Dairy News Australia - October 2018 - With Murray Region

OCTOBER, 2018 ISSUE 96

MURRAY REGION

Bernie McManus might be 71 but he has no plans of retiring form the dairy industry yet. He has just signed a three-year contract with Tatura Milk.

Still at the top of his game BERNIE MCMANUS has no plans to retire from dairy farming in the near future, despite his advancing age.

The spritely 71-year-old still gets up every day to milk his 130-cow dairy herd at Bamawm with

his wife Carol.

He has also just signed a new three-year contract with his milk company Tatura Milk, so it’s clear he has a few more years left in him.

Mr McManus said it had taken him decades of

hard work to get the farm and his herd to where it is today — always focusing on working with, and making the best of, what he had.

“My health is good, I enjoy the challenges of dairy farming and I still get a lot of enjoyment

out of my herd,” he said.

“Genetically I have a herd of good cows and, while my health is going well, I am reluctant to pull the pin just yet.”

Continued page 12 >

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DAIRY NEWS AUSTRALIA OCTOBER 2018

2 // MURRAY REGION

Chairman’s message

Reaching out to help THE DEVELOPING season continues to give

us concern and the team at Murray Dairy has implemented several actions in response.

Hopefully you are already utilising the Murray Dairy tools and resources that are readily available year round, but also accessing the events and workshops specifically designed for this season and making use of feed, water and financial budgets.

Murray Dairy has personalised support for farmers, offering expert consultants who will

consultations, which can assist you to plan the next steps for your farm business through a one-on-one session that will help you scope, plan and proceed with confidence in developing a succession, expansion or transition plan for your farm.

come to you. This support includes: ■

■

Taking Stock, which allows you to access a free one-on-one session with a trained adviser. The consultation will help you work through key business decisions and identify actions to take, as well as other support available. The sessions are confidential and personalised to address your individual situation.

Succession, expansion and transition

■

Plan2Farm, which helps to put in place your farm’s long-term strategic direction.

WorkBook advisers guide you through a holistic program that considers all areas of your farm business.

To register and be connected with a trained adviser, phone Murray Dairy on 5833 5312.

Again, as in past seasons, we find ourselves imploring you to look after you and yours — and your neighbours, too. Check in and take action if needed.

For more information on upcoming events, resources and opportunities, see: murraydairy.com.au • Rick Cross Murray Dairy chair

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DAIRY NEWS AUSTRALIA OCTOBER 2018

MURRAY REGION // 3

Investing in factory’s future GEOFF ADAMS

THE SHEPPARTON UHT dairy factory of Freedom Foods will become the cornerstore of the company’s dairy push, with $70 million earmarked for investment at the site during the next 12 months.

The company is planning to boost its milk throughput on the site from 300 million litres to 500 million litres.

Freedom Foods announced its net profit of $19 million on sales of $353 million for the 2017– 18 financial year last month.

The company already has 40 dairy farm suppliers, and managing director Rory Macleod said they would be encouraging existing suppliers to lift their production to meet the increased capacity, although there may be opportunities for new suppliers in the future.

Freedom has an agreement with dairy supply company ACM to supply 100 million litres annually, but Freedom is developing its own supplier base, providing what Mr Macleod said was a price, “not the highest, but not the lowest”.

“We are very focused on our existing base and encouraging them to grow their production, before we seek out new suppliers,” he said.

Processing room operator Rob Heard checks a milk sample at the Freedom Foods factory in Shepparton.

The Shepparton factory processes UHT milk for overseas markets and Freedom Foods is now the largest supplier of contract packed milk brands to China and private label milk in Australia.

Mr Macleod has told investors that volume through the Shepparton site had increased and additional volumes would start during the first half of the 2019 financial year, reflecting demand in Australia, South-East Asia and China.

“The Shepparton UHT operations continue to be well placed to benefit from the significant changes occurring in the production structure of

The nutritional line is being built at Freedom Foods.

the Australian dairy market and the increasing demand from export markets in South-East Asia, China and the Middle East,” he said.

The company is also planning to expand nutritional manufacturing at its Shepparton site.

Freedom Foods owns an interest in Moxey Farms, in NSW, but Mr Macleod said the company was not interested in buying farms in Victoria for direct supply to Shepparton.

During the past financial year the group finalised installation at Shepparton of additional

one-litre format capacity and also upgraded processing capability and downstream packaging.

The increase in processing capacity would align and support growth in UHT filling capability at Shepparton to meet demand in domestic and export markets including South-East Asia, China and the Middle East, Mr Macleod said.

“The expanded processing capability will provide flexibility to further increase UHT filling capacity as market demand increases.”

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DAIRY NEWS AUSTRALIA OCTOBER 2018

4 // MURRAY REGION

Fodder supply struggling to meet demand DRY SEASONAL conditions in much of

Australia are placing pressure on dairy farmers nationwide, as feed and water prices increase due to high demand and limited supply.

Australian Fodder Industry Association chief executive officer John McKew explained the reason for this rapid increase.

“It is absolutely driven by extremely strong demand in NSW and now we are entering into a diminishing supply situation,” he said.

With prices heading in an upwards trajectory, Mr McKew said it was hard to say whether farmers would be happy with these current prices.

“If there is no more product or very limited supply, it doesn’t matter what the price is, to a point, if there is none,” he said.

“The price is less important than supply (at present). They are not mutually exclusive and it’s increasingly important to find supply for cereals and oat and hay.

“It’s a very different situation from six months ago.”

Mr McKew said prices for quality oat and hay were $150 to $200/tonne six months ago, but

now had reached the $350/tonne mark.

Dairy Australia managing director David Nation agreed high demand for fodder in some regions was causing a feed shortage across the east coast of Australia, while water prices and availability were also adding uncertainty for irrigators.

“In response to these challenges we are focused on providing advice and support to maximise home-grown feed in late winter and spring, assisting farmers with determining ongoing feed requirements, and encouraging the need to plan ahead as conditions continue to unfold,” Dr Nation said.

“Dairy Australia activities will also be ramped up to provide insights on the hay, grain and water situation, and to ensure farmers have access to the best possible information to make the right decisions.

