh dairy, cheese and whey powder were offset by a large decrease in WMP, down 62%. EU exports in December increased 8%; US exports in January decreased 22% over January 2014.

Quota removal worries farmer NOT ALL Irish farmers see the lifting of the Common Agricultural Policy (CAP) subsidies as a panacea. Tom Browne, one of Ireland’s biggest dairy farmers, is not celebrating, according to a website report. Mr Browne, milking 850 cows in County Cork, is urging caution among dairy farmers, saying he does not believe predictions that demand will match rocketing supply. He said the end of milk quotas presents an opportunity for young, ambitious farmers with the right land, but adds he’s nervous about such optimism. Mr Browne says there is a risk of underestimating what the rest of Europe is going to do. He believes Europe’s milk production is going to soar. “We have been told the end of milk

quotas will create thousands of Irish jobs, but at farm level it is a very different story. Nobody has trained in farming in the last five years, so there is a huge skills gap. There are way too many co-ops. We have 20 management teams when we ought to have two – and farmers are paying for that.” Another Irish dairy farmer, Tom Clinton – who also has a major dairy operation in NZ – says Ireland’s small farms will have to grow to stay competitive. The average farm there milks around 65 cows, compared to 400 in NZ. “Scale must go up. When you look at global standards, 90% of Irish dairy farmers would be classed as small. The dairy farm of the future is going to have to be bigger.” – Peter Burke

DAIRY NEWS AUSTRALIA MAY 2015

WORLD NEWS // 17

Fonterra blamed for rise and fall ANDREW SWALLOW

FEBRUARY’S PRODUCTION data

released by the Dairy Companies Association of New Zealand (DCANZ) last week shows Fonterra’s drought impact warning was over-the-top and explains why markets have corrected so sharply, say analysts. “The DCANZ production figures for February confirmed production is slowing but not nearly as fast as the market had thought it might, or Fonterra had said it would,” ASB rural economist Nathan Penny said. “That’s a big part of the story of why prices rose so quickly on the back of the drought declaration, and have now fallen.” Penny’s comments come in the wake of a 10.8% dive in the Global Dairy Trade index at the April 1 auction, the biggest fall in four years. It followed an 8.8% drop on March 17 wiping out February’s index gains of 9.4 and 10.1%. Those gains followed Fonterra’s January 29 forecast of a 3.3% fall in 201415 production compared to the 1584 million kg/ MS it collected in 2013-14, “reflecting the impact of dry weather on production in recent weeks”. Mr Penny said such a reduction was possible if the dry had continued across a wide area into February and March but it was “overly pessimistic”, he believes. That’s echoed by Westpac senior economist Michael Gordon.

“As time has gone on it’s proved too aggressive… Fonterra’s now saying there will be a 2% fall in production but even that’s looking too big which is why we’ve seen these ugly [price] numbers.” Mr Gordon said the question now is whether the market is simply taking out the “drought premium” or whether there is something more to it. “Over the next couple of auctions we’ll be able to tell.” At US$2746/t, the April 1 average winning price was only 9% above December’s nadir of US$2513/t, the lowest price since August 2009. Mr Penny said global demand for dairy remains “pretty soft” with China seemingly still able to draw on inventory and experiencing weaker domestic demand due to a slowing economy. “We see that [Chinese] demand picking up as we get further into the year as they are reducing interest rates and removing some housing market restrictions. Lower oil prices should also help in China so we expect to see a lift later in the year but it will take time for that momentum to come back.” As a result Mr Penny said he doesn’t expect “too much to happen” at this week’s April 15 auction. A positive in the market is growing US consumption thanks to initiatives to increase sales of liquid milk and positive publicity on the health benefits of saturated fat in butter. “Their dairy consumption per capita has risen for the first time in several years,”

FORECASTS FALLING NEW ZEALAND’S ASB shaved 10c/kg off its prediction for this season’s payout following the April 1 auction, to $4.60/kg/MS, and has $6.20/ kg/MS on the board for next season. “That still has time on its side but the risks are on the downside at the moment,” rural economist Nathan Penny says. A fall in the New Zealand dollar against the greenback would help, but ASB isn’t expecting much movement. Thanks to last season’s high payout most farms “aren’t under the pump yet, but they definitely will be if we have two low seasons in a row,” Mr Penny said. Westpac has said its $4.90/kgMS 2014-15 forecast, and $6.10/kgMS for next season, were under review. “It’s really not looking likely it will be over Fonterra’s $4.70/kgMS forecast now,” senior economist Michael Gordon said. “If they had any good news I think they would have delivered it.”

he points out. That’s mopping up more US production, reducing exports, though production is still growing thanks to the buoyant domestic market and low feed – mainly corn – prices. “But there’s still a lot of extra milk coming onto the global market from ourselves and the EU. Demand

will catch up because it’s still growing but 10% growth [in New Zealand output in 2013-14] was just too fast.” South American production has responded to the lower prices faster but reduced exports from those countries alone will not reverse the price trend, Mr Penny adds.

Global demand for dairy remains soft, says an analyst.

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DAIRY NEWS AUSTRALIA MAY 2015

18 // MARKETS

US margin insurance distorts global market Dairy NewS aUSTraLia june, 2012

agribusiness // 17

Export demand remains strong

AMID FALLING farm-

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should be interested in the MPP scheme. While the MPP reflects a significant change in direction for the US dairy industry, shifting away from direct payments and price support, a margin – or lack thereof – acts as a production signal. Subsidised margin insurance encourages greater production than the market requires when prices are low. Under the MPP, almost 40 billion litres is insured at the basic margin of US$4/cwt – that’s over four times Australia’s total 2013/14 production. With about 15% of US dairy production being exported in 2013/14, it’s worth bearing in mind when considering global supply scenarios in the coming years. • Amy Bellhouse is an industry analyst with Dairy Australia.

LE •

Malaysia FTA benefits dairy Freedom

margin relief is near on the income side of the equation. On the contrary, despite significant softening since late 2014, US butter prices remain well above global export indicators, while cheese remains at the high end of the spectrum; making it possible that further downside remains for the US All-Milk price. At the time of writing, corn and soybean planting is progressing well, and stocks are reasonable, taking pressure off the feed cost side of the equation. If the USDA calculated margin creeps lower in coming months, a considerable number of farmers will be eligible for insurance payments: and many farmers are insured at levels which are not infrequently reached. This highlights the reason that dairy farmers exposed to a global market

