Dairy News Australia - November 2017

New milk plant for northern Victoria PAGE 3 OAD MILKING

Focus on Tasmanian herd� PAGE 19-20

MILK DEMAND

Freedom Foods expands Shepparton plant PAGE 7

NOVEMBER, 2017 ISSUE 86 // www.dairynewsaustralia.com.au

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

NEWS // 3

New milk plant could lead to fixed price contracts GEOFF ADAMS

Faulty irrigators costly. Pages 12-13

MILK PROCESSING will return to the former dairy town of Girgarre in northern Victoria after an absence of almost four decades, following a decision by ACM to build a new multi-million-dollar factory.

The news has been welcomed by Girgarre residents who haven’t seen milk production in their town since Nestle shut the former Girgarre Cheese Factory site.

ACM plans to start work in December, subject to planning approvals, with milk processing expected to start in September next year.

ACM chairman Michael Auld said the factory could employ up to 35 people and process

about 100 million litres of milk in the first year.

Employment numbers could lift closer to 50 when cheese making production starts in the second year of operation and throughput increases to 200 million litres.

The company may recruit some experienced staff from the Rochester Murray Goulburn factory, which is shutting down soon.

Asked why the company didn’t buy an existing plant like Rochester, Mr Auld said the processing approach was different and the Girgarre plant would be built to provide maximum flexibility in handling different streams of milk.

The company, which has been recruiting organic dairy farmers recently, intends to install two spray dryers and a discrete process-

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Improving rumen health. Page 26

NEWS �����������������������������������������������������3–13 OPINION ��������������������������������������������� 14–15 MARKETS ������������������������������������������16–18 MANAGEMENT ������������������������������19–20 ANIMAL HEALTH ���������������������������21–23 MACHINERY & PRODUCTS ������������������������������������� 24–26

ACM director Tom Auld and chairman Michael Auld on the site of the planner new factory in Girgarre, northern Victoria.

ing system which will allow it to handle organic and non-organic processing concurrently.

ACM has purchased 10 ha of vacant land adjoining the old cheese factory site.

‘‘Over time we will be able to offer fixed price contracts over three years for a portion of farmers’ milk.”

Mr Auld said the existing services, including gas, electricity and a water treatment system, made the site attractive and Girgarre’s location among dairy farms was also a strategic advantage.

Mr Auld, who grew up in nearby Stanhope, could remember how the old factory had a reputation for milk processing and cheese making.

Nestle shut down milk processing at the old factory in 1979, Heinz used the factory for tomato processing for a number of years and more recently a waste food recycling business, Resource Resolution, has been operating there.

This business will continue with a changed emphasis in the future as the owners have received a $900 000 Victorian Government grant to establish a bio-digester which will generate renewable power.

The new ACM factory may buy the power from the neighbouring plant.

Mr Auld said the company’s focus was on establishing a milk pricing structure that removed some of the volatility for farmers and created a more stable income.

Last year the company finished with $5.30/kg milk solids, and this year was paying $5.76/kg.

“Over time we will be able to offer fixed price contracts over three years for a portion of farmers’ milk,” Mr Auld said.

He said the new factory would help suppliers get access to markets in Asia and domestically with value-added products such as specialty powders, retail butter, cream and cheese.

He said the company believed there was a viable future in the dairy industry if stakeholders get the model right across the supply chain.

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

4 // NEWS - MURRAY GOULBURN

Locals predict changes at Koroit processing plant RICK BAYNE

MURRAY GOULBURN suppliers in south-west

Victoria believe the co-operative’s sale to Canadian company Saputo will have consequences for the Koroit manufacturing plant.

Under the proposed deal, Saputo will acquire all MG’s operating assets for $1.3 billion.

With the existing Saputo Warrnambool Cheese and Butter plant just 27 km away MG suppliers in the Koroit district are confident the local plant will remain but believe there will be job cuts.

Woolsthorpe farmer Brian McLaren said the sale and promises for suppliers were the best possible outcome, although he laments the loss of the cooperative.

“I’m disappointed the co-op had to finish this way but it’s the best scenario we can hope for.”

– Brian McLaren An MG supplier for nearly 50 years, Mr McLaren had been looking at other options in the wake of lower opening prices this year but stayed with the cooperative.

“I’m disappointed the co-op had to finish this way because of what it stood for and what it was, but it’s the best scenario we can hope for,” he said.

“We could have finished up like Bonlac and they got nothing for their shares.

“With this arrangement there will be something in it for my shares, although there’s no promise for the last 25 per cent.

“Seventy five per cent is better than nothing, and nothing could have been the alternative.”

“As long as we can get the price to $6, which is where it should be, we should be okay.”

Mr McLaren said he expected the Koroit factory, which he supplies, to be retained.

“I’m confident Saputo will want that running.

Because they took so many suppliers, they can’t process all that milk they’ve got now at Allans-

Brian McLaren is confident Saputo will retain the Koroit facility.

ford, so what else would they do with the milk?”

He predicted a change to the product mix and some job losses at Koroit, “but there’s no way known they would buy it to shut it down”.

Koroit dairy farmer and former MG site manager Tom Paton said he was worried about what might happen to the Koroit factory.

“I’d like it to stay as a Koroit Co-op. I know investors who would be interested but they wouldn’t even give us a price.”

“Why couldn’t a group of farmers in the Western District get together and say: let us operate the plant?”

Mr Paton said he believed developing organic products would boost the Koroit plant.

“The price of organic powder overseas is unbelievable, and there is a world shortage of butter and infant baby powder and that plant can do both.”

Mr Paton said what had happened over the

past few years leading up to the sale was “wrong”.

“How come a company can come out and buy the lot and operate it and make money?” he asked.

“How come Murray Goulburn can’t?”

“It’s so wrong what they’re doing. There was a photo in the local paper of people in the pub celebrating Canadian people taking over. They’re going to get the biggest surprise of their lives.

“Saputo can’t keep everyone employed; it’s going to be a dark day for the town very shortly.”

Koroit farmer John Bushell said it had been “a massive balls up” over the past three years and while he predicts things will be better for the next few years, he’s uncertain of the longterm future.

“Everyone says you need a co-op but for the past three years the co-op has been the worst thing we’ve ever had,” Mr Bushell said.

Mr Bushell feared world markets and less

competition would cause more headaches for farmers.

“I hope it’s going to be good but gut feeling tells you with no cooperative it’s going to be dangerous. When it was good it was good for the industry; the past three years it’s been a thorn in our side and thank God there was some strong competition.

“You need a crystal ball to know what’s going to happen. It’s probably going to be great for a year or two but once it settles in you know what’s going to happen.”

Mr Bushell has starting rearing and selling Friesian steers for an alternate source of income.

“I’ve cut my dairy numbers right down and it’s the best thing I’ve ever done. The processors don’t understand that farmers are going to divert. Farmers struggle at $6 let alone $4.70.”

DAIRY NEWS AUSTRALIA NOVEMBER 2017

NEWS - MURRAY GOULBURN // 5

MG sold for $1.31 billion STEPHEN COOKE

MURRAY GOULBURN has been all but sold

to Canadian processor Saputo for $1.31 billion, with the co-operative seeking a majority of shareholders to approve the sale.

MG suppliers were informed via a supplier letter on the morning of the company’s annual general meeting on October 27.

Many were on their way to the meeting in Melbourne and didn’t get the message from the co-op, but heard the news via the media.

Suppliers attended the meeting in part to hear the board and executive’s plans for the co-op and were surprised to learn that the deal with Saputo had been agreed to, giving them little time to think about the offer or to develop questions for the board.

Many suppliers believed any sale would require 90 per cent approval from shareholders.

However, it was revealed that under the constitution the board could sell all assets without any supplier approval.

MG chair John Spark said this would have been “abhorrent” and the board will require a majority approval at an early meeting to be held next year.

The sale requires approval from both the ACCC and Foreign Investment Review Board (FIRB).

Supplier meetings with members of the MG Board, its executive and Saputo CEO Lino Saputo Jnr have begun and Mr Spark said the sale could be completed in the first half of 2018.

MG suppliers will receive a step up of 40c/ kg MS for the 2017–18 year for milk suppliers from November 1. On completion of the sale, this money will also be paid for milk supplied from July to October 2017.

An additional 40c/kg will be paid for active Murray Goulburn suppliers.

Saputo has undertaken to collect milk from all active MG suppliers for five years on existing terms and on “reasonable terms” after this.

Mr Spark said for a minimum of five years from next season, Saputo has undertaken to pay

Supplier reaction after Murray Goulburn AGM

active suppliers “the greater of the WCB farmgate milk price and the average of the farmgate milk price of the two largest milk processors”.

MG will retain any liability in relation to the current ACCC proceedings, ASIC investigation and unit holder class action.

For this reason MG will retain part of the proceeds of the sale until the conclusion of these matters. Further cash distributions will be made following such conclusion, or earlier if appropriate.

Any money left over from this amount will then be returned to Saputo. MG will then be “wound up”.

Farmer-director Craig Dwyer painted a blunt picture when addressing the audience.