“We recognise that a feed shortage is the last thing the industry needs after a difficult few years, but we feel confident in the strength of the dairy community, and the ability to draw on our experience in managing feed shortages and challenging operating environments.

“The most important message for all dairy farmers is to be prepared and act now to best prepare your business for the coming year.”

The industry’s Regional Development Programs will focus on providing support and delivering tools and resources to guide decisions on-farm in relation to feed planning and management.

Dairy Australia will promote its most important reports to manage these conditions, including the Hay and Grain Reports and Farm Inputs Monitor, while free feed budgeting tools are available to help farmers plan ahead.

Farmers can access the latest information and tools by visiting: dairyaustralia.com.au/feedshortage

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DAIRY NEWS AUSTRALIA OCTOBER 2018

MURRAY REGION // 5

Dairy Farm Monitor Project Dairy Farm Monitor Project 2017-18 Northern Victoria Overview

Farmers feeling the pressure 2017-18 Northern Victoria Overview

In 2017-18, 21 of the 25 farms (88%) recorded

Inpositive 2017-18,EBIT 21 of the 25 farms (88%) recorded The Dairy Farm Monitor Project provides industry and a The Dairy Farm provides and a positive EBIT 2016-17 2017-18 government withMonitor timely, Project farm level data forindustry targeted 2016-17 2017-18 government timely, making. farm level data for targeted strategy andwith decision $112k $185k strategy and decision energy (MJ/kg) imported three per “We’ve seen dry times previously making. but this is the quarter of this rain fell in December, rendering it $112k DAIRY FARMERS continue to do it tough as $185k Averagefrom earnings beforefeed, interest & tax applicationofofallwhole analysis Return on assets and milk price Average earningsaverage before interest & tax cent above the statewide and three and ineff ective for pasture growth. we’ve seen athe combination thosefarm dry conditions and rising feed prices Return ontotal total assets and have milkseen pricefirst timeEncourages Encourages application of whole farm analysis onthe Victorian farm businesses. cent above their western Victorian and And while water allocations were high, seven per$73k average profit across Victoria fall to the fifth factors.” principles 12% $9.00 12% $9.00 principles on Victorian farm businesses. $73k Average net farm income Gippsland counterparts. fl uctuating water prices saw those purchasing Adjusted for infl ation, the milk price was lowest level in 12 years.

In Northern Victoria, 25 farms were analysed. $8.00 Average net farm income $8.00 017-18That Northern Victoria Overview 10% 10% In Northern 25 farms Ms Waterman said the input pressures were temporary water stung as prices increased highest inVictoria, the 12-year history were of theanalysed. was the finding of Agriculture Victoria and the seventh 1% 2.5% $7.00 $7.00 017-18 Northern Victoria Overview 1%farmers 2.5% continue betotal cautious about their Dairy8%8% Australia’s 2018 Dairy Farm Monitor Report, project, with northern Victorian producers seeing considerably towards the end of the season, seeing Average returntoon assets $6.00 $6.00 Average return on total assets returns for the 2018–19 season. impacting those who entered the market late. per cent jump, adding an additional $0.74/ which found despite tough conditions, Return on total assets and milk price the 25 a 14 Dairying In 2017-18, 21 of the 25 farms (88%) recorded Return on total assets and milk price in Northern Victoria 6% -2.0% 6% $5.00 $5.00 12% Farm “Over 1.2% two-thirds of farmers predict their With a median price of $80/Ml in February kg MS. Victorian farms monitored hadindustry a better$9.00and The northern Dairy Monitor Project provides Dairying inaNorthern Victoria positive EBIT 12%-2.0% $9.

1.2% Average returnand on equity In 2017-18, 21 of the 25 farms (88%) recorded Return on total assets milk price Northern Victoria produced 1.89 billion $8.00 $4.00 returnsreturn will onimprove, increasing to highs of $170/Ml in June, maximum business Average government farmgood levelpasture data forgrowth, targeted Yet other$4.00 issues, including water 2016-17 and feed2017-18 year10%4% than lasttimely, year with 4% with equity but many The Dairy Farm Monitor Project provides industry and Northern Victoria produced 1.89 billion $8. a positive EBIT litres the of milk in 2017-18, 8% at $193/Ml and $253/Ml respectively.

12% participants were concerned about seasonal $9 10% strategy and pricesan peaked surveyed higher milkdecision productionmaking. and improved milk price.$7.00 prices, combined $3.00 $185k $3.00 to put pressure on $112k 8% 2016-17 2017-18 government with timely, farm level data for targeted litres of milk in 2017-18, an 8% 2% $6.00 2% $7. increase compared to 2016-17. $8 variability in the coming year,” she said.

Combined with interest feed budgets that were a positiveAverage Agriculture Victoria farm business specialist farms, despite earnings before & tax $2.00 10% $2.0088 per cent registering 8% 6% and decision making. strategy $5.00 increase compared to 2016-17. $112k $185k Encourages the application of whole farm analysis Farm profitability was influenced bymajor issue identified $6.$7 0% “Input costs were the underestimated and resulted in increased need to earnings before interest and tax (EBIT), with an Claire Waterman said the results refl ected the 0% Approximately 1,290 dairy farmers $4.00 $1.00 $1.00 4% on Victorian farm businesses.

Average earnings before interest &Farm tax profitability was influenced by principles $73k 8% $5.

Encourages application of whole farm analysis Approximately 1,290 dairy farmers for the coming 12 months, while milk price and purchase additional feed, market prices increased6% average net farm challengingthe seasonal conditions, despite improved $6 $3.00 average earning of $185 000 and in the region, account fornet 21% ofincome -2% $0.00 Average farm 2% -2% $0.00 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 on Victorian $4. $73k 06-07 07-08 08-09 09-10 businesses.

10-11 11-12 analysed.

12-13 13-14 14-15$2.00 15-16 16-17 17-18 and farmers income of $73 000 — an 18-fold on account last milk prices. in increase the region, forleft 21% of paying a lot more for both hay and4% Inprinciples Northern Victoria, 25 farm farms were 6% climate variability were also identified as concerns Australia’s milk production and $5 0% 14% milk price $1.00 Average farm income Australia’s milk production and 1% 2.5% overincrease the longerinterm. water net by the end of the season. year’s(net) average income of $4 000.

