Murray Goulburn confirms $5.20kg/MS PAGE 4
PRICE IS RIGHT
HERD IMPROVEMENT
DairyTas boss shares vision PAGE 6
Genetic selection pays off PAGE 22
SEPTEMBER, 2017 ISSUE 84 // www.dairynewsaustralia.com.au
RISEN FROM THE ASHES Farmers sign up to supply Stanhope cheese plant . PAGE
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
NEWS // 3
Retailers need to be put under spotlight Government to ease red tape on existing co-operatives, and to support new co-ops ■■ Australian Competition and Consumer Commission (ACCC) to evaluate effectiveness of voluntary code of conduct Another report, targeting competitiveness and transparency in the Australian dairy industry, is currently being conducted by the ACCC and due to be handed down in November. Mr Jenkins said farmers hoped the ACCC would address concerns along the entire supply chain that were absent from the Senate Committee’s report. The Chair of the Senate committee behind the report, Labor Senator Chris Ketter, described the Government’s decision to implement the ACCC review as a “knee jerk reaction to the Senate inquiry” when he addressed the Queensland Dairyfarmers’ Organisation conference last month. However, he said the ACCC investigation would be worthwhile. Senator Ketter said he was looking forward to the ACCC coming to grips with the “power imbalance” between dairy farmers and processors, and said the ACCC needed to make it easier for farmers to collectively bargain, to upskill co-operative groups, and to reduce costs ■■
STEPHEN COOKE
Queensland dairy conference. Page 10
Alternative feed source. Pages 18-19
THE RECENT Senate report into the dairy industry failed to adequately address the role of retailers in promoting discounted dairy products, according to the United Dairyfarmers of Victoria. The Senate report, originally due in February, was granted five extensions before it was finally released last month. UDV President Adam Jenkins said most of the Committee’s recommendations “reaffirm a lot of the work the dairy industry is already undertaking to improve transparency along the supply chain.” “However, we do note that the considerable time that was spent talking about retail pricing during the inquiry doesn’t seem to be properly represented among the recommendations.” The Senate Standing Committee on Economics handed down 12 recommendations, but it is up to the Government to implement them. Recommendations included: ■■ Dairy processors set conservative opening prices to avoid retrospective price stepdowns
involved in arbitration. He said because of his union background: “I understand what mongrels Coles and Woolworths can be.” He suggested the industry should drive a public education campaign to assist consumers in buying branded milk. “It makes me sick to see Coles and Woolworths pretend to be best friends of the farmers with what they’re doing when in reality not much of that is going back to the industry as a whole.” He said processors and retailers were “working hand in hand” against the interest of farmers. “Retailers have the power of setting $1/litre milk but you have processors willingly going along with that. This wasn’t definitively shown in the inquiry but we had lots of submissions that suggested that processors, in order to get other products on shelves in retailers, were prepared to go along with the dollar milk in order to get other products on the shelves. “There’s a lot of work to be done and ACCC is the right body to look at all those factors. I have confidence they have right expertise and integrity to look at it. We’re looking forward to the ACCC coming to grips with this and then the Government coming on board.”
Senator sceptical of voluntary code NSW pasture improvement. Pages 28-29
NEWS �����������������������������������������������������3–13 OPINION ��������������������������������������������� 14–15 MARKETS ������������������������������������������ 16–17 MANAGEMENT ������������������������������18–20 ABVS................................................... 21–24 ANIMAL HEALTH ��������������������������25–27 PASTURES �������������������������������������� 28–32 MACHINERY & PRODUCTS ������������������������������������� 33–34
• Cleris stainless steel fertiliser spreaders – linkage and trailing • Galvanised manure spreaders and vacuum tankers
THE SENATE report into the dairy industry released last month has received a mixed reaction from farmers and farm lobby groups across the country, with one farmer at the QDO Conference in Toowoomba telling the Senator it was “an absolute bloody waste of time”. Farmers were disappointed the report did little to address the influence of supermarkets. Senator Ketter said the effects test would help, noting “Coles and Woolworths fought tooth and nail against that coming in”, before saying Labor was opposed to it. Senator Ketter said he was sceptical of the
voluntary code of conduct, and disappointed two processors had not signed. He said the code of conduct allowed for price step-downs, which was “disappointing”. “I would have been stronger in a mandatory code of conduct,” he said. “I’ll delay my judgement and hopefully it will be reviewed by an independent body down the track. “Addressing the power imbalance between retailers/processors on one side, and farmers on the other, will probably eventually lead to a mandatory code of conduct and a strengthening of collective bargaining provisions in the competition and consumer act.”
Senate Economics Committee chair Chris Ketter
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
4 // NEWS
Line of credit on hand to maintain $5.20 STEPHEN COOKE
MURRAY GOULBURN will consider debt
funding of up to $100 m to shore up the current farmgate price of $5.20 kg/milk solids (MS). The co-op announced its 2016–17 financial results last month. It confirmed it would maintain its current opening price of $5.20/kg MS, saying on the basis of its current budget, it believes it will be able to fund this milk price out of current year earnings. A final price above this remained under review. It said any price above $5.20/kg would be
subject to various factors “including favourable movements in exchange rates and dairy commodity prices over the balance of the financial year, as well as retaining appropriate levels of milk intake”.
MG estimates this year's milk intake to be 2b litres. MG received 2.7 billion litres of milk in 2016– 17, down 21.8 per cent on the previous year. It estimates this year’s milk intake to be 2b litres. CEO Ari Mervis said milk from MG suppliers yet to leave has been factored into this estimate. 8 per cent of the total expected loss was
yet to leave. MG Directors will deviate from the Profit Sharing Mechanism to the extent required to pay a full year price of $5.20/kg MS, by providing access to up to $100 million. This effectively means a lower payout to shareholders and unit holders. However, the Board has already announced it has suspended dividend payments. No final dividend was declared in last month’s announcement. MG CEO Ari Mervis said the co-op had asked its advisers Deutsche Bank to "corral" unsolicited investor interest so they can consider all options. It was also working on correction an “unfo-
cused growth agenda” created by previous management. It has since cut spending on advisery fees and consultants by 30 per cent. Murray Goulburn also announced: ■■
■■
■■
■■
2016–17 revenue of $2.5b was down 10.3 per cent on the previous year The co-op took 35c/kg MS from internal funds to achieve the final 2016–17 milk price of $4.95/kg MS The co-op posted a 370.8 million dollar loss for the 2016–17 financial year Its gearing level (the proportion of borrowed funds to equity) is 37.7 per cent, up from 29 per cent the previous year
Murray Goulburn will consider all offers RODNEY WOODS
MURRAY GOULBURN will accept formal proposals from other businesses but any change in ownership would need to be approved by farmers. Murray Goulburn CEO Ari Mervis has told suppliers the coming months will be pivotal for the future of the business as the board and management finalise substantial business improvement programs. He said third parties would be “given an opportunity to submit formal proposals to the company”. “Ownership of Murray Goulburn remains with our farmer suppliers,” Mr Mervis said. “Our constitution restricts any one owner to 0.5 per cent of the issued capital. To change this, 90 per cent of our farmer shareholders would need to agree.” Mr Mervis said Murray Goulburn would consider debt funding milk price payments by up to $100 million if it suffers further reductions in milk supply. It has budgeted supply falling to 2 billion litres. “Our focus is on maintaining a competitive milk price to shore up the two billion litre lower milk intake that we have and, given that lower capacity, allocate our milk intake to those product streams that are the most profitable,” he said.
“We came out earlier than usual with our opening price in response to suppliers who wanted us to come out early. We are maintaining $5.20/kg MS and our underlying assumptions support this price. “We also have $100 million of funding in place if required to support this price.” Mr Mervis admitted the past financial year had “tested the strength and resolve of MG and its suppliers”. “What suppliers can expect in the coming year is a committed management team that will do everything it can to restore farm gate milk price,” he said. “Unfortunately these things are not solved overnight; we need to work through the issues thoroughly and properly.” In terms of the company’s financial position, Mr Mervis said the difficult decisions that had been made were showing positive results. “Hard decisions taken are starting to pay off,” Mr Mervis said. “We have managed our debt level down, exceeded our target in working capital reduction and are focused on improving returns across the business. “Clearly there is still work to be done. The price that we have paid is not as competitive as some of our competitors out there, and some of our suppliers have been under some financial stress and have taken the decision to move
to other processors.” One of those to move on is Invergordon farmer Mark Norman, who now supplies Australian Consolidated Milk. “There is no doubt in my mind that I wouldn’t have been able to milk cows for another 12 months on their (Murray Goulburn’s) prices,”
Ari Mervis
Mr Norman said. Despite this, Mr Norman said there would be a different feeling around the industry if a new owner took the reins. “It is such a great company and an icon of the industry, it would be a sad day for the dairy industry if it were to be sold.”
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
NEWS // 5
Fonterra boosts intake to 2b litres FONTERRA HAS surpassed its target of
increasing milk supply to 1.9 billion litres and is now tracking closer to 2 billion. Two billion litres means the company sits just below Murray Goulburn as Australia’s largest processor, with the Australian co-op’s supply falling to about 2 billion as a result of its supplier exodus. Mr Dedoncker said the company had set a target of increasing milk supply to about 1.9 billion litres and had achieved that in recent weeks. “Last year we finished at 1.5 billion litres and now we are tracking closer to 2 billion,” he said. “A lot of that is coming here to Stanhope but much is also going to Darnum and to Cobden and Spreyton in Tasmania. “That is creating the net milk we need to run our factories efficiently and to deliver profit at the farm gate.” Asked where the company was positioning itself with industry leader Murray Goulburn losing suppliers, Mr Dedoncker said its ambition was not to be number one, but it could end up taking the lead. “We have a clear strategy and we are implementing that strategy,” he said.
“We may happen to be the largest but that’s not our focus. “Our focus is to get the right amount of milk, cheese, whey, nutritionals. “If the outcome is becoming number one, that’s what it will be.” Fonterra opened early this season with $5.30/
kg of milk solids and then stepped up to $5.50 kg. Mr Dedoncker said Fonterra was confident the price was reflective of market forces. “But we won’t move early, we will only move when we know we have made those decisions that are returning the earnings. “But we feel it will be a great year for farmers.”
Fonterra chair John Wilson, MD Rene Dedoncker, Vic Ag Minister Jaala Pulford and BSC Chair Tony Marwood sampling Fonterra mozzarella at Stanhope
He said the potential was to move to $5.80/ kg MS this season. “The $5.50 is attracting farmers to Fonterra. I think our behaviour is also doing that as well. “We have completely changed our behaviour in the way we listen to our farming community and the decisions that we make.” Mr Dedoncker was appointed to his position just after the milk price crash and admitted that meeting face-to-face with farmers affected by the price cut was “brutal”. “We’ve learnt a lot from that.” He said he was now offering a different approach and the company was “looking them in the eyes”. “If we don’t take a step towards farmers and protect their interests there is going to be a massive problem. We have to take shocks out. “Farmers want transparency and they want to know that the price they are getting reflects what is going on in the world.” He said the company had improved its communication with its suppliers, sending a fourpage report out every four weeks.
Stanhope plant fuelled early season price rise STEPHEN COOKE
THE OPENING of its new Stanhope cheese
making facility enabled Fonterra to lift its opening price from $5.30 kg/milk solids (MS) to $5.50 kg. It underpins the importance of the facility to Fonterra’s growth in Australia. The New Zealand company has attracted 50 farmers from northern Victoria, most of which came from Murray Goulburn. Fonterra lifted its price to $5.50 once it knew it had the milk secured to support cheese production. The new factory has a capacity 50 per cent larger than the old factory burnt down in 2014. The additional milk means the new plant can be run at full capacity — processing 1.3 million litres a day, running 24 hours a day. The new plant returns mozzarella production to Australia for the first time since 2013, helping to capture growing demand for cheese both domes-
tically and across Asia, particularly in China and Japan. Fonterra chair John Wilson told those at the launch that the company’s cheese, whey and nutritionals strategy, based in Australia, “is critical to the growth and drive in demand that is required from an increasingly demanding consumer base globally”.