AB

gate milk prices in major exporting regions globally, cents/litre in March (AUD 41c/L) to 28 With season 2011/12 only a few incremental change in milk production (year-on-year) Euro cents/litre (AUD 36c/L) in April. weeks from ending, attention is now a buoyant domestic market Profit margins are under pressure in the focused on 2012/13 milk prices as farmhas kept US dairy farmers US, and in NZ Fonterra has announced ers consider strategies for the coming the final payout for the 2011/12 season year. Infor some relatively protected an domestically-focused has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incorgLobaL impacT extended period. to NZ$6.45-$6.55/kg MS (AUD$4.96porating lower prices and reduced ‘tier JohN DropperT $5.04). one’ access are undermining farmer Late 2014 finally saw Effectively, global dairy markets are confidence and supply stability. For GLOBAL IMPACT rebalancing. Lower prices will both private label contracts and promany farmers in export-oriented Shifts inAMY domestic commodity BELLHOUSE slow production growth and stimulate regions, a lower price outlook relative to cessor rationalisation have seen milk prices start to slide, and demand, and as this occurs we will ultithe current season not only adds to the companies adjust their intake requiremately see a price recovery. Key factors ments and pricing to meet the changchallenges of doing business, but seems Under the MPP, the These enrolments cover there has been a significant to watch on the global scene will be the to contradict the positive medium term ing demands of a highly pressured retail 64 billion litres ofcontractmargin drop in the USDA calcurate at which milk production overseas marketplace. Lower prices and is calculated by the outlook of Asia-drivenaround dairy demand slows in response to lower prices, the a lack of alternative supply opportunigrowth.(-18%) USDA as the gap between a forecast 95.3 billion litres lated All-Milk price Dairy Australia’s indicative outlook ties present challenges in a market with flows. 2012 milk production in the US those in south-east Asia and the Middle impact of the current financial worries income All-Milk national for capacity. since last December. is up around 4% onprice) 2011 for the year to East maintain consistently higher eco- on consumer confidence, the path of limited manufacturing Despite (the for southern farm gatein milk prices – production domes- April (leap year adjusted), whilst early nomic growth rates that support China’s economic growth, and the value published in the recent Dairy 2012: Sit- these challenges, the underlying and average feed costs, and the year. While feed markets uation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Australian dollar. margin is averaged over The program have also softened, this Demand for exported dairy prodfinished the March 2012 quota year up ever, the surge in supply has outpaced ita dairyprovides consumption and the a growing opening pricehas range of $4.05-$4.40/kg ucts remains a positive and will conMS and a full year average price range population providing a degree of cer- 2.3% on the previous year. New Zealand demand growth in the market. six consecutive two-month payments when margins not been as marked, resultThis situation has seen the scales tinue to grow with the middle class in between $4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish In the seasons followingperiods. the 2008 this season up 10% on last year - a huge tip in favour of buyers in dairy mar- large emerging markets such as China, report considers the wider pic-the individual’s aremarket below ing in tightening margins. ture and summarises the many factors financial crisis and subsequent com- market influence given 95% of NZ milk kets, with commodity prices retreat- with changes in diet and with increasing Some may of 2007. If the average which In April, thisat saw 261 - andhave also inbeen conjunction ing steadily over recent months. Butter urbanisation exported. calcuArgentina is also enjoymodity price can recovery, farmers in is play; the key theme ofcoverage the current sit-level, with growth. pricesJanuary are down some 30%the from theirput ing solid production regions havelated seen solid uation being that of re-balancing in the export-oriented offglobal by population the costs of Locally, 2007, margin for one ofgrowth, but a sig-Since range between US$4 and dairy farms become eligiglobal supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market is supported by a dairy supply chain. at the higher - and below these periods belowmilk frommargin US$8/cwt ble for payment under the growing population and stable permorebeen than 20%. Farm gate pricesinsuring much offalls this additional leav- losthas higher-cost competitors in the NorthIn regions of Australia focused on (10-20c/L). capita consumption. Whilst – the dairy have subsequently been reduced intherefore ing South America. Hemisphere expandproducing drinking milk, many farmers ern more likely US$7/cwt 29% of the time; the insured level, payment Farmers can insure amongst those Margin Protection ProDespite wider economic uncer- most exporting regions. The average market is currently a challenging place face a re-balancing market in the form ing output as their margins increased. levels. belowbasic US$6/cwt 22% is triggered for those between 25% and 90% of weather gram (MPP), a of subsidised to be a seller, all signs indicate that balfarm gate price for of milk in Francemargin demand hastwo remained resilient This season, favourable con- tainty, renegotiation of supply contracts and reduced access to ‘tier one’ supply. ditions have further enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately return. While the insurance is the time; below US$5/cwt months. historical milk production insurance scheme estab14% of the time; and below subsidised, it is not free. This margin has been (the highest of 2011, 2012 lished under the United For farmers taking out steadily deteriorating since the basic insurance level of and 2013, subsequently States latest Farm Bill, the cover above the basic level, US$4/cwt 12% of the time. October 2014, reaching an adjusted based on average Agricultural Act of 2014. Given the apparent like- costs can be significant – average of US$7.9955/cwt US production growth). Over half (55%) of the ASEAN-Australia-New austraLian DairY, The lihood of being faced with a particularly for large farms for the January-February insurance is subdairy farms in the US, rice and wine exporters to Zealand FTA (AANZFTA). seeking a high level of margin below $8/cwt, perperiod, a not uncommon with thesentibasic 25,000 enterprises, are “Protectionist Malaysia are the biggestsidised, ment over agricultural in a free trade (US$4/cwt) insurance. haps the real surprise is scenario: margins have level of cover enrolled for thewinners Margin goods is rife and growagreement (FTA) signed For example, a pack that only half the US dairy a US$100 been below US$8/cwt 41% Protection Program ing acrossfor the only globe, so to providefor portion betweenfor the two coun- provided austraLian FooD in this context it is pleas(200-330ml) configuratries last month. company Freedom Foods farm milking 500 cows, farms signed up. of the time since the start administration fee. 2015. ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a to forge an agreement ucts. seven years of negotianew milk processing withplant a production history with Malaysia that has The NSW location will tions, allows a liberalised to cash in on growing More US farmers are of 5,127,456provide litres, taking dealt with some sensiaccess to the most licensing arrangement demand in Asia. taking part in the tive agricultural issues and economic for Australian liquid milk The plant, to be built in sustainable 90% coverage at US$8/cwt Margin Protection not effectively covered by exporters and allows southeast Australia, will be source of milk. Pactum has Program, a subsidised would havestrong incurred a AustrapreAANZFTA,” says Fraser. links to the access for higher value the first Australian greeninsurance scheme. Sealing the deal: Malaysian trade minister Mustapha Mohamed “While under the lian dairy industry and will retail products. fields expansion in UHTof in US$102,962. mium with Australian counterpart Craig Emerson after signing the deal. AANZFTA agreement expand its arrangements It guarantees Aus10 years. However, farms most of Australian agriwiththe dairy 261 farmers for tralian wine exporters Freedom’s wholly but also through technical Despite the compleers through streamlining culture’s key interests supply of milk. The new the best tariff treatment owned subsidiary Pactum that purchased cover for or so called ‘behind the tion of this agreement, of rules-of-origin dechad tariffs bound at zero, plant will increase scope Malaysia gives any counAustralia will run the 265formillion at much remains to be done border’ restrictions.” dairy and rice are two sec- laration processes and Australianlitres milk supply try. It also allows open plant. Some ofalmost its products The FTA was signed on for Australia’s farmers to improved marketing – value-added, sustainable access arrangements from tors where incremental will be sold in Australia. that level are now starting May 22 in Kuala Lumpur tap into the full potential arrangements for certain market access improveand export focused. 2023 for Australian rice The company says by Australia’s Trade and of the Asian region and commodities. ments have been negotiInitially the plant will with all tariffs eliminated given Asian consumto see a return. Competiveness MinisThe Malaysian market beyond. ated under the Malaysian produce 250ml and 1L by 2026. ers’ rising incomes and As the world waits ter Craig Emerson and his He says the NFF will is worth about A$1 bilUHT packs from a–process The National Farmers’ FTA. improving diets, demand Malaysian counterpart now throw its attention lion in Australia agricul“This trade deal was capable of 100 Federation says the trade there will growand for qualwaits –linefor signs ofmila towards ensuring agricul- Mustapa Mohamed. tural exports – including also particularly imporlion L. The processing and deal will improve interity dairy products from significant and sustained Emerson says Australia ture remains front and being its fourth-largest tant for sectors such plant will emit national market access low-cost production bases packaging centre in completed FTAs will be as well-positioned sugar export market and carbon, dairy use less water, for Australian agricultural as dairy that have been such as Australia, whose recovery inlessglobal in the Malaysian market fifth-largest wheat export with South Korea, Japan, facing a competitive disand be more energy-effigoods. milk is well regarded. commodity prices, it seems as Malaysia’s closest tradChina and Indonesia as market. advantage in Malaysia cient than equivalent “After seven years of The new plant will ing partners in ASEAN, With an annual economic immediate priorities. compared with New ZeaUHT facilities in Austranegotiation, the NFF is allow Pactum to meet unlikely that substantial “These are all markets and in some cases better. growth at about 5%, land which already has lia and SE Asia. Pactum under no illusion of how growing demand for

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MARKETS  // 19

US dairy goes from accidental exporter to internationalist IN LATE April, Freshagenda’s directors were fortunate to attend the ADPI/ABI (American Dairy Products Institute/ American Butter Institute) Conference in Chicago. This major conference draws around 1000 delegates and is dubbed as the place “Where the Dairy Industry Does Business” – networking and deals dominate proceedings. Conference sessions aren’t a high priority for many attendees – but a keynote session featuring some of the US dairy industry’s most senior and respected leaders drew a large crowd. For us it provided some insights into the changing mindset of the US dairy sector towards the world market outside their borders and their transition to being “internationalist”. The conference panel discussion on global trade featured leaders of three exporting cooperatives, a USbased international trader and a highly respected consultant in risk management and procurement. Jim Wegner, the outgoing president and chief executive of the Northwest Dairy Association (Darigold), effectively set out the likely future reality for the industry based on extrapolating trends in production and domestic

of step with the current consumption. and evolving situation. In 2014 exports Changing these setaccounted for 15% of tings will take enormous US milk production, but political will in a climate projecting forward, Mr where the machinery of Wegner’s analysis sugUS government is highly gests exports will repredysfunctional. sent 23.5% of output by It’s not all about 2020 – a greater share obstacles; Mike McCully than domestic fluid milk FRESH AGENDA from the McCully Group consumption which is JO BILLS highlighted the advanexpected to continue to tage the US has in an decline. Exporting will not be an optional increasingly volatile trading environextra for the US industry – it will be at ment in having a strong market culture that embraces risk management tools the very core of the business. In meeting that challenge, the dis- such as futures, options, swaps and forcussion went to tackling some of the ward contracts. Some of the real gems came from realities of being more international. A lot of this centred on quality issues Jay Waldvogel, who for a time saw and farmer support arrangements action as COO at Fonterra, but is now which significantly hamper the indus- a senior vice-president in Dairy Farmers of America. try in its export efforts. He talked about the length and comStandards of identity for butter and SMP that are different from inter- plexity of supply chains that meant that national norms, a pricing system export returns will not grow in a straight that makes it difficult for exporters line, external factors, “the unpredictto commit to forward export orders, able” will have ongoing impact. He talked about fundamentals when the cost of their major input – milk - is based on domestic market around increasing demand based on trends, is constantly shifting, and sub- long term demographic and economic ject to administrative rules that are out trends that do not go away when prices

cycle downwards. It seems the US industry suffers the same emotional rollercoaster our own industry goes through when it seems the promise falls short of the reality and markets don’t continually climb. The panel’s discussion on sustainability would also be familiar to many in our own industry – that the word means different things to different people; how it can and will be used as a non-tariff barrier; and that many farmers see moves toward increased sustainability as adding costs. Mr Waldvogel said consumers everywhere are concerned about sustainability - “not just the nut jobs” but also that the US is a “well-behaved” industry that can use sustainability as a competitive advantage if the industry can think about it positively. Perhaps the most interesting insights, given where our own industry discussion has been in recent weeks, were shared in response to a question on the use of the productivity tool rbST, and GMOs. It was acknowledged that major competitors – NZ and EU – do not use either, and that customers have varying degrees of sensitivity. However, there was a clear push by a

number of US industry leaders to position these technologies as supportive of sustainability, and that fragmenting the supply chain through segregation is not that big a deal given that “milk is not milk” anymore. That’s OK – it’s an opportunity to differentiate and create value. Again Mr Waldvogel’s view was that safe, efficiently-produced and affordable milk to feed everyone is important – “we can’t feed everyone on organics”. The US dairy sector is going through a significant transition from exporter to a truly international industry. It is clear though that US involvement in global dairy trade will continue to grow. While some of the challenges – largely focussed on farm support arrangements, ironically - position them well behind other exporting regions; other aspects of the US dairy sector – their scale, efficiency and embrace of tools that deal with volatility as well as technologies that underpin sustainability - will make them formidable competitors in the future. • Jo Bills is a director of Freshagenda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.