“We’veReturn experienced a sharp increase in feed $3.

Return ontotal total assets Milk 32% of Victoria's. $4 on assets Milk income In Northern Victoria, 25 farms were analysed.

4% 2% 14% “There’s increase in milk price -2% MS return on total assets no doubt these drivers will have Feed prices hit the northern Victorian regionto $5.87/kg Although 448 mm of rain 32% was received — 92Average prices, food prices and a slightly improved milk$0.00 of Victoria's. $2.

1% 2.5% $3 to $5.87/kg MS 2% impact.” particularly withassets 41 per cent of metabolisable0% cent of the long-term average — almost aAverage price,” Ms Waterman said. conditions, Return onseasonal total assets Milk income (net) airying inMilk Northern Victoria Milk price, seasonal conditions, availability ofper feed and $1. price, availability of feed and returnhard, on total -2.0% 1.2% $2 other factors affected return onoftotal total assets. other factors affected return on 0% Average return on equity -2% $0. price, seasonal conditions, availability feed assets. and airying inMilk Northern Victoria Northern Victoria produced 1.89 billion $1 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 -2.0% 1.2% Physical farm characteristics other factors affected on total assets. litresreturn of milk in 2017-18, an 8% 448 mm of rainfall received = Physical farm characteristics MURRAY REGION PROFILE Average return on equity -2% $0 Northern Victoria produced 1.89 billion Return on assets Milk14-15 income (net) 06-07 07-08 08-09 total 09-10 received 10-11 11-12 12-13 15-16 16-17 17-18 448 mm of rainfall = 13-14 increase compared to 2016-17.

On average, farms in the North reduced stocking rate but 92% of long term average litres of milk in 2017-18, an 8% On average, farms in thesize North reduced stocking per ratecow. but 92% ofReturn long term average Futureexpectations expectations for 2018-19 2018-19 increased average herd and milk production Farm profitability was influenced by on total assets Milk income (net) Future for Future expectations for 2018-19 increase compared 2016-17.

Milk price, seasonal conditions, availability of feed and Approximately 1,290 to dairy farmers increased average herd size and milk production per cow.

Irrigation costs 5% onreturn average other factors affected on$0.41/kgMS. total assets. inApproximately the region, account 21% of 4% Farm profitability 7% was influenced by Milk price, availability of feed and 1,290for dairy farmers Irrigation costsseasonal 5% onconditions, average $0.41/kgMS. More irrigation allocations used at higher price 4% 7% Australia’s milk production Only 65% expect business returns to and $ other factors affected return on total assets.

More irrigation allocations used at higher price in the region, account for 21% of Only 65% expect business returns to ($110/ML) 14% increase in milk price Only 65% expect business returns to down 80% last year $$ improve, 32% offrom Victoria's. ($110/ML) Australia’s milk from production andyear improve, down 80% last last Offset by higher milk production to $5.87/kg MS improve, down from 80% year 14% increase in milk price Future for 2018-19 Concerns as reported Offsetexpectations by higher milk production 32%byoffarmers: Victoria's. to $5.87/kg MS Concerns as reported by farmers:17% Future expectations for 2018-19 22% 19%by Concerns as reported farmers: Improved seasonal conditions hysical farm characteristics 22% 19% 17% Only 65% expect to business returns Improved conditions $ inseasonal 448 mmsold of rainfall received = 11% fodder purchases $0.40/kg MS to 22% 19% 17% Milk solids Average herd size Home grown feed hysical farm characteristics improve, down from 80% lastMS year 11% ininconcentrate fodder purchases to $0.40/kg MS to On average, farms in the North reduced stocking rate but 92% of long term average 535 kg MS/cow 59% of metabolisable 383 cows Milk solids sold Average herd size Home grown feed 6% costs to $1.26/kg Only 65% expect business returns $ 448 mm of rainfall received = 535 kg MS/cow 59% of metabolisable energy consumed 6% in concentrate costs to $1.26/kg MS increased average herd size and milk production per cow. 383 cows improve, down from 80% last year On average, farms in the North reduced stocking rate but 92% of long termenergy average consumed Concerns as reported by farmers: Water Seasonal conditions Input costsper cow.

Irrigation costs 5% on average $0.41/kgMS. increased average herd size and milk production 4% 7% More allocations used atand higher price Concerns as reported farmers: Acknowledgements - Dairy Farm Monitorirrigation Project provided funding$0.41/kgMS. support from the Victorian Government and Dairy Australia. by 22% 19% 17% Irrigation costsis5% on with average 4% 7% ($110/ML) Acknowledgements Dairy Farm Monitor Project is provided funding andof support fromDevelopment, the Victorian Government and&Dairy Australia.

This project is delivered- primarily through partnerships between with the Department Economic Jobs, Transport Resources, Dairy Australia and service providers.

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In 21 2017-18, of thethis work 25 farms (88%) Offset higher milk production The Dairy Farm Monitor Project provides industry out of 25 farms (84%) had a positive EBIT 12% $9.00 06-07

07-08

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10-11

11-12

12-13

13-14

14-15

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Milk price, seasonalApproximately conditions, availability of feedfarms 1,330 in Gippsland

Milkprice, price,seasonal seasonalconditions, conditions,availability availabilityofoffeed feedand and Milk

other factors affected return on total assets. other factors affected return ontotal total assets. produce 2.03 billion of milk other factors affected return on assets.

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cost control and a focus on directing profits too and seek out advice from improve, down from 80% year improve, down from 80% lastlast year improve, down from 80% last year resources to the area of best return. trusted advisers.”

Concerns as reported by farmers: This was one of the findings of the latest Concerns as reported by farmers:She said they sought out better milk Concerns asreported reported byfarmers: farmers: as by kgMS. Dairy Farm Concerns MS. MS. Monitor Report. prices, matching their production cycles to her price Agriculture Victoria farm business price the best available price packages offered price On average, farms in Gippsland increased stocking On average, farms in the North reduced stocking raterate but specialist Claire Waterman told a Murray by processors. by 6% and milk production per cow reduced by 3%. increased average production cow.