Fonterra lifted its farmgate price to $5.50kg once it knew it had the milk secured for its Stanhope factory. "Global dairy demand is very strong, it is driven by the demand for high-quality nutrition, particularly into developing markets,” he said. "But dairying is very volatile. “World prices move very, very quickly when supply and demand is relatively balanced, and it doesn’t take much to create significant uncer-
tainty in the dairy climate. “Recently I’ve been with farmers in Europe, the US, South America, and home in New Zealand and here in Australia, and every single one of those farmers has had to deal with extreme volatility and have had to adapt their businesses to do so. "The challenge for us and the challenge that we take on very strongly is to continue to build innovative plants, putting more and more product into food service, consumer and sophisticated ingredients to ensure we can deliver the best prices to our farmers. “But ultimately I need to say prices will be volatile.” Mr Dedoncker said the key driver for Fonterra in the Australian market was that it was “a really diversified business”. It offered a diverse portfolio of productions into three distinct channels — retail, food service and ingredients. “If you are focused on one product only with one trade channel only, you have a real risk in your
business system,” he said. “We don’t. “We have three massive channels that we can send product through and we have at least four different product categories.” “Fonterra cheese already tops more than half the pizzas made in China, and now we will be sending Australian-made mozzarella to cater for growing demand.” Mr Dedoncker said 40 per cent of people in urban China eat at Western-style fast food outlets once a week, and the use of dairy in foodservice has grown by over 30 per cent in just five years. “This growth has been helped by demand for cheese — as disposable incomes rise the dining-out culture is growing, particularly for pizza. “In Japan, cheese consumption is rising by 3 per cent each year, with huge potential for growth. “Japan is the world’s second-largest importer of cheese, with Australia their number one supplier — they’re our biggest market for cheese.”
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
6 // NEWS - VICTORIA
Mulcahy brothers buy Kiewa Country brand RODNEY WOOD
THE KIEWA Country brand has a new owner
with Murray Goulburn selling it to Kyabram dairy company, Kyvalley Dairy Group. The agreement will see the Kiewa Country brand re-launched after it was closed down, in July, as part of Murray Goulburn’s staged closure of their Kiewa factory. Kyvalley director, Wayne Mulcahy, said the next step is to talk to Kiewa locals to see if there is enough interest to make the brand profitable.
FARMERS SHARE COPING STRATEGIES AT DAIRY EXPO A panel of local farmers will share how they manage the pressure caused by milk prices, seasons and other unpredictable external factors at the South Gippsland Dairy Expo later this month.
S O U T H
The company plans to send staff to the Kiewa area to meet all Murray Goulburn distributors and introduce the company. “Our view is to meet and discuss with potential customers and explain who we are and find the support for re-launching the brand. If there’s enough interest we’d send it up to that region,” he said. Despite Murray Goulburn struggling, this did not seem to put off the Kyabram company from purchasing a brand that produced low fat, full cream and skim milks, a flavoured milk range and thickened cream. Local farm management consultant, Matt Harms, OnFarm Consulting, will host the panel, featuring Dean Turner, Yannathan; Warren and Kerrie Redmond, Inverloch; and Andrew and Sue Lamers, Outtrim. The session will run on Wednesday, September 27, from 11 am. The Dairy Expo runs for two days, starting 9 am that day. “Our prediction for the coming season is unpredictable,” Mr Harms said. “With milk prices, seasons, illness and
“There are a couple of reasons (why we bought it). One is because we live and work in northern Victoria. It’s a northern region brand and the opportunity to purchase was a onceonly opportunity so it made sense to buy it. “The second part is we are rapidly growing and this will lead to more staff and work in the region. “We thought we could do something positive in the dairy industry in the face of Murray Goulburn. It will be good for the farming community and good for northern Victoria,” Mr Mulcahy said. other external factors that are all highly unpredictable, we will hear how others have previously managed these pressures. “When thrown an unpredictable event, how have they persisted and strengthened their business to withstand future events? “Panel members will share their experiences, how their businesses have performed under pressure and how they have come out trumps.” It is the 18th year of the South Gippsland Dairy Export, organised by the
Peter and Wayne Mulcahy celebrate the purchase of the Kiewa Country brand from Murray Goulburn.
Da ily milk ing comp etition • One Hand • One Minute • One Teat • Most Milk
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The funds raised from the Dairy Expo have helped the Club distribute over $500 000 back into the community over the last 20 years. Murray Goulburn and Reid Stockfeeds will also host a breakfast on Thursday, September 28 at 8.30 am. The Dairy Expo will be open from 9 am to 3.30 pm both days. Admission is $10 per person with children under 16 free.
Our prediction for the coming season is unpredictable… Controlling what you can control
Korumburra Showgrounds, Corner South Gippsland Highway & Charles Street, Korumburra
THE BIG GIPPSLAND JERSEY MILK OFF
Strzelecki Lions Club.
Wednesday 27th September at 11am
Wednesday 27th & Thursday 28th September 2017 from 9am-3.30pm
Be sure to visit our major sponsor, Murray Goulburn and the MG Trading team in their hospitality area at the event.
The Kyabram business intends to get most of their extra milk intake from northern Victoria but have had farmers from the Kiewa Valley express interest in supplying. The sale price of the Kiewa brand was not disclosed.
Matt Harms ONFARM Consulting
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Peter and Wayne Mulcahy celebrate the purchase of the Kiewa Country brand from Murray Goulburn.
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South G ipps land Shire Counc i l
With milk prices, seasons, illness and other external factors that are all highly unpredictable, we will hear how others have previously managed these pressures. When thrown an unpredictable event, how have they persisted and strengthened their business to withstand future events? Panel members share their experiences, how their businesses have performed under pressure and how they have come out TRUMPS! Panel Members: Dean Turner (Yannathan), Warren & Kerrie Redmond (Inverloch), Penni Ellicott (South Gippsland Shire Council), Jamie Murphy (Rabobank), Andrew & Sue Lamers (Outtrim) Proudly sponsored by South Gippsland Shire Council & Rabobank
Thank you to the following exhibitors who are the Dairy Expo’s proud sponsors of the ‘The Udder Truth’ showbag initiative… • Browns Stockfeed Pty Ltd • Coopers Animal Health • Lely Center Gippsland • Easy Dairy Automation Systems • Gendore Tractors & Machinery Pty Ltd • GippsDairy/Dairy Australia • MaxCare • ProviCo • Phibro Animal Health • Rabobank • Reid Stockfeeds • Rural Bank • Shade Sheds Victoria • Vic Feeds • Victorian Hoofcare Services
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
NEWS - SOUTH AUSTRALIA // 7
Farmer wellbeing program extended after successful start A SOUTH Australian program designed to
improve the wellbeing of dairy farmers is continuing after a successful pilot. Rick Hinge has been re-appointed as wellbeing co-ordinator with DairySA after a 12-month pilot that he says made a positive impact on farmers. The role to support wellbeing in the South Australia dairy community is funded by DairySA and the SA Dairy Industry Fund. A fifth generation farmer, Mr Hinge has worked in rural health and drought assistance for the past decade. He says the wellbeing role has given farming families a way to communicate their needs. “My first priority is to listen,” he said. “I don’t come with any pre-conceived ideas; just come acceptance of the situation. Most times that creates a situation where people are happy to talk. “Men prefer to talk one-on-one with someone they trust. Some of the best engagement I’ve had is looking at the rye-grass and the cows, and some of the better outcomes are when husbands and wives or partners sit across the table and I listen to what’s going on.” Mr Hinge said communication was the biggest issue facing farmers in tough times. “When things become difficult and we get under pressure, we generally forget to talk or we don’t do it very well. The outcome of that is a lot of extra pressure.” He says the role is a new way to engage with people if they’re in stressful situations. Mr Hinge covers the state and drives about 1000 km a week. He sees people on referral and “where I see a cow, I call in”. “My agricultural background has given me the heads-up on what it takes to be a farmer and I understand how traumatising it is when the numbers don’t add up.” Farmers have a variety of concerns. “One of the most difficult things for any farming family is to not have enough money in the bank to pay bills, though that’s not necessarily the first thing people want to talk about. When you go to listen you hear what’s on the agenda today and my priority is to deal with that.” “Everyone is different and every situation different. I still come across different responses but overall the little up in price is better than going down and there’s generally a good positive experience when I visit.” The job has cemented Mr Hinge’s “deep respect” for farmers and their families. “I’m amazed at the resilience of farmers. They have an amazing capacity to keep going when things aren’t great.” The model used for the welfare connect program has a good success rate, he says. “When you connect with people, it’s all about trust and rapport and that takes time. I respect DairySA for having the courage to create a new position and keep it going.” Mr Hinge’s links across the dairy industry create referrals to farmers needing help, and he in turn can refer them to financial counsellors, mental health services and other supports as needed. “Once you open the communication it often takes the cork out and relieves the pressure,”
he added. DairySA’s Chair Michael Connor welcomed the support of the SA Dairy Industry Fund, which will allow the roles’ positive impact over the previous 12 months to continue to build. “Whilst this project was specifically designed
to assist people during challenging times, it will also provide them with the opportunity to increase their skills and resilience strategies in the areas of mental health and wellbeing for the future,” Mr Connor said. Mr Hinge can be contacted on 0429 225 144.
Rick Hinge has been re-appointed as wellbeing coordinator with DairySA after a 12-month pilot that he says made a positive impact on farmers
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
8 // NEWS - TASMANIA
Dairy career paths need more exposure RICK BAYNE
NEW DAIRYTAS regional manager Jonathan Price wants to expose more people to career paths in the dairy industry. Replacing long-serving Mark Smith in the role, Mr Price says the industry is well positioned and confidence is improving, though it’s not yet ready to be called buoyant. “Most people are well-positioned to set themselves up for a good season with some positive price signals and more favourable seasonal conditions,” he said. “It’s not quite buoyant but there is more optimism than there has been in recent years, which is pleasing. Confidence levels have increased from a relatively low basis given the events of the past 18 months.” Mr Price said his immediate priorities were to continue supporting the delivery of programs to help farmers. “At times we need to shift our focus onto shorter-term pressures, as we’ve seen in the past 18 months around the adjustment in price and the challenging wet conditions we experienced last winter, but we’ll continue on the longer-term goals.”
One strategic goal centres on people in the industry. “I think the dairy industry in Tasmania has raised its profile into the broader community in recent years but I still think there’s an opportunity to extend that profile into a greater level of knowledge and understanding as to what the industry can provide as a career path,” he said. “Creating a greater level of knowledge and understanding around career paths should create a larger base of people wanting to get into the industry which will increase the overall calibre of people and therefore allow the dairy businesses of Tasmania to benefit from that bigger pool of people. “There is an appreciation of the role the industry plays in the Tasmanian economy; the next level is greater knowledge of how it operates and its markets, opportunities and career paths.” Mr Price said a lot had been done at industry level to educate farmers on employing and managing people correctly to stay in the industry. His priorities include helping farmers to increase capability to achieve their business goals, mostly centred on profitability, sustainability and the environment. “I see a strong dairy presence long-term. There has been substantial growth over the past 10–15 years and the level of interest around investing in
CAN YOU AFFORD TO WASTE HAY? “We saved a whole bale a day when we went with the Chainless bale feeder” Victorian Dairy Farmer
MOON LAKE SPENDS $2.7 MILLION ON DAIRY REPLACEMENT
Tassie hasn’t waned in that period,” Mr Price said. “The appetite of existing dairy farmers has been curtailed a little but at an investment level it has remained strong and we continue to see new entrants into the industry.” Mr Price is originally from Tasmania and worked with Fonterra for the past eight years, initially as an Area Manager (Circular Head) and then as Regional Milk Supply Manager — Tasmania. His most recent role was Farmer Services Manager at Fonterra’s headquarters in Melbourne. After nearly 15 years with DairyTas and 25 years in the Tasmanian dairy industry, Mr Smith retired at the end of August.