Index comes back to earth in April FRESHAGENDA’S AUSTRALIAN dairy

export index finished the April at 168 points, losing 13 points since the end of March, and shedding all the gains made since the start of 2015 on the back of the now infamous “NZ drought” story. At the time of writing Fonterra have released their latest forecast for the current season, which will see intake up slightly, rather than the 3.3% decline it had predicted just a few months ago. The price rally on the back of

this was brief, with no good news on the demand side to support it and mounting evidence that the forecast was just about mathematically impossible. Both Fonterra and Westland revised payout forecasts down at the beginning of May, and looking at what’s happened to commodity prices in the last little while it’s easy to see why. Whole milk powder lost US$860/t in value during over the March and April period, while skim milk powder lost US$400/t.

In contrast, Australia’s major export category cheese has been much more stable. Cheddar prices have fallen $US220/t over the past two months, losing just $US20/t in April. Comparing the Australian and New Zealand indices, it is clear what the differences have been. For the month of April the Australian index shed 14 points while the NZ index shed almost 20. If we remove currency impacts, comparing solely on the NZ product mix and keeping the index in Australian dol-

lars, the difference is even greater – 25 points. The Australian dollar continued to trade within a range of US76c to 78c during April, but ended the month around where it

was at the end of March – at US78c. The index is a lead indicator of average export returns - based on spot prices, currency movements and export mix.

The index measures current market sentiment, but in reality it takes 3 to 6 months for prices to translate into actual returns, depending on the timing of contract negotiations.

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DAIRY NEWS AUSTRALIA MAY 2015

20 //  OPINION RUMINATING

EDITORIAL

Long road ahead for GM acceptance

MILKING IT... All our cows are content

GOOD TO see the dairy industry knock back a proposal from the RSPCA for an animal welfare approved milk brand. Australian Dairy Farmers president, Noel Campbell, said it would have divided the industry. “We believe a brand that was RSCPA labelled would indicate any milk provided under another label would have practices that were less than good for animal health and welfare,” Mr Campbell said. Absolutely agree - it would have been the thin end of the wedge. We can only imagine different companies trying to get one up on their competitors by being “even more animal welfare friendly”. You can guess who would have had to pay for that.

Chinese investment

WITH AUSTRALIA crying out for foreign investment, it’s interesting to look across the ditch and see what’s happened at Crafar Farms, purchased by Chinese company Shanghai Pengxin in late 2012 following two years of legal and political challenges. The Chinese company paid an estimate $200 million for 16 farms in the North Island. There was some local angst about how it would ruin the industry etc but recent reports show the farms are booming - producing more, employing more people – on top of significant investment made in infrastructure and the environment. “It is good to see those screaming skulls’ protests – hidden behind a thin veil of racism – have been proven utterly wrong and their silence now is rather deafening,” said our man on the spot.

100 billion not out

A STUDY of genetically modified feed at the University of California calculated the number of food animals raised on GM feed since 2000 – an amazing 100 billion head - then looked at animal production and health statistics – both of which have improved during that time. The researchers aren’t saying GM feed has been responsible for those improvements, but they are saying if GMO food was unhealthy, as often claimed by anti-GE zealots, animal health and production would have declined. Can 100 billion animals be wrong?

Advertising Chris Dingle chris@dairynewsaustralia.com.au

Second opinion?

THE WORLD Health Organisation recently declared that glyphosate was “probably carcinogenic”, causing a bit of a fuss given the ubiquity of Round Up and its clones. But did this eager offshoot of the United Nations properly assess the threat of glyphosate before setting the cat among the pigeons? No new studies were done, rather 17 experts were asked to review publicly-available studies about glyphosate then issue their assessment of the risk. The same process apparently led this august body to declare night shifts and hairdressing as “probably carcinogenic” and coffee as “possible carcinogenic”.

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IT WASN’T surprising to hear the processors’ opposition to GM pastures at the United Dairyfarmers’ of Victoria conference last month. Their seal of approval would have given a green light to further trials and commercialisation by seed companies. If there was no opposition then farmers would have been keen to purchase the improved pasture varieties, opening the door for seed companies to pay to further develop and commercialise it. Deep down, farmers would know it was always going to be a long road to get this technology on farm. And if they want it – and the proposed $250-$300/hectare benefit it brings – they need to unite and lobby for it. Peter Stahl of the Australian Dairy Products Federation (the processors’ representative body) told the audience at the conference of the risks involved of adopting GM. He said all processors have concerns about market place acceptance – both domestically and internationally. With many unfounded fears about GM in the community, Australia’s adoption of the technology would be easy to exploit for commercial gain. Our largest competitor in the region, New Zealand, has a GM ban and this is top of mind. Dr Stahl said despite the science, politicians have a tendency to lean towards the precautionary principal if they feel some of their votes may be at risk. He also said the industry needed to ask why the idea of GM is so contentious. It will be a long road to have this technology adopted and there will be a large number of potential roadblocks and hazards in place. It will take a united push to improve the acceptance of GM and it’s not the processors that need to be convinced, it’s the customers and consumers. The science and facts behind GM are up against a well organised campaign by anti-GM activists who can bring down the most rationale argument with a catchy slogan like “FrankenFoods”. As Dr Stahl told the conference: “It’s regrettable that supporters of GM don’t rally.” If farmers want the right to use GM ryegrass, they have a long battle ahead. Only they can decide whether it’s worth it.

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DAIRY NEWS AUSTRALIA MAY 2015

OPINION // 21

Are leaders born or made? they drive an XF falcon or use a I HAVE often thought about the Commodore 64 computer. Then question “Are leaders born or made?” quickly go on to remind them that This is the subject of hundreds of most farmers are still using 1980’s books, studies, courses and self-help technology on their farms. guides. The great catch 22 position To be a self-confessed “leader” in exists at the moment that stands the dairy industry or any agricultural in the way of growing our industry industry runs the risk of being cut to take advantage of the coming down as a tall poppy. As naturally Asian century. Profitability allows quite humble people, dairy farmers uptake of new technology that can be harsh on people who do speak increase efficiency that in turn drives out on issues facing our industry. OPINION profitability. This in turn puts some people off PAUL RODERICK We all have a role to play in moving into industry roles. making this happen. Industry must As a person who likes to be liked, this is hard to deal with as sometimes the next generation. Without a clear continue to support research and - the right thing to say or do may not plan of succession, this often leads development. And as farmers we make you popular. I have seen some to resentment and a breakdown of must seek this out and uptake and leaders being able to strike that that working relationship and the pick some of the low hanging fruit. balance between doing and saying personal one as well. This will more Processors must find new and what is right and maintaining the often than not lead to the end of a innovative was to support suppliers as they uptake changes on farm. respect and confidence of most of the farming business. Above all, we must keep investing We have two full-time employees people they represent. Dairy is not immune from negative people who and a couple of casual milkers, one in our people especially the young. We must continue to attract the will always find fault but by in large of whom described me as the best best and brightest if you explain a position, into all levels of our they will accept it and industry. Hundreds move forward with you. of different jobs exist The first 10 years in “Processors could note that what dairy I saw my father motivates and inspires the workers between the cow and the carton. involved in any number on our farm also pertains to We don’t need to of industry roles in what inspires confidence in the reinvent the wheel on advocacy, research and this, but continue the extension. We have had a suppliers - this is not always a fantastic programs long association with the question of dollars.” that exist. Cows Queensland Department Create Careers, of Primary Industries. As a farm just 5km from the now closed boss he had ever had. This was a Picasso Cows, Legendairy, YDNA. We must look at innovative ways research farm at Mutdapilly, we were little overwhelming for me to hear often involved in trial, research and as we don’t pay over the award but to transfer ownership or management extension days both on the station just treat them with respect and ask from generation to generation either in the family unit or by other means. them to work with us not for us. and at our farm. Processors could note that what By showcasing the success stories we Dad spoke at field days and other events about some of the things that motivates and inspires the workers can encourage others to do the same. We must make it easy for young he was doing on farm. I’m sure it on our farm also pertains to what was through this association with inspires confidence in the suppliers people to survive and thrive in DPI and his involvement in the - this is not always a question of dairy. I was lucky! I had some good individuals around me that Northern Dairy Group, a precursor dollars. As suppliers, we are like a teenage encouraged me and guided me in to Sub-Tropical Dairy, that he had the confidence to try and implement boy - we want to feel loved. We my early years. We need to be these new ideas into the farm. Not all ideas want to be wanted. Nothing drives mentors for the next generation. So are leaders born or made? and ventures were successful. (Dad confidence like being told by your I was not born as a leader. I have still shudders when he thinks of the processor that they want all of your money that he spent on Embryo milk and more of it. That they are in the past 20 years or so held some investing in capturing new markets, leadership positions but I still don’t Transfer in the early 80’s.) But most added value and building brands and putting money know if I’m a “leader”. To be honest, it doesn’t matter. increased profitability as we headed into stainless steel to handle your toward industry deregulation in milk. We want to be part of your Leadership comes in many forms. team. We can be your biggest We don’t need hundreds of Noel 2000. Campbells and Robert Pooles to As Dad’s contemporaries at DPI advocates. Having recently been to Tassie, lead our industry. But we do need moved on, he allowed me to take a more active role in this side of the I have seen the confidence that this young people to have the confidence business. This highlighted what I brings. The processors must invest to lead their farm businesses and see as my father’s great ability to in upskilling their suppliers. Look at the processing sector forward. To not hold on to things for too long, ways to help them build efficiencies uptake new technology as it becomes available and grow our industry into move on, transfer responsibility into their farm businesses. I am a great believer that we must the future. and let go. From the time I started Dairy has allowed me to develop work, he transferred large chunks look at both ends. Sure the price of responsibility on to my shoulders we get is important, but so is what that confidence, do some fantastic which was equal parts challenging it cost to produce that L or KG. We things, go to some great places, meet as it was daunting. He would often must know our costs. Processors some even better people and become show me things once and leave me to in conjunction with suppliers must a much better asset for my farm and it saying “you’ll work it out”. This has find ways for them to invest in the local community than if I had taken been a great lesson for me as I now latest technologies that drive this another path. • Paul Roderick is a fifth-generation efficiency. manage staff. Nothing annoys me more when dairy farmer based in Harrisville, Too often I see the exact opposite to this in our industry where the I hear someone from outside our Queensland. This is an extract from older generation struggle to let go of industry say “the farmers have to the key note speech he gave at the ADIC responsibility and put their faith in get more efficient”. I ask them if Business Breakfast last month.