Dairy breakfast in Shepparton lastherd monthsize and “It’s milk not the case that oneper factory offers the most successful farms in Victoria’s one price.” north had incredibly tight cost control and Ms Waterman said water remained a were more efficient in terms of applying continuing unique challenge to farming in resources where they received a return. the north. kg MSMS MS “Attention to detail is excellent in conditions “Water has a definite Water Seasonal Input costs Water Seasonal conditions Input costsimpact,” she said. gS MS Water Seasonalconditions conditions Input costs Water Seasonal Input costs MS knowing where they can generate a return,” Farmer Tom Perry raised a question Ms Waterman said. about the number of farms considering

Physical Physicalfarm farmcharacteristics characteristics 22% 19% business returns 17%to Only 65% expect $ 22% 22% 19% 17% 22% 19% 17% 19% 17% improve, down from 80% last year Concerns Constant 3% 4%as reported by farmers: 7%

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Average netnet farm income Average farm income

1% 2.5% 2.3% 3.0% Average return on on total assets Average return total assets

0.7% 1.0% -2.0% 1.2%

Average return equity Average return on on equity

Source: Dairy Australia & Agriculture Victoria.

Farm profitability was influenced by Farm profitability was influenced by

14% increase in milk price to $5.87/kg MS in milk price 19% increase exiting the industry and said he believed “In terms of the cost squeeze, there may to $5.74/kg MS the numbers were higher than in some be a feeling of ‘here we go again’. periods of prolonged drought.

“It’s not the same as 2006–07, but there A national farm survey has reported up may be some attrition going on.” to 20 per cent of farmers had considered The farmer confidence survey of rainfall received = leaving the industry in the past 12 months. discovered that up to 20 per cent of of long termfarmers average Speaking after the breakfast, Dairy had considered leaving the Australia industry analyst John Droppert industry, but Mr Droppert said this did not of rainfall received = exits. said figures were not yet available on exits necessarily translate as actual Irrigation on average $0.41/kgMS. from 2017–18, and he urged caution costs around The Dairy Farm Monitor Report found of long term average. interpreting the survey.

2017–18 season challenges More irrigation the allocations usedpresented at higher price Rainfall between “There may be some farmers who have ranged for farmers in the 475 north,mm yet it was better ($110/ML) money from the Murray Goulburnand sale who the previous year with good pasture 1,070than mm.

Offsettheir bydebt highergrowth, milk production may be considering paying down higher milk production and or leaving,” Mr Droppert said. improved milk price.

448 mm 92%

746 mm 85% 5%

100% allocation of high reliability Improved seasonal conditions water shares was received in the

DAIRY NEWS AUSTRALIA OCTOBER 2018

6 // MURRAY REGION

Irrigator wants immediate action ANDREW WILSON is looking at a temporary water bill in excess of $200 000 just to irrigate his pastures this year.

It is a bill he can ill afford.

With little or no prospects for fodder purchase this spring he is facing a huge dilemma. What will he be feeding his cows this year?

It is the question foremost on most dairy farmers’ minds and has left Mr Wilson wondering: how much deeper does he digs the financial hole?

“It is a huge worry, if I don’t grow grass what will I be able to substitute it with?” he said.

“I want to maximise my spring growth but at $340/Ml how do I do that? I need 600 Ml to get me through to May and at $200 000 worth of water, that is a big bogey man to be looking back at you on paper when your business is already running tight to the line — and especially in a season when money isn’t falling out of the sky.”

Mr Wilson has been farming on his Strathmerton property for nine years.

In February 2017 he bought the neighbours’ property hoping to grow more fodder. That property came with bore water and was one of the main reasons why he was attracted to it.

“I now have 330 acres and at the most I will milk 220 cows. I have doubled my land size and increased my herd numbers by 40.

“I have made the decision I want to be a dairy farmer but looking forward there is a big brick wall standing in my way.”

Mr Wilson is worried if he borrows money to buy water for this season will it turn around next year, or is this the start of something bigger?

“During other years we have always had a substitute to draw on to feed our stock. Cows need a certain amount of fibre in their diet and they can’t survive on grain alone, but fibre isn’t going to be around this year and if it is, farmers from Townsville right down to here will be eyeing it off.

“There really is no plan B to feed our cows this year which is what makes things different this season.”

Mr Wilson has attended various meetings over the past few months and he heard a lot of solutions discussed. He said the best one he had heard to date was give farmers access to environmental water now.

He said action needed to happen now — not in a few months’ time when the opportunity to grow spring fodder had passed.

“Water going through farmers’ wheels from now until October 15 should be booked up to the environmental water holder — not put onto the market where investors can grab it and push the price up. It should be set aside for farmers and go directly to them.

Strathmerton farmer Andrew Wilson is facing a huge water bill.

“We are part of the environment, our farms are an environment and it shouldn’t be an us against them mentality. We have turtles, birds, snakes and insects on our properties and most importantly we have the ability to grow food.

“In four months’ time the government will be handing out cash to us all just to keep food on our tables for our families when some of this pain and heartache could be avoided by access to environmental water now.”

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DAIRY NEWS AUSTRALIA OCTOBER 2018

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8 // MURRAY REGION

Niche market has potential COULD DAIRY beef become the next market? Agriculture Victoria dairy development specialist Sarah Chaplin thinks so.

Dr Chaplin joined a tour to the United States, organised by Dairy Australia and Meat & Livestock Australia, to investigate the wellestablished dairy beef supply chain from farm to market.

The trip included a visit to three dairy farms, four calf rearing ranches, two beef feedlots, one milk-fed veal producer and three meat processing works.

“We went away with a view to see what we could bring home to Australia with us and the possibilities for pathways for dairy beef here in Australia. It is definitely a niche market but we have come home with a much better understanding,” Dr Chaplin said.

Dairy beef has the potential to produce a high quality meat grade due to increased marbling, although the carcases themselves do produce a smaller steak.

“We came away with the impression dairy beef produce a quality product,” Dr Chaplin said.