Jonathan Price
Moon Lake Investments has announced it will spend $2.7 million upgrading the dairy on its Woolnorth property in northwest Tasmania. The Woolnorth property, the Gums, is part of the Van Diemen’s Land Company, Australia’s biggest dairy, which Moon Lake purchased in 2015. The company said replacing the existing 50 bail rotary with a new 60 bail rotary platform provides the opportunity to expand output by 20 per cent. Work is due to start in November and the new rotary is due to be operational in the second quarter of next year. Moon Lake Managing Director Sean Shwe said the new dairy was “an example of Moon Lake’s commitment to the VDL Farms enterprise”. It is part of the company’s commitment to invest $100 million over five years on its Tasmanian operations. “The company spent $6.3 m in capital expenditure in 2016, with a further $6.6 million in capital committed in 2017,” Mr Shwe said. The Woolnorth operation is a 1000 milking cow farm and spring calving farm and the new cowshed will have the ability to handle up to 200 more head.
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
10 // NEWS - QUEENSLAND
Queensland Government funds Fair Milk logo pilot scheme THE QUEENSLAND dairy industry has received $550 000 from the State Government to produce a ‘Fair Milk logo’ pilot scheme. The money is part of a funding package of $960 000 for marketing strategies to help consumers make better-informed decisions when they buy milk. Queensland Agriculture Minister Bill Byrne said the funding package would “assist farmers and small local milk processors to improve their marketing and labelling campaigns.” “While the Queensland Government is not in a position to set fair milk prices, it is important for consumers to understand where their money
is going and how it will support local dairy farmers,” he said. The $550 000 will be provided to the Queensland Dairyfarmers Organisation over three years to design and implement the pilot scheme. The funding came after the initial ‘Fair Milk Logo’ Bill moved by the Katter Australia Party (KAP) failed to pass through parliament. QDO President Brian Tessmann said that while the QDO would have preferred the original Bill moved by the KAP to pass through parliament into legislation, the funding would “go a long way in helping industry develop its own logo”.
“The voluntary ‘Fair Milk Logo’ that will be developed by QDO will be used to help consumers play their part in helping Queensland farmers as they continue to struggle under the impacts of unsustainable $1 litre milk. “People have consistently asked what milk they should buy to support our local dairy farmers. While QDO encourages them to buy branded milk, the ‘Fair Milk Logo’ will be a clear indicator right on the bottle. “The real challenge starts now for QDO to work constructively with our farmer members and the processors to make this ‘Fair Milk Logo’ a reality.
QDO ran an ‘I Buy Branded Milk’ campaign, which Mr Tessmann was well supported by Queensland consumers. A further $290 000 in funding was allocated to the Office of Small Business to assist small processors and farmers diversify their product range, and better develop their markets with improved branding and marketing. It has been tasked with developing tailored mentoring support services and workshops in conjunction with key stakeholders, and expand the Government’s Go Local campaign, to support Queensland businesses in the dairy industry and complement the ‘Fair Milk Logo’ scheme.
David Kucks, Quinalow, Roxley Ehrlich, Evergreen, and Ross Rosenberger, Silverlea, at the QDO conference in Toowoomba last month.
Jason Weare, Parmalat, with Parmalat suppliers Scott Menkins, Rosalea Plains, and Geoff Tacey, Kingaroy, at the QDO conference in Toowoomba.
Tony Burnett, DFMC, with WEny and David Jones, Kenilworth, at the QDO conference in Toowoomba.
Colin Kahler, Geeham, Mary McInnes, Radford, QDO vice-president Ross McInnes, Corrie Hayden, Pilton, and Jim O’Donohoe, Hirstglen, at the QDO conference.
Land & Water SPECIALISING IN RURAL REAL ESTATE & WATER TRADING
LOOKING TO BUY OR SELL A DAIRY FARM? CONTACT US TODAY! For personalised service & professional advice, speak with one of our friendly staff members Michael Downie 0458 241 242
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Ph. (03) 5833 0221 | 295 Benalla Rd, Shepparton VIC 3630 Email: shepparton@landmark.com.au | www.landandwater.net.au
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
NEWS - WESTERN AUSTRALIA // 11
Jess inspires next generation of farmers WITH AN ageing farming population, the attrac-
tion and retention of the next generation is critical to the future of the dairy industry and agriculture in general. Young Dairy Networks play a critical role across the country, and Western Australia has a strong advocate responsible for harnessing the next wave of talent. Jess Andony coordinates WA’s Young Dairy Network as part of her duties with Western Dairy, WA’s regional development program. She divides her time between technical duties on several of Western Dairy’s research projects, a range of extension activities and the role of coordinating events for WA’s young dairy farmers. As the WA Young Dairy Network Co-ordinator, she is passionate about engaging with young people and encouraging them to take up opportunities to further their agricultural career. “I fully support anything that encourages young people to be involved in agriculture. “If I can inspire someone else to give agriculture a go then that’s something that I love.” She has been described as a fountain of energy and great ideas and has driven a fresh wave of momentum through the network. Jess is a big advocate of study tours to make sure young people expand their ideas and networks by seeing how other dairy regions operate. She also works hard to overcome the cost hurdle of study tours by actively seeking sponsorship to help alleviate the cost. “As soon as you jump on a plane from Perth there is a big cost, as we are a long way from other dairy regions — but that doesn’t stop us,” Jess said. The Network has grown significantly under Jessica’s management and her ambition is to make sure every young person working on a dairy farm in WA joins the group. “We have about 160 dairy farm businesses in WA so we’re a small community of farmers, but that doesn’t mean that everyone knows one another, as we are a very spread out region geographically. “The formation of the Young Dairy Network with the support from Dairy Australia has meant that we have been able to bring our young farmers together. “Having an interesting range of YDN activities to choose from means we are well placed to reach out to everyone.” Jess grew up on a dairy farm in Harvey and graduated with an honours degree in Animal Science from Murdoch University. She began fulltime employment with Western Dairy in 2015. Her work with young people in agriculture, establishing the WA Young Dairy Farmer of the Year Awards and her contribution to R&D in the WA dairy industry and her commitment to coordinating disaster relief for dairy farmers in the wake of the 2016 Waroona/Harvey bushfires saw her awarded the Western Australian Young Achiever Award earlier this year. Award judges praised her technical and emotional support to the 19 WA dairy farms impacted by the Yarloop fires last year, especially given her own family’s farm was among those affected. Her nominator said her work in the fire response in the weeks and months after made a real difference to the recovery for the farms, as she showed "experience and empathy way beyond her years". In the aftermath of last year’s bushfires Jess
organised the delivery of feed and supplies to affected dairy farmers and established a database to help coordinate the relief effort. “I just started calling a whole bunch of people and finding out who was affected. “We’d lost half our farm, and so I was trying
to help Mum and Dad but then there were so many other farms that needed help as well. “We just jumped in and did it because it needed to be done.” Jess said she was surprised and humbled at the recognition on receiving the award.
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
12 // NEWS - NSW
Research will drive greater production DAIRYMAN BILL Inglis heads up the council that anchors the research and development projects taking place at the University of Sydney’s Dairy Research Foundation at Camden, NSW. The 63-year-old former dairy farmer and, these days, dairy heifer grower at his farm at The Oaks, a township 14 km from Camden, wrangles a broad church of industry interests on the council he has chaired for the past nine years. “The 17 council members represent all sectors of the industry including researchers, farmers, academics, public servants, industry advocates and students,” Mr Inglis said. “We have our share of challenges and scarce research dollars are at the head of the list. “Obviously, we’re research driven and R&D
POWER RETAILERS NEED TO BE SHOCKED INTO ACTION Farmers and regional and rural NSW residents will see increased in their power bill of 200 per cent, according to NSW Farmers’ President, Derek Schoen. He has called on the Federal Government and electricity retailers to establish short-term and long-term reforms to provide respite to those living
revenue is shrinking and this is a major problem across the industry. We’re working on it. “I think also that there is a culture within the industry that is inward-looking rather than forward-looking. “We need to be looking to our future.” Dairy Australia funds most of the research programs at Camden largely through the FutureDairy program tasked with developing dairy robotics and automation. Mr Inglis said other research has focused on assisting farmers get greater value out of their land. “Triple-cropping programs allow production of 40 tonnes of dry matter per hectare.” He said he was most positive about the future growth of the dairy industry in NSW.
outside capital cities. “Regional electricity users are paying the highest electricity prices in Australia, and with the introduction of costreflective pricing, some users will see increases in their electricity bill of 200 per cent,” Mr Schoen said. “The typical household in the bush pays around $2083, while in Sydney this is $1507.” Mr Schoen said retail markets in regional areas are not competitive, and regional electricity users are not getting a fair deal on their electricity. “If you are in Dubbo, even if you shop
“We’re seeing larger dairies being developed. As coal mines in the Hunter Valley close down in coming years, I believe more quality land will go into dairy production. “We also need new consumer destinations for our milk other than domestic supermarkets. “Major processors are today actively developing new markets in Asia. “Growth will come through our processors developing new high-end products and new destinations for our milk including quality export cheeses.” Bill says $1 a litre supermarket milk had been ‘a drag’ on the industry in NSW but he was delighted by the number of consumers who had chosen to pay more for farmer and processor branded milk during the past 12 months.
around, you will only get a 32 per cent cost-saving on your electricity from the default market offer. “If you live in Darlinghurst you will get a 51 per cent cost-saving. Regional users are not receiving the benefits of a competitive electricity market.” Mr Schoen said an immediate solution could be the introduction of a comparison rate for retail electricity market offers, allowing customers to directly compare the myriad of market offers and find the best deal. “In NSW we have over 100 different market offers. This is not a sign of
EXPRESSIONS OF INTEREST
Bill Inglis
“I’m looking forward to hearing the recommendations of the Australian Competition and Consumer Commission’s inquiry into the industry,” he said.
competition or innovation, it is a sign of price opaqueness. “A comparison rate, much like those mandated for loan products, would allow consumers to navigate the myriad of offers and find the best deal for them. “In the longer-term we need incentives and feed-in tariffs that encourage distributed energy resources, demand management, and energy efficiency on farms. “I want to see farmers control their own destiny with respect to energy and electricity.”
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295 Benalla Rd, Shepparton VIC 3630 Ph. (03) 5833 0221 | Fax: (03) 5833 0269 Email: shepparton@landmark.com.au www.landandwater.net.au
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
NEWS // 13
Synthetic replacement biggest threat to dairy THE BIGGEST future threat to the world dairy industry could be the possibility of scientists replicating dairy milk’s nutritional profile synthetically in laboratories. This was one of the thoughts offered at a Dairy Connect producer workshop last month featuring executive director of the Global Dairy Platform, Donald Moore. Synthetic milk would be a far greater challenge to producers than the current cross-generational movement to replace animal-sourced foods with plant-sourced foods, he said. Mr Moore heads up a team of five that goes to work in Chicago each week with the primary mission of building the power and reach of the dairy industry around the world. He has spent the past 17 years in dairy, 10 years of which were servicing international markets at a senior management level working for Fonterra out of New Zealand. The challenges facing the industry in ‘developed’ markets were reasonably uniform in most countries and these included the rise and rise of plant-sourced milk alternatives.
