Dairy Exporter April 2016

NEW ZEALAND

Learn, grow, excel

GETTING ORGANISED

THE LEAN, EFFICENT APPROACH

Manage your own risk Page 16

MARCH 2016

Handling the tough decisions Page 30

$12 incl GST

EASING THE OE

PLANNING FOR LOCAL OUTCOMES

MANAGING YOUR WELLNESS

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CONTENTS

MIRAKA PILLARS EARN PREMIUM 11 UPFRONT 10

10 Split payments to help cashflow There are ups and downs to Fonterra’s plan to split dividend payments.

GETTING ORGANISED THE LEAN, EFFICIENT APPROACH 51

MILK PRICE FALL HITS LISTED COMPANIES 14

16 Manage your own risk Dairy analyst Brian Rice thinks New Zealand farmers could make more use of price risk management tools.

BUSINESS 22

26 More than just powder The Danone Nutricia plant in Otago is focused on producing high-quality valueadded products.

30 Handling the tough decisions Reducing wage costs is one response to low payouts, but it has to be done properly.

SYSTEMS 38

42 Feeding to reduce nutrient loss A feed focus might be another tool in the battle to cut nitrogen leaching.

44 Challenging the system For James and Belinda McCone, fine-tuning their farm meant looking at more than just the stocking rate.

SPECIAL REPORT 51

52 Leading lean change Lean management is more than a single idea – it’s a new way of thinking about system improvement.

57 Time for a tune-up The FarmTune programme is helping farmers adopt lean management techniques.

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TEAM PLAYER 22 Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

ENVIRONMENT 67

70 Downturn prompts silage suggestion Are you getting the best value from your silage?

STOCK 72

72 Focus on cost Tane and Rachel Little don’t see any point in buying extra production.

YOUNG COUNTRY 78

80 Easing the OE Innovative schemes are helping young people travel the world and gain new experiences without breaking the bank.

82 Laying the foundations of a successful future Farming wasn’t in Shaun Bradley’s blood, but that hasn’t stopped him making a mark on the industry.

COLUMNS

20 Market View 40 CO Diary 74 Vet Voice 88 Know How, Can Do 92 Dairy 101 95 State of Play 96 Demonstration Farm 98 Dairy Design 100 Dairy Solutions 102 Property

PLANNING FOR LOCAL OUTCOMES 78

CHALLENGING THE SYSTEMS 44

JACK OF ALL TRADES 40 Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

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DAIRY DIARY

BROUGHT TO YOU BY FONTERRA FARM SOURCE NZFARMSOURCE.CO.NZ/STORE 0800 731 266

APRIL April 21 – DairyNZ’s People Expo’s focus on Good to Great: tips for a balanced and productive workplace. The expos provide ideas to help lift performance, grow your people and create efficiencies onfarm. They will be held in Taranaki on April 21;

Bay of Plenty, April 27; Waikato, April 28. For further information and to register visit http://www.dairynz.co.nz/people/dairynzpeople-expo/.

MAY May 4-5 – Keynote speakers for this year’s Dairy Women’s Network conference include Diane Foreman and Catriona Williams. Three workshop sessions are being held on each day of the conference. For further details visit www.dwn.co.nz.

May 12-14 – DairyNZ’s Mark and Measure: Strategy and Business seminars will be held in Taupo in May and then Queenstown June 8-10. Registration for the Taupo seminar closes April 26 and for Queenstown May 9, unless places fill earlier. To register, visit www.dairynz.co.nz/farm/business/mark-and-measure/.

May 14 – The New Zealand Dairy Awards will announce the 2016 winners at an awards dinner in Wellington. For details visit www. dairyindustryawards.co.nz.

May 17-18 – This year’s DairyNZ Farmers’ Forum in Hamilton focuses on the changing global environment and how it will shape the future of New Zealand milk production. The forum will be held at the Mystery Creek Events Centre in Hamilton and

JUNE

June 7-10 – Rotorua is the base for Ayrshire New Zealand’s annual conference. Visit www.ayrshire.org.nz.

June 15-18 – The New Zealand Agricultural Fieldays is the largest agribusiness expo in the Southern Hemisphere and is held at the Mystery Creek Events Centre near Hamilton. Visit www.fieldays. co.nz for details.

is free to levy-paying dairy farmers and their staff. Entry fee for other attendees. View the full programme and register at www. dairynz.co.nz/farmersforum. (See page 12).

May 20 – The winner of the 2016 Ahuwhenua Trophy BNZ Maori Excellence in Farming Award for Dairy will be announced at the awards dinner to be held at Claudelands in Hamilton. Check out the details at www.ahuwhenuatrophy.maori.nz.

May 23-25 – The Thames Valley Jersey Club hosts Jersey New Zealand’s annual conference this year. Details will be available on www.jersey.org.nz.

May 25-27 – This Year’s LandWISE conference in Hawke’s Bay is themed ‘The Value of Smart Farming’ and aims to provide an understanding of how digital technologies might help on the farm now and in the future. Regular updates will be available at www.landwise.org.nz.

June 19-24 – Holstein Friesian New Zealand’s annual conference is in Canterbury this year with herd visits and an elite Holstein sale. View the itinerary at www.nzhfa.org.nz.

June 20-22 – The South Island Dairy Event (SIDE) 2016 has the theme Bounce Forward and will be held in Invercargill.

Registrations open in April with an early bird closing date of May 27. For further information and to register visit www.side.org.nz.

FOR EVERY KILO OF MILK SOLIDS, THERE’S A TONNE OF THINGS TO GET RIGHT. When it comes to making decisions around milk quality, you don’t have to go it alone.

We’re ready to support you with firsthand advice and proven products. Our partnership with market leaders ensures the best solutions for your operation.

Talk to your local TSR today or visit us in store.

NZFARMSOURCE.CO.NZ/STORE

6

0800 731 266

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

11

EDITORIAL

16

20

of the crop

DAIRY INDUSTRY

Time for a tune-up?

The internet is full of sayings like “tidy desk, tidy mind” and how being tidy makes you more efficient and productive. Lean management, the Toyotainspired management programme about continuous improvement of systems and processes to streamline businesses has had books written about it and has some great possibilities for the dairy farming sector.

Our special report is all about Getting Organised, the lean, efficient approach.

Purata Farms in Canterbury is embracing the programme and calling it InSynC. Getting InsynC has fostered staff engagement and created efficiencies in their business, which are then embedded in the culture to sustain those efficient, less-wasteful ways (p 54). DairyNZ call it FarmTune in the Waikato and are just getting started (p62), and have been piloting the programme with great results from enthusiastic participants in Southland (p57).

It sounds like a great programme, I am thinking of adapting it for my home life, calling it HomeTune and driving out waste and inefficiencies and implementing processes to get my four teenagers to clean the toilet and tidy their rooms – or would it be easier to wait until they leave home I wonder?

New to Dairy Exporter this month is an Industry Insight column, where we air an insight or view from an industry person who might give us a slightly different take on a subject than the onfarm view. First up is Andrew Watters from MyFarm looking at the importance of strong onfarm financial management during the downturn in milk prices (p34). As Andrew says, those in the driving seat when prices recover will be the strong financial managers.

Brian Rice from Rice Dairy, a Chicagobased dairy price risk management company, told Anne Lee dairy farmers need to manage their own risk – and that the demise of Fonterra’s GMP scheme was a great loss to the industry (p16). Rice is

in New Zealand to speak at the Fonterra Shareholder’s Council’s Grow Your Mind seminars in early April and will be giving shareholders an insight into risk mitigation techniques which can be applied in farming businesses.

NZX, the NZ capital markets operator, has just received approval from the Financial Markets Authority to operate a Milk Price Futures and Options market, and the launch date is provisionally set for May 2016. Check out the May issue of the Dairy Exporter to learn about what futures and options are and how to get involved in managing your dairy price risk. We will have a Futures 101, frequently asked questions, a glossary of terms and who to approach for help and registration to get involved. NZ farmers are the most exposed in the world to global commodity prices and have had the fewest options available to them to manage that risk, Rice said.

“Once you get a milk price futures market you are going to be light years ahead of where you are today,” he added.

Even though the industry is full of gloom with a low payout, you can’t help but be impressed and uplifted by reading about the Dairy Industry Award winners for 2016 in our special publication Cream of the Crop, included free with this issue.

Share farmers are doing it hard, but many of them remain positive about the longterm outlook for the sector, and they are driving out costs and snapping their wallets shut to ride out the downturn.

Many farm managers we interviewed are still planning and searching for a step up into contract milking and the dairy trainees are busy learning and upskilling to take the next move up the career ladder and practising saving their money to buy some cows and build their dairy businesses.

This year we have made videos of all 33 regional winners, and edited them into 11 regional videos, concentrating on the

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

AWARDS

S P E C IA L

winners of each category and why they love their region. They can all be viewed, along with the winners’ stories, at a special landing page on the Farmers Weekly website, www.farmersweekly/dairy-industryawards They are a stunning group of people and we wish them all the best of luck for the finals in May in Wellington.

Jackie NEW ZEALAND

Learn, grow, excel

NZ Dairy Exporter is published by NZX Agri Global HQ: PO Box 529, Feilding 4740 Toll free 0800 85 25 80, www.dairyexporter.co.nz Dairy Exporter/Young Country editor Jackie Harrigan Ph 06 323 0734, M 027 359 7781 jackie.harrigan@nzx.com Lead subeditor: Belinda Howard Reporters Hugh Stringleman ph 09 432 8594; Glenys Christian ph 027 434 7803; Sheryl Brown ph 021 239 1633; Richard Rennie ph 07 552 6176; Cheyenne Stein 06 323 1660; Anne Hardie 027 540 3635; Anne Lee 021 413 346; Karen Trebilcock 03 489 8083 Production Manager: Lana Kieselbach, ph 06 323 0735, production@nzx.com Designer: Aaron Davies and Jo Hannam Account Managers: Warren McDonald, National Advertising Manager, Ph 06 323 0143 John McMaster, Auckland/Northland, Ph 09 3756 007 Daphne Keller, Waikato and Bay of Plenty, Ph 07 552 6273 Donna Hirst, Lower North Island, Ph 06 323 0739 John Watson, Livestock, Ph 06 323 0761 Shirley Howard, real estate/international, ph 06 323 0760 Debbie Brown, classifieds/employment, ph 06 323 0765 David Paterson, South Island, Ph 03 382 6143 Subscriptions: www.agrihq.co.nz/shop ph 0800 85 25 80, +64 6 323 7104 or subs@nzx.com ISSN 2230-2697 (Print) ISSN 2230-3057 (Online)

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Word in your ear Hot summer tests milk cooling system Working hard at the task at hand, then pausing to reflect and enjoy the pride of a job well done, is something Wade Hamlin from Taumata Island Dairy Ltd instils in his staff every day. His mantra is to meet challenges head on then look back to assess what has been achieved. That sense of achievement can carry you through in seasons like these.

This season, the farm manager and his team were set with an unexpected challenge. As the hot dry summer took hold of South Wairarapa, one milking graded with thermodurics, then another.

Grades kept coming. Inshed practice was good, rubberware and seals good, while the team checked the cause of grades remained elusive. Grading penalties mounted.

“It really opened our eyes,” says Wade.

“We couldn’t find the issue.

Then I went past the milk vat one day and I picked up that the milk-in temperature was very high.”

Milk was going into the vat above 20°C and no amount of refrigeration capacity for the vat chiller would be able to bring it down.

2606TTSM01

“Our warm incoming milk temperature was tracked to the primary water source.”

“Over the summer we are regularly getting to 29-33°C days heating up the ground water and high iron content in our ground water meant good-quality water was pumped one kilometre from its source to the shed. Because it had to travel so far we were storing it in 24,000L tanks and the water was sitting in there around 20°C. Milk from the cow was

Effective glycol solution offers big cooling capability with a small footprint.

going into the vat at over 20°C. We put hoses across the chiller unit. That helped for a while and then we’d have another hot day and we would grade again.”

Compounding effects of warm ground water, alkathene piping travelling across the farm, and then storage tanks meant the primary cooling capacity was at the mercy of the weather. Without help there was nothing more the team could do.

Solving the problem – The farm owner, Andrew Watters, recommended that Wade get in touch with Tru-Test to help solve the problem. ‘As a director of MyFarm he gets to see a wide range of companies, and different products and told me to get a quote off you guys.’