She said the development of a market would take a whole supply chain approach, including developing a market, seeing how it would work regionally and the challenges and opportunities it would present.

“Australian dairy beef producers will need to overcome some misconceptions of dairy beef quality held by meat processing companies — special design of processing chains may be required for dairy beef.”

Some of the key findings of the US trip included: ■■ The majority of American dairy beef is derived from Holstein or Holstein beef cross calves — there was little enthusiasm for a straight Jersey calf although Jersey beef cross calves were seen as viable.

■■

www.jamesstockfeed.com.au info@jamesstockfeed.com.au 1 Murray Valley Hwy, Nathalia Ph: 03 5866 2771 Vic 3638

Dairy beef is considered an important aspect of overall farm business, and reproduction management has changed over time to support this.

■■

Calves can be between one and seven days old when they leave the farm and can be transported for up to 28 hours.

■■

The four principles of colostrum management include quickly, quantity, quality and cleanliness — some farms use immunoglobulin supplements to achieve even higher quality.

■■

Calves can be sold via video sales.

■■

Veal production occurs on a much bigger scale in the US and most veal calves enter small but well-structured facilities, although the housing conditions observed would not be considered acceptable under Australian animal welfare standards.

■■

Calf scours are common in the first 14 days and are treated with oral or intravenous fluids.

■■

Respiratory disease is seen around three to five weeks and no prophylactic antibiotics are fed, while antibiotics are relied upon to treat BRD.

■■

No castration or dehorning is undertaken and there has been a voluntary phase out of tethering, which is nearing 100 per cent compliance.

■■

Low labour and production costs contribute to profitability.

■■

Staff training in animal handling was a high priority and many operations employed veterinarians with qualifications not recognised in the US as herd managers, enabling high levels of herd management.

Dr Chaplin said change in the industry would happen slowly but it did provide an alternative use for keeping steers and bulls.

“I foresee incremental changes as a move in the right direction. I think this will be a continuous improvement story about good calf rearing, good resources and doing things better,” she said.

(From left) Peter Havrlant from NSW Department of Primary Industries, Dr Sarah Chaplin from Agriculture Victoria, Dr Jamie McNeil from Dairy Australia and Jessira Perovic from Meat Livestock Australia.

DAIRY NEWS AUSTRALIA OCTOBER 2018

MURRAY REGION // 9

Make the most of spring HEADING INTO spring, it is crucial that we maximise pasture growth to ensure that we are able to produce and conserve as much high‑quality forage as possible.

Setting paddock rotations to maximise pasture quality Through most of winter, pasture quantity was far more limiting on most farms than quality.

Normally, in early spring, as pasture growth and leaf appearance rates increase, our focus needs to shift to managing for quality.

Paddock rotation length generally needs to be shortened to help maintain grazing pressure and ensure high quality pasture is available by reducing the rotation length.

Whether soils are drier than average or still moist, pastures will be in a much better position to give greater yield responses if they have not been over-grazed.

Try and maintain a rotation based on leaf stage; the focus should be on grazing at the 2 to 2.5 leaf stage and leaving 4 cm to 6 cm residual pasture after grazing. This will ensure that pasture quality is maintained and shading at the base of the sward is minimised.

■■

■■

■■

Pasture composition — is it a rye-grass or rye-grass/clover mix with minimal weeds?

Is the paddock to be used for a follow-up summer crop and when does it need to be sown in relation to soil temperature, soil moisture and trafficability?

Is the paddock close to sources of water for irrigation?

Are potassium levels in soil excessive?

Silage from these paddocks may be undesirable for feeding to transition cows.

• This is an excerpt from a Dairy Australia article called ‘Making the most of spring feed’. Go to the Dairy Australia website for more information.

■■

Locking up paddocks — how many and which ones?

As spring progresses, it is important to only drop paddocks out of the rotation for conservation that are surplus to the herd’s requirements.

In most years on a majority of farms, pasture growth will generally exceed herd requirements in early to mid-September.

This year, however, depending on climatic conditions and management — for example, if your pasture has been continually over-grazed (that is, grazed before the two-leaf stage and the grazing residual is below 4 cm) or if pastures have been moisture stressed or too wet — the spring surplus will be unpredicatable and will likely have reduced yields.

A simple strategy to determine how many paddocks to lock up is to graze paddocks in the same order each rotation, and if the next paddock is beyond the ideal leaf stage, skip it and drop it out of the rotation until it is ready to be cut for silage or hay.

If pasture growth slows and you need more grazing area, use the ‘dropped out’ paddock with the least mature pasture (or, alternatively, increase the rate of supplements fed per day).

Other things to consider when deciding which paddocks to lock up include: ■■ How easy will it be to get machinery into and onto this paddock if it rains heavily?

Key messages

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DAIRY NEWS AUSTRALIA OCTOBER 2018

10 // MURRAY REGION

Putting pain into words TRAGOWEL DAIRY farmer Catherine Shepard

Catherine Shepard (left) has put pen to paper and written a heartfelt poem about the current state of the dairy industry. She is a dairy farmer at Tragowel with her husband Mick (right) and daughter Tiarna.

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is well aware of the pain the dairy industry is going through — it is what prompted her to put pen to paper and write her poem The Dairy Farmer’s Eyes.

She said it was the mental anguish and suffering she had seen in friends and neighbours and her own husband Mick’s eyes over the past couple of years — and more so in recent months — that provided the inspiration.

“Dairying has been a hard rollercoaster over the last few years and I know life is never cruisey and you have to deal with what is put in front of you, but it has been tough,” Mrs Shepard said.

“Dairy farmers might be resilient but they can only take so much — they are still human.”

The couple purchased Mick’s family farm in 2010, although he had been working on the farm since 1999.

“I was the least likely one to take over the farm,” he said.

“I spent 15 years in Melbourne and there was no way I ever would have thought I would end up with my hand up a cow’s bum, but I just love it and I don’t want to do anything else.”

The Shepard family had been long-term Murray Goulburn suppliers and had to go through all the pain and heartache when the co-op dropped the milk price in 2016.