Emerging economies faced a whole raft of different challenges with a lack of industrial and communications infrastructure and softer nutritional education programs, he said. He told the producer workshop that with a world population of 7 ½ billion in 2017, dairy ‘supported’ around one billion people internationally. “Around the world, six billion people were regular milk and dairy product consumers,” he said. “Of the approximate one billion people supported by the industry, 600 million lived on dairy farms and 400 million worked in industry support. “A total of 240 million were employed fulltime in dairy jobs. “And, a magnificent total of 37 million women ran dairy farms.” Mr Moore said global opportunities for dairy were opening up largely in Africa and those parts of Asia with developing middle classes. “There are a number of rapidly developing mega-cities in Africa with burgeoning numbers
VFF calls RSPCA ‘wolf in sheep’s clothing’ QUESTIONS REMAIN over the decision by RSPCA Victoria to renounce its activist campaigns, including attacks against the farm sector, while the group retains its seat on the board of its parent organisation RSPCA Australia, according to the Victorian Farmers Federation. The VFF has called on RSPCA Victoria to commit fully to its pledge to cease campaigning by using its influence to petition RSPCA Australia to follow suit. “RSPCA Victoria has made a clear commitment to stop campaigning, but unless it washes itself of any connection to activism at both state and national levels, the perception will be that it is just a wolf in sheep’s clothing, masking its campaigns behind the activities of a powerful national body,” VFF President David Jochinke said. “There is a clear conflict of interest when RSPCA Victoria has a memorandum of understanding with the State Government to regulate animal welfare laws for farms while RSPCA Australia is actively campaigning against farming practices.” The push comes after an upper house inquiry in the Victorian parliament into RSPCA Victoria’s practices found the animal welfare group needed to improve community engagement and transparency around its powers, and should only investigate alle-
gations of cruelty to commercial animals in emergency situations. RSPCA Victoria CEO Liz Walker said the report’s three recommendations would be followed in full, but Mr Jochinke said stronger action was required for the organisation to gain the trust of farmers. “Farmers get a lot of pleasure out of producing food and feeding people, but their jobs are complicated when the RSPCA media machine condemns normal animal welfare processes” Mr Jochinke said. “If RSPCA Victoria wants to end its campaigning and repair relationships with farmers, we need real assurance that this behaviour is going to change at all levels, and that there is no potential for RSPCA Victoria to use RSPCA Australia to attack farm practices.” Mr Jochinke said the VFF was frustrated the inquiry didn’t explicitly advocate for changes to Victoria’s current animal welfare system. “The fact that the report doesn’t recommend any pathway to change suggests we are dealing with a perfect system, but that is not what we said in our feedback and it is not representative of farmers’ experience,” he said.
joining the middle class,” he said. “In this context and in these markets, the best definition for middle class is a person earning US$10 a day who is looking for quality nutrition for his or her kids.” Challenges for the industry around the world include apparently growing opposition to consumption of animal-based protein including milk. “In terms of sustainability, we know farming land availability is limited and water for farm production may become scarcer,” he said. “The Global Dairy Platform’s pathway forward will focus on internally aligning the industry around the world so we are all on the same page of the plan. “We will continue to engage with critical United Nations’ agencies such as Food and Agriculture and we will seek to forge partnerships around nutritional security, sustainability and dairy development including innovation. “It’s important to be at the UN to ensure we can correct imbalances and misconceptions.”
Donald Moore
JEFF ODGERS NAMED DAIRY AUSTRALIA DEPUTY CHAIR Shepparton Dairy farmer Jeff Odgers has been named deputy chair of the Dairy Australia Board, paving the way for him to succeed outgoing chair Geoff Akers at the next AGM in November. Mr Odgers was appointed deputy chair on July 27. Mr Akers will retired from the board at the next AGM, having reached the maximum tenure under the constitution. He said the appointment would ensure a "seamless transition" following his retirement. Mr Odgers owns a dairy farming business near Shepparton, Victoria, milking 700 cows, and has broad experience in managing large scale farm enterprises in northern Victoria and Tasmania. His formal qualifications include a Bachelor of Business (Agricultural
Jeff Odgers
Management) and an Associate Diploma in Farm Management. He served as a Director of the Murray Dairy Inc. Regional Development Program (2006 — 12) and led the organisation as Chair (2008 — 12). Mr Odgers was first elected to the Board in 2013. He served as a member of the Dairy Australia Board Human Resources Committee from November 2013 to November 2015, and became a member of the Audit and Risk Management Committee in December 2015. In addition, Mr Odgers is a director of Bega Cheese Limited and was also a Director of Tatura Milk Industries prior to the successful merger of the two companies. Under the current Dairy Australia Constitution, the Board has the discretion to appoint a Deputy Chair at any time.
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
14 // OPINION RUMINATING
EDITORIAL
Stanhope plant a game changer
MILKING IT... Watch out, Norman Dairy Australia’s Norman Repacholi sat next to a fellow speaker at the Queensland Dairyfarmers’ Organisation conference, unaware he was the only person in the room not to recognise the Queensland legend in their midst. Unbeknownst to Norm, the WorkSafe ambassador was none other than rugby league legend (and Queensland woolgrower) Shane Webcke, one of the toughest players to represent his state and country. When the self-deprecating Webcke was introduced to speak and subsequently told Norman had no idea who he was, he replied: “He must be a Victorian.” Webcke gave an emotional talk on how his father was killed while working on a farm, and the continual impact on his family.
Big spenders
Synthetic milk
The pitch
Moon Lake Investments, owners of Van Diemen’s Land farms in Tasmania, spruiked its decision to upgrade the rotary dairy on one of its farms. Moon Lake Managing Director Sean Shwe said the $2.7 million upgrade was part of his company’s commitment to invest $100 million over five years on its Tasmanian operations. “The company spent $6.3 m in capital expenditure in 2016, with a further $6.6 million in capital committed in 2017,” Mr Shwe said. By our calculations, they’ll need to spend another $87.1 million in the following three years to meet their commitment. That’s a fair whack of cash — they might want to get a wriggle on.
Executive director of the Global Dairy Platform, Donald Moore, recently told an Australian audience that the biggest future threat to the world dairy industry could be synthetic milk. Although synthetic milk may conjure thoughts of vegan companies engaging scientists to overthrow the farming sector, it wouldn’t surprise us if the world’s largest dairy companies have already investigated the concept. As an example, Kodak was once a world leader in cameras and printing. One of its employees actually invented the first digital camera. However, the company thought it would be a fad, and did not want to encourage a process that would eliminate one of its biggest sources of revenue, printing. As its competitors adopted the technology, it fell further behind until it filed for bankruptcy in 2012. Astutue dairy companies will embrace the technology in a bid to safeguard their future. Where this may leave farmers is an entirely different question.
Fair to say the farming community contains its fair share of geniuses and unheralded engineers. Problems that need to be solved on farm normally result in a creative solution. Well now the brains trust behind the Australian Dairy Conference will give 10 farmers the chance to pitch their brilliant ideas at the ADC in Melbourne next February. A shortlist of up to 10 finalists will be given five minutes to present their concept to a judging panel and conference delegates. They’ll need to demonstrate why their idea is the number one thing farmers should introduce when they get back to the farm. Like all great ideas, we’re guessing simplicity will be the key. Entries close October 2. Head to www.australiandairyconference.com.au to register.
Advertising Brett Matthews
0417 440 009
brettm@dairynewsaustralia.com.au Editor Stephen Cooke
0427 124 437
The re-opening of Fonterra’s Stanhope plant is a game changer for the dairy industry. In a volatile global environment, it has strengthened the company’s strategy of diversified sales and in turn lifted farmgate prices to its suppliers. It has invested $130 million to secure its place in the world market, and secure additional supply in Australia. It has based its investment decision on growth areas both in a geographic and consumer sense. Fonterra chair John Wilson told those at the launch that the company’s cheese, whey and nutritionals strategy, based in Australia, “is critical to the growth and drive in demand that is required from an increasingly demanding consumer base globally”. The new plant has enabled the company to offer a diverse portfolio of products into retail, food service and ingredients. The company has said it won’t repeat its past mistake of offering prices to farmers it can’t afford and with its diverse product lines should be able to withstand market storms. It has put its Australian suppliers through great pain over the past 18 months so sustainable pricing is the least they can offer. While Fonterra’s rebuild is complete, Murray Goulburn has been forced to close factories to cut costs and ensure those remaining run as efficiently as poosible. Although its hand has been forced, MG Managing Director, Ari Mervis, told a briefing on the release of its annual results that it didn’t need to be big to maximise profits. It was aligning its strategy and concentrating its milk on where it would be most profitable. This is good news to those who openly questioned the former management’s decision to align with Coles on drinking milk. It was also working on correcting an “unfocused growth agenda” created by previous management While a strong Fonterra is good for its suppliers, a competitive Murray Goulburn would be good for the whole industry.
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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
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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 SEPTEMBER 2017
OPINION // 15
Government employees must respect on-farm biosecurity WAYNE JOHNSTON
NOT ALL biosecurity threats are external.
Sadly, over many decades Tasmanian has had successive incursions by a range of pests, weeds and diseases. Many of these have become part of the landscape. And while it is not feasible economically, or even in a technological sense, to eradicate these, we should be looking to manage them. This is an indictment on our history but it is one that we need to deal with. We need to look at those pests, weeds and diseases that have established themselves in Tasmania, and on an individual farm basis we need to
Effects test needs real teeth
be aware of the mechanisms by which they may gain a toehold. While gorse, for example, is widespread with significant incursions on Crown land farmers need to ensure we need to ensure that weeds such as this do not infest our own land. A ll farmers need to understand the characteristics of exotic diseases, what weed species look like, and be vigilant for animals that are not native to Tasmania. But incursions on farms can occur in a variety of ways, not all of which are in the control of the
farmer. We have several government businesses that regularly come on farm, which appear to have no respect for, or understanding of, biosecurity. Whether it be reading water meters, electricity meters or undertaking valuations, they appear to be oblivious to the fact that, as they move from farm to farm they can, and do on occasions, become the vector for the spread of disease and pests. The TFGA calls for these organisations and employees to not only undergo biosecurity training, but to adhere to biosecurity regimes. If this requires footbaths and vehicle wash downs, or
other biosecurity measures then so be it. It will only be a matter of time before one of these organisations has to address the legal ramifications when it is proven that they have infected a farm. The TFGA will continue to demand the highest standards of biosecurity in Tasmania. We need a system that is robust, transparent, consistent and science-based. Anything less is unacceptable. • Wayne Johnston is President of the Tasmanian Farmers and Graziers Association.
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FOLLOWING THE long awaited and fought for passage of the ‘effects test’ legislation through the Senate, there are many now asking where we go from here. Farmers rightfully want to know what the Government is intending to do to progress the test from paper into action. Questions still remain on what exactly this new power will look like and when or whether it will address the issues dairy farmers have raised time and time again. A multitude of industries including dairy are looking to the Australian Competition Consumer Commission (ACCC) to act upon unfair market practices. As one of the strongest advocates for the test, Queensland Dairyfarmers’ Organisation (QDO) see it as a major component in a range of legislated safeguards and industry authorised practice changes needed to improve market fairness issues affecting trade between retailers, processors and farmers. For the dairy industry, the test should be most useful for market issues occurring between processors and retailers. If applied properly it should also benefit further down the value chain. It is now up to the ACCC to be vigorous on issues such as predatory pricing, in particular between brands where the market is the supermarket shelf. For example, how is it not predatory to sell one brand on the shelf with little or no mark up, yet set significantly marked up prices on competing brands? While anyone can raise complaints, it is up to the ACCC to take action and act upon the powers legislation gives them. With the exception of a few large companies, most members and organisations in the dairy industry do not have the wherewithal to do this. Farmers are relying on the ACCC to fulfil this role. As the final touches are being put on the ‘effects test’ regulation and guidelines, the message from Queensland dairy farmers is to get the job done promptly and properly. • Brian Tessmann is President of the Queensland Dairyfarmers’ Organisation.
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
16 // MARKETS
A tale of two industries ONCE UPON a time there were two dairy industries, on opposite sides of a big ditch, that were very similar. They produced about the same amount of milk, they made similar products and the farmers got paid a similar amount ….then everything changed. Comparisons are often made between the New Zealand and Australian dairy industries about prices, farmgate prices and various aspects of the industries — and depending on the cycle, which has the better structure. It’s a rivalry a little like the Bledisloe Cup in Rugby — and depending on your measure of success — almost as one-sided. As chart 1 shows if success is measured in terms of industry size and output — the Kiwis have scored all the tries. While Australia’s output has stalled, New Zealand’s milk output has more than doubled since the mid-90s. Fuelled by favourable production conditions, a tax structure that favours investment in land, access to growth markets and a dominant farmerowned cooperative, Kiwi farmers have responded enthusiastically, expanding and intensifying — and increasing debt-load. Fonterra was established back in 2001 — with the aim of moving what was already an important industry further down the value chain towards the consumer. The critical mass offered by Fonterra — which was given a free-kick by the government’s competition watch dog, the Commerce Commission — was meant to make Kiwi farmers price-setters rather than price takers in global markets. In return, the act establishing Fonterra required transparency in farmgate price-setting, and some provisions to reduce barriers to entry to new players and competitors, to reign in the co-op’s market power. Many Kiwi farmers have no other option but Fonterra when it comes to supplying milk so the regulations are meant to ensure there is adequate contestability and efficiency. The New Zealand Commerce Commission reviews Fonterra’s farmgate price calculation each year, which is based on sale revenue from reference products minus operating costs and an allowance for capital recovery. It is on this basis that Fonterra’s revenue is divided between farmer payouts and dividend, as well as returns to unit holders in the Fonterra Shareholders Fund. It’s a level of transparency and oversight that many farmers on this side of the Tasman may envy — although it’s not without its critics.