Having recently been to Tasmania, Paul Roderick can see the confidence processor demand for milk instills in suppliers.

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22 // ABVs

New indices will help fine-tune g LEE-ANN MONKS

WITH A large, high pro-

duction herd, Jo and Bryan Dickson (Emu Banks) are looking forward to having the flexibility to use each of the new breeding indices to choose sires to use over different groups of cows. “As a commercially focussed herd, we will use the Balanced Performance Index to select sires to use over most of the herd,” Mrs Dickson said. “That’s the index that best matches our breeding goal which is to breed highly profitable cows. We are looking for high production cows with the health, fertility and functional type to last many years in our herd. “But there will be small groups of cows that we particularly want to

improve fertility and cell count so we will use the Health Weighted Index to choose sires to use over them. “And similarly there’s a small group that we want to primarily improve functional type so we’ll use the Type Weighted Index to select their sires.” The Dicksons have two dairy farms near Terang in Victoria’s Western District. The home property has predominantly Holsteins and another property, with mostly Jerseys, is run by a manager. They recently purchased a property neighbouring the home farm which will allow the Holstein herd to be expanded from the current 700 to 900 in the coming years. In the April 2015 ABV release, a bull bred by the Dicksons, Amu Banks Christmas-ET, was named

WHO:

Jo and Bryan Dickson WHERE:

Terang WHAT:

Genetic improvement

No 3 on the Holstein profit-Australian proven list. It is the highestranked bull they have bred and they are now milking seven of his daughters. The Dicksons were named eighth top Holstein herd in the herd average ABVs based on the balanced performance index. Their average production is about 9000L/cow/ year and 630-640/kg/MS.

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Profit is the key selection criteria for choosing sires to use over most of the herd. “As our focus is profit, we’ll mostly use the list of bulls based on the new Balanced Performance Index. I am happy that

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it places more emphasis on fertility and longevity traits than the old APR; it means the index is progressing with farmers’ evolving needs,” she said. The new index also includes emphasis on type. “We use the Good Bulls Guide, both the brochure that comes in the mail and the web-version to create a short list of bulls to research in more detail. We use mostly Australian sires but we also try to include a couple of bulls from overseas for genetic diversity.” Some years the Dicksons use a synchronisation program over the main herd. In this case they use ‘bull of the day’ for joinings. Progeny test sires, including young genomic bulls, are included in this mix. If the cows haven’t been synchronised, Mr Dickson decides on indi-

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abvs  // 23

e genetic improvement vidual matings based on a combination of Genescreen recommendations (to avoid inbreeding or joining two haplotype carriers) and his own knowledge of the cow family. When it comes to the maiden heifers, the sire’s calving ease is considered, as well as profit. The Dicksons use Genescreen to determine individual matings for heifers, based on their pedigree. This year they plan to use sexed, fresh semen over some of the heifers. “Although we will be limited to the bulls available through the fresh, sexed semen service, we’ll still select from those available for profit and calving ease,” Mrs Dickson said. The elite cows go into the flushing program which focuses on breeding bulls for sale to AB com-

panies. “We use individual matings for the elite cows. Like the rest of the herd, we use some PT sires in the flushing program but they tend to be the ones that have better genomic results,” she said. The only time profit is a secondary priority is when selecting sires to use over the small group of cows with individual traits for improvement – such as fertility, cell count or type. “For these cows we are prepared to accept a small compromise in profit to improve specific traits. That’s where the Health Weighted Index and the Type Weighted Index will be useful to us,” she said. Mrs Dickson believes the introduction of three indices creates the opportunity to improve genetic gain across the industry. “We now have three

Genetic gains grow More than one third of the productivity improvements achieved on Australian dairy farms comes from genetic gain. This is one of the findings reported in the recent Australian Dairy Herd Improvement Report, published by the Australian Dairy Herd Improvement Scheme (ADHIS) and the National Herd Improvement Association of Australia (NHIA). Michelle Axford from ADHIS said farmers could be very confident in the contribution made by genetics as this figure had been stable over the past decade. “Every dairy farmer has to join their cows so it makes sense to ensure that the joining contributes to the herd’s genetic gain. The best way to achieve that is to use artificial insemination over most of the herd,” Mrs Axford said. “Using good genetics over the herd does not have to involve spending any more time or money. The Good Bulls Guide is a quick way to identify affordable sires that suit a given breeding objective. “The beauty about genetic gain is that it is permanent and the benefits compound very year.” The Herd Improvement Report provides a snapshot about how the national dairy herd is tracking across a range of performance criteria. Some of the key findings from this year’s report include: ■■ Milk solids production per herd recorded cow has increased 9.4% over the past 10 years. ■■ The percentage of cows calving between February and April has almost doubled (from 14% to 27%) since 1999. ■■ About half (48%) of herds are herd recorded which is similar to five years ago. ■■ Less than one third of herds (29%) have recorded AI sires for most of their cows. ■■ Daughters of AI sires produce about 52kg more milk solids than their naturally bred counterparts. ■■ Herd test and AI make up about 2.1% of total variable costs on a dairy farm (Dairy Farm Monitor Project Annual Report 2013/14).

very powerful indices, to meet the different breeding priorities of most Australian dairy farmers. “As farmers, AB companies and resellers all start using these indices, there will be less confusion, allowing farmers to consistently choose sires aligned to

their breeding priority. Over time that will achieve better genetic gain across the national herd,” she said. • This article was first published in the April-May 2015 edition of the Australian Holstein Journal and has been reprinted with permission.

Bryan and Jo Dickson’s Terang farm.

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Dairy News AUSTRALIA may 2015

24 //  abvs

New DNA test unlocks genetic potential of dairy herds RESEARCHERS BEHIND a new tool say

it gives dairy farmers the potential to double the net income per cow that arises due to genetic improvement.

The new genetic selection tool, called Clarifide, takes genetic information from an animal’s DNA and converts it into a practical decision making tool for farmers.

Clarifide is the culmination of many years of research and development at the Australian Dairy Herd Improvement Scheme (ADHIS), the Victorian Department of Eco-

nomic Development, Jobs, Transport and Resources (DEDJTR), and Zoetis. It has been successfully trialled in Victoria. Clarifide offers reliable predictions of the future

potential of a herd with a simple tail hair test from the day of birth. A Clarifide genomic test delivers information on young heifers that is equivalent to recording their

Graeme Gillan

performance over seven lactations Geneticist Jennie Pryce, of DEDJTR, said tools like Clarifide gives farmers access to more reliable data for a number of traits not previously possible, with significant economic benefits. “Research suggests that farmers could double the value of their investment if they adopt a genomic selection tool for their breeding and selection decisions,” Dr Pryce said. The simple tail-hair DNA test will allow farmers to identify superior animals from as early as birth and identify whether or not these animals possess the potential to deliver on economically important traits including milk production, good fertility and overall durability. “With an extra level of precision, farmers can now confidently select their best replacement animals, allocate higher value or sexed semen to genetically superior females, and increase the rate of genetic gain for economically important genetic traits, with the use of this new DNA technology,” Dr Pryce said. South West Gippsland dairy producers, Peter and Jeanette Clark, were able to realise the hidden genetic potential of their heifers after using Clarifide during trials in Victoria. “We could never have imagined the extent of genetic potential that existed in our herd without a genetic test like it,” Mrs Clark said. “We realised we were missing out on an opportunity to mate our heifers to top-rated semen after seeing their breed-

ing values, so this tool has allowed us to make faster genetic improvements in our herd and know that we are breeding from the cow families that will make this advancement possible.” Holstein Australia CEO, Graeme Gillan, said the Australian dairy industry should take advantage of valuable breeding tools and grow their overall knowledge, acceptance and utilisation in herds. “In Australia, genomic testing is an under-utilised technology, especially at female level, so it is exciting that there is going to be another channel that farmers will be able to incorporate into their business,” Mr Gillan said. “A farmer’s biggest asset is their herd, so if they don’t value genetics, they are missing out on an opportunity to know more about animals from an early age and make better breeding decisions. “The more farmers can get out of their herd, the more opportunity for gain. “In essence, farmers can put their money and efforts into the animals that will help to build a more profitable farm.” Zoetis technical services manager, Emily Piper, said the new tool will allow farmers to avoid the risk of raising genetically inferior animals. “We can now assist dairy producers with the difficult decisions around selection and management of heifers using a simple tail hair sample. “That DNA sample can deliver a wealth of knowledge to producers about the animal’s future production, health and type potential,” Dr Piper said.