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DAIRY NEWS AUSTRALIA OCTOBER 2018

MURRAY REGION // 11 In 2016–17 they had a fantastic hay season and that is one of the reasons why they will make it through this year — beyond that they are not sure what will happen.

“Twelve months ago we made some pretty hard decisions which included culling our herd numbers from 280 back to 200. We had too many old cows in the herd and we did use some of the money to buy 20 new heifers,” Mrs Shepard said.

The Shepards can now feed the cows they have better, and per cow production is up.

“It did take us years to convince ourselves that milking less cows could actually be better financially. As an industry we have been talked into thinking we need to milk more cows to make more money,” Mrs Shepard said.

They also put their hay block on the market (Mrs Shepard said it would be a miracle if it sold) and made changes within the running of the business’ financial structure.

“We changed a lot of things from the way things were always done and it has been a very positive move for our business,” she said.

Mrs Shepard said initially she would sit down to look at the bills and her husband would disappear for the day because it was too stressful — they now sit down together and discuss their business.

“This farm never really had a budget and even though it was our farm, everyone else was doing the book work for us. Doing it ourselves has made us both much more accountable and aware of our business financially,” she said.

The Shepards acknowledge many farmers don’t deal well with change, but the changes

they have made have been positive and will allow them to survive this year.

They have some permanent water and there is always the option to sell a portion of that in the future if they have to.

“I shouldn’t have to sell my assets to survive in this industry,” Mr Shepard said.

“I used to think if I had to sell the family farm I was a failure but I have got over that thinking now — something needs to change in the dairy industry or there will be none of us left.”

The Dairy Farmer’s Eyes

By Catherine Shepard Here they go again, I hear some of you say, Whinging and whining about the price of hay.

Complaining about the crops that this year have grown shorter, The price of that liquid gold, good old fashioned water.

The milk price isn’t high enough to cover the expenses, Let alone having cash to spend on machinery, pumps and fences.

Do you love the job you work, really love what you do every day? ’Cause I don’t know one single dairy farmer who could simply walk away.

Not everyone could do this as a lifelong career you see, It’s not just a job; it’s a life, it’s pride, it’s honest, it’s family.

My heart is sinking though as I look into some dairy farmers’ eyes, The unanswered questions on the dairy sector including, how, what and why.

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I’m asking that you please take the time to see what I’m seeing every day – take a look into a dairy farmer’s eyes.

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No disrespect intended but our farmers are tiring and sick of being carrots on a string, You see you can’t just leave the job; there’s debt and bills and feed costs continually coming in.

This district that we all live in, was once a dairy hub of our state, So when you see a dairy farmer, any farmer for that matter, stop and say ‘G’day mate’.

Don’t get me wrong, everyone has a place and important are all our jobs, Whether it’s retail, factories, businesses, cropping or shearing sheep by the mob.

Tiarna Shepard has six dogs on her Tragowel dairy farm.

How has it got this hard? What can we do to hang in? Why are water prices so damn high?

Dairy farming has changed you see along with water regulations and rules, Australia is a sunburnt country, a land of sweeping plains yet sometimes ran by fools.

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DAIRY NEWS AUSTRALIA OCTOBER 2018

12 // MURRAY REGION

Still going strong < Continued from page 1

Mr McManus’ passion has always been breeding and this year his herd Bercar ranked third overall on DataGene’s Balanced Performance Index (BPI) list (although he has been as high as number one before). The Jersey herd has placed in the top 10 for the past 15 years.

Bercar is operated as a closed herd and Mr McManus has been using AI since 1965.

He began working in the insemination industry in 1969 and he reckons over the years he has inseminated a staggering 60 000 cows.

When it comes to his own herd he always looks for high index bulls with good type and workability.

“We have had a lot of success with the sire Valentino in our herd but we are always on the lookout for a good out-cross to bring new blood into the herd.”

The nucleus of the Bercar herd comes from four very strong cow families: Peach, Biddy, Meg and Rita.

“Peach had 10 lactations with an average PI (performance index) of 125. She was a 6500 litre cow with very high components and was an outstanding foundation cow,” Mr McManus said.

“Rita was the first 7000 litre cow we had in the early 1970s. Meg was from Yarravale Danny Boy and we have had a lot of good cows descend

Bernie McManus is passionate about breeding good Jersey cows.

Some of the next generation of the Bercar herd.

from her as well.”

He rears a dozen bull calves each year and keeps a couple to put over the heifers while the others are on-sold.

The bull calves are reared away from the females in their own shed. Everything is kept separate to prevent contamination and the bulls have their own paddocks to run around in.

Mr McManus places a bucket of dirt in each pen, which he said stopped the bulls from eating their rice hull bedding and prevented them from getting sick.

Bercar has had 20 bulls go into AI and five have gone on to become AB proven sires.

“We had three go in, in one year back in 2004.

Semen companies only take the best of the best and it is a tough gig to get a bull accepted so it is a nice recognition to make it.”

Mr McManus said breeding good stock took a lot of time and effort.

“It doesn’t just happen and you have to do the right things all the time, which includes strong breeding goals and looking after the herd well.

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DAIRY NEWS AUSTRALIA OCTOBER 2018

MURRAY REGION // 13

A couple of the bulls will be kept to put over the heifers while the rest will be on-sold to other farmers.

“I am strict with the cows, especially when it comes to high cell counts. We usually bring in around 35 heifers a year so that allows us to keep a uniform herd and allow for some culls.”

Mr McManus has always loved the Jersey breed.

“They suit the size of this small farm and you can control things pretty well with a smaller animal.”

The herd is totally spring calving, which allows the couple some much-needed time off over winter.

The cows are agisted off-farm during this time, which allows some time to rest and recover and be ready for the season start in August.

“Having the cows off-farm allows me to pasture harrow the entire property and start the season off with a good bank of feed,” Mr McManus said.

Looking after the soil has always been an important part of management, and a solid fertiliser history has ensured the little property grows as much grass as possible.

“An old farmer once said to me if you can’t afford to put super on put on twice as much and don’t cut corners. It is something I have always remembered and it is advice that is even more important when it comes to tough times.”