Chart 1.
Taking a helicopter view of the New Zealand dairy industry’s development over the last couple of decades, a few things stand out. First and foremost it has always viewed itself as a global player and its tiny domestic market has seen to that. It is still strongly supply-driven — most of the post-farmgate capital has gone into stainless steel rather than innovative high value products. In terms of the operating environment, the industry has enjoyed significant government support — in the formation of Fonterra, in pursuing market access and supporting investment in the sector. Community support hasn’t been so steadfast. Alongside the industry’s growth and intensification have grown vocal and persistent concerns about environmental impact. The industry’s significant economic contributions have not been sufficient — or perhaps, shared widely enough — to shield it from criticism when it comes to the pollution of waterways and threatening its “100 per cent Pure” reputation. Back on this side of the ditch, dairy farmers generally command sympathy and respect from the community — but mostly because the industry is perceived to be “doing it tough” most of the time. The industry has received plenty of government attention also, but mostly in the form of overlapping inquiries and short-term responses to crises. The Australian processing sector is less cooperative in nature and much less concentrated. In southern regions where most farmers have lots of choices to make when it comes to supplying milk. Competition for milk supplies has been a key pre-occupation for local dairy companies trying to fill capacity in the production-constrained environment and “pick the winners” in terms of product and market mix in view of their inability to compete on cost. In attitude and actuality, the Australian dairy industry is much less a global player than it was — accounting for around 6 per cent of global trade compared to a peak of around 17 per cent in the early 2000s. That said, a virtually open market for imports and with around 75 per cent of milk production converted into tradeable products — the industry is not immune from international markets, despite the increasing share of milk consumed at home. Nevertheless, the mechanics of the domestic marketplace — which is tough and getting tougher — and more particularly supermarket power is an increasing focus for an industry that is withdrawing from the world.
FRESH AGENDA JO BILLS
A tale of 2 industries – fun facts New Zealand
Australia
Milk production (bill litres)
20.7*
9.0
Share of production exported^
95%
34%
Share of global trade^
38%
6%
Average farmgate price# ($A per kgMS) Manufacturing product mix
4.78
5.02
WMP: 51% SMP: 15% Cheese: 13% Butter/oil: 21
WMP: 8% SMP: 32% Cheese: 46% Butter/oil: 14%
Take note: Refers to June 2016 to May 2017 for New Zealand and July 2016 and June 2017 for Australia unless elsewhere specified,*estimate based on milk solids ^ share calculated on milk equivalent basis #nominal prices paid between 2000/01 and 2016/17 Sources: DCANZ, LIC, DairyNZ, Dairy Australia, Freshagenda
The recent Senate Inquiry has called for a lot more involvement from our own competition watchdog in the way the industry and domestic market works, although it appears to have dismissed the need for greater price transparency. It’s unclear that a more consistent approach to industry structure and regulation would have produced a similar outcome for the two industries — much is clouded by climatic conditions that have certainly favoured the Kiwis over the past couple of decades. Although it’s interesting to observe how these divergent pathways have evolved, and how dissimilar the two industries have become, it makes
Chart 2.
less and less sense to compare them! Still Chart 2 shows how it stacks up for the coming season. What’s the reason for the gap this year? A more bullish outlook from Kiwi dairy companies, and superior conversion efficiency; or does it reflect waning leverage and value capture on this side of the Tasman? It’s this gap and whether it is sustained that is likely to decide who is declared the “winner”, although profitable and sustainable growth in a supportive community should be the goal for both industries. • Jo Bills is a director of www.freshagenda.com.au
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
MARKETS // 17
Grain prices rise on fear of dry season States, the EU and Australia all projecting be the bright spot for the Australian dairy indus- smaller crops. Total winter crop in Australia is expected try. Following a record hay and wheat harvest, to fall 33 per cent in 2017–18 according to the combined with global record breaking grain ABARES June crop report. This is a 33 per cent yields, low water prices, subdued fertiliser prices fall on a yearly basis, however yields are still and unusually high cull cow prices, input costs expected to be bigger than the previous three were set to remain favourable during the second years. Despite the large stockpiles of wheat availhalf of the year. A few months later, following a remarkably able on the global market and years of record dry start to winter, the outlook appears less rosy. production, the wheat market rallied in July. The price rally can be attributed to unfavourWinter brought well below average rainfall in most regions, with some experiencing the driest able and dry conditions in Australia, Canada, parts of Europe and very hot weather in the winter ever. Key agricultural areas in Western Australia are northern plains area in the United States. The global wheat price surge affected the yet to receive sufficient rain and drought concerns led to price jumps, especially in the grain Australian market, and combined with domestic drought concerns causing growers to hold onto market. The question is whether these jumps are tem- grain, prices rose close to $70/tonne in a month. Towards the end of winter, rainfall began to porary market overreactions to the threat of drought, or if higher input prices are here to stay. alleviate drought concerns and offered some price relief, especially in For four consecutive southern regions of Ausyears global wheat pro- The question is tralia. duction broke previous whether these jumps Market experts suggest yield records. Global wheat prices are strongly wheat production is esti- are temporary market correlated to weather conmated to contract 11 mil- overreactions to the ditions and the recent lion tonnes this year, threat of drought, or if spikes do not reflect to 743.2 million tonnes higher input prices are price the underlying supply sitaccording to the latest uation. USDA World Agricul- here to stay. More rainfall is likely to tural Supply and Demand entice growers to increase selling which should Report. Despite this reduction, wheat production is see prices ease further. As wheat supply is not likely to become an issue any time soon, prices projected to be the second largest on record. In 2016–17 global wheat consumption will likely continue to be driven primarily by decreased resulting in larger-than-expected weather and rainfall forecasts. In the hay market, cold weather and frosts stockpiles on the market. Combined with record production, this depressed prices significantly stunt pasture growth in southern regions and during the year, both on the global market and prospects for this season’s harvest deteriorated during winter. in Australia. Despite current oversupply of hay, some preSince early 2016 wheat prices in Australia consistently dropped and between July 2016 and May dict that a poor harvest this season would be 2017 prices were well below the long run average, enough to create undersupply for next season ranging from 10 per cent to 30 per cent below and drive prices up. Supply is increasingly scarce in northern the five year average. Due to wheat oversupply many growers Australia and as product is being sourced from planted less this year, with China, the United other regions, freight costs form an increasing
EARLIER IN the season input costs looked to
percentage of overall cost. Prices remain well back from previous year but quality is inferior and many farmers are opting for more expensive, high quality feed to ensure animal health and maintain production. Dry conditions during winter added pressure to the outlook for the next season, however late winter rainfall eased concerns somewhat. Good rainfall during spring will be key. Water prices increased during winter as unusually high evaporation rates led to much lower than expected inflows to the major storages. Following rainfall in August, stream levels increased, but are still well below normal levels and without significant inflows during spring the outlook is dry for the water season. Despite the sharp price rises in July, water trading increased significantly compared to previous months, demonstrating the effects of a dry winter.
GLOBAL IMPACT SOFIA OMSTEDT The BOM forecasts spring rainfall below average, and weather going forward looks to be the key catalyst for input prices. Both the ENSO and Indian Ocean Dipole outlooks are expected to remain neutral for the remainder of the year, restoring some confidence for a future downpour, however high pressure systems south of Australia continue to reduce low pressure systems and cloud cover. It is still too early to say what the outlook for the second half of the year and input prices will be. With a decent amount of rain it is likely input prices will not stray too far from reasonable levels, especially in the hay and grain markets as current indications suggest decent supply for the rest of the year. However only time, and rain, can tell. • Sofia Omstedt is industry analyst with Dairy Australia.
Global wheat production is estimated to contract 11 million tonnes this year, to 743.2 million tonnes, but is still projected to be the second largest on record.
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
18 // MANAGEMENT
Headlage, snaplage provide cost effective alternatives RICK BAYNE
WHEAT HEADLAGE and corn snaplage are
providing northern Australian farmers with
nutritional and cost effective feed options. And more might be turning to the system after about 40 dairy farmers attended an August 4 field day at Allora, including some who travelled 150 km in a mini bus.
Department of Agriculture and Fisheries dairy extension officer Ross Warren said there was very positive reaction to the day, with a lot of interest in adding the alternative forages in dairy operations.
Mr Warren said wheat headlage and corn snaplage trials at the Gatton research farm and the Allora farm both produced positive results. “There were similar responses at Gatton to what we achieved on farm,” he said. Headlage refers to a silage crop that has been cut higher than standard, usually just below the first leaf. Wheat headlage yields two times the physical material per hectare as the same crop taken for grain, and is one-third the price of grain on a dry matter basis. Andrew Mullins, who hosted the field day at his Allora farm, decided to trial the wheat and corn options after seeing the work at Gatton.
“We just pull grain out and put the earlage in. It’s pretty much two kilos as fed for every kilo of grain you pull out.“
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Last winter he tried wheat headlage for the first time and then turned to corn over summer. Both were good but corn seems the best option. “The wheat wasn’t as high in starch as we’d been hoping,” Mr Mullins admitted. The crop was damaged by insects. “We had the option of either spraying it and waiting for the withholding period or cutting it early so we went early, which I think hindered our starch development in that headlage,” Mr Mullins said. The longer headlage is left ensiled, the more digestible the starch becomes. However, further local results indicate corn might still be the best option. “Others around us who did wheat a bit later still didn’t have as much starch in it as what the corn did, so I think the corn is a much better option,” Mr Mullins said. He plans to plant 80 hectares this year. “Probably half that we’ll need for silage so whatever is left we’ll put down the same again“. Mr Mullins said corn snaplage — or earlage — was “brilliant“ nutrionally and was enjoyed by cows.
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About 40 dairy farmers attended the field day on snaplage and headlage at Andrew Mullins’s Allora farm.
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
MANAGEMENT // 19
WHO:
Andrew Mullins WHERE:
Allora WHAT:
Snaplage and Headlage
“We just pull grain out and put the earlage in. It’s pretty much two kilos as fed for every kilo of grain you pull out. You swap over and they never miss a beat; they just went straight on to it. Because it’s in a mixed ration they took straight to it.“ The new rations have led to improvements in milk fat component, which increased about 0.3 per cent. “There’s quite a bit of fibre in it with the husk of the corn crop still in the silage. It’s cut long and shaggy and I thought the cows might leave it behind but they eat every little bit of it,“ Mr Mullins said. Production is no more expensive than regular harvests. “We have to get contractors to harvest if we go through to grain; either way we’re paying a contractor,“ Mr Mullins said. “The beauty of it is that once the contractor is finished, it’s ready to feed. With grain
Farmers heard that wheat headlage and corn snaplage are providing northern Australian farmers with nutritional and cost effective feed options.
you still have to process it, so this gives you an option without going to all the expense of infrastructure such as mills and silos to handle grain.“ After replacing the wheat with corn, production went up about 10 per cent. “It hasn’t changed since then,“ Mr Mullins said. Mr Mullins urged othger farmers to consider wheat headlage and corn snaplage options. “It’s just a matter of trial and error. You’ve got to get your fibre under control first but then it’s a bonus. When we’ve got enough silage so we’ve got our fibre set down for the year, then we can go chasing higher quality products like the headlage or earage. “I think the corn will be a lot easier for us to work with and it suits the high starch quality a lot more than the wheat.“ Northern NSW dairy farmer Jason Bake is a long-term user of the system and also presented his positive impressions to the field day.