“Some may see it as far from ideal, but make no mistake, at no point when I first took this job on, did I ever expect to be in the position to be selling MG,” the Cobden farmer told the meeting.

“I signed up to fix it, not sell it, however, reality has prevailed and forced our hand.

“As a consequence, we as a board have looked at every possible option, from standalone through to equity partnership through to a full share sale.

“Believe me when I say, that no stone has been left unturned by the board and management in exhausting all avenues before arriving at this agreement.

“This included tough conversations with Federal Government in which I was involved, having personally met with the Deputy Prime Minister along with Ari (Mervis) in Canberra two weeks ago.

“The outcomes of that conversation were that it is not an industry problem but an MG one, so it was suggested that we needed to find a commercial resolution.

“The option of short-term loans for MG to buy itself some time to trade out of the situation was flagged but it was clearly understood firstly that it would be challenging to secure government agreement, and secondly, any loans would still have to be repaid in full at a point in the future,” Mr Dwyer said.

Brad Adams, Cobram ‘‘I would have liked some remnants of a co-op left. ‘‘To have this done has been a shock. The directors never came to us and asked what we wanted. They should have said, ‘It’s your company, what do you want to see?’. ‘‘I need to read the finer details but they should have received more money for the assets.’’

Tony Barlow, Korumburra “We’ve supplied Murray Goulburn for seven years so it’s a bit sad. Now we’ll go to where the best price is.

“We came today on a bus with the Murray Goulburn Gippsland suppliers and nobody was expecting this. We thought they may have given us the options at the meeting.

“It’s not ideal but I think it’s the only option.”

Ian MacAulay, Yarram “I was a little surprised today. I had a vain hope we could retain some sort of co-operative but this is the second best scenario.

“It gives us some security for our immediate future.

“It was the last chance we had to be masters of our destiny.”

Lindsay Jarvis, Kiewa Valley ‘“There’s a feeling of sadness as it’s the end of an era. It’s sad but it was inevitable because of previous decisions.

“I presume the board studied all the alternatives and this is the best. It provides some security for the immediate future.”

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

6 // NEWS - MURRAY GOULBURN

Suppliers vent feelings at roadshow MURRAY GOULBURN chair, John Spark, and new buyer, Saputo CEO Lina Saputo Jnr, are learning exactly how suppliers feel about the sale of their co-operative through a series of roadshows being held in major dairy areas.

Suppliers have had time to digest the news that their co-operative will be sold, having first learnt on the morning of the AGM on October 27 that it had been all but sold.

News has broken since that the Saputo bid was not the highest financial offer. MG has said it was the board’s unanimous view that “the Saputo transaction represented the best outcome for its suppliers and investors”.

Many suppliers believed any sale would require 90 per cent approval from shareholders.

However, it was revealed that under the constitution the board could sell all assets without any supplier approval.

Mr Spark said this would have been “abhorrent” and the board will require a majority approval at an early meeting to be held next year. The round of meetings is to provide further information to suppliers, as well as to receive frank advice.

Northern Victorian dairy farmer Di Bowles was one of many Murray Goulburn suppliers disappointed at how news of the sale was delivered.

“I was very unimpressed as I heard it on the way to the AGM. It was very disappointing the way suppliers had it communicated to them,” she said.

Mrs Bowles said she was also concerned with how only a 50 per cent vote was needed for the takeover to be successful.

“It’s disappointing that it’s 50 per cent and not 90 per cent. It wouldn’t have passed. At the moment it’s borderline.”

Mrs Bowles said she was looking forward to seeing how Saputo presented itself in the near future.

“It will be interesting to see how they present themselves in upcoming meetings we have with them,” she said.

“Sadly it will probably get over the line but hopefully shareholders raise concerns. “(If successful) it will have implications for the whole dairy industry, not just Murray Goulburn suppliers.”

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fact wet and dry shareholders were going to be paid the same.

“The 75 cent share for wet or dry shareholders is pretty annoying.

“I think that’s unfair when we had been encouraged by the chair and the board to stay because

our shares would be worth more as wet shares.”

Despite all of her concerns, Mrs Bowles said she would not turn away the proposed price stepup.

“It’s really nice, I’m not going to say no to extra money and it will make us on par with others.”

DAIRY NEWS AUSTRALIA NOVEMBER 2017

NEWS - VICTORIA // 7

Freedom Foods seeks more suppliers FREEDOM FOODS is expanding its Shepparton milk processing plant with a multi-million dollar upgrade, and ramping up processing capacity.

The company is now looking for more milk supply from the northern Victorian and Southern Riverina region.

The UHT factory, which is only about three years old, exports about half of its production, with 85 per cent of exports going to China.

Freedom Foods managing director Rory Macleod said last year the factory produced about 85 million litres, this financial year it is expected to be more than 150 million litres and in the next year the company hopes it will produce about 200 million litres.

To achieve those goals, the factory was recently upgraded and will put in further filling capability for 2018–19.

Some equipment will be moved from the company’s factory in Taren Point, Sydney, to Shepparton to allow the range to be diversified by next June.

The company has just finished a $30 million investment and another $10 million will be spent on further expansion in the UHT plant in the next six months, and the nutritional plant will have at least $40 million expenditure in the next 18 months.

The expansion will create more employment, but the production is not labour intensive. There are 75 to 80 full-time positions at the moment, which will increase by up to 10 positions with this year’s expansion.

A new nutritional plant could provide jobs for up to 15 people in the next few years.

The company is looking for good skilled workers to operate highly automated lines, and others to work in quality systems.

The factory has been receiving 100 million litres of milk under an agreement with its former partners, ACM, and will continue with this arrangement, but will also be looking for new supply directly from farmers.

One of the goals of Freedom Foods group general manager of dairy and grains, Corrie Goodwin, is to recruit new supply from the Goulburn Valley and southern Riverina.

“We brought on our first direct supplier in August,” Ms Goodwin said.

“New referrals have come thick and fast after that. We’re looking for farmers who have a mindset, appetite and drive to build a strategy with us.”

Mr Macleod said they were looking to engage suppliers for a long-term commitment.

Although he wouldn’t say what price they were paying, he said they would be concentrating on delivering a fair price with less volatility.

“We would pay on average a price better than most of the commodity processors,” Mr Macleod said.

“We only take the milk we need. We build for what we need, and our price parameters are different.

“We’ve gone through in the last four months, a fair bit of capacity expansion, with big upgrades in processing and installed extra filling capability, finished in August.

“Our volumes are increasing for our customers in Australia and we are seeing a more stable customer base in China and South-East Asia.”

The company is also on the brink of building a nutritional plant to produce products like sports performance foods, adult nutrition and infant nutrition, for their own products.

“We have an ambition to be a much bigger, consumer-branded nutritional product business.

This nutritional platform is a key area of growth for us,” Mr Macleod said.

The Shepparton factory, in Old Dookie Rd, was built about three years ago and concentrates on mostly UHT liquid milk in full fat, low fat or skim milk.

Freedom Foods managing director Rory Macleod with general manager of dairy and grains supply, Corrie Goodwin.

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

8 // NEWS - TASMANIA

Ringarooma named Legendairy Capital of Australia IN EARLY February 2017, the search commenced to find and recognise Australia’s Legendairy towns.

Stories have been shared from Beaudesert to Berry, Cowaramup to King Island, and everywhere in between.

Nine months later, the search is over, with Ringarooma, from the heart of Tasmania’s north-east, named Australia’s Legendairy Capital for 2017.

With a population of 232 people, Ringarooma might be a little town but it has a big heart.

Local dairy farmer Marcus Haywood and his wife Simone, who spearheaded the successful campaign, say it’s a well-deserved honour.

Mr Haywood and the locals are determined to keep the community surviving and thriving.

Dairy farming has always been the backbone of the community and Mr Haywood said the community rallies when the chips are down.

When the local fertiliser company lost its trucks and workshop in a fire last year, locals put together an auction to raise funds to help out. A competitor even lent the company a truck so they could continue.

When the school faced closure in 2011 the whole town took a stand and their petitions and protests saved the day.

“That’s the type of community it is,” he said.

“Everybody knows each other; if something bad happens to your neighbour you go and check on them. We’re like one big family.”

The threat to the school proved the community’s resilience. “The government was dead wrong about it,” Mr Haywood said. “If they shut the school it would have been an hour-plus drive for students to get to the next school. It was ridiculous.”

The town still has a hall, a few shops, a post office and a pub, mostly relying on the surrounding dairy area for their business. The Ringarooma valley has 20 dairy farmers producing about 52ML of milk each year.

The locals are determined to keep them. “We play eight ball two nights a week at the pub to help keep it going,” Marcus said. “If a town loses its pub there’s not much to go to. We don’t want to become a ghost town.”

Mr Haywood said Legendairy Capital title has lifted the community’s spirits. “Everybody is rapt in it,” he said. “We’re primarily a dairy area and everyone realises how important it is.”

Ringarooma received $2500 when named Tasmania’s Legendairy Capital, which it used to renovate a recreational area for students at the school,

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award and will used this to restore the school’s 100-year-old dairy which has fallen into disrepair.