The Area Sales Manager for Tru-Test’s Milk Cooling & Tanks, Tim Rix, supported by Ordish and Stevens (the local milking systems firm) set about finding the best and most efficient remedy. They installed a secondary cooling system using a 15hp Patton Pak glycol refrigeration unit and changed the existing plate cooler to a new double bank plate cooler for the glycol unit.

Resolved problem completely – The upgraded system saw an instant change with in-vat milk temperature dropping to 7−8°C and an easily reaching 6°C at pick up with the vat refrigeration kicking in.

Tim Rix, Area Sales Manager (Lower North Island).

For Wade looking back installing the Glycol system was the right move. He’s confident of meeting the current and the incoming milk regulations.

“It’s one less thing I need to worry about and I can get on with other challenges.”

Farm Owner:

Farm Manager:

Location:

Andrew Watters, Taumata Island Dairy Ltd Wade Hamlin, 1.5 seasons on Taumata Island Dairy Ltd

South Wairarapa, (54 bail Rotary)

Stock numbers:

600 Jersey Cross herd

Weighing & EID 0800 263 278 MilkHub Dairy Automation 0800 6455 482 DTS Milk Cooling & Tanks 0800 500 387

New MiHub Body Condition Score (BCS) Report automatically calculates suggested drying off dates Understanding your herd’s BCS has been given a lot of media attention recently particularly as it relates to critical decisions around which cows to dry off and which cows to milk through, to ensure good calving and mating outcomes for the following season. *DairyNZ note that “body condition score affects dry matter intake, milk production, reproduction, and cow health and welfare. In addition, BCS in early lactation may affect the sex of future calves and the productive and reproductive capacity of heifers yet to be born.”

To make things simpler for farmers, Tru-Test has released a BCS Suggested Dry Off Date Report in its MiHub Herd Management software based on a cow’s BCS and expected calving date. The decision criteria in the software defers to DairyNZ recommendations and is calculated on cows having a BCS of 5.0 at calving and 2 and 3 years olds having a BCS of 5.5 at calving. It is assumed that pasture and supplement is being fed allowing 0.5 of a BCS to be added every

Moonyeen Greathead, Tru-Test Training Manager, discusses MiHub BCS Report at a Tru-Test Drying-Off Workshop.

30 days, with no weight gain for the first 10 days of being dried off and the last 30 days before calving. The report allows farmers to select cows for alerting, drafting and grouping for dry-off.

At recent Drying Off workshops for Tru-Test dairy automation, Moonyeen Greathead, Tru-Test Training Manager notes that “farmers, the response to the new BSC reports was enthusiastically received as they made a time consuming task quick and easy.

Condition scores can be easily entered into MiHub, either in the shed or online, or by importing a file from the DairyNZ BCS App. Tru-Test is soon to release

Condition Score Targets* Body condition score at calving

Body condition score at mating

• Mature cow: BCS of 5.0.

• The average decrease in BCS for the herd after calving is no more than 1.0.

• Heifers & rising 3 year old: BCS of 5.5.

• No more than 15% of cows below BCS 4.0 and cows gaining BCS.

• No more than 15% of herd below BCS 5.0.

“The BCS report is a fantastic tool to aid sound decisions at dry-off”.

Matt Shippam – Farm Manager Landcorp Aoraki

a phone App that will allow BSC to be easily entered from the paddock.

With BCS being so critical to herd performance additional features in MiHub also includes reports for Spread of the Herd Condition, Individual Condition Score, Group Comparison and Condition Score Comparison.

Body condition scoring is subjective so we recommend that farmers work closely with their Vets or Certified Assessors.

MiHub Herd Management can be used standalone as software only or comes integrated with all Tru-Test Dairy Automation solutions. Tru-Test will be at the National Fieldays so come along for a demonstration or call 0800 645482.

• No more than 15% of cows are above BCS 5.5. * Source: http://www.dairynz.co.nz

www.tru-test.com/dairy

How are you tracking?

Let’s talk.

UPFRONT

Split payments to help cashflow

10

NZX’s AgriHQ analysts are predicting a milk price of $4.55/kg MS at an exchange rate of US$0.67 and an average commodity price of US$2300/tonne.

At Fonterra’s interim results announcements indications were given that the co-op was expecting whole milk powder commodity prices to rise to US$2500/tonne by the end of the year, which is line with NZ Dairy Futures prices.

At an average commodity price of US$2500/tonne and an exchange rate of US$0.67 the AgriHQ milk price calculator predicts a milk price of $5.15/kg MS. Figure one shows DairyNZ’s estimated average cash income received from milk production, dividend, net livestock sales and other farm cash income as well as cash expenses, including farm working expenses, interest, rent and drawings for an average New Zealand farm producing 155,000kg MS in 2015-16.

The dividend payments of 20c/share in April and 10c/share in May are included but tax is excluded.

Newman said the average farm example shows a deficit of $177,000 or $1.14/kg MS before tax which is likely to equate to about 6c/kg MS.

Cash Income vs Cash Expenses 2015-16e Dairy Farm2015-­‐16e Income vs Expenses $120,000 $100,000 $80,000 $60,000 $40,000 $20,000

Source: DairyNZ Economics G roup

Total Cash Expenses (excl Tax)

May

April

March

February

January

December

November

October

September

August

July

$0 June

W

hile Fonterra’s move to bring dividend payments forward has been welcomed by dairy farmers there’s also a word of caution over the effect it will have on next season’s cashflows.

Fonterra announced at its interim results meeting last month it would be splitting its final dividend payment in half and bringing those payments forward so that a forecast 10 cents/share is paid in May and the final payment, also forecast to be 10c/ share, is paid in August.

Usually the co-operative makes one final dividend payment in October following the release of its full-year accounts, while its interim dividend is paid in April.

This year the co-op declared an interim dividend of 20c/share after it forecast an earnings per share for the full season of 45-55c.

DairyNZ economist Matthew Newman said splitting the full-year dividend into three tranches rather than two would help cashflows this financial year because the second tranche of a forecast 10c/share payment would be brought forward out of next season into the current financial year.

For an average farm producing 150,000kg milksolids (MS) that equated to an additional $15,000/share or kg MS for a fully shared-up farmer that would come into this financial year.

The final payment would fall into next season’s payments and come in August at a time when cashflows are at a low ebb.

“But farmers have to remember there won’t be anything extra in the October 20 payment and some farmers have come to rely on that too,” Newman said.

The juggle-around of payments means DairyNZ is now predicting an in-season payment for this financial year of $3.90-

$4/kg MS for a fully shared-up farmer.

That includes 30c/share but does not include any payments from Fonterra’s Cooperative Support loan scheme.

Farmers were able to borrow 50c/kg MS interest-free on share-backed milk produced from June 1 to December 31 last year.

Newman said for most farmers, milk production over that period would equate to about 60% of their full season’s production so the loan would equate to 30c/kg MS. While that would add to the in-season payments it had to be remembered it was still a loan and would have to be paid back.

Under the terms of the loan that would happen when milk price exceeds $6/kg MS. Currently no analysts are predicting the milk price to hit that level next season.

DairyNZ is preparing cashflows for next season but, like farmers and analysts, is having difficulty predicting where payments will end up.

Newman said early forecasts have fully shared-up farmers receiving $5/kg MS in-season which includes a dividend payment.

Dollars p er Farm

Anne Lee anne.lee@nzx.com @Cantabannelee

DairyNZ economist Matthew Newman – splitting the full-year dividend will help cashflows.

Total Cash Income

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

UPFRONT

Richard Wyeth – We want our farmers to do well.

Miraka pillars earn premium Sheryl Brown sheryl.brown@nzx.com @sherylbrownnz

Maori-owned dairy processor Miraka will introduce a new payment policy and incentive programme for the 2016-17 season and will stop basing its milk price on Fonterra’s.

Since its establishment in 2011, Miraka has paid 10 cents/kg milksolids (MS) above the final Fonterra milk price.

It has always been in the strategy to set its own competitive milk price and there was now enough confidence in the company’s performance, which had met and exceeded expectations over the last five years, chief executive Richard Wyeth said.

The new incentive programme would give farmers the potential to earn an extra 20 cents/kg MS premium on top of the milk price.

The Te Ara Miraka Farming Excellence Programme was based on five pillars; people, environment, cows, milk and prosperity.

There were 31 standards, including 13 mandatory standards, which farmers must meet under the programme.

Each standard had a rating and farmers would get a score out of 100 at the end of the season, which was the percentage value they would get paid of the 20c/kg MS premium available.

Farms would be audited and scored by an independent third party, with a governance structure in place for farmers to appeal or review their scoring.

These standards were above and beyond the typical milk supply contract regulatory standards for dairy farmers around milk quality and food safety, Miraka milk

supply general manager Grant Jackson said.

“Miraka is an organisation that really lives by its values and every one of these standards relates back to the five principles of Miraka – excellence, kaitiakitanga, integrity, tikanga and innovation.”

Some of the mandatory standards included expectations on farmers to provide the Five Freedoms to all animals, provide proof of formal employment contracts and payment of minimum wage, an environmental management plan, animal health plan, no animal welfare or Ospri prosecutions, all waterways fenced off and an evident health and safety culture.

Providing the five freedoms was part of the Animal Welfare Act to ensure all animals were provided with food and water, adequate shelter, the opportunity to display normal patterns of behaviour, physical handling that minimises unnecessary pain or distress, and rapid diagnosis of injury or disease.

Farmers would not be required to provide shelter in every paddock, for example, but they would have to prove they had a plan in place that if animals showed any signs of distress they could put them under shelter within 30 minutes, and that all staff were aware of that plan, Jackson said.

“We are really trying to future-proof our farmers and make sure they’re more resilient by knowing some of these regulations.”

The other 18 standards were based on best practice. For example effluent storage and application, recycling farm plastics, having a low mean somatic cell count and being grade free.

Another standard incentive was measuring herd production through herd

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

tests or milk meters. Looking at herd management would drive production efficiency, which would therefore create a lower stocking rate while getting the same production and lowering the environmental footprint, Jackson said.

Under the prosperity pillar there would be incentives for farmers to have a financial plan and budget and to have a completed Dairybase assessment.

Miraka was not privy to this financial information. The idea was to ensure farmers were benchmarking themselves, Wyeth said.

“We want to make sure our farmers are first class, and we want our farmers to do well.

“It’s not a co-operative, but we try to create a community and it’s a whanaubased business and our suppliers are part of the business.”

“We want our farmers to be prosperous and part of that is them making sure they know where they sit in their business.”

The incentive programme would enable Miraka to build on its consumer brand and add value to its products, Wyeth said.

It’s a unique programme and covered a wide base of initiatives that would help sell the Miraka story.

“We believe it’s all about adding value and to do that you’ve got to be telling an authentic story and that’s what we’re trying to create at Miraka.”

The Miraka strategy was to grow the percentage of value-add product to 20% next season and reach the target of 50% by 2020, Wyeth said.

Miraka took on 12 new suppliers this year, predominantly winter milk suppliers, which would put the processing plant at capacity in 2017 with 105 suppliers.

11

UPFRONT

Making the most from milk

Dr Caroline Saunders – developing markets want to know more details about food products.

Sheryl Brown sheryl.brown@nzx.com @sherylbrownnz Lincoln University professor of trade and economics Dr Caroline Saunders will be presenting at the DairyNZ Farmers Forum in May about what overseas customers want from New Zealand milk and what they are willing to pay for.

The presentation includes results of a survey of 1000 consumers from China, Japan, United Kingdom, Indonesia and India.

“The work we are doing is looking at how we can get the due price NZ milk deserves and identifying what consumers in different markets really value about that, and what value they put on that and how we can position ourselves in markets to get that value.”

In China, for example, consumers were prepared to pay 50% more for NZ products, she said.

Consumers were interested in food quality and safety, which NZ was largely good at, as well as attributes such as environment and social conditions.

NZ had to find alternative ways to get that information across and gain more of the value associated with its products.

Smart technologies were one example 12

to target consumers who were doing more research and shopping online, she said.

There was a stark difference in the information consumers in different markets wanted about food products.

In developing markets, consumers wanted more details about products and wanted to find it out for themselves, whereas in developed markets consumers trusted the brands and products because they had a history with them.