DAIRY NEWS AUSTRALIA MAY 2015

ABVs // 25

Three-way cross for hybrid vigour WORKING AS a veterinarian pregnancy

testing dairy herds helped shape the thinking of Tim Humphris when he and his wife Lyndal decided to go farming. “I saw too many empty cows. Declining fertility in the dairy industry was always going to be an issue I wanted to address,” Mr Humphris said. A three way cross breeding program to boost hybrid vigour has been the cornerstone of their farming enterprise at Tongala in northern Victoria since they entered the industry seven years ago. “Mixing Friesian, Jersey and Aussie Red bloodlines has given us a motley-looking herd, but we are getting outcomes in terms of fertility and cow health,” Mr Humphris said. He keeps careful pedigree records and aims to keep continually out crossing their 330 milkers. Cows that are predominantly Friesian are mated with Jersey semen, Jerseys get a red sire and Aussie Reds are crossed with a Friesian. The couple maintain about 30 registered Aussie Reds as a contribution to building genetic diversity in the small breed. This year they have had one of their bulls selected as an AI sire by Genetics Australia. “I’ve always had a strong interest in breeding, especially in selecting bulls,” Mr Humprhis said. The breed had opened up its register to quality red bloodlines from Scandinavia to help broaden its genetic base. While there were a number of Aussie Red herds in Australia, semen sales were overwhelmingly used for crossbreeding. For this reason the breed restricted the percentage of Friesian blood to help farmers maximise hybrid vigour when using Aussie Red semen. When making breeding decisions on his farm, Mr Humphris said he gave priority to health and fertility traits over production. “With our herd averaging about 550 kilos of solids, I’m currently getting enough milk,” he said. His sire selection is based on getting cows in calf, with low mastitis and sound feet. Mr Humphris has welcomed the first Health Weighted Index with the release of the April Australian Breeding Values.

WHO:

Tim and Lyndal Humphris WHERE:

Tongala WHAT:

Three-way cross

The new index embodies what he’s been trying to breed for and should take away the hard slog he has had to do in the past. “I’ll now be able to quickly make a short list of bulls that are potentially suited to our herd and then evaluate them more closely. All the sires listed in the Good Bulls Guide will deliver gains in production, so that’s a given. “Improving health and fertility as well as longevity are the next most important contributions breeding can make to improve our dairy business,” Mr Humphris said. He believes the revamping of the ABVs with the introduction of three new breeding indices will benefit the whole industry. “The three indices will give farmers more choice. We all have different breeding priorities and the changes will allow us to customise bull selections to our individual needs.” He believes it will be possible to make significant gains in a chosen priority by following a single index for a number of generations. The three new indexes are: ■ The Balanced Performance Index which focuses on maximising net profit through production, fertility and type. It replaces the current Australian Profit Ranking. ■ The Type Weighted Index gives priority to improving overall type, mammary system, udder depth and fore udder attachment. ■ The Health Weighted Index is strong on fertility, cell count, feed efficiency and survivability.

Tim and Lyndal Humphris.

Accelerating change in Murray Dairy region GORDON COLLIE

TONGALA

FARMER Tim Humphris is looking forward to playing a part in helping revitalise the dairy industry in his region. He has had a long time interest in research and is pleased a major program is getting underway to extend knowledge to farmers across the Murray Dairy region in northern Victoria and southern NSW. “I think there is massive potential to rebuild dairying in our area where we’ve seen production decimated by years of drought”, he said. Tim and his wife Lyndal have signed up to be one of two partner farms in a Dairy Australia funded initiative which aims to accelerate the uptake of information and change in farming practices. The second partner farm at Yarrawalla is owned by Don and Meg Stewart who will participate with sharefarmers Kelvin and Shelley Matthews.

The three year project will see the partner farms working with a team of consultants, service providers, researchers and other producers in the adoption of research and technology with a focus on pastures and irrigation management. Partner farms will be supported to develop and achieve their business goals with access to specialised advice. Farm performance will be monitored and evaluated with the collection of data on indicators such as dry matter production, water use efficiency and feed utilisation. Lessons learned will be shared closely with 30 satellite farms which will road test the results in their businesses. Information will then be shared with a further 380 farmers through open days, farm walks and production of case studies. “The whole idea is to develop an extension model which accelerates the uptake of new information and research results,” Mr Humphris said.

“I hope that the work that is going to be done on our places and the satellite farms will develop into a think tank to really progress our local dairy industry. “I’m looking forward to driving water use efficiency further.” This was essential if the industry was to develop with water being devoted to the environment and allocations becoming more expensive. Their feed system relies predominantly on ryegrass and Mr Humphris said he was looking forward to exploring potential to get better performance during tough, hot summers and improving yield for water used. They grow maize for silage and while it took 7 megalitres of water a hectare to grow a crop, production of three tonnes of dry matter per megalitre compared favourably with a perennial pasture dry matter yield of 1.1 tonnes per megalitre. “So there is definitely potential to make better use of irrigation on our pastures,” Mr Humphris said.

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Dairy News AUSTRALIA may 2015

26 //  management

Higher stocking rates require pasture focus Gordon Collie

IMPROVING PASTURE utilisation to allow

higher stocking rates is part of a plan to accommodate the fifth generation family member in a NSW dairying enterprise. James McRae and his wife Lauren have focused on growth since joining his father Chris on the farm at Barrington two years ago. The herd will build from about 75 milkers to at least 100 in the next year with a larger batch of replacement heifers coming through set to lift numbers to about 90 in the first stage expansion. “We are pretty happy with our genetics and plan to grow by breeding up,” James said. The progressive young farmer has a clear sense of

Who:

The McRae family Where:

Barrington What:

Higher stocking rates

direction as he charts his future in dairying. “I think it’s pretty important to have strong objectives,” James said. “It’s about planning to make the best possible use of the resources we have to maximise earnings and profitability while not forgetting lifestyle balance. “I feel more confident in decision making as we move towards our goals.”

In the high performance herd, cows are averaging about 8000 litres each lactation and producing 590kg of milk solids. To make the most of bonus incentive payments James said a focus was to lift production of solids to 600kg. Much of the 184ha property is rolling country at the base of the Barrington Tops, about 50km inland from Taree. The effective dairying area on the Barrington River flats is 45ha, about 38ha of which is irrigated from the river. Improvements to the undulating natural pastures will take the pressure from dries and heifers off the milking area. “We are lucky to have a reliable water supply for stock and irrigation and can shift sprinklers across Cows are averaging about 8000 litres each lactation and producing 590kg of milk solids.

Lauren and James McRae with James’s father, Chris.

the property in about four and a half days,” James said. The property has relied on a mix of kikuyu, chicory and clover as the summer feed base with rye and clover sown for winter grazing. James said they planned to increase the productive area for the milking herd by about 5 to 8 ha and were also moving to establish a lucerne and chicory mix on some of their best alluvial flats. “Chicory has been a standout performer for us. It’s been quite competitive in the kikuyu and has really impressed with good feed value during drought.” The lucerne area is being split into a 4ha autumn plant and a 6ha spring plant to evaluate the results of different planting times such as The McRaes plan to establish a lucerne and chicory mix on some of their best alluvial flats.

crop establishment and weed competition. “We should get three years grazing from the lucerne and chicory,” James said. Italian ryegrass will be sown with the autumn lucerne and oversown through the lucerne each season from then on. “We believe the lucerne will allow us to lift overall performance by maximising production from different soil types. The lucerne needs well drained country as it is prone to waterlogging.” They take advantage of any pasture surplus between September and March by making plastic wrap bales of silage. Silage is a safer option than trying to make hay with annual rainfall averaging around 950mm. “Even in the drought last year we managed to

get 100 bales off,” James said. The silage helps fill a winter feed gap. With temperatures getting as low as -4°C, pasture growth slows, pushing out rotation times. James said pasture was also supplemented by feeding varying amounts of cracked barley and mineral mix in the bales at each milking. Grain feeding averages about 1.9 tonnes per cow per year. “Even with good quality pasture feeding, grain is a profitable option with our bigger frame cows,” James said. Pasture growth is boosted by regular applications of nitrogen, mostly in the form of urea. “Grazing management and not overstocking paddocks is a key to getting maximum pasture performance,” James said.

Extra effort put into feeding heifers to make sure they hit target weights was rewarded. “Having strong heifers coming into the milking herd is a real benefit,” he said. James said he was open to ways to continually improve performance and is pleased with his early experience hosting a NSW Dairy farm focus group. His degree in agricultural business management from Charles Sturt University is being put to good use and he is interested in continuous learning. Succession planning is also on the agenda with the family enterprise set to be restructured into a partnership. “We are looking to set ourselves up for a long term future in dairying,” James said.

DAIRY NEWS AUSTRALIA MAY 2015

MANAGEMENT // 27

Reclaiming plantation land SUDESH KISSUN

TASMANIAN DAIRY

farmer Paul Lambert’s secret to success is to make farms efficient. A former winner of the Tasmanian Dairy Business of the Year award, Mr Lambert loves clearing plantation land to return it to production, especially when it is written off as having little or no potential.