“We want to fix at least one of the rooms so the kids can raise calves in it,” Mr Haywood said.

“That way they can learn about the dairy industry and what makes the town tick.”

including new signs for a bike track, chess pieces for a giant chess board, upgrading a vegetable patch, and maintenance for the school’s defibrillator, which is available for the whole community to access.

It has received $7500 for winning the national

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

10 // NEWS

Qld, NSW invest in energy saving programs THE QUEENSLAND Government has committed a further $10 million to extend the Energy Savers Plus program, in the wake of climbing power prices in the state.

The expanded Energy Savers Plus program will include an additional 200 energy audits for farmers and offer a 50 per cent co-contribution (capped at $20 000) towards the cost of implementing changes recommended through the audits.

To date 60 per cent of the 130 farms participating in the Energy Savers program have or plan to implement part of the $3 million of annual energy cost savings identified in the energy efficiency audits across different industries.

This includes 50 farms implementing energy efficiency projects and another 32 that are planning to in the future.

Queensland Farmers Federation President Stuart Armitage said that the Energy Savers Plus program has been and continues to be an important resource for Queensland farmers to identify, learn and implement energy efficiency practices and changes to their businesses.

“Farmers throughout the state will continue to benefit from the opportunity to identify energy savings as the sector grapples with the impact of electricity price increases.

“QFF is looking forward to working through

the details of the expanded program with the government.

“In a public debate that is so focused on supply-side energy matters, it is pleasing to see the government recognise the importance of energy efficiency and demand management in reducing energy costs.

“Energy Savers is a useful tool to help farmers proactively dampen the impact of the massive price rises we have seen, but it does not completely solve the broader issues of electricity affordability — we have to keep working at the other areas too”, Mr Armitage said.

Farm gate power bills have doubled since 2009, according to Cameron Quin, national business director of renewables supplier, Solar Bay. “This is four times higher than the Consumer Price Index increase during the same period,” Mr Quin said.

“NSW has seen a similar price rise and energy reliability in regional and rural areas is a constant issue, so farmers operating independently from the grid has become a real option.”

Solar Bay and NSW dairy advocacy group, Dairy Connect, announced an alliance last month designed ultimately to build solar energy technology and funding packages for dairy farmers.

Solar Bay is working with the University of

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Newcastle Institute for Energy and Resources in undertaking R&D in generation and thermal storage solutions for dairy farmers.

Mr Quin said conventional dairy farms were likely to be able to save around 20–30 per cent on their existing energy bills using onsite renewable generation paired with storage technology.

“In robotic dairies, savings could be in the order of up to 50 per cent compared with today’s overhead costs,” he said.

“As battery storage technology develops, we’re going to be in a far more favourable renewable energy environment.

“Prominent NSW dairy producers in conventional and robotic dairying are actively investigating solar solutions and we’re assisting in that journey.”

Dairy Connect CEO Shaughn Morgan said renewables have a critical role to play in delivering lower cost energy to the dairy industry in the future.

“Obviously, in the short term, we’re going to have to source electricity from a range of providers including renewables, coal and gas,” he said.

“But the amount of investment going into research and development and the quality of the institutions conducting that R&D, give us cause for great optimism about the pathways forward.”

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

12 // NEWS - SOUTH AUSTRALIA

Losses of $600/ha through faulty irrigators RICK BAYNE

SOUTH AUSTRALIAN farmers could save money and improve productivity by fixing or replacing outdated irrigation equipment and making sure they have a good start to the season.

A catch can survey of farmers in south-east South Australia has shown that systems not irrigating well face a production loss of $150 – $600 per hectare per year.

With the state’s power prices the highest in the nation, a field day conducted by DairySA in October has highlighted how technology can cut the costs.

The catch can survey found most farmers are operating with less than optimal equipment.

The Smarter Irrigation for Profit field day held at Donovan’s Dairy near Mt Gambier showed that measurement is the key to improving irrigation performance.

Tim Powell from Integrated Irrigation told the field day that a catch can test on pivots found most were underperforming, resulting in significant potential losses of pasture productivity.

In some cases of overwatering, potential water and energy savings could be made by improving the pivot. On the other hand, in instances where the pivot is under watering, extra water and energy may be needed to irrigate effectively to achieve additional pasture.

The tests involved arranging hundreds of rain gauges lined up under the pivot to see how much comes from every sprinkler.

Mr Powell said tests on newer pivots verified that sprinkler and pumping systems were very good and producing even watering.

However, most farms don’t have newer pivots.

“Older pivots show up quite a few different things; over time sprinklers wear out and need to be replaced,” he said.

“We found a lot that need to be upgraded.

In the Limestone Coast area there would be a good few hundred that need to be upgraded,” The testing process included a cost analysis to calculate what poor irrigation patterns cost in productivity.

“For systems not irrigating particularly well it shows a production loss anywhere between $150 to $600 per hectare per year,” Mr Powell said.

Facing the prospect of less production, most farmers want to do something about it. “Noone wants to lose productivity,” Mr Powell said, “but most of the time it comes down to what it costs to fix it and how quickly you can get that into your budget.”

Mr Powell said the payback period varied depending on what’s wrong with the system.

“The most common thing they need to do is replace sprinklers and regulators and that would be a payback within 12 months.”

He urged farmers to have tests done before replacing pumping equipment and to regularly measure soil moisture levels.

Mr Powell said farmers could use the data of soil moisture tests “With power costs you don’t want to be wasting anything. Soil moisture tests help because you can see what your soil is doing and whether you can hang out for the cheaper power.”

The field day heard from researchers and presenters from the commercial sector showJohn Hunt, Allendale East, James Mann, Wye casing a range of technologies. and Tim Powell, Integrated Irrigation.

Continued page 13 > IMMUNITY+ COMP 129x186 6/11/17 9:27 AM Page 1

DAIRY NEWS AUSTRALIA NOVEMBER 2017

NEWS // 13

Bluetongue found in northern Vic BLUETONGUE VIRUS has been detected in seven dairy heifers near Echuca, forcing authorities to establish a 50 km designated virus zone as they determine the source.

The virus was detected in three 12-month-old heifers near Echuca on October 14 during preexport testing, before a further four heifers were found to be affected at the property.

The detection of antibodies in the heifers’ blood indicates previous exposure to BTV, with one heifer believed to have been exposed to the virus in NSW where it is more prevalent.

The cattle were not showing signs of clinical bluetongue disease and no virus was detected in the animals’ blood.

A zone of possible transmission of 5 km has been established and a further buffer zone of 50 km has been established around the property while surveillance activities are undertaken, and these will remain in place for a total of 30 days from the date of detection.

Victoria’s chief veterinary officer Charles Milne said it was an “unusual” situation that Agriculture Victoria would continue to monitor.

“What we’ve detected is evidence of past infection and we’re undertaking an intensive surveillance of 50thkm around the farm to ascertain if there’s been any spread and how it came to be within that area,” Dr Milne said.

“There’s no movement restrictions from farms

that have been affected. The purpose is entirely to satisfy export partners who require these animals to be free of viruses.

“Agriculture Victoria staff will be contacting producers in the area to seek their assistance and make arrangements for on-farm sampling of cattle.

“We would ask the farming community to co-operate with the exercise so we can rapidly understand how the animals came in contact with the virus.”

Rochester Veterinary Practice’s Mitch Crawford said there was no cause for alarm at the announcement.

“The first thing is: don’t panic, because it doesn’t cause any disease in Australia as far as

we know,” Dr Crawford said. “(The virus) does exist in northern Australia, and that provides some trade restrictions, but the virus is transmitted from cow to cow by biting insects that to our knowledge are not in Victoria.”

The viral disease is spread through flying insects called midges and affects ruminants including cattle, sheep, goats, buffalo and deer.

Clinical bluetongue disease has not been recorded in any livestock species in the field in Australia, with the exception of two minor incidents in sheep in Darwin in 1989 and 2001.

Dr Milne said there was no risk to humans from BTV, nor was there any food safety issue associated with livestock products.

< Continued from page 12 Senior Research Fellow from the University of Southern Queensland’s National Centre for Engineering in Agriculture, Dr Joseph Foley and Nigel Fleming from SARDI, along with Phillip Marks from Balanced Ag Consulting showed a range of soil moisture monitoring technology and introduced the technologies that would be used to measure biomass at this year’s focus pivot, Pivot 6 at Donovan’s Farm, for further research.

Dr Foley stressed that monitoring both water meters and pivot pressures can assist farmers to identify irrigation performance issues to ensure irrigation is optimised.

“Through using these technologies farmers will have the ability to better match irrigation applications to the crops’ needs,” he said.

Dr Foley said it was important that farmers objectively measure rather than rely on gut instinct and encouraged farmers to select a measurement tool that’s suitable for their farm and then to learn how to properly use it.

He said that getting irrigation right at the start of the season was essential. “We want farmers to understand there’s production loss if they’re not irrigating appropriately, and that often occurs at the start-up after rainfall or wet periods.”

The National Centre for Engineering in Agri-

culture is installing VARIwise cameras on the focus pivot which provide estimations of pasture growth rates. They provide the capability to report back the pasture dry matter per hectare from the machine itself. The cameras are suspended on the centre pivot and the images are analysed robotically through vision analysis software.