The DairyNZ Farmers’ Forum will be at Mystery Creek, Hamilton, on May 17-18. This year it will focus on the changing global environment, what’s driving those changes and how this could shape the future of NZ milk production.

The two-day conference would give farmers insight into current global trends and ways to set up the farm to adapt to future challenges.

Keynote speaker Tim Hunt, Rabobank’s general manger for food and agribusiness research, will speak on what’s happening in global markets and what this means for NZ farmers.

DairyNZ’s strategy and investment leader for sustainability, Rick Pridmore, said the Farmers’ Forum was about helping farmers understand what was driving those global changes and what they could do to position their businesses for it.

“Innovation and the ability to change has long been at the heart of dairying’s success story and will continue to be.

“Adapting to the changing environment is now more important than ever – the industry is going through challenging times, particularly with payout, so farmers need to look at where we can give our businesses a lift,” Pridmore said.

Day one looks at the big picture and day two shifts focus to the farm, looking at new technologies and techniques to help farmers respond and lift their farm businesses.

Workshops include looking at whether ‘$3/kg MS farm working expenses is doable?’ and ‘living a pasture-first strategy’ with DairyNZ’s Rob Brazendale and John Roche.

DairyNZ general manger for research and development David McCall, would back up the pasture focus with a presentation on “adapting now – pasture-first”.

DairyNZ Farmers’ Forum – workshops and speakers DairyNZ Farmers’ Forum – May 17-18 Mystery Creek, Hamilton Free for levy-paying farmers and their staff.

Registration is essential. To register visit www.dairynz.co.nz/farmersforum DairyNZ Farmers’ Forum – workshops and speakers • What is happening in the global markets and what does that mean for us - Rabobank’s Tim Hunt • What do overseas customers want from their milk and what are they willing to pay for? – Lincoln University’s Caroline Saunders • Genetic modification – should it be part of our future? – Waikato University’s Jacqueline Rowarth • Zespri bouncing back – lessons learnt by the kiwifruit industry after PSA – Chief executive Simon Limmer and grower Ian Greaves • Innovating your business – Entrepreneur Melissa Clark-Reynolds • ‘What is value-add’ panel discussion – Tatua’s Paul McGilvary, Open Country Dairy’s Laurie Margrain, Miraka’s Richard Wyeth and Lewis Road Creamery’s Peter Cullinane.

• Growing better quality and more persistent pastures – DairyNZ’s David Chapman and Cameron Ludemann • Breeding better cows – DairyNZ’s Jeremy Bryant.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

This is what a late lactation herd test can save you.

It can save you giving supplementary feed to cows that would be better dried-off.

It can save you treating low-producing cows that you will end up culling.

It can save you treating healthy animals with antibiotics that they don’t need.

It can save you having good cows with high SCC going untreated into dry-off.

It can save you guessing and it can save you time.

But above all it can save you, in very real terms, money.

Which is probably no bad thing these days.

If you want to find out more on how herd testing can help you save, talk to your FSM.

UPFRONT

Bob Edlin bob.edlin@xtra.co.nz The effects of the fall in the milk price have showed up in the half-year results of companies listed on the New Zealand stock market.

Livestock Improvement Corporation’s profit was reduced while PGG Wrightson and Skellerup reported their revenues being bruised by exposure to the effects of the dairy industry downturn. The a2 Milk Company, in contrast, reported a bumper half-year.

Farmer-owned LIC signalled reduced earnings last October as a result of the lower forecast milk payout and reduced spending onfarm.

In the upshot, its $145 million revenue for the six months to November 30, 2015, was 9% down on the corresponding period the previous year. Net profit after tax was $15.9m, down 46%.

Chairman Murray King said the season’s lower forecast milk price had created financial challenges for many dairy farmers “and as a co-op we are closely linked to that”.

The half-year result was a reflection of this, he said. Because the company was continuing its essential capital expenditure programme “we now expect the yearend result to be closer to a break-even position,” he said.

LIC significantly reduced its operating costs without reducing its service to farmers, King said. “It’s times like this when service becomes even more important, so we are hugely focused on that.”

PGG Wrightson reported operating earnings before interest, taxes, depreciation and amortisation (EBITDA) of $30.9m for the six months to December 31. This was $2.9m down from the result in the corresponding period the previous year.

However, the previous half-year result was a record and the company presented its latest result as its second-strongest interim performance for eight years.

Chief executive Mark Dewdney called it “a very strong result given the challenging trading conditions in many agricultural markets”.

Low dairy prices, and the perceived risk of drought from El Niño conditions, resulted in more conservative spending by the company’s NZ farming customers.

Group revenue decreased 5% and net profit after tax decreased $3.7m to $16.1m, compared with the previous corresponding period.

Among the company’s various divisions, a lack of live cattle exporting had led to Livestock’s operating EBITDA decreasing by $800,000. Domestically, cattle and 14

Milk price fall hits listed companies sheep tallies were higher, but sheep prices were lower. Dairy volumes were also lower than in the previous year.

Seed and Grain’s operating EBITDA decreased $1.8m but the company’s NZ seed business recorded another strong result.

Farmers were shifting to higherperforming forage and crop seeds, and spring-sown forage options such as brassicas and fodder beet were increasingly regarded as a key part of animal winter plans, Dewdney said. Demand for the company’s dairy summer feed options such as chicory were also growing as farmers reduced their reliance on imported supplementary feed in response to the lower dairy payout.

While sentiment in the dairy and sheep meat sector had deteriorated in recent months, Dewdney said, strong confidence in the horticulture-based sectors would provide further opportunities for growth.

PGG Wrightson accordingly is maintaining its 2016 full-year operating EBITDA forecast range of $61-67m.

Skellerup reported mixed performances within the group. Its half-year revenue of $107m was up 9% but its $9.6m net profit after tax was similar to the previous corresponding period.

Skellerup’s Agri Division revenue was up 4% but chief executive David Mair said the drop in forecast payout had resulted in some deferral of spending. This had slowed sales of dairy rubberware and footwear.

Many Skellerup products were essential

consumables, Mair said, “so we expect a recovery”. But the exact timing was difficult to forecast.

In contrast, overseas sales during the first half of the year had been strong, enabling the Agri Division to record a slight increase in revenue. But the higher costs of sales in delivering to these markets had reduced the division’s earnings before interest and tax compared to the previous year.

Work is continuing on Skellerup’s new integrated dairy rubberware development and manufacturing facility at Wigram.

Chairman Sir Selwyn Cushing said the outlook for the Agri Division was difficult to project.

Low global milk prices were likely to have some impact on the timing and amounts farmers would spend between May and July, the off-season for most NZ dairy farmers.

The a2 Milk Company had the best story to tell. Its Australian and NZ business reported substantial growth in revenue and operating earnings in the six months to December 31 thanks to the exceptional growth of sales in a2 Platinum infant formula. The China and Other Asia business also recorded significant revenue growth from infant formula and for the first time returned positive operating earnings.

Growth initiatives in the United States are focused on establishing the broad distribution of a2 Milk in California while in the United Kingdom the company’s

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

A2 Milk has had a great half-year result.

fresh milk business improved after repositioning into the specialty milk segment.

The unaudited group half-year profit of $10.1m included: • Total revenue of $139.1m, an increase of 86% over the previous corresponding period; • Group operating EBITDA of $18.7m, a whopping 472% increase.

The result includes $8.1m establishment costs in the US and UK markets.

The company is forecasting a significantly improved operating cash flow for the second half of its financial year.

Chief executive Geoffrey Babidge said revenue from infant formula in Australia, NZ and China had grown to $73.9m, an increase of 340%, and accounted for 53% of total group turnover.

Most sales were made through Australian grocery and pharmacy outlets but direct sales into China increased significantly, with strong growth in e-commerce channels and mother-andbaby retail stores.

Synlait Milk, a2 Milk’s manufacturing partner in NZ, is benefiting from this growth. Babidge said a2 Milk had experienced stock shortages, particularly during the first four months of the half,

but “we have increased our production schedule with Synlait to meet increased demand”.

The company is building milk supply in NZ, to facilitate increases in infant formula production next year.

‘It’s times like this when service becomes even more important, so we are hugely focused on that.’

The infant formula regulatory environment in China was continuing to evolve, Babidge said, but a2 Milk considered itself well-placed to respond to any changes in the regulations in conjunction with its manufacturing partner.

Fonterra’s latest half-year results were scheduled to be announced on March 23 and Synlait’s on March 31, both after the deadline for this article.

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UPFRONT

Manage your own risk Anne Lee anne.lee@nzx.com @Cantabannelee

United States-based dairy analyst Brian Rice has some candid observations for Fonterra farmers – points that in the nicest possible way he has to be blunt about.

They’re points he hopes will shed some light and offer some solutions to what has fast become a serious issue for Kiwi dairy farmers who’ve found themselves painfully exposed to global dairy commodity volatility – price risk management.

“Number one on the list is that Fonterra does not manage your milk price risk for you – that’s on you and that’s the way it is world over. No co-ops manage milk price risk for their farmers.

“What they do though is offer tools for them to use but it’s always got to be the member’s choice to use them or not,” he says.

Rice understands New Zealand dairying having visited several times before, through his experience is working with NZ-based clients and brokering trades on NZX’s commodity dairy futures market.

He’s the founder and principal of Rice Dairy, a Chicago-based company that provides dairy price risk management solutions to clients globally and he’s in NZ this month at the invitation of the Fonterra Shareholders’ Council.

Rice is speaking at the council’s eight annual Grow Your Mind seminars across the country.

This year the seminars aim to create a greater understanding of commodity volatility, highlighting the risks to farming businesses and importantly providing an insight into how those risks might be managed.

It’s dangerous territory for farmers to believe Fonterra would be managing milk price risk but Rice says farmers might believe that because they’re used to the co-operative managing everything else outside the farmgate – from the pick-up and processing to marketing their product.

In Fonterra’s case Rice agrees its valueadd strategy is designed to somewhat shelter farmers from a level of volatility.

But with milk price making up the vast proportion of farmers’ returns it’s vital farmers look for and understand how to use tools to manage milk price risk.

Key to that is understanding how the milk price itself is derived – that at its core it’s based on global commodity prices from the GlobalDairyTrade auction, less costs as set out in the milk price manual.

16

Brian Rice – managing milk price risk up to farmers.

Fonterra theoretically has little discretion when it comes to setting the milk price.

That brings Rice to number two on his list of things that, in the nicest possible way, he has to be blunt about.

“Fonterra does not control global dairy prices either. In the grand scheme of things it’s a speck floating on the waves (of volatility) like everyone else in global dairy markets.”

The problem is even if they do understand those home truths there’s very little Fonterra farmers can do to manage their milk price risk.

Fonterra’s guaranteed milk price (GMP) was withdrawn last year, despite being oversubscribed, because many shareholders were disgruntled with the scheme.

They saw it as “unco-operative” because all farmers weren’t receiving the same milk price.

There was a feeling from some that it created winners and losers – an idea likely stemming from the fact that for the two seasons GMP was available to all, the final milk price was below the GMP price.

Rice says the reality is all co-ops in the US and around the world offer their members tools such as GMP and in his view the GMP product from Fonterra was a good one.

“Fonterra did it beautifully. What they had was a very well-constructed programme and the fact it’s gone is a very big loss.

“There’s a shared history with the US there. Some of these tools can involve complicated concepts and sometimes the guys in charge of getting the message across don’t quite do that and the guys receiving the message don’t hear what they should or aren’t interested in the detail.”

He says it was a mistake to get rid of it, and having a forward contracting programme such as GMP is critical.

But he warns farmers it’s also critical they make the effort to understand it and really get to grips with what their price risk is.

As a broker dealing in futures markets he often advises farmer clients the best fit would be to use a GMP-type, forward contracting tool rather than using futures, even though he misses out on commissions.

“We do that a lot if it’s right for the farmer, if we see they need a simpler tool that doesn’t require putting any capital in.”

Futures markets are a key price risk management tool used by thousands of US farmers.

Rice says before farmers start using any

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UPFRONT such a tool when released in NZ they must understand exactly what it is and the detail of how it works.

“Hedging is not gambling – it’s the opposite of gambling; it’s decreasing your risk in a strategic and methodical way.”

But there’s complexity in it and farmers must take time to look at the detail.

Margin accounts that accompany futures hedging markets are a prime example.