Corn earlage
Allora dairy farmer Andrew Mullins, Ross Warren, dariy extension officer with Queensland’s Department of Agriculture, and Jason Bake, Coffs Harbour. Mr Bake is wearing a Maroons jersey after losing a bet!
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
ABVS // 21
Hoeys retain top place ALANA CHRISTENSEN
DESPITE HAVING the equal best Jersey herd and second best Holstein herd in Australia according to the latest Australian Breeding Values, Katunga dairy farmer Daryl Hoey remains a humble man. Having maintained the title of best Jersey herd for more than a decade, he places the reason behind his success on a considered and consistent effort. Milking more than 300 cows on his 150 ha property, which comprises 60 per cent Jerseys and 20 per cent of each Holsteins and Australian Reds, Mr Hoey said the accolades had taken years of work. “I’ve just spent many years obviously using the right bulls,” he said. “I pretty much only use bulls based off the Australian system and I’ve always placed a lot of emphasis on protein, production overall and fertility. They’ve probably been the priority, and then udders after that.” Mr Hoey places a strong emphasis on fertility and said considering the issues that had occurred across the Australian dairy cow population in past decades, it was always a key factor in his selections. “It’s just something I think we can do better at. We’ve spent probably 15 years not placing enough emphasis on it and ended up with definitely a fertility issue across the whole popula-
tion, and it’s a slow process to fix it,” he said. “I think fertility is a big driver in profitability. I still want my cows to calve every 12 months. We don’t always achieve it, but that’s the goal. “So by trying to place my emphasis on fertility, hopefully (I can) try and fix a lot of the problems that have happened across Australia in the last 20 years.” While Mr Hoey places great considerations into the genetics in the herd, he maintains that it’s about improving the overall herd and ensuring it will ultimately suit Australian conditions and deliver quality production. “It’s still the milk cheque that pays the bills,” he said.
Katunga dairy farmer Daryl Hoey has had his Jersey herd ranked equal best in Australia, with his Holstein herd taking out the silver in DataGene’s August Australian Breeding Values results.
MORE FOCUS ON TOP HERDS, COW GENETICS The rising popularity of genomic (DNA) testing of female dairy cattle means DataGene’s release of Australian Breeding Values (ABVs) puts the spotlight on the top herds and cows, as well as bulls. DataGene’s Genetic Evaluation Manager, Michelle Axford, said the August ABV release saw more herds competing for the top genomic females lists than in the past. When genomic testing first became available to Australian dairy farmers in 2011, a few leading dairy breeders tested a limited number of females. So, the list of top females was dominated by these herds. With many dairy herds now routinely testing each heifer drop, the number of genetic tests ordered in the past year has increased by about 40 per cent. There are now 66 355 females with genotypes. “August’s top genomic female lists reflect this. For example, the Holstein top females list has an increase of 50 per cent herds contributing top females compared to the April 2017 ABV release,” she said. Australia’s top genomically tested Holstein cow is Glomar Goldwyn Lucky 4319, bred by the Johnston family of Sale, Victoria, with a Balanced Performance Index (BPI) of 399. The BPI accounts for the traits that affect profit, production and longevity
in the herd. A BPI of zero represents the average of mature, Australian cows, so at 399, Glomar Lucky has the genetic potential to contribute an extra $399 a year in profit. There’s stiff competition vying for other places in the Holstein Top 10 females. Several leading breeders have strong contenders: the Ireland (Redmaw, Lockington, Vic), Lillico (Hindlee, Smithton, Tasmania) and Lister (Calister, Calivil, Vic) families. At a herd level, Trevor and Leah Parrish, Kangaroo Valley NSW continue to hold the position of Top Holstein Herd with an average BPI of 144. They are followed by Daryl Hoey (Beaulah Park, Katunga, Vic), Hogg family (Adlejama, Biggara, Vic) and Kitchen family (Carenda, Boyanup, WA). Australia’s top genomically tested Jersey cow is Kings Ville SCD Belle 78, with a BPI of 337, bred by Rob and Kerrie Anderson, Drouin West, Victoria. First place for Jersey herds is shared by Daryl Hoey (Beaulah Park, Katunga, Vic) and Con Glennen (White Star, Noorat, Vic) with an average BPI of 118. In the Red Breeds, the Graham family (Beaulands, Nowra, NSW) continues to hold the top spot with an average BPI of 107. Mrs Axford said the easiest way to improve the genetic merit of a dairy herd is to always use bulls that carry the Good Bulls icon. Bulls that meet the Good Bulls criteria in the August ABV release include more than 900 Holsteins, 135 Jerseys, 20 Red Breeds, 12 Guernseys and 40 Brown Swiss.
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
22 // ABVS
The quest for the ultimate commercial cow HOLSTEIN BULL Calister Maebull has been in
demand since he received his first ABV in April but to breeder, Craig Lister, the more pleasing aspect is the sire’s contribution to his end goal. “We’re trying to breed the ultimate commercial cow,” Craig said. “One that will efficiently convert feed to milk solids; is not prone to mastitis; gets back in calf; and without any type fault that would restrict a long and productive life.” When Craig — a fourth generation farmer — began share farming in 2003, the Holstein herd he purchased was ranked below national average for genetic merit. Now, Calister Holsteins is in the top 10 Australian herds
WHO:
Craig and Sharon Lister WHERE:
Calivil WHAT:
Genomics
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for genetic merit ranked according to profitability (BPI). Craig says adoption of genomic testing was critical in improving his herd. Involvement in industry projects during the development of genomic breeding values convinced Craig of the technology’s merit and he subsequently began investing in genomic testing once it became commercially available in 2011. Since 2014, every heifer and about 25 per cent of bulls are now sampled within weeks of birth. For the bulls, the genomic results determine whether they are destined for a career in AI or to be sold as herd bulls. For heifers, the increased data reliability provided by genomic testing enables more accurate breeding decisions, especially for low heritability traits such as daughter fertility and longevity. Heifers in the top 10 per cent for breeding values from the genomic testing are used as donors in the embryo transfer program, with the lowest 25 per cent of genetic merit and crossbred cows in the herd used as recips. The rest are bred conventionally for AI. All heifers are joined to sexed semen achieving 50% calf on ground rate from fresh sexed
semen of which 90% are heifers. They get more than 50 heifer calves a year from that. “It’s a powerful tool to rebuild your herd,” Craig said Calister Maebull is currently the number 2 proven BPI Australian daughter proven sire. Maebull was bred from a package of embryos purchased and imported from Morningview Holsteins in Iowa, when online embryo auctions, coinciding with a high Australian dollar, provided the opportunity to cost effectively invest in bloodlines from north America. The embryos are out of Morningview SHTL Lucy, with a family history including Palermo, Shottle, O’Man and Durham. Lucy’s dam was a full sister to Morningview Legend, a bull which has had success in ABV rankings. Maebull has 69 milking daughters and combined with his genomic results, has a 90 per cent reliability for production traits. Maebull has a BPI of $303 and high ratings for survival, cell count and also daughter fertility. The Listers have four Maebull daughters milking in the herd. Several of the stud’s most potent maternal bloodlines originate from cows purchased at the 2008 Calivil Creek Holsteins dispersal sale.
Craig Lister with his Holstein herd on his Calivil farm.
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5th Dam: Kaarmona Lester Babe VHC-91. Photo: Ross Easterbrook
1800 ABS BULL www.absglobal.com/aus Craig and Sharon Lister with their daughter, Emily.
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
ABVS // 23 “I made the decision in 2008, if I’m registering cows, I’d start with good brood stock,” Craig said. He purchased 8 head from Calivil Creek, which have bred the lines of AI sires Bowyang and Livingston. They also purchased heifers at IDW sales, including the dam of Canjam, who was 14th genomic bull overall. Cows are culled on cell count and fertility. “If you want longevity in cows, choose those with a high survival index; high fertility index and high production,” he said. Craig said genomics has proven a massive step towards the improvement of both his, and the national herd. “The ability to measure progress on heifers as soon as they drop means you can make decisions immediately. “You get the heads up straight away on survivability and fertility, which are both low heritability. Previously, you wouldn’t know until the end of their career.”
Farm management The milk price crash forced the Listers to heavily destock but the end result has made them more self-sufficient. Between May and October 2016, 217 dairy cows and 57 replacement heifers were sold, providing a valuable cashflow and reducing the stocking rate to a level where the business was self-sufficient for fodder requirements with only minimal inputs. They were milking 450 at the time of the milk crash but now milk 350 and carry 250 replacements. “We are enjoying the lower stocking rate,” Craig said. “We’re self-sufficient now, apart from grain which we buy in.” Craig and Sharon farm 702 hectares of irrigation land (396 ha owned and 306 ha leased off Craig’s mother, Judy). Depending on irrigation water availability, about 100–150 ha is utilised for grazing the dairy herd, with the remaining land farmed dry or opportunistically irrigated to carry replacements, dry stock and produce fodder. They lease a total of 900ML of high reliability water entitlement from Judy, through the Goulburn Irrigation System. The grazing area consists of Lucerne or Spanish/Italian rye-grass and clover pastures, while annual rye-grass and sub clover crops provide the bulk of the fine-chop silage harvest (500– 800tDM/year). A roaming 100 ha cereal cropping rotation provides the herd’s rough hay requirements, while assisting with weed control and the pasture renovation program. They produced 1100t DM in hay last year, which will last for a few years, and aim to produce 600t DM of silage each year. Homegrown forages are supplemented with a custom grain, legume and mineral blend in the dairy, of which the composition and amount fed is altered to balance the herd’s nutritional requirements. The 50-stand rotary dairy has automatic cup removers and retention bars so the herd can be milked by a single operator. Craig’s mum, Judy, relief milks three times a week, and also rears calves, and Sharon also relief milks. They have one non-milking full-time employee to assist with general farm duties. “We focus on having as much feed as we can directly grazed by cows. We have a concrete feed pad with troughs and used a PMR system with a mixer wagon before. “It was a good opportunity for maximising feed use effiiciency but it adds costs and requires additional labour. It doubles the cost of feed when you conserve it and feed it back.”
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
ANIMAL HEALTH // 25
APIAM ANIMAL HEALTH GEMMA CHUCK
Which worms upset your heifers?
AS WE come to the end of winter and spring approaches, it is time to think about how the change in season can affect the burden of internal parasites in weaned stock. This article discusses the common gastrointestinal worms and how they can affect dairy heifers.
The common gastroinestinal worms Gastrointestinal worms in cattle are divided into nematodes (round worms), cestodes (tapeworms) and trematodes (flukes). They are assigned to one of these groups according to their structure. Within each group, the life cycles and growth of the parasites are generally very similar and different from those of the other two groups. The nematodes are the most economically important internal parasite of cattle. Tapeworms play a minor role and flukes cause significant economic losses in some geographic areas.
The main concern with tapeworms in cattle is from a human health perspective.
The impact of gastrointestinal worms in cattle As described, the clinical signs of gastrointestinal worm burdens include weight loss, ill-thrift, diarrhoea and dehydration. Research has shown that even low-level infections can have a negative effect on productivity in young animals, such
as dairy replacement heifers. These heifers may not show overt clinical signs and thus are described as having subclinical infestations. They may have a suppressed appetite and reduced productive grazing behavior, leading to reduced feed intake and growth. Worm larvae cause a significant immune response which can lead to chronic inflammation and gut hypersensitivity.
Young, growing heifers are highly susceptible to gastrointestinal parasitism and the production losses in this group of animals will be the greatest. If there has been sustained exposure to worms, adult cattle will generally develop good immunity by 18 to 20 months of age. Next month we will discuss the treatment and management of gastrointestinal worms in cattle. • Dr Gemma Chuck is a veterinary adviser at Apiam Animal Health.
You always want to do your best for them. They’re like family.