Farmer James Mann has found that startup at his property ‘Donovans’ has been better matched to pasture needs as a result. With pasture yield penalties in the order of 105 kg/DM/ ha/day of delay in starting irrigation, it is hoped that this improvement will be reflected in productivity at the site over the season.

Nigel Fleming, Research Scientist, Soil Fertility and Nutrient Movement, SARDI, and Dr Joseph Foley, Senior Research Fellow (Water Engineering & Irrigation), National Centre for Engineering in Agriculture.

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

14 // OPINION RUMINATING

EDITORIAL

MG pays ultimate price for poor decisions

MILKING IT...

Where’s Phil?

Down in the pit

A loquacious unit holder sought the spotlight at the Murray Goulburn AGM and was determined to make the most of it.

Four questions were raised amongst a long spiel on the effectiveness, or lack therefore, of the board, with MG Chair John Spark doing a commendable job trying to keep him in line.

Among his statements that pointed out the bleeding obvious, was that farmers deserved better of the board, and the previous board.

“And where’s Phil Tracy?” he asked.

“He’s right here,” came the cry from many in the crowd, pointing to the former chair, who oversaw the appointment of Gary Helou and the subsequent collapse of the co-op.

It was a brief return to the spotlight, but probably not one the former Chair was keen on.

If a politician ever asks to visit to discuss the industry’s issues, you may as well schedule it for milking time and put them to use!

Queensland farmer Brendan Hayden, Pilton, accepted Brisbane Labor MP Joe Kelly’s offer to lend a hand for the day, trading in his suit and tie for an apron and gloves.

Brendan said it was refreshing to spend a day with a politician this way, “contrary to the usual censored and noncommittal state we have become accustomed to”.

While $1/litre milk was discussed, Brendan said he also gained an appreciation of what Joe and his political peers do each day.

The Queensland Dairyfarmers Organisation is now encouraging other farmers to invite one of their members onto the farm for a day.

We’d love to see that happening right across Australia – as long as the pollies were fair dinkum like Joe, and not just there for a media opportunity.

Floating a weird If cows had idea wings A floating dairy farm will be established in the harbour at Rotterdam in the Netherlands.

Featuring the French bred of Montbéliarde cows; the floating farm will be made from a concrete base and will measure about 1000 square metres.

The roof will be fitted with solar panels and a rainwater collection system. The farm will be built in levels; the lower level processing the milk, while on the second level the cows can roam and will also have access to pasture on the quay.

The owners hope to produce 800 litres of milk a day.

Probably not the strangest thing that’s happened in that country!

Advertising Brett Matthews

Sanction-hit Qatar is flying in food from abroad, including milk from the UK. It comes from a Midlands farm, making a 3000-mile trip because of sanctions imposed by its four neighbouring Arab states.

It takes four days for the goods – exported by Birmingham company Y International – to arrive, then it goes on sale with other British milk selling for at least AUD$8.60/ litre.

The liquid milk is a business boost for the dairy farmers who appreciate the guaranteed price.

Qatar has also airlifted cows into the emirate to help overcome the sanctions.

0417 440 009

brettm@dairynewsaustralia.com.au Editor Stephen Cooke

Some Murray Goulburn suppliers felt ‘ambushed’ on the day of the co-operative’s AGM. They were travelling to Melbourne to hear the latest information from the board of their beleaguered co-op, only to learn that the decision had been made.

All were shocked. Some were angry and others resigned to their fate. The revelation that 90 per cent supplier-shareholder approval wasn’t required by the board meant the co-op and all it once stood for was finished.

“A lot of us feel like this (decision) was dropped on us today,” one supplier said, receiving applause from the room. “Left in the dark again,” said another.

Murray Goulburn director Craig Dwyer addressed the room to explain why the decision was made.

Essentially, there was no other option, he said.

Dwyer had met with (then) deputy PM Barnaby Joyce and told the audience at the AGM: “The outcomes of that conversation were that it is not an industry problem but an MG one.”

Bad business decisions have seen the demise of the once proud co-op, gobbled up by one of the world’s largest dairy businesses in Saputo.

What makes it more galling for many suppliers is that others companies are identifying opportunities to grow and seizing on them.

Saputo has purchased MG for the same reason it bought WCB in 2014 — to take advantage of the opportunities in Asia, right next door.

Fonterra is also investing in Australia to help it secure its foothold in cheese exports, also to Asia.

And on a smaller scale, two companies, Freedom Foods and ACM, are investing millions in Victoria to expand.

So while opportunities in the industry remain, it’s genuinely sad to see that an Australian co-operative won’t have the opportunity to capitalise.

The world moves on and it’s to be hoped that the competition at company level for milk translates into competitive prices for those producing it.

Publisher

Shepparton Newspapers Pty Ltd

Printed by

Newsprinters Pty Ltd

Production

Stacey Taylor

0427 124 437

editor@dairynewsaustralia.com.au Dairy News Australia is published by Shepparton Newspapers Pty Ltd. All editorial copy and photographs are subject to copyright and may not be reproduced without prior written permission of the publisher. Opinions or comments expressed within this publication are not necessarily those of the staff, management or directors of Shepparton Newspapers Pty Ltd.

Regional editor Geoff Adams

news@dairynewsaustralia.com.au

WWW.DAIRYNEWSAUSTRALIA.COM.AU

Head Office 7940 Goulburn Valley Highway Shepparton, VIC 3630 Phone (03) 5831 2312 Postal address PO Box 204 Shepparton, Victoria 3632 Australia

DAIRY NEWS AUSTRALIA NOVEMBER 2017

OPINION // 15

Drop power prices or help farmers use less BRIAN TESSMANN

DESPITE MORE energy policy posturing, Aus-

tralia’s climate and energy strategy is getting little traction and remains under pressure from powerful coal interests.

There seems to be an attempt from both sides of politics to confuse consumers as to the real cause of higher power prices.

Both politicians and the media appear complicit in continually discussing power generation issues by making wild claims about future blackouts.

All the while smoke-screening the real causes of energy price increases that have nothing to do with whether the power is sourced from renewable or coal technologies.

Electricity distribution costs, overvaluing distribution assets, retail profit and government financial return on asset expectations are the main reasons behind the ‘energy crisis’ gripping the nation.

Put simply, most renewables can match dirty coal for generation costs. So called clean coal technologies, if ever successful, will likely be more expensive. But generation costs are not the real problem.

The question most rural and regional advo-

Government bows to activist agenda DAVID JOCHINKE

cacy groups have been asking for years now is how post-generation costs can be lowered to reduce the strain on farmers and their businesses.

It seems clear the Federal and State Governments have no interest in addressing this issue no matter what options are put to them.

The result has led to more consumers, including proactive farmers, looking to generate their own renewable power, with some considering in-party or going off the grid entirely.

However, the major concern is that as consumers go off-grid, costs for those who remain will increase. This is an untenable situation for farmers who are already dealing with unsustainable prices.

The fact is all dairy farmers use energy for milking and cooling milk. Many also use it to power their substantial irrigation infrastructure.

For our local dairy industry to remain internationally competitive, the cost of this energy has to be slashed.

To save our dairy industry’s viability, the State and Federal Governments must fund programs that assist farmers to implement on-farm efficiencies or create their own renewable generation.

• Brian Tessmann is President of the Queensland Dairyfarmers Organisation.

THE VICTORIAN Farmers Federation is the key stakeholder representing agricultural animal industries and is disappointed with the lack of consultation on the establishment of Animal Welfare Victoria.

The VFF supports a farming community that upholds the highest level of animal welfare and continues to advocate for good animal health and welfare outcomes.

Farm animal industries already adhere to QA programs. These programs involve extension, education and include monitoring and enforcement through commercial incentives and supplier obligations.

These industry activities are complementary to the regulatory controls and meet community and international expectations.

We reflect Australia’s position as a leader in modern, sustainable and scientifically based welfare practices.

The Victorian Government’s announcement last month to establish Animal Welfare Victoria will simply add more cost and more bureaucracy to a system that is already working.

Agricultural animal industries are already

engaged with Agriculture Victoria and the State Government on animal welfare through the Livestock Industry Consultative Committee (LICC).

The LICC consists of representatives from all farm animal industries, processors, transporters, saleyards, agents and regulators including Agriculture Victoria, PrimeSafe and Dairy Food Safe Victoria and is chaired by the Chief Veterinarian Officer of Victoria.

Unfortunately the RSPCA walked away from this committee some time ago.

And now it appears the State Government is bowing to an activist agenda by establishing an entity that places all animals under the one umbrella.

Animal industries need to remain separated in order to achieve the best welfare outcomes.

The VFF is calling for further investment into LICC to generate scientific research that underpins legislation and protects access to overseas markets and reinforces Australia’s international leadership in farm animal welfare.

• David Jochinke is President of the Victorian Farmers Federation.

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16 // MARKETS

Telling it like it might be AUSTRALIA DAIRY farmers are at the very end of a value chain that stretches around the world and back again.