Mr Lambert told the recent Australian Dairy Conference in Tasmania that he sees soil fertility as important in turning farms around. Important during the first few months of development are soil testing and large corrective applications of lime, dolomite, phosphorous and potassium. He and his wife Nadine run a 700-cow farm at Merseylea, in central north Tasmania. The 180ha irri-

gated land has four irrigation pivots and he milks cows on a 50-bail rotary platform. “I have for many years tried to run an efficient farm,” Mr Lambert said. “We probably learnt our skills in profitable dairy farming back in the 1990s and then expanded from 200 cows to 2400 from 1995 to 2009. “In 2010 we sold two farms to corporate farmers and now milk 700 on

the home farm; we also own a 20% share in a dairy farm where I help with management.” A NuffPaul Lambert ield scholarship in 2011-12 took Mr Lambert away for nearly seven months to study robotic milking and onfarm energy production. His father Ted has

Best paddocks twice as good as worst paddocks EVERY DAIRY farmer knows that on commercial farms) but still had some paddocks are more produc- big variations between paddocks. “Although we weren’t expecting tive than others but FutureDairy researchers were staggered to find the average difference Professor Yani Garcia with a between the best and worst prototype of paddocks is 100%. ‘DUG’. Or to put it another way, the pasture utilisation from the top yielding paddock was almost always twice that of the lowest paddock. Researcher Professor Yani Garcia and his colleagues analysed data from commercial and research dairy farms in both Australia and New Zealand. “In almost every case, there were more paddocks performing below average than above. This means a few very high yielding such large variability between padpaddocks were inflating the aver- docks, we are very confident in the findings because we found the same ages,” Prof Garcia said. Research farms operating to trend across multiple farms, across best management practices achieve years and even across the two counmuch higher overall levels of pasture tries,” he said. “In all the studies, pasture manutilisation (20-25 t/ha/year for ryegrass compared with 12-14 t DM/ha agement and fertiliser (and irri-

gation in some cases) were based on best management practice and well defined management rules. So we expected that differences between paddocks would be reduced, but they were not.” While more research is needed to better understand the causes of paddock variability and therefore ways to overcome it, Prof Garcia said the findings showed enormous potential gains from improving under-performing paddocks. “It is certainly worth identifying under-performing paddocks and investigating underlying cause such as compaction, soil nutrition, drainage and pasture management.” Prof Garcia suggested that in the future technology such as unmanned ground vehicles had the potential to provide farmers with detailed information about soil nutrition and pasture cover which would allow more precise management and boost pasture utilisation.

schooled him to run things well and to irrigate as much ground as possible. His father also helps in selecting the right cows. Mr Lambert said this has resulted in a clean, high-performing herd that produces efficiently

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under its feeding regime of irrigated grass and 500 tonnes of grain per cow, with grain costs about $320-$350/tonne. “A lot of dairies are using more and getting good results. This season we will use about half a

tonne per cow; the state average would be just over a tonne.” Pasture growth has also been good, most of the state getting good autumn rains. Things are looking great, he said.

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Dairy News AUSTRALIA may 2015

28 //  management

Increasing effluent use on paddocks David and Sue Walton on their Tasmanian dairy farm.

Rick Bayne

GETTING THEIR irrigation and effluent systems right has been a longterm challenge for Tasmanian dairy farmers Sue and David Walton. Although in an area known for good rainfall, the Waltons still rely on irrigation to get them through dry summers. But it hasn’t always been easy. The Waltons have a 100 megalitre dam on the property that is fed by two bores and they’re determined to put their effluent to better use. They are about to embark on the latest upgrade to the system with a new concrete trap to be built in front of the dairy. “The concrete apron can be hosed off and drained into the effluent settling pond. We won’t be walking as much mud into the yard, and the cows will be cleaner as will the milking,” Mr Walton said. Mrs Walton said the work is mainly to stop build-up around the entrance to the dairy and in general help mitigate greenhouse gases. The farm has received funding from NRM North for the work. It is the latest in a long series of adjustments to make sure the irrigation and effluent systems work to their optimum. “We need improved drainage and a more efficient way to get the effluent out on to the paddocks,” Mr Walton said. The Waltons can potentially irrigate about 20ha of their 69ha farm through the effluent system. They milk 210 cows in Meander, Tasmania on a 69ha milking platform. Production has been on a steady upswing and last season topped 99,000/ kg/MS or about 492/kg/MS per cow. “We’re just striving to keep increasing production as we can, without huge jumps,” Mr Walton said. “We’re concentrating a lot more on quality milk rather than quantity.” The effluent pond was previously a twin aerobic and anaerobic set-up.

Who:

Sue and David Walton Where:

Meander What:

Irrigation and effluent

However, Mr Walton said it wasn’t working well and was replaced with one big deep pond. “We have a stone trap after the yards. Then it is pumped out to the paddocks and only pit water and bottom yard rain water fill the effluent pond now,” Mr Walton said. “Then we pump from the effluent pond to the stone trap and again out to the paddocks.” The farm’s situation is complicated by having a creek near the dairy. They place high priority on protecting the waterway. “When we built the yards we built a nib wall about 220mm to stop any run-off or splash reaching the creek,” Mr Walton said. The cows head to the “At the same time dairy. we have to be able to clean the yards and then have somewhere for it to go while not polluting the environment.” The farm previously had a stationary sprinkler which had to be moved around on the bike. “That was no good so we invested in a travelling irrigator which is better but it also has its problems,” Mr Walton said. The pipes have to cross four or five paddocks to have enough area for

spreading the effluent. “That means we’ve got to have pipes across those paddocks all the time and the length of the pipes create too much friction for the sprinkler to operate efficiently,” Mr Walton said. The pump itself is not quite big enough to get to the top of a slight incline where the effluent is distributed. “We get to the fourth or fifth paddock The Waltons have a 100 megalitre dam on the property that is fed by two bores and they’re determined to put their effluent to better use.

and we can’t go any further. We have to put out enough to make it efficient. So we’ll look at a bigger pumping system in the future,” he said. “The first irrigation system we put in had three sprinklers per two hectare paddock which wasn’t sufficient and it couldn’t keep up. The next two systems we installed went to four sprinklers per two hectare paddock which is doing a far superior job. “The whole farm is irrigated to help us to maintain enough home-grown feed to avoid costly inputs, which is usually limited to under a tonne of grain per cow of either crushed wheat or pellets.” They also grow silage on a run-off block which is fed through a feed pad near the dairy. “We are a high rainfall area but we still need irrigation,” Mr Walton said. “The effluent irrigation is put on as well as the regular irrigation. It’s is great for the soil and the grass benefits from that.” The farm has perennial pastures, mostly different types of ryegrass and clovers. “I’ve given up putting in fodder crops; perennials are a better option,” Mr Walton said. “Every year I re-sow a paddock and usually try for a new type of ryegrass. I’m lucky if I get a 27-day rotation which is just under what I need.” The farm is irrigated every year, some

years more is required than others. “The past seven years have been better than the previous seven years,” Mr Walton said. “We had quite a long dry period for about 10 years and we were irrigating every season sometimes to the point of running out of irrigation water.” Adding two bores into the irrigation dam has helped considerably. This season has been good; irrigation has started and is expected to be needed for a while yet. The herd is mostly Friesian with Jerseys being phased out of the mix. “We had to go for New Zealand genetics for a number of reasons; one of those being that we don’t have a large dairy (a 15-a-side herringbone) and we were after a smaller sized Friesian cow. We haven’t got the space for giants,” Mr Walton said. Milking is seasonal and calving starts in early August, running for six weeks. They also synchronise their heifers and use sexed semen to calve two weeks earlier than their main herd so they can be trained into the milking routine early. This also gives a bigger choice of replacements, and the surplus numbers are sold to the Chinese market or locally. “I’m starting to sex semen the best of my cows during the AI period. The other cows just get selected semen. We’ve got nice, quiet cows and their milk is going up every year.”

DAIRY NEWS AUSTRALIA MAY 2015

ANIMAL HEALTH // 29

Calving tips and tricks IN LAST month’s Dairy News Australia, we discussed the common causes of dystocia (difficulty in giving birth) and ways it can be prevented. This month we’ll focus on how to assist in a calving, give some tips to increase your chance of success and advice on when to seek veterinary help. How to intervene The cow or heifer should be adequately restrained in a crush or tied with a halter to a suitably fixed object. Hygiene is so important and all equipment (including arms) must be thoroughly cleaned to avoid contamination of the reproductive tract. You will need ■

Two clean buckets of

■ ■ ■

■ ■ ■

■

■ ■ ■

■ ■

warm water Jug Mild liquid soap Disinfectant (e.g. chlorhexidine) Paper towels Obstetrical lubricant Calving chains of variable lengths Calving rope/head snare Calving handles Obstetric gloves Calving jack or pulley (experienced personnel only) Resuscitator (optional) 7% iodine for calf navel

It is helpful to have all these things readily accessible in a designated box or bucket. Place the calving chains and head snare in one of the buckets with some disinfectant. Use the second bucket

ANIMAL HEALTH GEMMA CHUCK and mild liquid soap to thoroughly wash the anus and vulva of the cow (the jug helps here), ensuring all excess soap is rinsed off. Use the remaining soapy water to wash your hands and arms and dry with paper towel. Wearing obstetrical gloves with sufficient lubricant, insert your hand through the vulva and into the vagina of the cow.

Determining the position of the foetus Calves can present in many different positions (see last month’s article). Sometimes it can be difficult to determine the position of the foetus and therefore what needs to be done to correct it. Start by assessing the size of the calf relative to the birth canal. A vaginal delivery should be possible when: With the calf coming forwards: you can fit your hand entirely over the calf’s head in the pelvis of the dam or if you can extend the front legs so that both fetlocks are a hand’s breadth past the vulva of the cow when traction using only handles (and humans!) is applied.