The nematodes (round worms) The small brown stomach worm, Ostertagia ostertagi, penetrates the lining of the abomasum (fourth stomach) causing severe damage and inflammation. Infected heifers have a severe scour, inappetence, anaemia and weight loss. Cattle up to 18 months old can be affected. This parasite can enter an arrested phase of its lifecycle which then can then resume 3–9 months later. This type of disease can cause significant losses in young heifers as the worm larvae emerge. The Barbers Pole worm, Haemonchus placei, thrives in northern NSW and QLD where there is summer rainfall. This blood sucking parasite also inhabits the abomasum and causes severe anaemia and loss of protein. This results in the characteristic ‘bottle jaw’ appearance with affected cattle being weak and slow to move. The stomach hair worm, Trichostrongylus axei, is the last of the common abomasal nematodes. It also damages the lining of the abomasum causing inflammation and reduced absorption of nutrients. The stomach hair worm is often diagnosed in mixed worm burdens and exacerbates the severity of an infection. The main species of small intestinal worm affecting cattle is Cooperia spp. These worms are often present in mixed infestations. Affected animals will have diarrhea, poor weight gain and inappetence.
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The trematodes (flukes) Both the liver fluke (Fasciola hepatica) and the stomach fluke (paramphistomes) require a particular species of aquatic snail in order to complete their complex life cycle. For this reason cattle become infected in only certain regions of Australia where these snails co-habit. Contact your local veterinarian to find out if liver fluke is present in your area. Liver fluke infection results in significant damage to the liver tissue and bile ducts which causes irreversible scarring. Signs of liver fluke include inappetance, weight loss, ‘bottle jaw’, anaemia, jaundice and death.
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The cestodes (tapeworms) These worms are long and segmented, measuring up to 6 metres in length. They commonly inhabit the small intestine but their presence is usually of no consequence, having little ill-effect on the animal. Heavy worm burdens may compete for nutrients and interfere with gut motility leading to poor weight gain.
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Cool. That means we’ll be snorkling on the Barrier Reef this Christmas.
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*20kg & 800kg Rivalea bagged/Veanavite branded, incl. GST & in 1 transaction from an AgLink, Elders, CRT, Landmark, NRI, AIRR or Murray Goulburn store in Vic, NSW or Tas. Open to Aus residents 18yrs+. Entrant/participating reseller must retain original purchase receipt. Limit 1 submission of the online entry form per receipt. Starts 12.01am AEST 01/09/17 & ends 05.00pm AEDT 31/10/17. 1 entry in the prize draw for every $150 (incl. GST) of eligible product purchased - entries rounded up to the closest $150 increment. Draw - 04.00pm AEDT 01/11/17 at Webmatrix, 7A High St, Wodonga, VIC, 3690. Prize - Kubota RTV X-900 valued at $25,000 RRP (incl. GST) incl. plastic canopy, acrylic windscreen & tow hitch. Registration fees/insurance/any other extras not included. Winner must collect prize from store where winning purchase was made. Winner advertised on www.veanavite.com.au from 01/11/17. Promoter – Rivalea (Australia) Pty Ltd, ABN: 53 004 892 835 of Albury Road, Corowa NSW 2646. Authorised under NSW permit number LTPS/17/16322.
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5/09/2017 5:30 PM
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
ANIMAL HEALTH // 27
Herd cell count won’t budge despite culling cows
Culture results will guide the further investigation of the problem, the aim of which will be to identify the source of infections, the method of spread, and how to prevent spread. The cultures will also help us understand the likelihood of being able to cure existing infections. Leon’s next task will be to carefully collect a set of about 25 milk samples from selected cows immediately after his next herd test.
As happens most of the time, a bit of background analysis and a good set of milk cultures prior to launching into a detailed investigation are likely to result in a higher quality investigation and a better outcome for Leon. * Leon’s name has been changed for this article. • Rod Dyson is a veterinary surgeon and mastitis adviser at www.dairyfocus.com.au
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Hence, culling or withholding this cow (and other cows like her) is unlikely to make a significant difference to the BMCC. The third likely factor is that mastitis infections in a herd are a dynamic and fluid situation, constantly changing. Over any period of time, previously uninfected cows are becoming infected, and some infected cows are being cured, either by treatment or by self-cure. It is the rate at which these changes are occurring which can cause significant changes in which cows are contributing most to the BMCC at any given time, and if this rate of dynamic change is high, then culling or withholding cows from the vat may seem to have little or no effect, simply because other cows have become infected over that time and have become significant contributors to the BMCC. So where does this leave Leon? Further analysis is needed to see whether at previous herd tests the same cows constantly appear in the list of significant contributors, meaning that Leon has a small group of cows which are the key to his BMCC, or whether there is a constant change in the significant contributors, meaning there is likely to be a relatively high rate of new infections being a major contributor to Leon’s BMCC. Probably the most likely outcome is that both conditions are occurring. Either way, the key to interpreting and understanding this analysis will be milk cultures.
A cow’s contribution to the BMCC is a function of both her current Individual Cow Cell Count (ICCC) and also the volume of milk she is contributing to the vat.
T S
“I can’t just keep culling cows if it isn’t going to make a difference.”
E
“I CULLED the 10 highest cell count cows and the cell count didn’t change — not at all!” Leon* was frustrated — very frustrated! He milks about 300 cows in Northern Victoria with a spring/autumn split calving system, and I could hear the frustration in his voice. Leon supplies a processor where the premium payment threshold for Bulk Milk Cell Count (BMCC) is 250 000 cells/ml. The farm has been constantly in and out of the premium band for a couple of years now, and nothing he has done has solved the problem. In the last month, the average BMCC was just over 250 000 and a chart of Leon’s BMCC for that last month is pretty typical of what has been happening throughout the last couple of years. He just can’t get the BMCC below 250 000 and then keep it there. As Leon said, “I can’t just keep culling cows if it isn’t going to make a difference.” This is a story we regularly hear — farms either culling or withholding high cell count cows from the vat, and the BMCC doesn’t seem to change. There are a number of reasons why this might occur, but three factors are likely to be very significant. Firstly, a cow’s Individual Cow Cell Count (ICCC) is not a static number — a cow’s ICCC can change from day to day, and even from hour to hour. A cow that has herd tested yesterday may have a similar ICCC today, or could have a quite different ICCC today simply as a result of both natural biological variation and the cow’s immune system responding to the varying levels of challenge in the udder. If enough cows change their ICCC, then the overall BMCC will change as a result. Secondly, Leon’s worst 10 cows in terms of ICCC were probably not the top 10 cows in terms of contribution to the overall BMCC. A cow’s contribution to the BMCC is a function of both her current ICCC and also the volume of milk she is contributing to the vat. Analysis of Leon’s last herd test showed that about 15 per cent of his herd had exceeded the level of contribution which we consider to be
significant, and combined with the pattern of contribution, it showed that in Leon’s herd, there is a larger number of cows with a moderately high ICCC rather than a small number of cows with a very high ICCC creating the problem. Interestingly, one of Leon’s cows with an ICCC over 1 000 000 cells/ml did not even make the list of significant contributors, simply because her production was quite a bit lower than other cows.
S
ROD DYSON
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
28 // PASTURES
Grazing and silage prove a cost-effective mix GORDON COLLIE
ANNUAL AND perennial rye-grasses with
clover for grazing and making silage is at the heart of a cost-effective farming system operated by Kevin and Michael Malone at Tumut. The Malone family have been dairying in southern inland NSW for more than a century and based on their current 300 hectare aggregation with a 1.5 km frontage to the Tumut river since 1969. There was a local milk factory in the early years, but now the farm is one of just two remaining in the district supplying Riverina Fresh at Wagga Wagga. Kevin is an electrician by trade who has been farming almost 30 years and has been joined by his brother Michael, a qualified mechanic. “We make the most of a water allocation which is not unlimited and can vary from year to year,” Kevin said. “We’ve had some tough seasons where our supply has been down to 20 percent but there have been no problems with availability since flooding last year.
WHO:
Kevin and Michael Malone WHERE:
Tumut WHAT:
Conserving pasture
“The flats used to flood every winter before the river flow was regulated for hydro power generation,” Kevin said. “We couldn’t function without irrigation to get the pastures started each season.” They use a mix of travellers and a centre pivot which can be moved between two 24 ha circles. “We’d love another pivot which takes all the work out of irrigation. It’s on our wish list,” Kevin said.
Michael and Kevin Malone in their eight-a-side- swing over herringbone.
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
PASTURES // 29
Cows moving into the dairy
Kevin Malone with calves.
By mixing annual and perennial rye-grasses the grazing season is extended at both ends with feed value boosted by the addition of clover and oats. Perennial rye with clovers can provide grazing for three to four years, with the flexibility to renew by direct drilling. “We did a lot more cultivation when we were growing sweet corn for the fresh market,” Kevin said. Triticale was grown as part of the cropping rotation for both grazing and whole crop silage. Surplus pasture is conserved as fine chopped silage and some hay is also made. “We used to store the silage in square bale modules, but it was a two person operation to feed out, so we’ve switched to making silage in pits.” “We can store up to 1700 tonnes of silage and like to put away about 700 to 800 tonnes each
season. With the floods last year, we were struggling to make any.” Having some smaller silage pits which can be fully used up avoids spoilage from having to reseal a pit. Silage is fed out twice a day along fence lines to minimise wastage from about April until early September. About 3 kilos of roller-milled triticale used in the milking bales daily is the only bought in feed used. “We only started bail feeding in 2006 during a drought, but the value to milk production was worthwhile continuing,” Kevin said. Rye and clover grown under the centre pivot provide the bulk of summer feed needs with a mix of oats and rye providing grazing during winter and into spring.
They milk about 190 Holsteins and maintain a cost-effective production of about 7000 litres or 23 litres a day. “We milk through an eight-a-side swing over herringbone and would love a bigger shed, but the reality is that the dollars just aren’t in dairying at the moment.” Many of the cows are registered as part of the Enolam stud and Kevin’s youngest son Ryan, an agricultural science student at Charles Sturt University is keenly interested in genetics. Milk income is supplemented with a dairy beef enterprise, producing Holstein steers and the progeny of an Angus bull used over around 50 heifers each year for ease of calving. Calves are typically raised for about two years, with the Friesian steers selling at 600 plus kilos liveweight.
Calf housing
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
30 // PASTURES
Taking ownership of pasture varieties WITH A multitude of pasture varieties available
on the market it can be difficult selecting the right cultivar to suit your farm. Notman Pasture Seeds have conducted a pasture trial program in southern Australia where farmers can identify what performs well under their local conditions and management practices. Agronomist Andrew Allsop, based with Notman Pasture Seeds in western Victoria, said the trial program allows farmers to see how innovations in pasture breeding are delivering increases in pasture yield, persistence and quality on their farm. Mr Allsop said the trial programs are conducted under standard industry protocol. “Working with farmers allows us to compare industry standards with current farming practices, and we are able to identify the suitability of new germ plasm in our local environments and screen yet to be released lines with current industry standards and practices,” he said. Andrew said Notman Pasture Seeds run sites predominately in high rainfall or irrigation zones of southern Australia and focus on criteria including persistence, seasonal production, quality and palatability. A perennial rye-grass trial sown on dairy
farmer Mark Hammond’s Labertouche farm has enabled him to compare current market varieties to new breeding lines coming through. In the replicated trial, Mark said it has been good to identify those rye-grass varieties which are performing well under the local conditions. “It’s been good to see what works on our farm and what doesn’t,” he said. Mark said the trial results have given him confidence, with the perennial rye-grass varieties planted on his farm generally being the top performing trial varieties. Pasture species trial results vary from trial to trial and different cultivars behave differently under different management conditions. Adam Fisher of Notman Pasture Seeds said the reason for this variance is often determined by a number of factors. “These include the particular growing conditions and trial management at the site; whether the trial was run on a research station or onfarm; and whether the trials were sole species or in mixes.” He said Notman Pasture Seeds emphasised persistence as a key indicator when measuring the performance of a perennial rye-grass as it’s
a characteristic that’s important advantage in a tough year “Cultivar selection is important when renovating pastures. However, understanding what works and what doesn’t work on your farm can be invaluable. “By seeing the new innovations in rye-grass plant breeding first hand you can see the extra benefits in yield, persistence and quality the newer varieties are delivering.”