He was surprised when visiting NZ recently just how little awareness there was about what was required.

“Farmers and brokers are getting ready for (milk price) futures but I didn’t hear a lot of talk about managing margin accounts and what happens if farmers sell futures contracts and then the futures market doubles – where’s all that money going to come from?”

In the US banks offer a hedge line of credit that’s quite separate from the other banking facilities used in the banking relationship with their farmer client.

A farm with 1000 cows, which hedges for a full year, might need to have US$1.5 million prepared for their margin account, Rice says.

If farmers and banks here aren’t prepared for that “they’re in for a rude awakening,” Rice says.

To hedge effectively farmers should look at hedging or fixing their input costs as well as their revenue.

They need to measure their risk with

How margins work In the futures market, a margin account acts as a “good faith bond”. The original deposit of money is called the initial margin. When the futures contract expires, or you choose to close it, the initial margin plus or minus any gains or losses that happen over the span of the futures contract will be refunded. The amount in your margin account changes daily as the market fluctuates in relation to your futures contract.

While the initial margin is the minimum amount required to enter into a new futures contract, the maintenance margin is the minimum level an account can reach before needing to be replenished.

For example, if your margin account drops to a certain level because of a series of daily losses, brokers are required to make a margin call and request that you make a deposit to your account to bring the margin back up to the initial amount.

Before entering a futures contract it’s important to understand the full implications of margin and seek advice from a broker and your bank.

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Not that sort of hedging.

precision – there’s no such thing as average, he says.

Every farm business will have a different risk profile and every farmer will have a different risk appetite.

Rice has developed a model for clients to measure and manage their risk as well as analyse different scenarios.

It began as a spreadsheet but is now a standalone product, Vault, and is automatically updated with live information from a number of futures markets available in the US for both input costs and milk price.

While NZ farmers might think there’s little they can do to manage their input cost price risk, Rice is working with a dairy farmer in this country using a modified version of his original model.

Feed and fertiliser are two of the major cost price inputs and Rice says he could link the Malaysian palm kernel extract futures market to the model and is aware of moves in NZ for a future-contracted fertiliser programme.

Although the touted NZX milk price futures market is not yet available he’s used algorithms that connect the NZ (commodity) dairy futures prices to approximate a milk price and is even

looking at the NZ Pasture Index.

Interest rate risk is perceived as a much greater risk in NZ than the US, likely because of greater debt carried in this country but there are ways to manage that too, Rice says.

Farmers might be frightened off by the idea – but interest rates swaps were an option and with much better education needn’t be as feared as they currently are.

Although it’s definitely in an experimental, prototype stage the aim is have the model operating to a point where price risk exposures could be analysed under different scenarios.

The advent of a milk price futures market would be a monumental step forward for NZ dairy farmers, he says.

While dairy farmers in NZ are the most exposed farmers in the world to global commodity prices they have the fewest options available to them of any farmers in the world.

In the US about 75% of the price risk farmers face is milk price and Rice believes it’s about the same here.

“So once you get a milk price futures market you’re going to be light years ahead of where you are today.”

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

PASTURE April 2016

Right time to take stock: how will covers look come spring?

Audit winter crops

Late autumn presents an ideal chance to review your winter feed budget and finalise key decisions on pasture cover, drying off, cow condition, winter crops and the amount of supplement on hand.

Your goal is to reach calving in the best possible shape, with cows at the right BCS and the correct amount and shape of farm pasture cover to set up a successful first grazing round.

Every farm needs its own plan for the coming months; what matters most is that you keep monitoring growth during the pre-dry and dry period. The more closely you watch conditions on farm, the quicker you will be able to act if things don’t go to plan.

If your covers are low, N fertiliser used over a reasonably large part of the farm can be a ‘circuit breaker’ to grow your way out of a feed deficit, typically for less cost than imported feed.

A mild winter coupled with new ryegrass genetics will mean higher winter growth rates and farms ending up with more feed than expected during winter.

The likes of Trojan and Bealey perennial ryegrasses grow 2025% more than older cultivars such as Bronsyn, for example, and Shogun hybrid ryegrass has amazing winter growth. This creates potential opportunities.

If cows are wintered at home, you might be able to feed more pasture DM and save on supplements. If they’re wintered off, perhaps some can come home early. You don’t want too much pasture at calving – it loses quality and worse, it re-grows much more slowly in the second round, creating a feed hole.

Having a wet weather contingency plan to protect pastures is also critical if you are to reach calving in optimum condition for the start of another season. Visit our website www.agriseeds.co.nz for tips on looking after pastures in wet conditions.

Now is also a good time to check winter crops. Current yields vary widely due to the mixed season, good in some areas, but poor in others because of dry weather, or fungal and bacterial issues which have affected some wet, humid parts of the upper North Island.

Crop yield is critical for setting up the winter feed budget (to get to spring in the right place), as well as determining correct daily allocation, so it’s very important not to assume or estimate your DM/ha, and to do a DM test.

On a 12 t DM/ha crop, even a 2% error equals 2 t DM/ha. If you don’t have enough feed on hand to ensure you reach calving with the target cow BCS and farm pasture covers, now is the time to know about it, so you can plan accordingly. Crops will keep growing through winter, and can gain 1-2 t DM/ha, depending on the weather, so feeding less crop and more supplement early in winter (rather than the reverse) can allow time for crops to accumulate more yield to help improve feed supply.

For further information visit www.agriseeds.co.nz

For further information freephone: 0800 449 955, email: mail@agriseeds.co.nz or visit: www.agriseeds.co.nz

MARKET VIEW

EU muddies milk price signals Susan Kilsby

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put voluntary limits on milk production in place. What these measures do is encourage farmers to hold on to plans to grow or at least maintain milk supply. The support measures muddy the price signals coming from international markets.

It is not surprising European dairy farmers have embraced the post-milk quota era with all guns blazing. Some farmers spent many years preparing their businesses for the opportunity to expand milk production. New barns were built, dairies were expanded and herd sizes increased. Dairy companies also reacted by building new processing facilities to absorb the expected increase in milk supply.

‘Spain did exceed its quota limit in the year to 2015 but was probably written off by analysts because of its Mediterranean location, more famous for beach holidays than producing milk.’

Numerous studies were done, before the quota was removed, to assess the impact of this policy change. They mostly under-estimated the actual increase in milk production. Several studies concluded there would be a lift in milk output of about 1% and the growth would come from the more efficient milk-producing countries in the north-west of Europe. The studies might have got the scale of the increase wrong but they did correctly pick which nations would expand milk output.

Figuring out where the extra milk would come from wasn’t that difficult given there were only about eight countries that were constrained by the quotas in the years

leading up to their removal.

The countries that were expected to increase production the most were: France, Germany, Ireland, Denmark, Poland, the United Kingdom and the Netherlands.

In absolute terms the countries that have expanded output the most are: the Netherlands, Germany, Ireland, Spain, the UK, Poland and Belgium. The expansion has largely happened where it was expected to, with the exception of Spain.

Spain did exceed its quota limit in the year to 2015 but was probably written off by analysts because of its Mediterranean location, more famous for beach holidays than producing milk.

Even some of Europe’s largest dairy companies weren’t fully prepared for the sharp lift in milk production in recent months. Friesland Campina – the largest milk processor in the Netherlands – couldn’t manage all the milk it was supplied earlier this year, despite investing heavily in extra processing capacity. This resulted in the dairy company paying its farmers a bonus to not expand milk supply until the processor could find ways to manage the larger intakes.

One factor that might have been overlooked in the studies was the impact of the extremely high dairy prices that happened from 2013 to 2014. This was the point when Europe’s dairy farmers were planning for the post-quota era. This was when they made plans to build bigger sheds, and keep additional replacement stock.

Since the quotas have come off these farmers have concentrated on operating larger dairy units, rather than focusing on the profitability of these systems. And as long as the European Commission keeps bailing them out there is little incentive to cut milk supply.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

pm

European dairy farmers are relishing the freedom the post-milk quota era brings but are not ready to be fully exposed to global market forces. The saying “you can’t have your cake and eat it too” springs to mind, but at the moment European dairy farmers are able to have both because the European Commission keeps topping up the cake plate.

In 2015 European milk production expanded by 2.3% compared with 2014.

In percentage terms this doesn’t sound much but in absolute terms it is. An extra 5.5 million tonnes of milk was produced by the European Union 28 countries last year. This equates to about 25% of New Zealand’s annual milk production.

Typically when NZ milk production slows, the global markets react by a lift in prices. However, with so much extra milk coming out of Europe at the moment it is not surprising the markets are taking little notice of the slowing in NZ’s milk output.

Assuming normal market forces were in play the extra milk supply coming out of Europe, not matched by an equivalent lift in demand, would result in a decrease in dairy commodities prices that would in turn reduce farmgate milk prices. This is exactly what is happening in NZ, but the price signal European farmers are receiving is being muffled by the supportive measures the European Commission is using.

The commission has doubled the size of its intervention programmes for skim milk powder and butter. The programme now allows for 218,000t of skim milk powder and 100,000t of butter to be bought. The intervention price for butter is €1698/t or about US$1900/t. The extension of the intervention scheme will allow European dairy companies to continue to pay a milk price that is above the level they might otherwise have been able to afford. Milk prices have not dropped far enough to encourage farmers to abandon plans to grow their milk supply.

Other ways the commission is supporting its farmers include additional direct subsidies for those in need, and allowing milk processing companies to

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22/03/16 2:5

m a e T ayer l p BUSINESS

Hiring the right people onfarm and keeping them makes life a lot easier for Waikato farmer and Federated Farmers Waikato president Chris Lewis.

Sheryl Brown spoke to him about his interview tactics and management style.

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Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Pukeatua, south Waikato

S

taff retention has been pivotal to building a competent, experienced team of staff to allow Chris Lewis to be handsoff and spend more time away from the

farm.

The Federated Farmers Waikato provincial president admits he couldn’t do what he does without confidence in his team to successfully run the daily farm duties.

Self-delegated to relief milker, relief calf-rearer and general farm-hand, Chris fills in the gaps on the roster when necessary and is happy to take orders from his staff.

“I get a text and get told what to do. That’s a credit to my staff and that’s how I like it.

“I have experienced staff and I don’t tell them what to do now – they know. That’s why I can do Federated Farmers to be honest. Without them I’d be struggling.”

Located at Pukeatua, 20 minutes south-east of Te Awamutu and 280m above sea level, the 330ha farm is rolling to steep country.

Chris and his wife Caroline have equal shares in the business with Chris’ parents Sam and Robyn Lewis.

The 1155-cow System 4 operation has a supportive 135ha runoff next door that is used to graze replacements, winter cows and grow 45ha of maize.

The business employs five full-time staff and two casual staff during calving, with Chris and Caroline helping out where needed.

Ireneo Molina started as a farm assistant eight years ago. He is now farm manager and foreman, as Chris calls him, running the daily business.

The two senior staff have both worked onfarm for four years. One farm assistant has worked there three seasons and the other is in his first year.

The calf-rearers, who also milk the cows during June and July to give the other staff a break from the farm dairy, have worked there for five seasons.

Chris used the DairyNZ Roster Builder to model potential systems and they are now trialling a 6-on, 2-off roster, which seems to work. Ideally, he would like to move to a 5-on, 2-off roster in the future. The roster is structured around the four staff, with the farm manager and Chris floating to cover time off.

“One of the benefits of a 6-on, 2-off roster, I thought I would milk more, but I actually milk less because things are more organised. So there are benefits for the boss – it allows me to have my lifestyle.

“My role is to fill in gaps. I go to the shed and ask what needs to be done.”

Chris leaves it up to staff to work out their

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

roster, time off and how they rotate the farm tasks.

“They have a system that works. I don’t get complaints so I don’t change it. They take ownership of it.”

When advertising an onfarm role, Chris always mentions the farm’s strategy to retain staff where possible.

At the interview he makes it clear he wants people to stay for a minimum of two years.

Chris only gives out job descriptions to people who phone and ask good questions or show a real passion for the industry. Once he has selected the top applicants he uses a recruitment company to check their references and then will interview 3-6 people onfarm.

Their top criteria are punctuality, integrity and attitude, and personality.

“My wife and I are punctual people, a staff member who is late – I won’t accept that.”