While more and more of the industry’s milk is sold domestically, the international market continues to heavily influence farmgate prices — particularly in southern Australia.

This is because around 90 per cent products from this part of the industry — whether sold at home or abroad — are competing in a global market.

In our business we developed a continuous forward-looking product that tracks the fundamental value of the major dairy commodities, based on a rolling analysis of global supply and demand balance.

We sell this product globally — to major dairy companies, ingredient buyers and traders in Europe, the US, Asia and in Australia.

These heavy hitters have identified the need to have a comprehensive view on what could develop in the future, that they can track and respond to over time.

In a market as volatile as dairy, small changes can make a big impact to the bottom line.

It’s not just major corporates that understand this. Dairy farming is also a game of inches, even small changes in input costs, a turn in the weather, or an unexpected drop in farmgate price can have a huge impact on profitabil-

ity — even viability.

Farmers receive an annual opening price, and perhaps some step ups through the current season, but little information in between on how next year might be shaping up.

With very little forward-looking market information out there that relates directly back to farm, we continue to share our analysis of the commodity value of milk (CMV) — based on our global work — in these pages.

When things shift materially, we also share an outlook on southern farmgate price — which is composed of the projected CMV and the likely value capture above commodity returns (see Chart 1 - page 17).

It’s an indicative figure, but allows farmers to understand how expected market conditions might affect farmgate price once exchange rates and product mix implications are considered.

This doesn’t always make us popular — especially when the market for milk is weakening!

In October we released an updated farmgate price outlook, based on our latest quarterly analysis of global market conditions.

For the current season, the CMV has improved from our June outlook — as butter prices have remained higher for longer.

However, offsetting that has been the

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The net effect is a forecast fall of $0.10/kg MS in the midpoint of our range for the 2017– 18 season — which now sits between $5.70 and

Changes in spot CMV over previous season outlook ($/kgMS)

$0.04

$0.54

-$0.27 -$0.17

$0.46

$5.45

$4.85

2016/17 (actual)

Cheese/ Whey

SMP/ Butter

WMP

$A change

Mix/Yield

2017/18 (forecast)

Chart 2.

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

MARKETS // 17

The outlook for southern milk prices Two elements of the price outlook are: Projected mid-points of Commodity Milk Value and full year milk price estimate (4/KGMS)

$5.80 $0.35

$5.25

weakened market sentiment.

To quote American economist Edgar Fielder: “If you have to forecast, forecast often”.

That’s why our analysis is monitored and updated monthly, and our outlook is updated when things shift substantially.

The purpose of a forecast is not to pretend the future is certain and set. It’s to help plan for a future farmgate price scenario that might have serious implications for your business, something that you might want to discuss with those around your business on whom you

rely — family members, financiers, consultants, suppliers, and workers.

These discussions are not so easily had when the bombshell has hit — plans can be reactionary and short-sighted as a result.

But testing the resilience of plans against forward looking-information on income and input costs could allow adjustments to be made that help mitigate risk and develop contingencies that will keep businesses in shape for the long haul.

We’ve taken some heat for flagging a likely decline in farmgate prices next year — that we’re

talking the market down or even giving dairy companies the excuse for paying less!

Well these views are objective; they’re our own (without first checking with dairy companies); and are based on anything but guesswork.

If we have learned anything from the last couple of years in this industry, it’s that denying market realities only gets you so far, and without prior warning the wake-up call can be devastating.

• Jo Bills is a Director of www.freshagenda.com.au.

$0.40

$5.45

$4.85

2017/18 forecast

2018/19 projected

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Value capture Commodity value of milk This outlook is sensitive to a number of variables affecting product prices and the value of the $A.

Chart 1.

$5.90/kg MS. This assumes an average exchange rate of US$0.78.

Chart 2 (page 16) breaks down contributions to the change in underlying CMV between 2016–17 and the current season — which on average accounts for 80 to 90 per cent of farmgate price.

There is clearly a significant contribution from butter, more than offsetting low returns from SMP. Improvements in cheese prices have been steady if not spectacular but the contribution to commodity value reflects the importance of cheese in the industry’s product and export mix.

The biggest change is in the outlook for the 2018–19 southern farmgate price — although there are still many things that can change between now and next season.

We have revised the midpoint of our range down $0.35/kg MS to which is now projected to be between $5.05 and $5.45 kgMS — a wider range to account for the greater uncertainty and potential for change between now and then.

This time it’s the underlying commodity milk value that is responsible for the change.

As global markets move into an oversupply situation in 2018 — largely due to the recovery in EU milk production — commodity prices are expected to fall.

Critical to this outlook is the strength of the northern hemisphere spring, but with favourable farm margins in place — this is likely to add significantly to export availability.

Large EU intervention stocks of SMP continue to weigh on powder values, and recent comments from EU Commissioner Phil Hogan aimed at discouraging further purchases in 2018 have added to uncertainty and significantly

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rt demand remains strong Export value more critical than ever

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

18 // MARKETS

cents/litre in March (AUD 41c/L) to 28 Euro cents/litre (AUD 36c/L) in April.

Profit margins are under pressure in the US, and in NZ Fonterra has announced the final payout for the 2011/12 season has been cut from NZ$6.75-$6.85/kg MS gLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96GLOBAL IMPACT JohN DropperT LAURIE WALKER $5.04).

Effectively, global dairy markets are rebalancing.

Lower Shifts in private label contracts and prowhat prices seems will to beboth emerging is a pattern of WITH THE beginning of the 2017–18 season, it’s difference between milk proteins (from SMP) the Australian dairy industry? slow production growth and stimulate cessor rationalisation have seen milk The share of Australian milk exported in one importing to service lower-value segments of worth looking back over some of the changes relative to butterfat (from butter) has narrowed demand, and we will ulti-market such as cheese companies adjust their require- dairy and since December 2016, has reversed itself. form or another has trended downwards the occurs Australian dairy overas this that have taken place in intake the Australian food-service and discounted generic shred Undoubtedly, EU’s intervention stockpile of the last two decades. mately see a pricefor recovery.

Key factors industry, andpricing examining somethe emerging ments and to meet chang-trends cheese, while Australian After steadily rising through the 1990s on from as seek a clearer picture of where the Aus- SMP has distorted the market and suppressed to watch the global scene will be the companies focus on ingwedemands of a highly pressured retail maintaining the protein prices, and until the EU can provide 32 per cent in 1990/91 to 60 per cent tralian dairy industry is headed.prices and rateinat1999/00, which milk productionpresence overseasin high-value, long term marketplace.

Lower contract markets. to a low Firstly, there has been a growing consumer clear and credible guidance on how it will dis- this proportion has steadily fallenslows in point response to lower prices, the a lack of alternative supply opportuniIndeed, 2016–17 Australian cheese producof 34 per cent in 2014–15. pose of this mountain of powder, it will likely be appetite for butter and saturated fats once again financial worries 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 This is a function of both lower milk pro- tion and exports were down only slightly on last both in Australia and in countries such as the a source of instability that continues to underlimited manufacturing capacity. Despite is up around 4% on 2011 for the year to East maintain consistently higher eco- on consumer confidence, the path of duction, down from a peak of 11.27 billion litres year (-2 per cent), while cheese now makes up US, and a decline in sales of margarine substi- mine the market. these challenges, the underlying domes- April (leap year adjusted), whilst early nomic growth rates that support China’s economic growth, and the value in 2001–02, and a larger domestic market due a significant proportion of cheese consumed in tutes. dollar. tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the AustralianAustralia. to population growth which grew from around In part this is due to a changing understandAustralian processors Demand for exported dairy prodever, the surge in supply has outpaced finished the March 2012 quota year up ita dairy consumption and a growing Australian butter imports have also increased 19 million to 24.5 million over the same period. ing of the risks of saturated fat consumption, ucts remains a positive and will con-period, with most of the demand growth in the market.

2.3% on the previous year.