This season with a dry year looming, Mr McManus has over-sown his property with

One of the 36 heifers that arrived in the first four weeks of calving.

rye-grass. He also soil-tested to make sure his fertiliser application was spot on to achieve maximum pasture growth.

“The soil tests cost $1200 but we got a rebate through our milk company which made the testing very affordable.”

From an irrigation point of view, the farm is divided into 32 lasered bays.

“No water leaves the farm at all, it is all recycled.”

Mr McManus needs about 250 Ml to irrigate his pastures each year.

He has some high-reliability water shares, a spear point bore and he sources the rest from the temporary water market.

He has already purchased 58 Ml at $300 and he is hoping to get a small portion of environmental water through the tender process.

“I have been very upset by the way the government has handled the issue of water — water should be made available to the people who urgently need it to grow food, it shouldn’t be allowed to go to some speculator to push the price up for everyone else.

“If the government want to be fair dinkum they need to do more than pay lip service to the farming community, they need to keep farmers on farms.”

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DAIRY NEWS AUSTRALIA OCTOBER 2018

14 // MURRAY REGION

Young farmers question their future STEPHEN FISICARO and Emily Brown

purchased their first dairy farm three years ago — and they have been on a rollercoaster ride ever since.

The joy of owning their own farm has been soured by tough times that haven’t been of their own making.

The Katunga farmers started out as Murray Goulburn suppliers and had to deal with the heartbreak of the price drop in their first year.

This year, high water prices and the low availability of fodder have got them questioning whether or not they will be here next season.

They are confident they will make it through spring, but what happens after that is anyone’s guess.

“We have carried over enough water for one full watering of the farm, which does take some of the pressure off — along with the rain we have had over the last couple of weeks,” Mr Fisicaro said.

He said carrying the water over was more good luck then management, but the couple was certainly happy to be in a position to at least get the milking herd through spring.

“We are looking at a half decent spring and

we should be able to cut some silage, but what is going to happen after that who knows?” he said.

They have maintained fertiliser application, and Mr Fisicaro said the growth difference had been quite dramatic.

“You can certainly tell where I haven’t put fertiliser,” he said.

The couple said feeding young stock and dry cows had been an issue.

The blocks they were agisting on have been sold and it has been a struggle to feed the dry cows, whose condition is not as good as it should be, because they haven’t been able to source quality hay.

They are considering selling some of their young stock but they concede it might be hard in this climate to even find a buyer.

“Over the last three years we have managed to break even or a little bit better with no major improvements to our property,” Ms Brown said.

“To this point we have been okay but buying water or hay this season is going to be a huge issue and we don’t really know where we are going to be in six months’ time.

“Water is three times the price of what we

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Ms Brown said even though the milk price had increased this year, it came nowhere close to covering a 300 per cent increase in the price of water compared to last year.

The couple chose to be dairy farmers and, at

35 years of age, are considered young by industry standards.

“There are so many people around our age exiting dairying. It is hard enough to make it through to farm ownership in northern Victoria in the first place, let alone be able to afford to buy permanent water with your property,” Ms Brown said.

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DAIRY NEWS AUSTRALIA OCTOBER 2018

16 // MURRAY REGION

Farmers form new dairy co-op A GROUP of concerned farmers, formerly

known as United We Stand, has formalised its commitment to the dairy industry and established a new co-operative — Eureka Dairy Co-op.

The co-operative has been approved by the Australian Competition and Consumer Commission, which gives it the legal governance required to move forward with its goal of developing a sustainable milk price for the future of the industry.

More than 50 farmers with a milk pool of about 140 million litres are interested in becoming active members and the co-op is in the process of establishing a member’s card to provide discounts for services for both business and personal use.

The five directors are all northern Victorian dairy farmers and include Marshall Jacobs (chairman) from Rochester; Cheryl Hawken (secretary/ treasurer) from Echuca; Scott Sommerville from Timmering; Chris Gamble from Bawawm; and interim director and spokesman Steve Hawken.

Mr Hawken said while the group had appeared to be quiet, there had been a lot of work going on behind the scenes.

“We have spent the last few months sorting out all the legal requirements and are now in a position to move forward,” he said.

“We remain in active discussions with processors both big and small, including a couple

Eureka Dairy Co-op directors (from left) Marshall Jacobs, Scott Sommerville, Steve Hawken, Cheryl Hawken and Chris Gamble.

of niche processors who have approached us recently, and we are confident there will be some action in this space after Christmas.

“We are currently building a network of farmers and are happy to hear from anyone interested in joining us, regardless of how many cows you milk.

“The only requirement is milk must be premium, although we do have avenues to help farmers who are experiencing cell count issues.”

He said the co-op had never lost sight of its initial goal, which had always been to receive a fair and sustainable milk price.

Mr Sommerville said even what he would call the “traditionally positive farmers” were now feeling the pinch.

“The industry is in a real mess,” he said.

“The tables have turned. In the old days tanker drivers wanted to be dairy farmers, now dairy farmers want to be tanker drivers.”

The member’s card has already had interest from retailers, including a dairy chemical company offering services and discounts and a livestock processor.

The co-op is exploring other opportunities including power, fertiliser and insurance, and hopes local businesses like hairdressers and cafes will jump on board.

For more information, phone Eureka Dairy on 0456 741 517 or email: admin@eurekadairy.com.au

DAIRY NEWS AUSTRALIA OCTOBER 2018

MURRAY REGION // 17

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members, with chair Rick Cross and director Greg Ault to step down at the organisation’s annual general meeting in October.

Lachlan Marshall from Blighty and Rochester’s Tom Acocks will take up three-year terms as farmer representatives alongside existing directors Karen Moroney, Tony McCarthy and Andrew Tyler.

Service provider Andrew Mann has been re-nominated after completing his co-opted term.

Mr Mann, who represents the banking sector, will sit alongside other service providers Chris Thomas and Mark Bailey.

Mr Acocks and Mr Marshall bring a new perspective to the board, with experience in strategic business planning, knowledge of the global dairying environment and an interest in technology and innovation.

Mr Marshall is managing director of family business Yurunga Farms Partnership, which comprises of nine companies across the supply chain.