Notman Seeds’ Andrew Allsop undertaking a probing trial at Allansford, Victoria.
Cropmark Research Director Nick Cameron, with Notman Seeds’ Adam Fisher and Peter Notman.
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
PASTURES // 31
Analyse your legume content AGRONOMIST ANDREW Harborne has advised farmers to analyse the legume content of pasture with their end goal in mind. Mr Harborne, the southern NSW area manager for Upper Murray Seeds (UMS), says a 30 per cent clover content will provide atmospheric nitrogen and drive feed quality. Having the right amount of legume content (ie clover/grass ratio) improves pasture quality and utilises dry matter, he said. Mr Harborne said Upper Murray Seeds’ flagship Atomic annual rye-grass outperformed 10 other varieties in an independent trial concluded in September 2016 where Atomic produced 9216 kg DM/ha. (The side-by-side rye-grass variety trial was
DUAL-PURPOSE LUCERNE STRIKES RIGHT BALANCE Stuart and Greg Conochie from Kalbar, south east Queensland milk about 230 Jersey cows and have a structured feed plan including the grazing of GTL 60 lucerne from Pasture Genetics. The lucerne pastures are typically grazed from May through until August in
conducted by BGA Agriservices, April-September 2016, Casino NSW.) “Atomic’s abundant biomass production reduces the cost per kg/DM, and increases the capital gross return from milk making the annual tetraploid a real winner in terms of boosting profitability,” he said. “Other premium products to help grow a dairy farming business include high performing seed blends, or mixes, designed to suit a particular enterprise, but with the help of a skilled agronomist a blend can be fine-tuned precisely according to your needs.” Mr Harborne said investing in the best pasture choice possible will pay dividends in the long-term.
conjunction with Jivet Tetraploid Annual Italian Rye-grass pastures. Through spring and summer periods when lucerne is in its peak growing time, round bale hay silage is cut to supplement the feed ration when required. In recent years Q75 Lucerne and GTL 60 Lucerne have been the preferred varieties for the Conochies. Stuart said they look for quality and persistence when selecting a dual-purpose Lucerne for their region and GTL 60 lucenre
This crop of UMS Atomic ryegrass in northern Victoria was cut for silage and regrazed well into the season.
meets all their requirements, while Q75 lucerne is more of a premium hay option. In April, the Conochies sowed an irrigated paddock of GTL 60 Lucerne at 25 kg/ha. In the first year, the paddock performed well producing good yields under some extreme summer temperatures and large rainfall events. Stuart commented that the lucerne was tested in its first year. In May another paddock was sown to both GTL 60 Lucerne and Q75 Lucerne.
The Conochies said both varieties have a place in their system. They are aiming for at least three or more quality years of production.
Stuart Conochie
DAIRY NEWS AUSTRALIA SEPTEMBER 2017
32 // PASTURES
Two new tools to rejuvenate pasture DUNCAN AG has introduced two new machines
from Ireland that can be used to rejuvenate pasture and aerate their soils — the Alstrong Auctus overseeder and Alstrong Aerator. Duncan Ag chief executive Craig McIsaac says the 3m-wide Alstrong Auctus pasture rejuvenator has a unique design that allows it to carry out several operations in one pass. It can be used in sprayed out pasture or cultivated ground. It has 10 individually sprung levelling boards that scarify and scratch the surface to remove dead grass, expose the soil and create a shallow seed bed. The levelling boards are followed by a heavy duty roller drum with teeth that break up surface pugging and allow air and water to enter the surface layer of the soil. An air seeder broadcasts the seed behind the roller using splash plates.
The Alstrong aerator has a drum with blades that can break up soil pans to a depth of 30cm.
Behind the seeding zone the Auctus can be specified with grass harrow finger tines or heavy duty prismatic rings that set the seed in the soil. A shield over the roller stops soil from the rollers getting into the seeding area. The Auctus has a strong structural steel frame and weighs 4.5 tonne, which can be increased to 5.2 tonne with water ballast. It is a trailed machine that follows uneven contours and the 15 mm blades on the roller drum are made of hardened steel. The Auctus comes standard with a French-
FORAGE BRASSICAS BACK ON THE MENU Dow AgroSciences has launched ForageMax herbicide, which it says will enable farmers to reconsider growing forage brassicas. “These high quality feeds had been relegated to the ‘too hard’ basket due to infestations of fat-hen and diamondback moth,” according to Dow’s Dan Dixon. “As with everything, though, there is a cost involved. However, producing returnon-investment data has been a priority for us, and we can now report excellent results.” Mr Dixon said ForageMax produced
made Delimbe air seeder or Duncan Ag can fit it with an APV seeding unit. Alstrong Aerators are also heavy duty machines. They are based on a large drum with 15 cm blades that can break up soil pans and shatter the soil structure to a depth of 30 cm when used in dry conditions at the correct speed. In pasture it does its job without disrupting the grazing system. The blades are set almost perpendicular to the direction of travel but at a slight angle, which adds a twisting motion that helps break soil pans. an average increase in dry matter of 7.18 tonnes/hectare across three trials and twoAlstrong seasons.aerator has a drum with blades The that“Considering can break upthe soilreturn-on-investment, pans to a depth of 30cm. ForageMax (100 ml/ha) cost $40/ha to produce an extra 7.18t/ha dry matter, which equates to 179 kg/$1 spent. “This gives a much higher return-oninvestment than buying in a round bale (300 kg at $60/bale) which only produces 5 kg/$1. When converted to the metabolisable energy (ME: digestible energy less energy lost in urine, gases) of the feed component, using ForageMax to grow turnips results in around 2000 ME/$1 spent as opposed to only 30 for oat/wheat hay, according to Mr Dixon. Mr Dixon said a farmer in Princetown,
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The weight of the roller is concentrated on each blade as it enters the soil, and the fast working speeds (up to 20 km/hour) also help shock and fracture the soil. The aerators come in three different versions: trailed models are 2.5 m wide or 3 m wide and the three point linkage model is 3 m wide. The 3 m models weigh 4 tonnes dry and 6 tonnes with water ballast while the 2.5 m model weighs 3.5 tonnes dry and 5.5 tonnes with water ballast. Tel. (03) 9314 9666 Victoria, said they had had three times the amount of dry matter in the treated crop compared to the untreated crop. The added bonus was that they had no fat-hen trash to clean up, so it was easier to get back into sowing new pasture.
Yarram farmer Scott Travers with turnips – untreated and treated with ForageMax.
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
MACHINERY & PRODUCTS // 33
Super Comby solves machinery headache for Fish Creek farmer GIPPSLAND DAIRY farmer, Graeme Nicoll,
Fish Creek, has recently purchased the latest Super Comby after a successful 10 year run out of his old one. Graeme chose his first Super Comby 10 years ago when he was setting up his pit silage as his main source of supplementary feed. Not being a fan of machinery, he wanted simple gear that could do multiple jobs and would last. His first Super Comby met his expectations. When Graeme was first looking to buy a feedout wagon, he was needing an 18–20m3 sized silage wagon, similar to his neighbours. Due to his rolling terrain, getting in and out of the lane way, and through gates, he found that with the smaller wagon, he can get all he needs into it and feeding out takes similar time to that of the neighbours with the larger wagons. “The Comby might look small, but I kind of struggle calling it a smaller machine, because it fits enough silage in to do the job,” Graeme said. The low sides makes it easier to load, being able to see into the body, and where you’re placing the load from the tractor cab, making it easier to fill it properly. To reduce the headache of owning machinery, Graeme’s philosophy was to buy machinery
that could do multiple jobs. Choosing the Comby meant he could have just one feeder to replace a silage wagon and a feedout cart. This means just one machine to maintain, one machine for staff to learn to operate, and no need to be continuously swapping machinery on the tractor. “This machine means we only need one feedout machine on the farm.” “Our first Comby proved that we could feed square bales, if we had to buy them in dry times, more than adequately.
Graeme Nicoll has recently purchased the latest Super Comby after a successful 10 year run out of his old one.
“It does a great job of feeding out chopped silage, but also means if we’ve got a few round bales we can throw them in the wagon and feed
them out as well.” Tel. 1800 750 428 or visit www.hustlerequipment.com.au
Utility tractors on a budget Mahindra has launched its 6060 utility tractor range in 2WD and 4WD. Mahindra says the 3533cc 4 cylinder water-cooled direct injection diesel engine provides power and torque. The increase in weight (2850 kg for 4WD) and (2530 kg for 2WD) provides more grunt. Other features include: ■■ 4 Cylinder 3533 cc Displacement with 51 PTO horsepower ■■
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DAIRY NEWS AUSTRALIA SEPTEMBER 2017
34 // MACHINERY & PRODUCTS
More to Chinese tractors than you think
GRUNT
JOHN DROPPERT
CHINESE TRACTORS.
Wait! Don’t turn the page just yet. I know what you’re thinking — and it probably wouldn’t be wise to print it here. It’s fair to say Chinese tractors, in general,
have the reputation that Korean ones had not too long ago, and Japanese ones well before that. One that makes for much hilarity when you see a low-hour machine for sale, or a suspected sucker shaking hands on a deal at Farm World.
If the media coverage and odd court decision are true, at least some segments of this broadly generalised category are worthy of lashings of ridicule and disdain. I’d have thought most of them can easily be
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picked out at the field days — the ones where the spray paint has not quite all gone where it should, and the panels just seem to be that bit too far out of alignment. The plastic looks and smells like it’ll melt if the sun stays out too long. It seems that not everyone got the memo though, or money really does talk; as you still see them getting purchased, out in paddocks, and then advertised for sale or sympathy.
You can’t tell me that the Chinese economy has gotten to where it has on the basis of tractors that break down after 100 hours of slashing. I’ve never driven a good Chinese tractor, but then again I’ve never driven a bad one either. I’d really like to flog the guts out of one just to see what it can do. Here’s why: As you may be aware, this column has a soft spot for tough, basic spec machines that get the job done without making you a coffee and giving you a massage. The ones where the levers are still connected to things; tractors that you can walk up to, have a look under the bonnet, and actually see what’s going on. At face value, Chinese tractors fit that bill perfectly. And I strongly suspect that there are at least some good ones out there on the market. Whether they’re based on reliable older platforms, backed by more established dealers rather than simply ‘importers’, or straight out manufactured to a higher standard, with decent castings and fittings, more precise parts, and the like. They must exist. Why do I believe this? Because I’ve been fortunate enough to see just enough of China (not much) to know that locally produced machines are everywhere there — just as there are a great many Chinese cars on the roads. You can’t tell me that the Chinese economy has gotten to where it has on the basis of tractors that break down after 100 hours of slashing. I have also seen Chinese milk processing plants with more people as tour guides than working on the factory floor, and robotics that would make the eyes of any Australian plant manager water. You can’t tell me that they don’t have a clue how to build tractors. I’m sure that there are plenty of dodgy characters cutting corners, but it seems disingenuous to suggest that the Chinese can’t build decent tractors. So are we tending to import too many of the ones that fit the cheap price buyers expect to pay? Or are there plenty of good ones that we don’t hear about because a couple of bad apples are trashing the basic end of the market? My budget doesn’t extend to finding out through trial and error, so I’m just asking questions … • John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.
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Order your Pasture Genetics GTL®60 Lucerne from your local rural store
GTL®60 Lucerne continues to exhibit elevated levels of residual plants and the ‘high relative feed value’ trait that Pasture Genetics’ varieties are known for. You can have high levels of grazing tolerance, long term persistence and the ability to cut high quality hay.
Our lucerne growers tell us that their key requirements for a lucerne variety are ‘productivity, persistence and quality’ – and with GTL®60 Lucerne, we can tick all those boxes. Our lucerne varieties are bred in Australia, for Australian growing conditions. They also come with our unique Establishment Guarantee, which reduces the risk when establishing a new stand.” Tom Damin Research & Technical Services Manager.
14-16 Hakkinen Road, Wingfield, SA 5013 • T 08 8445 1111 • F 08 8445 7777 • seed@pasturegenetics.com •
• pasturegenetics.com
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