New Zealand population providing a degree of cerHowever, since 2014–15 when milk produc- strongly over the same which may not be directly responsible for car- have some difficult choices tinuehas to grow the middle This situation scales production is widely to finish tainty beyond the current product comingclass frominNew Zealand. tion washas 9.81 seen billionthe litres, production fallen with diovascular disease, as onceadjustments. thought. about howexpected to extract large such China, of buyersin in dairyand marthis season up 10% on last year - a huge tip in favour In thethe seasons following thehas2008 Part of theasexplanation for this pattern of 2015–16 2016–17 toemerging 9.68 and markets Whilst demand for butter captured maximum value from each successively changes and with increasing commodity prices market influence given 95% of NZ milk kets, with then financial crisis and subsequent simultaneous imports and exports may be the 9.01 billion litres,retreatwhilst thewith share of milkin diet the attention of the media, most of comthe discuslitre of milk. nature free trade agreements. Aushas months. increased,Butter to 35 perurbanisation cent and then- and sion has focussed on the retailfarmers aspect ofinbutter. alsoofinAustralia’s conjunction over recent is exported. Argentina is also enjoy- ing steadilyexported modity price recovery, tralia has a freeLocally, trade agreement with New Zea37 per some cent. 30% from their with global population A more fundamental is that growth. ing solid production growth, but a sig- prices are down export-oriented regionsquestion have seen solidif this land, is giving New Zealand With powder falls in prices Australian strong ongoing 2011 demand demand for butter is here to chart) stay, this will likely theproduction, domestic market supported by a favourable access to a peaks, whilst havemilk nificantNonetheless, supply gap inwith Brazil prevents global supply growth (see - with large dairy market. there were serious concerns that Australia for fat, Australian farmers face a question of require long-term structural changes amongst higher-cost competitors in the North- much of this additional milk from leav- lost more than 20%. Farm gate prices growing population and stable perAt Whilst the same time, Australia has a free trade would cease to be a major in dairycapita exporter and how to get more fat from cows and less processors. consumption. the dairy haveprosubsequently been reduced America. ern Hemisphere amongst those expand- ing South Historically, protein has been the more valu- tein, and Australian processors of what to do cede its presence in major Asian markets to agreement with Japan (JAEPA) giving AustraDespite wider economic uncer- most exporting regions. The average market is currently a challenging place ing output as their margins increased. able component within milk, with processing with protein rich skim co-products from butter exporters from the US, EU and NZ, becoming lia better access to the Japanese market comThis season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France to be a seller, all signs indicate that balpared to the other major global dairy exporters. ever more domestic-focussed. and payment systems developed to reflect this. manufacture.

12% from 32 Euro ance will ultimately return. countries like China and for example, dropped ditions have further enhanced milk as importing Continued page 19 > Evidently that has not happened. Instead, Beyond this, what role will exports play in However, over the last few years the price incremental change in milk production (year-on-year)

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FTA,” says Fraser. strong links to the Austrathe first Australian greenSealing the deal: Malaysian trade minister Mustapha Mohamed hile under the fields expansion in UHT in lian dairy industry and will From our point of view, absolutely! with Australian counterpart Craig Emerson after signing the deal.

FTA agreement expand arrangements 10 years. associated with And without the problems baditsbacteria - like blocked of Australian agriwith dairy farmers for Freedom’s wholly pump nozzles, unpleasant odour, low nutrient content, and run-off. but also through technical Despite the compleers through streamlining e’s key interests supply of milk. The new owned subsidiary Pactum How do you beatAustralia bad bacteria? or so called ‘behind the tion of this agreement, of rules-of-origin decriffs bound at zero, plant will increase scope will run the - just add some special counteractive bacteria restrictions.” much remains to be done border’ Simple and rice are two sec- laration processes and for Australian milk and supplyoxygen into plant. Some of its products the was effluent and problem become an asset.

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

MANAGEMENT // 19 < Continued from page 18 Australia also has a free trade agreement with China, which importantly does not include the range of tariff restricted quotas for dairy products that feature in New Zealand’s own free trade agreement with China.

The effect of these tariff restricted quotas is that once imports from New Zealand exceed a certain volume, tariffs will snap back to pre-FTA levels.

Given the market access Australia has to certain Asian markets and the global supply chain links, some companies appear to be importing cheese and butter-fat products for the Australian market from overseas, whilst using scarce Australian milk to make products for international markets.

The implication is that processors cannot assume the domestic market will be there to offset volatility in the global market. Beyond drinking milk and certain fresh dairy products, almost every dairy category is potentially subject to foreign competition.

Australian companies are already competing with imports on price in the domestic market in certain categories, and this competition isn’t going away.

Historically, Australia has been a net exporter of dairy products. This was underpinned by the combination of a small population and cheap, abundant inputs meaning we had a cost competitive, marketable surplus that had to find a home overseas.

Neither of these factors are as true today as they were two decades ago; Australia has a much larger domestic market, and production costs have increased. Access to suitable land and water for dairying poses a constraint on industry production.

Faced with a smaller milk pool, numerous markets (both domestic and international) to service and a huge range of potential products, Australian processors have some difficult choices about how to extract maximum value from each litre of milk.

There is not enough milk to do everything, and processors can’t afford to have it tied up in low returning business activities.

Australia will continue to be an exporter, but the discussion needs to move beyond the volume of Australian dairy production and exports.

• Laurie Walker is industry analyst with Dairy Australia

Herd health benefits from OAD milking WHO:

Dave and Jane Field WHERE:

Montagu near Smithton WHAT:

Farm expansion

RICK BAYNE

TASMANIA IS giving Dave and Jane Field

the opportunity to get big, something denied in their native New Zealand.

With growth from 800 to 1350 cows in two years, the Fields want to make their farm as efficient and self-sufficient as possible, including the introduction of once-a-day milking.

The farm at Montagu near Smithton has been selected by Dairy Australia and DairyTas as a new Focus Farm, something Dave hopes will provide a two-way street of information.

The farm brings together a former dairy and its neighbouring grazing property and covers 750 hectares, including a 450-ha milking platform.

This year they will peak at about 1350 cows Dave and Jane moved to Tasmania from New Zealand two years ago seeking a large-scale, selfcontained farm.

“We wanted that in New Zealand but struggled,” Dave said. “It’s quite uncommon in New Zealand to have dairy grazing alongside milking.

If there’s a nice grazing block they tend to put a second shed on it and turn it into two dairies.

“There’s a bit more scale here; we could get one parcel of land with room to grow with the efficiency of having everything in one spot.”

The larger farm gave the Fields scope to intro-

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Dave and Jane Field on their Montagu farm near Smithton, Tasmania.

duce once-a-day milking and so far the experiment is working well.

“We’re trying to find efficiencies,” Dave said.

“Because we’ve got more grazing land we push the milkers further away from the cow shed and milk off a larger area.”

Last October they split the herds between once and twice daily milkings as a preliminary

step. “That went pretty well so we had enough confidence to put both herds on once-a-day and give it a go,” Dave said. “We started in May so it’s early days but we’ve noticed improvements in the in-calf rates, a lot less lameness, no spike in mastitis and it’s a simpler farm system for milking a lot of cows.

Continued page 20 >

DAIRY NEWS AUSTRALIA NOVEMBER 2017

20 // MANAGEMENT < Continued from page 19 The Fields consulted advisers in planning the shift and looked at other farmers already using the option. “It’s just a different way of turning grass into milk and putting milk in the vat,” Dave said.

Finding efficiencies to improve work-lifestyle balance was part of their desire to run a big farm with six staff.

“We milk the cows in the morning and walk them out to the feed and shut the gates; then you don’t have to go near them until the next morning. “It’s very efficient; if they come in busting with milk then you put them back to a different paddock.”

The Fields are working on genetics to create a herd suited to once-a-day milking. “Not every cow will do it efficiently; some will get fat because they don’t produce enough milk to make it work,” Dave said.

“It’s easy to identify those not suited. They either milk well on once-a-day or they get fat and don’t milk well at all; there’s not much in the middle.”

While most have adapted easily, high sale prices has made it viable to exchange unsuitable cows for new stock.

The Fields, and their Focus Farm followers, will review the financial performance of the system. “It’s not an irreversible decision,” Dave said. “If after one or two years we can’t make it work and go back to twice a day, our herd would be so much better because a lot of the animals we’re getting rid of would be average to poor on twice a day.”

The farm has a mix of Friesians and cross

The first open day held on November 1 attracted 60 farmers.

bred cows, which appear to have better genetic merit for once-a-day milking. They rear about 650 calves between autumn and spring.

The cows are producing about 1.4 kg/Ms per cow and the Fields are aiming for a total of 525 000 kg/Ms in 2017–18. “We’ve got roughly one-third split between autumn-calved cows, spring-calved cows and spring heifers; we’re comfortable around 1.4 milk solids with the cost savings and the amount of grain we’re feeding,” Dave said. “It does seem to be working.”

It’s too early to tell if there will be much incalf rate improvement. “In autumn we did a

nine-week mating and had a 17.5 per cent empty rate, but most of those cows had been empty before. I was pretty comfortable with that,” Dave said.

The Fields aim to stay around 1350–1500 cows for the short-term, though improved drainage would open the option of increasing numbers.

Over the past two years most of the work has been improving laneways, along with some drainage and re-grassing to improve homegrown pasture utilisation. They are focused on growing and harvesting more pasture by increasing soil fertility, irrigation, pasture species, cow

genetics and management.

“It’s a big property and we need to have good systems and good people,” Dave added.

A support group of local farmers and led by Basil Doonan from Macquwarie Franklin will meet bi-monthly to discuss on-farm decisions and the benefits for the business.

There will be up to six open days so famers can see the progress and understand the rationale behind the decisions and the outcome.

For more information on the Focus Farm project contact the DairyTas office on 6432 2233 or go to www.facebook.com/TasFocusFarm

DAIRY NEWS AUSTRALIA NOVEMBER 2017

ANIMAL HEALTH // 21

APIAM ANIMAL HEALTH GEMMA CHUCK

A can of worms

THE OVER-USE of anthelmintics (‘drenches’) for the chemical control of gastrointestinal worms has led to resistant worm populations in many areas of the world.

This article discusses the use of non-chemical control, along with strategic drenching, to minimise the threat of drench resistance on your farm.