If someone lacks experience or qualifications but they have the right personality and attitude to succeed, they’ll get a chance.

He would rather have a farm assistant with minimal experience who is prepared to learn on the job, than hire someone who is looking to move on quickly to the next step.

Having a plan for interviewing potential staff is important. Chris, Caroline and Ireneo are all present at any interview.

In the first half-hour Chris does most of the talking about the farm system, strategy, and health and safety requirements, and discusses the job description, the roster and staff uniform.

It’s important to emphasise how the farm business is run and the high expectations they have of staff.

As part of Chris’ role with Federated Farmers he comments on farm policies and practices that farmers need to adhere to, so he needs staff that are able to deliver on his own farm.

“With my role, there is an extra spotlight.

I want to minimise embarrassing comments.

I say comments in the media and I have to practise it.”

Several years ago some drug and alcohol issues resulted in an accident on the farm, which was the catalyst to improving their farm policies, he says.

“It forced us to address issues ahead of the industry. At the time I begrudgingly did it.”

But through his involvement with Federated Farmers and attending a lot of industry meetings he has since seen evidence of the risk in the industry and the need for farmers to improve their onfarm policies and paperwork.

“As an employer you can’t get away from your legal responsibilities. Farmers can’t escape

23

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BUSINESS

FARM FACTS

Owner: Lewisridge Farms, Chris and Caroline Lewis, Sam and Robyn Lewis Area: 330ha effective Cows: 1155 Friesian crossbred 2014-15 production: 457,000kg milksolids (MS) 2015-16 production target: 435,000kg MS Runoff: Pukeatua 135ha, Te Awamutu 40ha Farm dairy: 60 bail rotary, in-dairy feeding, ACR, automatic drafting, AfiFarm milk meters, weigh scales Staff: Five full-time, two casual (mostly calf-rearing and winter milking) Farm working expenses: 2013-14: $4.40/kg MS 2014-15: $4/kg MS 2015-16: $3.50/kg MS

their obligations. Laziness or ignorance is not an excuse.”

He watches people’s reactions and takes note of their responses. If they seem relaxed and open to the farm policies and high expectations, he takes them on a farm tour.

Before the farm tour he gives the person a knowledge test and encourages them to ask him questions about the farm. He will ask them protocol around treating a mastitis cow or a lame cow, ask them a basic health and safety question, or ask them about what they’ve been learning through Primary ITO. “If they’re one-word answers they haven’t engaged. If they don’t know how many milkings to keep a mastitis cow out of the vat they haven’t been paying attention on the previous farm and are a risk.”

He doesn’t expect them to be the most qualified, but they should know the basics, and be interested in farming and prepared to listen and learn.

The most important part of the interview process is taking them to the dairy and introducing them to the other staff.

Chris gets a staff member to give them a tour of the dairy. It gives the interviewee a chance to relax and ask staff what it’s like to work on the farm and to work for Chris.

It also gives his staff a chance to ask questions and form an opinion about the person.

“My staff are the ones that have to work with them more than I do. They get to ask them questions and this is where a lot of them will fail the interview because my staff will get a bad sign.”

It’s about finding people who will fit in and work together well. For Chris it’s more important they get on with the other staff and the farm manger.

“We don’t have 10/10 working conditions. I’m fully aware of our issues and faults. When I employ staff I’m well

aware of personality matches and you have to accept not everyone will enjoy working for you.”

If there are issues onfarm that Chris isn’t happy with it’s the farm manager who is responsible for communicating that to staff.

All staff have a performance review every six months, which helps to monitor their achievements onfarm and set achievable personal and career goals.

Chris spent 61 cents/kg milksolids (MS) on wages in 2014-15. This season it will rise to 63c/kg MS with slightly less production.

The farm manager is also paid a production bonus, based on a target set at the start of the year.

“It’s an incentive for him to keep staff motivated after April.

“It benefits me – if he’s focused on a goal, he’s focused on my farm.”

Chris, Caroline and Sam, along with all full-time staff, have a monthly meeting with farm consultant Andrew Gould, with ASB bank manager Brian Kenny and Hayley Gilbert also often attending.

Sharing the farm business strategy with the bank manager as well as the staff is equally important. It lets staff know what to expect.

“My staff know where I want to head.

I share my strategy with them, which is confidential, but it gives them confidence in their job.”

At the meeting they discuss the farm manager’s report including production, feed on hand and animal health and discuss what is happening onfarm. They then do a farm drive to look at cows, condition score them, pastures and measure feed stacks before heading back for morning tea to discuss a plan for the next month.

If there is a difference in opinion, they have a robust debate, which is a great process for staff to learn why and how decisions are made, Chris says.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

“It teaches staff why we are doing something, they understand how we came to a decision.”

It’s also a great tool for Chris to reconfirm he is making the right decisions, especially in a tight financial year.

They are in the process of rolling the farm system back to a more sustainable system, using grass as the major feed and adding supplement through the shoulders.

“We haven’t pushed the cows to get that bit extra this year because the return on feed and effort is not going to be there for obvious reasons.”

Breeding cows that can produce well on the atypical steep Waikato farm is the aim.

Sharing that vision with staff is a key part to achieving that goal.

“I want a cow that can handle the hills, they need that strength and bossiness.”

They still haven’t achieved a perfect 5 body condition score (BCS). The two herds have sat at 4.8 and one at 4.6 most years on June 1.

“BCS is very objective, the weights are not and they don’t lie. When you see the weights it’s a quick indicator of what cows are doing.”

The cows are weighed twice a day at the farm dairy and they use that data alongside the milk production data from the AfiFarm milk meters to monitor how a cow is performing.

They do a lot of benchmarking against previous seasons and other farms.

The four traits Chris aims for in the breeding programme are fertility, somatic cell count, lameness and udders.

He uses CRV Ambreed and nominates every cow to bulls more than 200 Breeding Worth (BW).

“I know everyone wants to chase BW, but I want a cow that’s able to go the distance on our farm.”

The cost of rearing replacements is too high for the cow to only last a few years in the herd.

They have reduced their empty rate from 13% to 8.8% in the past few years through a combination of factors, including teaser bulls, better feeding and pasture management, and well-trained staff.

Staff and Chris alternate one-hour shifts during mating to monitor and identify cows on the platform, to minimise concentration fatigue, touch-up tail paint and draft cows.

Their empty rate has improved and they now have more cows in-calf in the first four weeks.

Chris is speaking at two DairyNZ People Expos – Bay of Plenty People Expo, April 27, and Waikato People Expo, April 28.

To register visit www.dairynz.co.nz/ people/dairynz-people-expo/

25

BUSINESS

More than just powder Karen Trebilcock ak.trebilcock@xtra.co.nz @KT_at_Exporter

The first thing to understand about Danone Nutricia’s plant at Clydevale in Otago is that it is not producing a commodity.

Sure, the milk comes to the dryer in a tanker and comes out in a 25kg brown paper bag but there are a whole lot of things happening in the middle that happen nowhere else in New Zealand.

And it’s those things in the middle that have brought a specialised workforce from around the world to the South Otago valley.

“We’re not producing milk powder.

We’re producing a food for the most vulnerable in society, for our babies, and for that we believe we need control from the cow right through to the consumer and that is what we have in Otago,” Danone Nutricia’s managing director

Back to the beginning Buying the Clydevale dryer was very much about the Karicare company returning to its beginnings, Danone Nutricia’s managing director Corine Tap said.

Nutricia, which become part of Danone in 2007, dates back to when Sir Truby King, the founder of Plunket, began testing cow’s milk as a replacement for breast milk for malnourished babies in the early 1900s and opened hospitals for babies and their mothers – the first at Karitane, north of Dunedin.

The Karitane Products Society developed and sold its first milk formulas in 1927 and the range was licensed to Douglas Pharmaceuticals for distribution in Australasia and Asia in 1986. Ten years later the company was sold to Nutricia, which still uses the brand name Karicare.

“It’s one of the few stories in the world, where one individual’s mission to fight malnutrition made such a big impact on the health of babies back then and that still is continuing today,” Tap said.

“So you can understand why we feel very passionate about this part of the world.

“We’ve come back home.”

26

Base powder is bagged before going through a metal detector and packed onto a pallet for trucking to Port Otago.

Corine Tap said from Sydney.

“Controlling everything from the cow to the product is very important for us and very important for the mums who buy it.

“Being able to put ‘Made in NZ on our baby formula is what we want to be able to do as NZ is known worldwide for its highquality milk,” she said.

The plant’s two tankers visit only 18 farms, all owned by Dunedin man Grant Paterson. Most of the farms have 50:50 sharemilkers and the furthest away is near Gore.

The dryer works 24 hours a day, every day of the year, processing 40 million litres of milk into base powder for Nutricia’s 0-6 months and 6-12 months baby formula range.

Paris-based Danone, a global food company which specialises in fresh dairy

products, water, early life nutrition and medical nutrition, bought the 2012-built plant in August 2014 from Paterson and Auckland-based food packaging company Sutton Group.

It’s spending €15 million ($NZ 25.5m), doubling capacity, with Clydevale now producing base powder for NZ, Australia, Malaysia, Thailand, Hong Kong and Chinese markets, and the plant is on track to soon produce all the base powder for the age range Danone requires for Asia.

“It’s about quality, not quantity from Clydevale and in 2017 we aim to be able to do that,” Tap said.

Danone Early Life Nutrition NZ operations director Cyril Marniquet, who lives in Auckland but visits the factory regularly, is already hoping for a second dryer to be built there.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

BUSINESS “We’re in global discussions about it.

There’s no time frame but we really want to work with NZ farmers because of the efficient farming practices here but more importantly because of the quality of milk produced.

‘We want our farmers to be able to farm using the best possible practices and they can’t do that at low prices so we are making sure they are able to be sustainable in the long-term.’

“NZ milk is of the highest quality with a high protein content which we want for our infant formula.”

Increasing the number of cows that supply the plant won’t be difficult with farmers already knocking on the reception door at Clydevale wanting in. Processing winter milk might also become an option.

Currently the factory uses skim milk powder it has already processed for production through June, July and the first half of August and has agreements with neighbouring Open Country, Oceania and Synlait plants in Southland and South Canterbury to take excess milk.

“We have very good relationships with our neighbours,” Marniquet said.

It also has a new relationship with the University of Otago, with a graduate programme giving jobs to science students there.

“We’re looking for the best people to come and work with us and not only do they get to work here but we also send them overseas to our other plants.”

When Danone bought Clydevale it kept all the staff and added more, with 90 people now employed onsite.

The company is not keen to share too much of the detail about what happens between the milk coming into the plant and exiting as bagged base powder, but it involves pasteurisation, the removal of milk fat because the fatty acids in baby formula come from vegetable oils

Sarah Hutchings (left) and Meghan Bennet are two recent University of Otago graduates who have been employed by Danone. Hutchings has a Bachelor of Science in microbiology and Bennet a Bachelor of Applied Science in consumer food science. which are added in the plant, along with minerals and vitamins before drying, and packing into bags.

The vegetable oil comes from a supplier in the North Island and the vitamins and minerals from a mix of NZ and overseas suppliers.

The milk fat is sold to a dairy trader.

The bags are put on a pallet and trucked to Port Otago, then shipped to Auckland or Thailand for further blending as a dry product and canning.

The science behind it is done at research and development centres at Utrecht in the Netherlands, and in Singapore.

At Clydevale the highest of quality and food safety standards are maintained – even my camera had to be sanitised before it was allowed in and my pen had to be left behind – but that attention starts on the farm.

Last spring Danone fitted every dairy which supplies Clydevale with new coolers to make sure milk is at the right temperature before it reaches the vat.

Testing milk for residues and bacteria is rigorous.

Sustainability is also important for the company. They have ruled out feeding palm kernel onfarm and the LPG-powered plant will change to a wood pellet-fired boiler, a first for the NZ dairy industry, in the next few years.

By 2050 the company plans to be

“making milking easier and faster”

globally carbon emissions-neutral.

Although Danone won’t say what it’s paying its dairy farmers, it says sustainability is also important when it comes to them.

“We see the NZ raw milk price swinging between $8 and $4 as being too volatile,” Marniquet said.

“We want our farmers to be able to farm using the best possible practices and they can’t do that at low prices so we are making sure they are able to be sustainable in the long-term.

“These guys have to get a decent margin out of what they do.”