He has been in management in the dairy industry for more than 18 years, commencing in south-east Queensland and later moving to southern NSW. Mr Acocks is a partner in his family’s business and his focus is also on continual improvement and business development.

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Rochester dairy farmer Tom Acocks is one of two new appointees to the Murray Dairy Board.

He has been involved in working groups across the supply chain and in advocacy that reflect his interests. He was a member of the Australian Dairy Conference Programming Committee in 2013–14 and chair in 2016.

Mr Acocks holds a Bachelor of Agricultural Science from the University of Melbourne, and has completed a number of internationally recognised courses across different aspects of business management and leadership development.

He also spent three years working in agricultural businesses in Europe and North America.

Mr Ault, who was on the selection committee, said Mr Marshall and Mr Acocks demonstrated experience in strategic planning, business management and an interest in industry innovation that would support Murray Dairy as it looked towards the future.

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DAIRY NEWS AUSTRALIA OCTOBER 2018

18 // MURRAY REGION

Managing a fodder shortage HIGH DEMAND and successive years of low production has created a fodder supply shortage across Australia’s dairying regions, causing headaches for farmers sourcing feed.

When pasture is limited and supplies of fodder, or more precisely long fibre, are reduced, the temptation can be to just go and buy whatever feed is available.

However, carefully planning likely feed requirements and actively managing bought feed quality, supply and price risks is the best approach.

This can help reduce the cost of buying feeds and ensure that stock’s nutritional needs are met with reduced feeding risks.

Here are some tips for success as you progress through the five steps involved in managing a fodder shortage:

■■

■■

■■

stock.

Includes good estimates of pasture and other home-grown feeds available.

Makes allowance for feed wastage based on your feeding system.

Is free from errors.

If necessary, seek help from an adviser.

Step 2: Calculate your bought-in feed requirement for each month Consider immediate and longer term options for closing your feed gap, including: ■■ Stimulating more growth of winter pasture and crops.

■■ Feeding more grain/concentrates safely.

■■ Extending your forage reserves with alternative fibre sources.

■■ Drying off early and culling cows.

■■

What risks — for example, ruminal acidosis, mycotoxins (fungal toxins) and chemical residues — need to be managed when using specific feeds?

Formulate diets for each class of stock — milkers, dry cows, yearlings and calves — that: ■■ Are nutritionally balanced, meeting daily energy and protein requirements for target milk production/growth rates within animals’ appetite limits.

Will maintain sound rumen function.

Make realistic allowances for feed wastage, based on your feeding system.

If necessary, seek help from a nutrition specialist.

Revise your feed budget when circumstances change (for example, available feeds and number of animals to be fed).

For further information on feed budgeting, see the feed budgeting fact sheet at: dairyaustralia.com.au/ feedshortage ■■ ■■

Step 1: Calculate your monthly feed Determine what feeds you can buy to fill each demand and feed deficit month’s feed deficit: A monthly feed budget ensures you know what quantities of each feed you need to buy to meet your milk production and liveweight targets.

When doing your monthly feed budget, ensure it: ■■ Is based on an accurate head count.

■■ Uses realistic metabolisable energy (ME) requirements of your different classes of

■■

■■ ■■

■■

What are their dry matter, metabolisable energy (ME), crude protein (CP) and neutral detergent fibre (NDF) contents?

What are their effective fibre values?

How do they compare in terms of dollar value per unit energy and per unit protein?

What limits are there on the daily feeding rates of specific feeds?

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MURRAY REGION // 19

Step 3: Buy feeds

Step 4: Store feeds

Work out what you can afford to pay (breakeven and target feed prices).

When assessing a particular feed to buy, firstly check its physical quality, making sure that you have a representative sample.

Things to look for: ■■ An unusual appearance or consistency.

■■ Material too wet or too dry.

■■ Any contaminants or foreign materials, which may reduce nutritional value or cause digestive problems.

■■ Signs of mould, which can increase the risk of mycotoxins (fungal toxins).

Don’t wait until the truck arrives before you consider how you will manage risks around feed shrinkage, spoilage and/or contamination.

■■ Alternative fibre sources such as palm kernel meal and almond hulls may be prone to growth of fungi that produce mycotoxins (fungal toxins) if they are allowed to get wet.

■■ Feed contamination with stones and dirt can be a problem if you don’t have a concrete base.

Then look beyond the price tag, and see how each feed stacks up in terms of its relative cost per unit energy and protein using feed analysis.

Increase certainty of feed supply and predictability of feed costs by confirming verbal agreements with feed suppliers by mail, fax or email (in writing). The key points you need to cover are: ■■ Quantity.

■■ ■■ ■■ ■■ ■■

Quality.

Price.

Delivery period.

Delivery point.

Payment terms.

A pro-forma that covers all these key points is the Grain Trade Australia Contract Confirmation, which can be used for any feed, not just grain. To download a blank copy, go to: dairyaustralia.com.au/feedshortage

Step 5: Feed diet to herd Consider your feed-out area/facility and feeding equipment.

■■ Check there is adequate area, feed trough space and access to drinking water for the number of animals using the feed-out area/ facility.

■■ If feeding a partial mixed ration (PMR) using a mixer wagon, ensure the mix is not under or over processed. Follow the manufacturer’s instructions. Use ration conditioners such as water, molasses or oil to reduce fines, sorting of feed and rejection or wastage of feed.

■■ If you don’t have a mixer wagon and must feed two or three fibre sources separately, consider how you will best do this to regulate cows’ feed intakes, and avoid excess competition and wastage.

■■ Offer cows the right amount of feed at the right time of the day — don’t overfill troughs.

■■ Sequence feeds carefully during each 24– hour period.

■■

■■ ■■

■■

Offer cows fresh, palatable, high quality feed at all times. Don’t put fresh feed on top of old feed.

Clean feed-out surfaces regularly.

Discard any spoiled/mouldy feed ingredients.

Don’t forget the calves and yearling heifers.

Check that they meeting your target daily growth rates. If not, change their diet.

• This is an excerpt from a Dairy Australia article called Managing a fodder shortage. For further information, go to the Dairy Australia website.

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