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With the calf coming backwards: you can fit your hand entirely over

the calf’s hips in the pelvis of the dam or if you can see the hocks of the calf at

the level of the vulva when traction is applied

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DAIRY NEWS AUSTRALIA MAY 2015

30 // ANIMAL HEALTH

Calving tips and tricks FROM PAGE 29

using only handles (and humans). Front leg vs back leg? This is a common error and can result in excessive traction on two “back legs” when in fact they are two front legs and the head is flexed backwards. The calf will never be delivered this way. A helpful tip is to count the number of bendable joints between the elbow (or hock) and the hoof of the calf. There are two bendable

joints between the elbow and the hoof (the knee and the fetlock) whereas there is only one bendable joint (the fetlock) between the hock and hoof. Calving chains Chains are generally used around the limbs of calves to allow traction using a calving jack or pulley. An advantage of chains over ropes is that they are easy to remove after traction has ceased and they are easily cleaned. It is essential that they

are placed correctly to avoid damage to the legs of the calf. Chains should be placed in a double half hitch, with the hitch aligned along the front of the legs. One hitch should be above the first joint (fetlock) counting from the hoof and the other should be placed below this same joint. This helps prevent fractures of the limbs when traction is applied. Head snares Head snares are usually made of rope, although

plastic or wire loops are also used. Rope head snares consist of a thin piece of rope with a loop at one or both ends. They are often essential as they allow traction on the head independently of the legs. Careful placement is necessary to avoid damaging the calf. The loop of the snare should be positioned over the top of the calf’s head, behind both ears and the hitch of the snare should be placed in the calf’s mouth and pulled until the

loop tightens. Snares should never be positioned around the lower jaw as this will increase the risk of fracture. Traction Traction can be performed manually, using handles attached to calving chains and the head snare, or mechanically using a calving pulley or jack. Serious injury can result if calving pulleys or jacks are used inappropriately and advice should be sought from those expe-

WHAT’S ON YOUR MIND AT CALVING TIME?

rienced in this procedure prior to attempting it yourself. Other forms of mechanical traction which are not intended for this purpose should not be used to deliver calves as this can result in serious damage or death to the calf and/or cow. In a normally presented calf, traction should be applied on alternate front legs to ‘crawl the calf’ out through the pelvis. When both front legs are fully out of the vulva, traction can be applied on both legs at the same time. Aim to apply traction simultaneously with the dam straining. Once the shoulders of the calf have passed through the vulva, rotate the calf 90 degrees to help the hips (which are the widest part of the calf) pass through the pelvis more easily. This will help prevent ‘hip lock’. When to seek help Ultimately, if an abnormal position is found, experience and judgement will decide on whether

professional help is required to deliver the calf. Guidelines for when to call for veterinary assistance include: ■ If you have observed the cow or heifer to have a prolonged calving (Stage 1 or Stage 2 labour) and you are unable to provide assistance yourself. ■ If you have observed the cow or heifer to have a prolonged Stage 1 but you cannot find either the legs or head on examination. ■ If you cannot advance your arm into the birth canal. ■ If there has been no progression after 20 minutes of you trying to deliver the calf. ■ If there is a fetid smell or obviously dead calf. ■ If there is a disproportionately large calf to the size of the dam and it feels like there is ‘no room’. ■ If the health of the cow or heifer is a concern. ■ If the cow or heifer is down and unable to stand.

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around the New Zealand dairy industry causing farmers to question their drying off decisions and continue milking when this might not be the best option. DairyNZ developer Jane Kay said the statement was based on the premise that the cow’s mammary cells have a memory for low production and short lactation lengths. “There is no truth behind this statement,” she said. “Don’t worry about when the mammary cells go on holiday as most of them won’t be coming back.” Ms Kay said the cells in the mammary gland (or udder) are continuously changing. “During the lactation, old, inactive cells die and new cells are formed. These two processes - cell death and cell formation, are constantly occurring and the rate at which they occur depends on factors such as stage of lactation and milking frequency. “The balance between cell death and cell formation determines the number of cells in the udder and this affects milk production.” After a pregnant dairy cow is dried off, the udder resets itself during the dry period. Old inactive cells continue to die and new cells form. “This means the population of mammary cells changes markedly before the next lactation and there is no consequence of previous production on the next season,” Ms Kay said. “For example, when cows are milked once-a-day during one season and per cow production is reduced, there is no negative effect on milk production the following season.”

DAIRY NEWS AUSTRALIA MAY 2015

ANIMAL HEALTH // 31

Prevention critical in combatting calf scours ALTHOUGH IT is a well-

recognised and significant cost to a dairy farm, calf scours has traditionally been viewed as a normal part of dairy farming. The economic cost of a scours outbreak can extend well into the first lactation season of affected heifers, causing long term financial impacts, rarely linked back to the calf scours episode in her first weeks of life. Ross Lochhead milks 200 Holstein cows at Dederang in north east Victoria. He was experiencing calf scours regularly and one big outbreak a few years ago was a genuine threat to his operation. “A few years ago we lost 30 calves and had to spend hours and hours in the sheds caring for sick calves, plus we had the cost of electrolytes to keep them hydrated,” Mr Lochhead said. “You only realise that prevention is so very important when you’re facing a situation like we did.” Studies have shown that scours-affected heifer calves can be delayed in reaching joining weights, delaying calving and entry to milking herd by up to 180 days. Heifers can be sold prior to calving, due to the herd management challenges they present, and those that are retained are often ‘poor doers’ because the linings of their intestinal tracts have been permanently damaged by the scours pathogens. Poor nutrient absorption leads to reduced growth rates, and can impact their future breeding and milk production performance. In addition, calves lost or less vigorous may miss live export opportunities, further increasing the cost the initial bout of scours generated. Calf scours can be caused by a range of pathogens, including Rotavirus and E.coli, and in a recent study on farms with sick calves, more than 96% of farms were found to have multiple pathogens identified.

experience was tangible evidence that vaccination with Rotavec helps with calf scours – it was no longer a major issue on his farms.

“Rotavec has made a huge difference to my farm on so many levels, especially when it comes to the issues of quality, health, labour and dollars. Put

simply, calf scours is no longer a major issue on my farm – it affects roughly 5% of my herd which is very minimal and very manageable.

“This represents a dramatic improvement from a few years ago – we have witnessed a major decline in calf scours, reducing labour dramatically.

“Our calves are alive and healthy and high quality. Rotavec has definitely been a good investment. Prevention is so important.”

Jim Walsh

Coopers Animal Health technical advisor, Jim Walsh, said vaccination of dams against calf scour pathogens prior to calving, when coupled with other scours reduction activities, is an effective strategy. Other critical strategies include: ■ Good colostrum management ensuring calves receive correct volume of good quality colostrum, preferably within 12 hours of birth (after 24 hours colostrum cannot be absorbed). ■ Good hygiene practices at colostrum collection, of the calving area and in the calf raising shed to minimise exposure to pathogens. ■ Support for the calf immune system including protection from weather, nutritional support and management for calving ease to minimise stress. Because most scours issues are the cause of multiple pathogens, broad spectrum coverage is critical. Coopers said its product, Rotavec Corona, was the broadest calf scours vaccine available, combining Rotavirus, E. coli, Coronavirus, and Clostridium perfringens (Types C&D). Rotavec Corona provides coverage of Clostridial perfringens (Type C) which can kill young calves before visible signs of calf scours appear through the release of toxins. Coverage against Cl. perfringens (Type C), is not found in common clostridial vaccines. Vaccination timing is critical as vaccination should occur around five weeks prior to calving to maximise protective antibody levels in the colostrum at the point of calving, for improved calf health. Mr Lochhead said his

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I reckon he’s been at it himself.

DAIRY NEWS AUSTRALIA MAY 2015

32 // MACHINERY & PRODUCTS

Tractor-forage wagon combo ticks all boxes JASON FARLEY works

as a machine operator for Trevor Platt who runs a large scale dairy business in the Macalister Irrigation District, just out of Sale in Victoria’s East Gippsland. About six months ago Mr Platt bought a 260 WORKING CLOTHES CHRIS DINGLE horsepower John Deere 7230R through local dealer, Cervus Equipment I’ve known Mark Allott (at Cervus Equipment) at Maffra, and the week from when he previbefore we caught up for a chat with Mr Farley he had ously worked at a John Deere dealership and with picked up a new StrautKUHN. mann Giga Vitesse CFS “These machines are 4001DO forage wagon good value and when they from the same dealer. need servicing we know They had the loan of that Mark and his team a 36 cubic metre Strautcan look after us.” mann wagon after Mr The John Deere tracPlatt had ordered the Giga tor sports a front linkVitesse and was awaiting age-mounted 3m KUHN delivery. In that time the mower and it is set up to new machine was on distake a KUHN rear linkage play at the Farm World mower to enable a 6m cut. Field Days. Both machines are also Mr Platt said the puronly six months old. chasing decisions for Mr Farley has worked his machinery is fairly straightforward. “In a nut- for Mr Platt for 12 months and looks after a lot of the shell, as our first option agricultural work; laser we only deal locally,

WHO:

Trevor Platt WHERE:

Sale WHAT:

Tractor and forage wagon

grading, silage, cultivation and sowing. Mr Platt bought a John Deere 170M just after Mr Farley started and they were using it with a 29 cubic metre Krone wagon when they were just doing green chop and Jason said he did 250 loads in six months. The Giga Vitesse has a capacity of 38 cubic metres and Strautmann claim that their new ‘ContinuousFlow System’ conveying unit has a lower drag resistance than those of the competitors.

Jason Farley on Trevor Platt’s Gippsland farm with Mr Platt’s new John Deere 7230R with a front linkage-mounted 3m Kuhn mower and Strautmann Giga Vitessa CFS 4001DO forage wagon.