“We are trying to take the price volatility out of future contracts as much as possible,” Danone Nutricia Early Life manufacturing director NZ Remy Charbonnel said.

“In France we have much smaller farms which supply us but most of the cows there are housed.

“We like how the cows are farmed here, it looks a lot more natural and we like them eating grass,” he said.

“We want the farmers to be able to keep farming like that.”

Marniquet said Danone’s thinking for NZ was long-term.

“That’s why we are in NZ, because we believe dairy will be here for a long time and the milk quality will always be high.”

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BUSINESS

Handling the tough decisions Claire Cameron

The downturn in the dairy sector has resulted in widespread cost-cutting initiatives and some farm employers are looking at options to change their staffing structure and reduce wage costs.

Melissa Vining is an HR consultant with Invercargill-based Progressive Consulting and says they are fielding enquiries from farmers wanting to save money and in particular from farmers looking to make staff redundant.

“Before deciding whether to make a position redundant we recommend farmers do an organisational review of their business to identify what work needs to be done on a daily basis and how many staff are required to complete the work,” Melissa says “You need to think outside the square, and often getting someone else to look at your business and challenge you on certain aspects is very beneficial.”

An organisational review could show training and development is needed to improve staff capability, installing automation such as cup removers is viable, or the staff roster could be modified to reduce the need for casual labour.

“We are seeing more farms that require staff who are rostered on over a weekend or public holiday to work the full day rather than just milking and having time off in between,” Melissa says.

She also encourages farmers to find ways of improving farm efficiencies, and to attend the Milksmart workshops and sign up for the Waste Hunt Challenge – both Dairy NZ initiatives.

“We have clients who have drastically cut milking times after sending their staff to the DairyNZ Milksmart course. If you save 20 minutes per milking through improved systems, over the course of one week you can save more than four hours per employee present at milking and provide significant savings over the course of a season.”

The review could identify a surplus of labour and therefore restructuring options should be considered.

“Some farmers are reducing herd size to winter cows at home or reduce bought-in feed and others are installing automation in the dairy – both of which may mean fewer staff are required,” Melissa says “In some cases farm owners or their partners are going to take a more handson role and in other cases with a few changes to the system they can achieve 30

Janet Copeland and Melissa Vining – good faith is an essential part of dealing with staff issues. the minimum work required with fewer employees.”

Before making significant changes farmers need to carefully consider the pros and cons of different options. For example, when deciding whether to make a permanent employee redundant and replace some of their workload with casual staff, the employer should do a realistic financial analysis of the cost savings and weigh this up against the costs or benefits that are less easily quantifiable.

“The loss of experience in the team because of a redundancy can result in increased costs in other parts of the business, such as increased deaths, breakages and loss of production,” Melissa says.

“If there is only a small saving between employing a casual employee compared

to a permanent employee then employers will sometimes opt for the permanent employee because it is the lower-risk option.”

Business restructuring is the umbrella term that encompasses adding new roles, merging roles, losing roles that are surplus to requirements, or a combination of these.

Janet Copeland from Copeland Ashcroft Law in Invercargill cautions farmers who are considering making these sorts of changes to get expert advice to make sure they meet their legal obligations.

“The law is complex and the cost of a restructure going wrong could be significant,” she says.

“It is one of the fastest growing areas of personal grievance law at the moment – in favour of employees.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

“The starting point is to check what the employment agreement says and ensure its provisions are complied with.

“Employment relationships are underpinned by the principle of good faith, and in the context of a restructure process good faith means that employees should be involved in the process and have the opportunity to consider and provide feedback and the employer must genuinely consider any feedback from employees.”

There must be a genuine commercial reason for restructuring a business.

Financial issues resulting in the need to downsize or realign constitutes a genuine reason but must be supported by an accurate financial assessment and the employer must be fair and reasonable in this analysis.

“You must be able to prove it – you must be able to show your books, what you’re going to save, and why you need to save it,” Janet says.

The restructure process takes a minimum of 10 days to work through, but ideally two to three weeks is required.

A lawyer will draw up a restructuring proposal consultation document that outlines reasons for the restructure, the proposed new structure, the process to be followed, and timeframes. Employees are then advised that a restructure is being proposed and invited to a meeting to discuss it.

All employees whose roles might be affected should attend the meeting but it’s often advisable to have the whole team present. Employees whose roles are

affected can bring a support person to the consultation meeting. At the meeting the consultation document is discussed in detail and questions from employees are answered.

Employees should be invited to give feedback on the restructure proposal once they have had time to consider it and usually a week is sufficient. They can provide written feedback or have a private meeting.

‘Unless the alternative position is vastly different and you can’t with training and development move that person into that role, you have a duty to put them in that role.’

Employers must be open-minded and genuinely consider the feedback before making a final decision. After consideration, the employer might amend the proposal, in which case the consultation document will be revised.

If the employer decides to proceed with the original proposal the lawyer will write a final decision document that outlines the feedback that was considered and the employer’s decision regarding that feedback and confirms that the proposed structure will be implemented.

“It is important to be aware that employers have a positive duty to redeploy,” Janet says.

This means if there is another position available within the business then the employer must consider offering the alternative position to an employee who would otherwise be made redundant.

“Unless the alternative position is vastly different and you can’t with training and development move that person into that role, you have a duty to put them in that role,” Janet says.

If an employee will be made redundant this should be confirmed in writing along with details of the notice period, end date of employment, and whether they are entitled to any compensation.

The employer should also offer to meet with them to discuss the restructure and redundancy. As a gesture of goodwill many employers allow the employee to take time off during work hours to look for a new job.

Failure to follow the correct procedures in the restructure process could give the employee grounds to raise a personal grievance. This must be done within 90 days of the grievance occurring. Employers who are found to be in breach of the Employment Relations Act (2000) as a result of not following proper process may be liable to compensate the employee for: loss of dignity, injury to feelings and humiliation (generally $5000-$7000); lost wages (typically minimum three months) and legal costs. There is also a risk of the courts imposing a ruling that the employee must be re-instated.

Restructuring do’s and don’ts

Don’t

• Take shortcuts • Use redundancy as a way of dismissing an employee for other reasons • Treat the proposal as a done deal before you’ve considered feedback • Give one person’s job to another person Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Do • Seek professional advice early • Consider all the available options and think outside the square • Keep staff informed and provide all relevant information • Remember the obligation of good faith 31

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BUSINESS Grain is harvested in the Waimea Valley in northern Southland in March.

Pain in grain mainly on the plain Karen Trebilcock ak.trebilcock@xtra.co.nz @KT_at_Exporter Southern feed grain growers are feeling the pain of the low dairy payout.

Federated Farmers Southland arable chairman Stephen Wilkins said southern grain growers had become reliant on the dairy industry in the past few years and the current downturn was hurting them badly.

“Grain growers are a tough bunch of people but it’s challenging times. We’ve still got some of last year’s harvest sitting around and we still have to sell this year’s.

What happens from now is anyone’s guess.

“It’s a two-year process growing feed grain. It takes a year to grow the crop and then that is to supply the dairy industry for the next year so trying to see what is going to happen two years out is difficult.

It’s easy to get caught out.”

He said although grain growers could store this autumn’s harvest, cashflow was becoming the big problem.

“Some farmers are growing green feed crops for short-term cashflow but they will still have to sell that into the same market.”

Options were sending grain out of the region or even to the North Island but with the grower paying the freight costs it wasn’t an attractive solution, he said.

Foundation for Arable Research director of business and relationships, Ivan Lawrie, said the biggest challenge for arable farmers was the reduction in demand, especially for feed barley grain and for maize and wholecrop silage.

“The price impact according to ProFarmer New Zealand Grain Report in early March is a drop in barley price of about $90/tonne from a year ago and there

are no signs of improvement,” Lawrie said.

“It is putting pressure on cropping farmers to find viable crop options looking at the new season.

“For the long-term contractual relationships that have existed between dairy farmers and cropping farmers it’s important that good conversations take place as there should be a good understanding from both sides of the new reality.

‘There are always comings and goings but this year it has been a radical and sudden shift and dairy graziers have been caught out.’

“Once farmers change activities for lack of demand, it will take a long time to rebuild those links and return to crops that service the dairy industry.”

However, Lawrie said, it was not all doom and gloom for arable farmers.

“With conversions to dairy now reducing or completely stopped, land for cropping can allow for a more stable supply of high-quality grains for the internal market and substitution of imports for other end-users of crops such as flour milling and feed manufacturing.

“Also, environmental regulations will encourage growing crops to use up nitrogen on dairy soils and there are encouraging signs from recent research to indicate that this integration will be of service to both industries.”

Sheep and beef farmers who had switched part or all of their operations to dairy grazing in recent years were also

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

struggling, with winter feed crops almost ready in the south and in many cases no stock to graze them.

Rural Livestock Otago livestock manager Rob Fowler said dairy grazing, both Mayto-May yearlings and wintering cows, had “easily halved” in the past few months.

“A lot of dairy farmers are going to try to winter on and keep their young stock at home,” he said.

“There are always comings and goings but this year it has been a radical and sudden shift and dairy graziers have been caught out.”

He said breeding ewe and beef calf sales in the south had been strong in past months with the top pen at the first beef weaner calf sale, at Owaka in mid-March, topping $1300 an animal, echoing what had already happened in the North Island.

“Last year the top pens were reaching $1000 an animal.”

He said many sheep and beef farmers had to borrow to buy stock to replace dairy grazing and cashflow would be an issue, with ewes bought in February not returning an income until the first lambs went at Christmas. Beef calves could take 18 months until they were ready.

“There will always be farmers ready to take on dairy grazing but I think some of them will remember this and won’t do it again.”

AbacusBio farm consultant Kevin Wilson said a good growing season in the south for fodder beet, kale and swedes had made the situation worse for dairy graziers.

“There’s certainly a lot of feed around and not a lot of stock to eat it.”

Wilson said he had heard winter grazing had dropped about $1 or $2 a cow, and graziers were trying to help dairy farmers and continue what were in many cases long-term relationships.

33

INDUSTRY INSIGHT

Farm financial management key

Andrew Watters I planned to write about why dairy farm land values were too high, and how most of us would be better off in the long run if farms traded at lower prices. It had been concerning how, over particularly the past two years, land values seemed to have got out of kilter with their earning potential.

Now it seems the land price topic risks being more bad news when we are awash with that – the industry is now facing the reality of a $3.90/kg milksolids (MS) milk price and commodity prices don’t look positive for next year. Three years of low milk prices would be very hard for most of the industry to manage, with the potential for very severe consequences.

Needless to say it is guaranteed that land prices will fall and perhaps significantly.

Our rolling average milk price has now fallen from $6.80/kg MS in 2013-14 to close to $5.70/kg MS this year and could fall further by next season. But I would pick that the 40% land price fall estimate by the Reserve Bank’s worst-case scenario, and some commentators, won’t happen.

There are too many relief points in the system, including buyer interest from offshore, whether we like that or not.

There will be domestic market interest as well from buyers supported by record-low 34

interest rates and confident the mediumterm milk price will sit somewhere between $5.50/kg MS and $5.80/kg MS. Rather than talk land values when so many variables are unknown, I thought despite farm financial management being one of the most boring things to write about, the topic and the opportunities have never been more relevant or important.

There are many fantastic stories of farmers managing costs well, with tips, ideas and approaches in this magazine and others. But I thought it worth writing about the process of managing finances because what we do with our budget is more important than just having one.

I run the risk of offending readers here, but evidence suggests the industry is not, on average, very good with financial management. A survey at last year’s National Fieldays at Mystery Creek showed 44% of farmers said they didn’t have a budget, and elsewhere it has been reported only 15-20% of farmers regularly review their budget through the season. These statistics might sell New Zealand dairy short, but overall not many farmers are able to forecast their cash, profit and loss, and balance sheet position.

The process that we find useful with our business, and with my own farm is as follows:

• What is the context, what are we aiming to achieve?

• Setting assumptions; optimistic, realistic, pessimistic.

• What farm system and farm management plan will best achieve our targeted outcomes?

• Plan the detail.

• Check implementation of the plan and regularly re-forecast.

• Use tools that make re-forecasting easy and that keep your professional team informed and involved.