Traditional recommendations

pasture for a short period, to expose them to susceptible worms in refugia. Unfortunately, the long duration of action of some anthelmintics will result in susceptible worms being killed and only resistant worms surviving to produce the next generation of worms.

2. “Move then treat”: Heifers are placed onto a ‘safe’ pasture at least one week prior to drench treatment. This allows some pasture

contamination by unexposed worms, to provide a small population in refugia.

3. Selective treatment of heifers that show evidence of worm infestation (diarrhoea, illthriftiness, poor weight gain) and leaving some heifers untreated.

4. Avoid the use of long-acting anthelmintics or those that kill all developmental stages of worms in the animal. These anthelmintics

Traditionally, worm control in dairy heifers involved regular and routine anthelmintic treatments, for example every 4 weeks, with 4 to 6 treatments per season.

It was recommended that treatment was followed by moving to a ‘safe’ pasture, which was considered to have a low burden of worms.

Whilst such regimes have controlled gastrointestinal worms reasonably well, they have led to the survival of a minority population of resistant worms.

These surviving ‘resistant’ worms subsequently parent the next generation of worms, leading to a majority population of resistant worms, where the original anthelmintic will no longer have an effect.

Think of this as inadvertent ‘genetic selection’ for the resistant genes, similar to how we select for specific traits in cattle.

will kill susceptible worms in refugia.

5. Avoid treating adult cows that have developed immunity. These animals are largely resistant to worm infestations but will still have a worm burden to some degree. It is controversial as to whether such burdens affect productivity in early lactation.

Continued to page 22 >

You always want to do your best for them. They’re like family.

A new way of thinking More recently, the concept of “refugia” has been proposed as the most important factor to slow the development of anthelmintic resistance.

The number of worms in “refugia” is the number not exposed to the drench.

Here the term ‘worms’ refers to all stages of the worm lifecycle (eggs, larvae, immature and adult worm). There are three main ways that worms can be in refugia i.e. not exposed to a drench: ■ Un-drenched heifers, in a mob that have received drench.

■ Inhibited larvae of some worm species. when they are not susceptible to a drench.

■ Worms on the pasture cannot be exposed to a drench, so are always in refugia.

Worms ingested after a drench will dilute any remaining resistant worms, so these do not become a significant proportion of the total worm population in the heifer.

These susceptible worms contribute to the next generation of worms, delaying the development of resistance.

However, there is a conflict between managing drench resistance and gaining good worm control.

Maintaining too many worms in refugia to dilute drench-resistant worms also means more worms to infect heifers after drenching. There needs to be a compromise to prolong the use of effective drenches.

She says we’re like family.

Maintaining worms in refugia In practice, we need to re-think the way worm burdens are managed. In the past, drenching programs focussed on elimination of infective stages.

Instead, we need to focus on maximising the contribution made by the susceptible worms to the next generation.

There are a few strategies to help achieve this: 1.“Treat and stay”: Putting anthelmintic treated heifers back on to known contaminated

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DAIRY NEWS AUSTRALIA NOVEMBER 2017

22 // ANIMAL HEALTH

When old becomes new ROD DYSON

SPLIT CALVING and long lactations have become the norm in much of our industry now, so it was a bit of a surprise when we were contacted recently by a farm in Gippsland that is strictly seasonal, meaning the whole herd is dried-off and milking ceases completely over the dry period until calving starts.

As part of our normal process, a history of Bulk Milk Cell Counts (BMCC) for the last two years was obtained for this herd and then charted with a trend line included.

Typically, a chart of a fully seasonal herd’s BMCC would show a trend of starting a little higher as the fresh cows come into the herd, then falling quickly in early lactation, followed by a gradual increase over the season.

Sometimes there can be a steep rise right at the end of the lactation as cows are being dried off.

In this herd, the rise in BMCC during the season was considerably more than what we would like to have seen.

Despite starting in the 70 000–90 000 cells/ ml range, the BMCC then steadily rose to above 250 000 cells/ml towards the end of the season.

The rise throughout the lactation was remarkably consistent, almost a straight line, and was actually no worse during the wet winter of 2016.

Naturally, when looking to understand a herd’s situation, we like to get some milk cultures to ascertain the cause and likely method of spread of new infections.

In this case, the farm had already been proactive and had obtained several batches of milk cultures during the previous lactation, and a batch early in this lactation, thereby giving themselves a considerable head start in dealing with the problem.

The milk cultures revealed an interesting pattern with most cultures around calving and in early lactation being Strep uberis, whilst in mid to late lactation, Staph aureus became prominent.

Despite starting in the 70 000–90 000 cells/ ml range, the BMCC then steadily rose to above 250 000 cells/ml towards the end of the season.

These culture results correlated nicely with the history of clinical cases in this herd. A Countdown Mastitis Focus report showed a high level of clinical cases of mastitis around calving, and much lower levels in cows that have been calved more than 14 days.

This was beginning to look like herd with a

Be sure look after the future of your herd

In addition to maintaining worms in refugia, other practices to delay the development of drench resistance include: 1. Avoid drenching more frequently than once monthly, unless there is a specific need, in consultation with your veterinarian.

2. Quarantine all introduced stock and drench on arrival.

3. Use effective combination drenches.

4. Weigh animals prior to drenching to establish an appropriate dose.

5. Administer the correct dose using the correct technique for the product.

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problem due to Strep uberis around calving, and then Staph aureus during lactation.

Calving has already finished for this year, so little can be done about that at the moment, but can we prevent the rise in BMCC this year?

If, as seems likely, the rise in BMCC is due to the spread of Staph infections, then knowing that Staph aureus is a cow associated (or contagious) mastitis infection and virtually all the spread of infection will be occurring during the milking process, we can confidently plan our approach.

A milking time visit and mastitis risk assessment is now the priority for this herd. A full appraisal of all the potential risks for spread of mastitis associated with the milking process will allow us to draw up a list of corrective actions and a control program for the remainder of this season.

The good news is that because it is only early in the lactation, there is an excellent chance of success if the control actions can be implemented reasonably quickly.

Once these changes have been implemented, a re-assessment of the effect of those changes will be critical to ensure they have achieved their goals — if not, further revised action will be needed ASAP! Ongoing monitoring will involve tracking the herd’s BMCC and regular analysis of herd test results and clinical case records, including

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regular Countdown Mastitis Focus Reports.

But we also must not forget about the issues around calving!

Control of mastitis infections at calving begins at drying-off, so even though the herd has used a blanket approach to dry cow therapy with both an antibiotic dry cow therapy and a teat sealant used in every quarter of every cow at dry-off, a comprehensive review of the dry-off protocols and procedures will be critical.

This will need to be followed by a pro-active plan to managing the calving & fresh cows during the next calving season.

There are some important key lessons to learn from this herd ■■

■■

■■

■■

Mastitis control on a farm is often complex and dynamic, especially in split and yearround calving herds.

Good records make analysis much quicker and more reliable.

The Countdown Mastitis Focus report can be a great tool for helping define the situation on a farm, and then monitoring progress.

Milk cultures have yet again proved their value.

• Rod Dyson is a veterinary surgeon and mastitis adviser at www.dairyfocus.com.au

< Continued from page 21

the experts in CALF management (03) 6352 2996

Control of mastitis infections at calving begins at drying-off.

Kyabram: (03) 5852 2244 Nathalia: (03) 5866 2860

Monitoring worm burdens and testing for drench resistance A commonly used strategy for managing worm burdens is ‘monitor and treat’.

Faecal egg counts, body condition, live weight gain, pasture length and predicted larval contamination of pasture are used to decide

when to treat heifers.

A faecal egg count (FEC) estimates the worm burden in an animal. They can be carried out on individual faecal samples or pooled to provide an assessment of a group of animals.

It is recommended that FECs are performed prior to treatment to determine if drenching is necessary. FECs can also be used to assess the effectiveness of a drench.

A ‘drench check’ is usually carried out around 10 days after a drench treatment and should yield zero eggs in the faeces of 10 randomly selected treated animals.

If the results indicate a worm burden, then further testing may be required to check for the development of resistance. Discuss the use of FECs and drench testing with your veterinarian.

• Dr Gemma Chuck is a veterinary adviser at Apiam Animal Health.

DAIRY NEWS AUSTRALIA NOVEMBER 2017

24 // MACHINERY & PRODUCTS

Replacing contractors with pure grunt RECENTLY, I have had cause to review my policy on ‘DIY vs hiring contractors’. Several times.

A Council-ordained requirement to move around 300 cubic metres of fill for a construction project looked well in excess of what my venerable Buttsworth scoop could accomplish in this lifetime.

A contractor seemed the way to go. But as so often happens, one of the contractors engaged has lost the ability to use his phone or read his calendar.

The other apparently doesn’t have access to his voicemail (which earnestly proclaims that ‘your call is important to us’).

Time for Plan C. Plan C involved the purchase of a backhoe and truck, because “@#*&$^ contractors, I’m going to $*^#&^ per cent do the *#^# per cent$ job my $#*&$#* self”.