The 2m wide pick-up has six helically arranged tine rows to reduce fodder contamination, with the tines connected with mounting clips to the central tube. The large diameter feed rotor has helicallyarranged conveyor fins with welded tine plates which have additional hardening at the tips. The power train avoids unnecessary joints and compensating clutches. The 45-knife cutting unit has a protection feature which allows the knives to swivel out when coming into contact with a foreign object. Like many new machines these days, the ISOBUS control offers the drivers easy operation without a long familiarisation period. It already integrates some monitoring options via the sensor system and creates the option of operation via existing terminals on the tractor. As far as the operation

Jason Farley says they have done 30 loads in a week of millet and sorghum with the new equipment.

of the wagon is concerned Mr Farley said that it performs admirably. “It matches anything else that I’ve worked with; the heavy floor, roller and pick-up set-up means that it picks up and unloads quickly, plus the doublesided knives are very efficient. “So far we have done 30 loads in a week of millet and sorghum. We will run every day doing green

chop, just about right through the year as long as the grass is there. “This new wagon pulls as well as the 36 cubic metre wagon that we used for a while. “The blokes at Cervus Equipment and John Deere have been really good. We had the usual hiccups with a new machine, but nothing major. The Cervus followup has been really good.

“This new Strautmann wagon is easy to operate, it is perfect on this tractor, with variable transmission. I thought that the larger size would be harder, but it sits on the road a lot better.” The business also runs a Fendt tractor which Jason has been using with a Duncan Renovator for sowing, plus they have a 2-year-old Kuhn large square baler.

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DAIRY NEWS AUSTRALIA MAY 2015

MACHINERY & PRODUCTS // 33

Do compact tractors have enough grunt? I’M GOING to be upfront here. This month I’m dipping my toe into the crowded, shark-infested waters of the ‘compact tractor’ segment. And it’s not because I’ve run out of things to write about, or have sold out to the lifestyle market. It’s because I recently accompanied a friend on a tractor-buying expedition (the best kind of expedition). Unfortunately, said friend doesn’t have the need or the budgetary willingness for a full size, grunt-spewing beast. Bearing in mind some sage advice about needing to step outside the comfort zone and learn something from time to time, I volunteered my services as a mechanically unqualified finder and assessor. The candidate for this purchase was primarily intended to mow lawns, but the ability to wield a bale spike, carryall, blade and slasher on the 3 point linkage was seen to be sufficiently useful to prompt an upgrade from the despised ‘lawn tractor’ concept. There are of course, several benefits

exhaustive investigative to buying a ‘compact and decision-making tractor’ – the best for an process yielded impatient Gen Y’er like a Kubota B2100 me being that you can with a hydrostatic load ‘er up and take ‘er transmission and home as soon as you’ve uncertain year of parted with the dough. manufacture (estimated They are also in the 1990s). more versatile in During a convenient smaller spaces (duh) JOHN DROPPERT period of agistment and implements are at the property of distressingly cheap, yours truly before it departs for its allowing for a fuller collection. Turf tyres mean you can combine final destination, it has proven itself a earthworks in the house yard, with not machine worthy of the greatest respect. Yes, it can mow lawns, but it can having to repair your lawn afterwards. In other words, retire both the shovel (somewhat surprisingly) wield a 4x4 round bale with ease, and when 4WD and the rake. Ace. I’ve never had much experience is engaged, the possibilities with a 4 with anything under 100hp, so I have foot grader blade are limited only by to admit I was sceptical, having heard the operator’s aggression, or common various opinions on how ‘soft’ such sense. Also importantly for the appreciation machines are. I was also interested in a machine of your columnist, it sounds impressive that apparently had the capacity to lift for a 2hp machine, and blows an more on the 3 point linkage than the amount of diesel smoke that exceeds ‘noticeable’, but falls well short of rear axle was rated for. Still, such quibbles aside, an ‘concerning’.

GRUNT

The Kubota B2100 compact tractor outside the family homestead.

Bi-speed steering is the next best thing to driving sideways, and once familiar with the slightly alarming tendency of the forward pedal to stick, it is a remarkably easy machine to get around. Being a Kubota, there are about one billion of them in the country, so you’d have to imagine parts won’t be an issue.

So, having been thoroughly impressed, do I want one? No, of course not – I’ve got a real tractor. • John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.

50 Bail Rotary Dairy Complex INCLUSIONS •50 Bail RotorExp1 Platform •LARSEN Original Design •Pneumatic Retention Bars •21m x 26m Shed •Technical Drawings and Comps •6m x 4m Skillion - for Vac Pumps •Shed and Yard Concrete •500 Cow Holding Yard & Rails •16m Solid Backing Gate •Feed System with 2 x Feed Heads •Yard Blaster with 3 x Hydrants •3 Way Drafting Gate •Internal Office (Freezer Panel Room) •Milking Machine •Pneumatic Cup Remover •ID, Feeding and Drafting •Internal Electrical •Internal Plumbing

EXCLUSIONS •Earthworks •Electricity Supply to Site •Water Supply to Site •Water Storage •Effluent System •Tanker Tracks •Cow Laneways •Milk Storage Tank •Freight (At Cost)

$ 880,000 Installed Special Deal Available ONLY Until June 30th 2015. Price is Ex Gst (Conditions Apply)

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CONTACT

(03) 9768 2424 - Fax (03) 9768 2323 - Greg Kinross 0437 357 912 sales@milka-ware.com.au

DAIRY NEWS AUSTRALIA MAY 2015

34 // MACHINERY & PRODUCTS

Easy, safe and comfortable ADAM FRICKER

An extra pair of hands Automatic Cup Removers are a great way to save on time and labour costs as well as assisting with maintaining healthy udders • Measured milk yield flow for accurate cluster removal • Increased milking efficiency • Increased productivity

Contact your local GEA Farm Technologies dealership or call GEA Farm Technologies on 1800 789 100

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e e r f PUD 1000 iP PER BAIL*

of automatic cup are based on number apply. The free iPUD’s May to 30 June 2015. *Terms and conditions 11 from d vali er Off . removers purchased

HONDA WAS a late starter in the sideby-side market when it launched the Big Red MUV in 2009. Since then it has released the capable Pioneer 700 and more recently the Pioneer 500, a side-by-side that sits closer to the large quad market in terms of size and price. With the heat coming down on quads from the nanny state, Honda’s timing couldn’t be better. The Pioneer 500 shares the mechanical heart of its stable-mate, the TRX500. The bulletproof 475cc, liquid-cooled, fuel injected singlecylinder puts a useful amount of grunt through the manual gearbox – also from the quad. It’s a willing unit, if a little noisy when pushed. This is a well-proven drivetrain suited to farm use, especially with the vehicle control and engine braking afforded by the manual transmission. Safety down hills is a weakness with some side-by-sides due to the lack of engine braking. The low range first gear in the Pioneer is the perfect ‘crawl’ ratio for offroad driving – it’ll go most places you

The Pioneer side-by-side is well suited for farm.

point it – and for bringing the cows in at a calm, leisurely rate. Performance up through the gears is good rather than startling, but this is not a racing vehicle despite the aggressive styling. In typical Honda fashion, it feels like it’ll take its punishment on the farm without fanfare and without complaint. While sharing its drivetrain with the TRX500 quad, the Pioneer has a full chassis in which all the heavy bits are set low for stability, and the wheel track is wider. Because it is not a huge vehicle, the full roll cage can give the impression that it is tall and narrow, an optical illusion dispelled once you’re underway.

You can chuck the small Pioneer around and feel secure. Similarly on inclines it felt stable. As with all vehicles there’s a limit but we didn’t find it. A big plus in our minds though is comfort. Easy to get in and out of, and with a cushy ride from the fully independent suspension with 150mm travel shocks, the Pioneer 500 makes farm transport easy. Our tester was fitted with some of the many factory accessories available for this model; in particular, a roof and a windscreen with a single wiper, added to the comfort. It also had an optional cargo tray fitted. Not the biggest tray in the world but still useable and far more practical than the standard carrier.

John Shearer pasture drill gives more options THE JOHN Shearer 3 metre Pas-

ture Drill has been purpose built for pasture renovation. In the Shearer tradition, the drill is engineered to maximize serviceable life and operation. Its robust construction makes it the ideal choice for use in many farming conditions, according to the company. Benefits of the double disc design include more uniform seeding depth; reduction of draft forces; trash handling ability; and less soil disturbance at faster sowing speeds. In some cases disc openers are more suitable than tynes when sowing into rocky conditions.

Sowing with a double disc opener leaves smoother soil profile and will assist in reducing water runoff. An easy to use spring pin to lock the press arm into place is used to control the depth and provides 6mm increments over 50mm travel. The spring loaded opener has a mechanical screw assembly to easily adjust the mainspring to decrease or increase pressure for both opening coulters and the press wheel. Downward force can be increase to help cut through stubble residue and in drier conditions penetrate the soil for good seed placement. The spring breakout pressure

can be adjusted up to 182kg and the unit has 254mm of vertical ground following capability. For the hydraulic version, pressure is adjusted on the go from the tractor seat to suit soil types and conditions. A pressure gauge fitted into the system allows the operator to monitor the down pressure. The John Shearer disc opener has been engineered to perform in many different soil types and conditions. Its compact design means that the press wheel is much closer to the sowing boot than most others on the market with remarkable benefits in terms of uniform seeding depth. The opener is a true parallelogram based around two carriers - the mounting carrier, which attaches the unit to either a square or diamond mounting frame; and the main carrier, on which the ground engaging coulters (or optional tyne) and press wheel are attached. Tel. (08) 8268 9555

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