The most important context is our own financial situation. Is the business focus still on the medium term? In which case we are looking to minimise the damage from the dairy down-turn – we want to maintain soil fertility and pasture species as best we can, we want to ensure we are still rearing enough good quality replacement livestock, we are replacing the plant and equipment which would, if kept, start to cost money for repairs and maintenance, and at the same time we want to minimise debt build-up.

Most of us should know or at least sense if the financial situation is more serious, in which case the priority is the next 12 months. This is a case of doing what we must do, and not much else. This shortterm approach has graduations, from targeted maintenance fertiliser on the

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

INDUSTRY INSIGHT

Andrew Watters – get to know how your budget works.

the risks are asymmetric – it’s far better to overachieve a conservative budget than underachieve an optimistic one.

We then need to make some farm system and management decisions. With lower prices most of us will be tending to reduce stocking rate, reduce boughtin feed and be tending towards a more self-contained system. Although the Dairy NZ labels of System 1 (self-contained, no feed inputs) to System 5 (grazing off, high

‘A survey at last year’s National Fieldays at Mystery Creek showed 44% of farmers said they didn’t have a budget.’

lower-fertility paddocks to no maintenance fertiliser at all. Hopefully you have the support of people who can assist with targeting limited funds.

Then we need to, independent of Fonterra, consider our budget assumptions, particularly around milk price. For many years Fonterra set conservative milk prices, and for 7-10 years the milk price was that or higher. For the past two seasons high opening milk prices have become low ones – it is sensible I think to be doing initial budgets somewhere around $4.50/kg MS. The 2016-17 season is definitely one where

bought-in feed) are useful, it doesn’t mean that System 1 = low-cost and System 5 = high-cost. There are examples of low cost systems whether low or high input.

The objective of the planning exercise is to keep production as high as sensibly possible supported by the lowest possible cost structure.

For example, a 200,000kg MS farm has an operating cost structure of $800,000 including drawings. If we can achieve a budget producing 5% less milk (eg 190,000kg MS) but with 10% lower costs ($720,000) then we can reduce our operating cost structure from $4/kg MS to $3.78/kg MS. Provided debt servicing levels are not too high, and we are still earning a dividend on Fonterra shares, we still have a good chance of breaking even at a $4.50/ kg MS milk price.

To get maximum value, we need to construct our budgets in some detail.

Although a budget that estimates total fertiliser spend is a start, it’s better to go to the next level of detail, the tonnes of each type of fertiliser we expect to use and the price that we expect to pay for that

fertiliser. If the price of urea falls, we can adjust the price in our forecast but keep the tonnes the same. That way we make sure the gains in reduced pricing flow through to lower expenditure.

A budget only works if it’s used. We sit down each month and look at actual expenditure. We want to ensure we’ve received the goods and services we’re paying for, we’re paying what we expected and check whether the expenditure happened in the month we thought. This latter point is important because we might need to adjust the forecast position based on what actually happened. We also take the chance to review the coming months and the seasonal impacts on likely income and expenditure.

Use the right tools. There are some smart tools available in the market. These products are moving to the cloud which enables production and milk price changes to be automatically updated. These tools take account of the effect of selling down livestock on the cash and balance sheet position. They also allow us to work collaboratively with our consultant, accountant and banking partners. Ask them about the options available. There is no substitute for good communication at times like these.

Lower-order sharemilkers and contract milkers might not have so much flexibility to reduce costs and make do.

On one farm I am involved with in Southland, costs have been reduced from more than $5/kg MS to $3.80/kg MS. Cost reduction has been from two factors – feed and grazing costs are down by half and we have fewer cows producing more per cow.

But our contract milker is now getting more than $1.30/kg because of the additional work they are doing – in this case money well-spent. It has been said many times but it’s worth saying again, without our farmers we don’t have a farm so let’s look after them as best we can.

It’s not all doom and gloom. Fonterra shareholders should receive a strong dividend and beef prices are up – both factors that mean farmers can operate and break-even at a lower milk price.

Dairy will be strong again, land prices will reflect their earnings, and farm businesses will be successful. But I can’t help thinking those in the driving seat will be strong financial managers.

Andrew Watters is the first to contribute to our new Industry Insight column, where industry leaders bring up an issue they have been pondering. Andrew is executive director of MyFarm, a farm and horticultural block syndication investment company, a Nuffield scholar, and, with his wife Alison, past winner of the Sharemilker of the Year title and owner of a 600-cow Wairarapa dairy farm.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

35

BUSINESS

Green petition heads off Landcorp

Bob Edlin bob.edlin@xtra.co.nz Many farmers downstream from Wairakei Estate signed a Green Party petition calling for a moratorium on Landcorp plans to convert thousands of hectares in upper Waikato to dairy farms, according to a report by Parliament’s Primary Production Select Committee.

The committee was told the farmers were among the 8102 petition signatories because fresh water was a passion for many in the region and they were concerned about their nitrogen budgets.

“The petitioners said that farmers in the lower Waikato catchment are working hard to fence and plant around waterways and to manage effluent ponds to reduce nitrogen leaching,” the report says.

“However, this may be in vain if nitrogen leaching in the upper catchment is not properly managed.”

Landcorp opposed the request for a moratorium, saying the issue affected all farmers and it was unreasonable to single out Landcorp because of its Crown ownership.

The committee recommended only that its report be noted, saying Landcorp was not the only business converting land into dairy farms, and a majority of committee members believed it would be impractical to put a moratorium on Landcorp while letting other conversions take place.

But the committee took “great interest” in the care of waterways throughout the country “and intend to look further into the downstream impact of these practices in the future”.

The report was tabled in Parliament in February, a fortnight before Landcorp announced significant modifications to its plans early in March.

Commenting on the committee’s decision, Green Party water spokeswoman Catherine Delahunty said she was pleased the downstream impacts of dairy conversions would be monitored more 36

closely. Many farmers had signed the petition because they were worried the measures they were taking to mitigate pollution and manage effluent on their own land would be undone by the pollution coming down the river from Landcorp, she said.

Delahunty was more delighted when Landcorp announced it wouldn’t proceed with its intensification programme, partly because of environmental concerns.

She said this was “a huge victory for the farmers, iwi, fisher people and all those worried about the impact of increasing dairying on the Waikato river”.

Chris Lewis, Waikato provincial president of Federated Farmers, said he wasn’t aware of any neighbours or nearneighbours who had signed the petition or would be willing to say they supported a moratorium.

Andrew Hoggard, chairman of Federated Farmers Dairy, said he imagined there would have been some farmers who supported the petition, although he didn’t know of any individually.

“I think there was justification,” he said.

Many would be concerned at the prospect of catchment nitrogen caps being applied but if many new conversions were allowed, potentially much bigger reductions would be needed.

The biggest challenge was deciding what catchment allocations should be and coming up with a fair method for allocating.

“We think it’s important that we clearly get on with the science and determine what catchments are fully allocated, and what catchments are over- or underallocated, so the proper decisions can be made around allowing new conversions,” Hoggard said.

“And you don’t want it just to be about dairy because every land use change will have an impact. So if you are moving from forestry to cropping or vegetable growing there is going to be an increase in nitrogen.

“It’s important not to focus on just one sector but to have regulations that take into account all increases.

“If the tourism on the Central Plateau is going to go up 10-fold over the next decade, where’s all the sewerage going?

Because tourists defecate as well.

“And towns are going to grow. What’s happening there?”

Dairy had a big role to play, Hoggard acknowledged. “But you have to look at the whole picture and how things fit together.”

The petition

The Green Party petition asked the House of Representatives to ask the Minister for State-Owned Enterprises “to put a moratorium on all future Landcorp managed or owned dairy conversions to help responsible farmers, and to restore the water quality of our lakes and rivers”.

It focused on Landcorp converting land to dairy farms throughout the country, particularly in the Waikato region. The main concern was the Wairakei Estate conversion north of Taupo. The petitioners were worried about the negative effects of conversions on water quality and that dairy conversions undermined the efforts of farmers downstream to repair and restore water quality in their area.

They limited the scope of their request to Landcorp – which accounts for only about one-third of the total conversions in the Upper Waikato area – because it was a State-owned enterprise and the Government could hold it to account for its activities and environmental effects.

Between 2008 and 2012, the ministry estimated the amount of nitrogen leached into soil from agriculture increased by 29%. The increase was mainly caused by increases in dairy cattle numbers and in the use of nitrogen fertiliser.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

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SYSTEMS

There’s no cutting corners when it comes to pasture, Lahmert says.

Jack of all trades Farmers are renowned for being a ‘jack of all trades’ – wearing many hats from vet to agronomist to accountant. In the case of Craig Lahmert this couldn’t be more true. He tells Cheyenne Stein about why it’s important for him to be on top of his pasture management and how he does it all as a one-man band.

38

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

FARM FACTS

The feed reader has cut Craig’s pasture walk time in half.

Location: Tokomaru, Manawatu Owner: Craig and Louise Lahmert Area: 90ha Cows: 230 Friesian cross Production: 91,000 MS Pasture grown: 12-13 tonnes

C

raig Lahmert and his wife Louise have been on their Tokomaru property for 16 years, and with no staff, everything from the dayto-day activities through to the farm books is left to Craig.

Although it’s home to stunning views of Manawatu, the property isn’t without its issues. The heavy silt loam soils mean the property goes from bone-dry in summer where nothing grows to “a right duckpond” in winter when pugging becomes an issue.

“The soils really just mean that pasture management always has to be front of mind. If you get it wrong, you could be in trouble for the rest of the season.”

He keeps his system simple and traditional with a ryegrass and clover mix and some short-rotation grasses. Fourteen per cent of the farm is turned over into crop each year as part of the pasture renewal programme. His crop of choice for the past four years has been chicory but is considering switching back to turnips.

“The last few years I’ve gone with chicory because you can get a few grazings in before winter. Before that I was using turnips but I would have to work the paddock a bit more and because of the soft soil you lose those first grazings because when it gets too wet you can’t graze it, whereas the chicory is more compacted.”

Although his pastures are doing well now, they haven’t always been that way.

When they first took over the property was covered in Yorkshire fog grass, and they soon discovered that once it was grazed off, nothing else grew back. Having priced up the cost of getting a contractor in to over-sow his paddocks, Craig realised he would be better off getting his own

equipment and doing it himself.

“I thought to myself, why am I paying someone $10,000 when I could go and buy my own gear and do it myself? So I went and brought my own drill and tractor and now I do all my own contract work myself.

I don’t have to rely on contractors being available so when I need something done, I just go and do it.”

Paddocks that once produced about 75,000kg milksolids (MS) a year are now producing 91,000kg MS, which Craig credits mostly to the improvement in his pasture and his weekly pasture walks.

“You just have to roll with what you have and keep trying to make improvements. I have been measuring grass for 15 years, it’s all about being able to know when you’re a step ahead and when you might need to put urea on to keep ahead of the game, it’s the key that keeps everything ticking along on the farm.”

Being a solo act, Craig has turned from pasture walks to pasture drives with the help of his feed reader attached to his quad bike.

“When I first came here I just used the old platemeter and walked the farm and it took me two hours. I did it every week in spring time, but because I’m on my own and had other jobs that probably took priority I needed to be a bit more efficient with my time but because of the type of farm I’ve got, I couldn’t afford not to do it.”

The feed reader means his weekly pasture drives only take an hour to measure all the paddocks. He measures weekly during spring and every second week in winter when he’s full-swing into calving.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Data from the feed reader is downloaded to the computer and emailed back to Craig’s phone and put into the app Grass Mate which creates feed wedges and provides all the information he needs and the push of a button.

“Grass Mate automatically puts the paddocks in the order in which they need to be grazed, which is handy. Often you can tell what order they will be by looking at them, but being able to quantify it means I can manage what I have better, particularly over summer when the place dries out because I can then allocate x-amount of supplement to fill the gap if I need.”

Grass silage is fed in summer to fill any gaps, and a palm kernel and maize blend is normally fed from calving through summer to give the cows a bit of an extra boost, but Craig says this year’s budget doesn’t accommodate it.

“We pulled the pin on supplement at Christmas time and whether I feed it or not this season is the $1000 question really. I’ve done a budget for the next year and I probably won’t. It’s a bit of a juggling act right now and means I will really have to be on top of my pasture management because I will be relying it more heavily than normal.

“The biggest thing this year was the El Nino that was meant to happen, so come spring last year I didn’t do any topping because everyone was saying it’s going to be dry, so I sort of fell over a bit there and lost quality because I didn’t top.”