Cheap, old rubbish of course, because with a few days of work the job would be done and they could be tinkered with and eventually, err, sold.

A bit of fun and actually financially competitive with paying ‘the professionals’, should they ever deign to turn up.

We’ll come back to the rest later, but I’m going to jump ahead a few steps at this point, to focus on the subject for this column.

2017’s worst excavating outfit ended up with a Chamberlain 791 backhoe. I have used several backhoes extensively over the years, but this one is a treat.

Classic to the point of separate driving and backhoe seats, air-conditioning by virtue of the breeze (heating from the exhaust gas blowing into your face), and a driving position that involves straddling the transmission whilst sitting on the fuel tank.

To these original features, the passage of time has added an external self-lubricating oil change system (ram leaks), sloppy pins in worn bushes, and a dodgy fuel pump fix that sees the exhaust blow a volume of smoke I can only compare to a coal fired battleship.

Naturally, the brakes don’t work, the hood doesn’t close properly, and the driver’s seat is rusted to the point where you want your tetanus booster applied before operating.

As far as classic grunt goes however, this thing brings the goods. The engine is an old Perkins 212, tough as nails and light on fuel.

So far I have literally used around half the volume of diesel as hydraulic oil — though this may say more about the state of ram seals.

The hydraulics are strong: it lifts and digs and dumps like a beast.

The cycle time is so good that you have to be careful with all the slop in the pins — you could put the hoe bucket through the back window of your truck pretty quickly if you don’t stop the

slew about a metre from where you want to drop the dirt. Good for throwing beyond your reach though!

As far as classic grunt goes however, this thing brings the goods.

It has a forward/reverse shuttle — something I’m always amazed these old backhoes manage to have but most tractors took decades

2017’s worst excavating outfit ended up with a Chamberlain 791 backhoe.

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to catch up with.

Perhaps best of all, a previous owner replaced the seat on the backhoe with a car seat. Who says I can’t be comfortable whilst having my need for retirement savings steadily reduced by the diesel smoke blowing across my face?

• 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.

DAIRY NEWS AUSTRALIA NOVEMBER 2017

MACHINERY & PRODUCTS // 25

Busting crust on effluent pond A NORTHERN Victorian dairy farm can now

utilise nutrients from its effluent pond on its pasture after using Crust Buster power from Biosystems Australia.

The surface of the pond was quite solid and barely moved when pushed, the crust on top of the pond was inches thick, and it emitted a strong, unpleasant smell.

The farmer called Biosystems Australia for help and agreed to trial Crust Buster effluent pond treatment because of its 100 per cent money back guarantee.

“The crust was thick, hard and had a solid grass growth almost all over. It was probably one of the worst cases BioSystems have seen,” the company said.

“The farmer was considering digging another pond and letting this one dry up and get filled in. Another option of a mechanical clean out was dismissed as the cost was prohibitive.”

To start the treatment the pond was broken into on the outside edge in eight places and the Crust Buster powder in water soluble packets

was added.

Within one week some changes were obvious.

The edges were showing a good green colour on new young grass and some small wet areas were becoming visible.

“After four weeks it was beginning to show big holes and the surface of the crust was moving.

“Big pieces of the crust were disappearing and more holes were opening up. There were areas of foam showing that there was gas being generated with the biological activity happening in the pond.

“By eight weeks we had almost a completely liquid pond and there was almost no crust visible.

The farm needed irrigation water so they were able to pump some from the pond. The pond had no smell, with only a small amount of old dying grass just visible in the middle.”

The farmer has continued to use the Crust Buster packs periodically and now uses the pond for irrigation water.

“His irrigated paddocks were showing a huge change in the health of the grass and the increase in dry matter was noticeable.”

An effluent pond before and after the addition of Crust Buster packs.

ALLFLEX WINS TWO WORLD EXPO AWARDS Allflex received two Dairy Herd Management Innovation Awards at the recent World Dairy Expo for its SenseTime cow monitoring system and the eSense Flex ear tag.

The awards recognise the top 10 dairy industry innovations introduced over the previous year, selected for their ability to help producers manage their herds better and more cost effectively.

A panel of nine judges, including six farmers and three technology experts from leading universities, determined the winners.

The criteria considered were the products’ usefulness, uniqueness, return on investment and ability to improve herd performance or day-to-day dairy farm management.

The two products were the only cow monitoring products that made it into the top 10.

SenseTime is a modular cow monitoring solution that delivers actionable information on the reproductive, health, nutritional and wellbeing status of individual cows and groups. It allows dairy farmers to make data-driven decisions for maximised productivity.

The eSense Flex ear tag is designed for long-lasting performance in vastly varying farm environments and

temperatures.

It is made of a UV-resistant material, for high durability, and has a special shock-absorbing head that increases resilience.

The eSense tag transmits actionable information back to the SenseTime system.

“We are very honored that our SenseTime system and eSense tags have been singled out by the prestigious Dairy Herd Management Innovation Awards,” said Shane McManaway, Allflex CEO for Asia Pacific.

“We are thrilled to be bringing these products to Australia in 2018; allowing dairy farms of every size to benefit from this advancing technology, helping them to improve their management, productivity and outcomes.”

SenseTime is due to launch in Australia in January 2018, with the eSense Flex ear tags set for release shortly thereafter.

Allflex won World Dairy Expo awards for its SenseTime cow monitoring system and its eSense Flex ear tag (pictured).

POWER UP YOUR PASTURES WITH A JOHN SHEARER DRILL

Increase your pastures’ feed density with a John Shearer drill and get the most out of the land you already have. Shearer seed drills are designed and built in Australia for our unique conditions. With variety of sizes and ground-tool configurations available, we have models to suit every region. Every machine is engineered for a long service life and top reliability with parts and support available nation wide.

Call 08 8268 9555 or visit johnshearer.com.au for more info or to find your local dealer.

TRUSTED SINCE 1877

DAIRY NEWS AUSTRALIA NOVEMBER 2017

26 // MACHINERY & PRODUCTS

Long-term rumen health through probiotic feed AN AUTOPSY recently performed by Tasma-

nian veterinarian, Dr Dave Nolan of Deloraine Veterinary Centre, on a six-year-old dairy cow that was part of a newly-developed ‘probiotic’ feeding program has found that the cow’s four stomachs were in an extremely healthy condition.

Jamie Berne, from Meander, was, at the time, milking 260 Holsteins, coming into drying off period. They milk 350 cows at peak times.

The herd at Fossil Park had been on the new probiotic program as part of their milking ration for the past two years.

Wholesale Probiotics Australia has been working on the probiotic-based feed additive for the last four years.

The company’s Dr Robyn Plunkett said results have proven it to be effective in replacing the standard chemical-based rumen enhancers and sodium bicarbonate.

According to the company, an added advantage, in the long term, is the development of the physiological state of the rumen. Several other autopsies have confirmed this.

The product is a unique combination of five strains of rumen-specific bacteria, a strain of active live dry yeast, plus five digestive enzymes.

Dr Plunkett said that it provides a natural alternative for rumen control and improves general health and wellbeing.

In addition, Jamie Berne’s herd had received a high strength probiotic-based lead feed supplement in their transition diet.

They were fed the probiotic in a professionally formulated blend of anionic salts, vitamins and minerals with three kilograms of grain, each afternoon, starting sixteen days prior to calving.

“We changed to BioPro Super Start two years ago for lead feeding for the springers. Prior to that we were using a good quality industry standard anionic-based lead feed mix,” Mr Berne said.

“We noticed immediate changes in the cows’ health — and particularly, we had very few LDAs (left displaced abomasums) after calving, compared with the usual seven or eight.

“In the last two years we’ve had two only. Plus, there has been less ketosis and minimal retained foetal membranes. The cows had more energy, straight away, and came onto milk very efficiently.

“We had faster calving and had to pull fewer calves.”

Jamie said the cows are more likely to eat their ration when including the new probiotic formula into the diet.

The cow that was examined had been showing no clinical signs of any current disease or illness prior to being humanely euthanased to facilitate the post mortem investigation. She had been producing 36 litres of milk per day, from only three quarters since February.

The autopsy report stated: ‘On gross

examination at post mortem, this cow’s rumen appeared extremely healthy with an extensive population of well-developed, long ruminal papillae as well as a thick internal rumen wall.

‘Bear in mind that these cows are fed nine kilograms of grain per day, a relatively high rate that, if poorly managed, can have significant detrimental effect on rumen health and activity.

‘Whilst the rumen was the focus of this particular investigation, the three other stomachs were also found to be extremely healthy, and this trend continued throughout the entire intestinal tract.’

After calving, the cows at Fossil Park are fed 30 grams per day of the milking probiotic formula in their ration.

“We are going to push this up to 50 grams by adding in the extra 20 grams of BioPro DFM. We don’t need the extra minerals,”’ Mr Berne said.

“Fat and protein is definitely on the up, and noticeably more in this second year. Our cell count is as low as it’s ever been, at the moment it’s around 70 000, and has been as low as 50 000.

Visit www.bioprobiotics.com.au

Autopsy showed a healthy rumen.

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Jamie Berne on his Tasmanian dairy farm at Meander.

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