Managing the summer dry is somewhat easier than managing the boggy wet conditions in winter. Pugging is a major issue for Craig, who says it’s just something he has to cope with.

39

DAIRYNZ

Pasture First approach – what’s new?

Phil Irvine It’s amazing what a difficult period does for honing the focus on the fundamentals of New Zealand dairy farming. Since the big drought in 2008, farm systems have tended to creep towards more reliance on feed brought on to the milking platform, with a corresponding lower reliance on pasture.

I think we have lost a bit of appreciation of just how good NZ dairy pastures are as our main feed source. Fortunately this is now beginning to change. It needed to change too, because whether you have a low, medium or high-import system, home-grown pasture is the largest and most important feed resource you have.

So what’s new? It’s time to ditch the input-based 1 to 5 farm system descriptors and look at matching pasture demand with pasture growth for your farm, ie building a farm system and stocking rate around the pasture resource of your farm. For some farmers this will involve a 12-month reliance on pasture and so will need a lower stocking rate to be sustainable. For others it might be six months of pasture-only feeding, with other strategies such as once-a-day milking, early dry-off or bought-in feed to fill the gaps on the margins. These two approaches seem to be the best bets at lower milk prices, based on extensive Farmax modelling done recently by DairyNZ as part of the Tactics campaign.

There’ll be others who will stock their farms higher and rely on pasture-only feeding, for say three months of the year in the peak of spring. They will import or grow more supplement to make this system work. This approach tends to be more risky at low milk prices and while

Craig’s little helper, Maggie.

From page 39 “Pugging is just something that happens and can’t really be avoided. All of the paddocks are set up where they have to come in and out the same gate so they do tend to get a bit of a thrashing.”

Craig has a stand-off pad that he can use when conditions are bad and utilises on-off grazing to save what pasture he can, but logistically it can be tricky, all of which makes pasture renewal 40

and management that much more important.

“September is usually our wettest month and around that time I normally have about five different herds going between the colostrums, milkers and dries – there’s only me and as it is I’m stretched out to shift them all within the milking time frames so using the stand-off pad becomes somewhat of a logistic nightmare some days.”

In past years Craig has had a winter

most succeed productively, their bank managers will tell you not many succeed financially. It’s this fact that is causing farmers to take a good, hard look at how they set up their farm for next season, especially how many cows they milk, how they can harvest more pasture from their farm and how little bought-in feed can they get away with.

DairyNZ is running a round of workshops to help farmers with these decisions. They will be interactive, with farmers able to work out things for their own business. Some will be specialist events but many will be based around discussion groups during April and early May. If you don’t normally attend a discussion group you are encouraged to at least get to one of these events. A problem shared is a problem halved.

Visit dairynz.co.nz/tactics for more information on Pasture First events.

Phil Irvine is DairyNZ’s regional leader for North Waikato kale crop but gave that a miss this season and says it will lighten the load a little bit not having to shift the break fences and feed-out hay, which can add two hours on to his already busy day.

“I need to be utilising my time efficiently whilst still getting everything done and making sure the cows are reaching their targets.”

This year Craig has added an extra 40ha to his property by buying a block at the back of their place, 10ha of which will be added to the milking platform with the remainder being home to his young stock that he hopes will ease the burden a bit during winter.

“The heifers will all come home instead of being grazed out which eliminates that cost, instead of paying for a grazier and transport we are just paying for the block of land.”

Craig says when it comes to his pasture he is always learning something new and says working with agronomists and industry professionals is key to best utilising the hand you’re dealt.

“There’s no cutting corners when it comes to your pasture either. You have to do it right because that’s your investment for the next 10 or so seasons.

A prime example was a guy recently who was like “Oh you have to replant as cheap as possible while the payout’s down’, but you can’t afford to do that in the long run, your affecting your quality and longevity of that pasture and will end-up spending more in the long run.”

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41

SYSTEMS

Feeding to reduce nutrient loss

Andrew Swallow andrewswallow@clear.net.nz Manipulation of diet is a tool that seems to have been overlooked in the search for ways to reduce dairy’s environmental footprint, an independent Manawatubased research scientist says.

However, other experts say it’s not as simple a solution as it may at first seem.

Lucy Waldron of LWT Animal Nutrition first flagged the apparent oversight of nutrition as a tool to reduce nitrate loss during the Horizons Regional Council’s One Plan hearings in 2012, where she gave evidence to the Environment Court as an expert witness regarding the role of animal nutrition.

Now she’s taken data from the Lincoln University Dairy Farm (LUDF) to illustrate what’s possible, running pasture crude protein (CP) and milk yield data through a computer model that shows spring urinary nitrogen excretion might be three times what it could be if the herd received a more balanced diet.

“At times the crude protein of the grass was over 30%. That’s more than twice what’s required for optimum milk production and it never gets below 15%

42

protein, which is about where you want the overall intake to be.”

The result of such high protein intake, as shown by Castillo et al in 2001 (Journal of Animal Science, 79:247-253), is calculated urinary nitrogen excretion of more than 1kg N/ha/day, or more than 300g/cow/day, yet for the same milk yield urinary nitrogen loss could be as little as 110g/cow/day.

“You need a low protein feed such as maize silage, that’s 10-11% protein, and it needs to make up over half the diet when the [grass] protein is that high.”

Waldron says there’s no clear relationship in the LUDF data about whether milk yield responds to changes in nitrogen content of the diet but notes there’s some evidence elsewhere that energy saved through not having to excrete excess nitrogen can be channelled into milk production instead.

It’s also well-proven that a higher starch content in the diet increases milk protein, so the milk produced from a betterbalanced diet could be of higher value.

“It may seem odd to be feeding supplements when grass is lush, but this is the way to dilute protein. To keep the cost down farmers need to plan plantings so they have some low-protein forages

available to achieve this in the long run, and allow for more silage to be made from spring grasses when CP is highest.”

To calculate whether such manipulation of the diet would be economic is Waldron’s next step in what she admits is “a project on the side” from her main research and consultancy work.

“I’m a nutritionist, not a farm economist or management specialist, and I’m not getting any funding to do this work, but I just want to show there are ways to dramatically reduce the nitrogen footprint of dairying through manipulation of diet before farmers start getting pinged with fines from regional councils. There seems to be a disconnect between the legislation being passed and information flow to the dairy farmers, the ones who are going to be impacted by it, about what they can do to comply with it.”

DairyNZ principal scientist in its feed and farm systems research group, David Chapman, says the numbers Waldron’s come up with for nitrogen excretion are consistent with the research but 30% crude protein grass would be the extreme and 22-25% is more typical, which, with a cow eating 18kg drymatter (DM)/day, would be a nitrogen intake of 500-550g N/day and

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

SYSTEMS

Low-protein feeds could help reduce nitrogen losses on farms such as Lincoln University Dairy Farm, independent nutritionist Lucy Waldron says.

Ambreed

excretion of about 200g N/cow/day.

If that nitrogen intake is reduced to 400g/day or below, which could be achieved by dilution in the diet, nitrogen excretion bottoms-out at 75-100g N/ day. The problem is the cost of the feed required to do that.

“In the current economic environment it is not going to be cost-efficient but I agree that theoretically it is possible to reduce that nitrogen level.”

South Island Dairy Development Centre executive director Ron Pellow echoes that, saying such options have been looked at for the Lincoln University Dairy Farm but the economics were challenging, especially because the farm would still have been growing 15 tonnes DM/ha of spring grass.

“Do you increase the stocking rate because you’ve still got that 15t of grass on top of what you’re bringing in? You might end up with a lower concentration of nitrogen in each urine patch but if you’ve got more urine patches per hectare there might be just as much nitrogen excreted.”

Taking some of that spring grass as silage to fill a summer deficit would make sense in Waikato but with the more even, season-long grass growth at LUDF it’s much less likely to be economic, he adds.

Lincoln University’s professor of dairy production, Grant Edwards, acknowledges reducing dietary crude protein content can be a useful strategy to reduce nitrogen excretion but it’s not a simple fix because diluting dietary protein from 30% to 15% at an 18kg DM/cow/day intake would require about two-thirds of the diet to be a 10% crude protein supplement if the other third was spring grass. At such levels of supplementation, despite some substitution for pasture, total drymatter intake might increase, resulting in little change in total nitrogen intake per cow.

He also echoes Pellow’s point about supplement leading to increased stocking rate and any effect of a low-nitrogen supplement being offset by more urine patches.

Edwards says it should also be noted optimum nitrogen content for pasture growth isn’t the same as the optimum for lactating cow nutrition, at more than 25% and about 18% respectively. Also, urine patches formed in spring in well-managed irrigated systems are a low leaching risk, so altering nitrogen excretion in spring might have little impact.

“It is more important to do it in autumn going into winter when the risk of nitrogen loss is high.”

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SYSTEMS

Culverden north Canterbury

Belinda and James McCone on Kinloch Dairy in north Canterbury.

Challenging the system When they took over a new property, James and Belinda McCone took a hard look at every aspect of the operation. They told Anne Lee it wasn’t about cost-cutting, but making sure everything worked to its full potential.

When James and Belinda McCone looked to fine-tune their farming operation a year after they bought the north Canterbury property they challenged not just their stocking rate but their whole farm system.

“And the first question was – are we growing and harvesting as much feed as possible?” James says.

The next was about how much risk they were prepared to shoulder when it came to bought-in feed levels and what that meant for stocking rate.

The review was more one of optimising the farm system and returns as well as

44

limiting risk in the volatile environment rather than simply slashing costs.

While it’s only the second season on the 128ha Kinloch Dairy near Culverden they’re no strangers to the area, having been involved in the wider Rutherford family farming business for nine years.

They’ve worked with Belinda’s family including brother Duncan and brotherin-law Kevin O’Neill to grow the business, mainly through conversion of dairy units on tracts of the long-held family farm, Leslie Hills.

James also acted as overseer for corporate farming entity Craigmore Farming during

the conversion phase of two of its farms in the area and is deputy chairman of the Hurunui-Waiau zone committee set up as part of the Canterbury Water Management Strategy.

When James and Belinda bought Kinloch they did plenty of work at the front end, planning and modelling systems with volatility and risk in mind.

Along with the wider family enterprise they were looking at bringing fodder beet into the system and in their case considering wintering half the cows at home.

With his experience on the zone

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SYSTEMS

Belinda and James McCone check the fodder beet.

committee James knew how important it was to set up the system so having cows on over winter didn’t unduly increase their nitrogen losses.

They also had to consider while the crop could produce high tonnages and cows would be transitioned on through autumn using it as a supplement, the area was essentially out of the grazing round during much of the milking season.

Up to 450 cows had been peak-milked on the farm before they bought it which meant a stocking rate of close to 3.8 cows/ha.

James has completed an Overseer course and his analysis showed with the beet in the system a cut in cow numbers was necessary to both achieve their nitrate loss target and deal with the loss in milking platform.

They peak-milked 400 cows in their first season, giving a stocking rate of 3.57 cows/ ha if the seven hectares of fodder beet isn’t counted in the milking platform area and 3.36 cows/ha if it is.

They used close to 690kg drymatter (DM)/cow of palm kernel and 160kg DM/ cow of silage in that first season as well as about 150kg DM/cow of fodder beet through autumn.

Production for the season came in at 493kg milksolids (MS) per cow with farm working expenses at $3.89/kg MS. The high per-cow production helped dilute costs and while tight pasture management to ensure cows were consuming high-quality feed was stringently followed, feed other than pasture was almost one tonne DM/cow.

Levels of bought-in supplement, particularly palm kernel were higher than other farms in the family business.

“Last year we sat down at a governance level and asked, although we’re profitable using this amount of palm kernel how comfortable are we with the risks around that?” James says.

As part of that discussion James and 46

Belinda challenged their own farm system further on Kinloch.

“That’s when we asked, are we growing as much feed as possible?”

That had to be the first question, he says.

Grazing management is already a very high priority so harvesting as much of what’s available every day is the focus.

“But we had to look more closely at just how much feed we had available.

“We looked for the easy wins first and did an audit of the irrigation system.

Straight away we found it wasn’t putting on what it should have been.”

Over the years various sprinklers had been replaced with new ones of a different nozzle size and the sprinkler system was only delivering about 75% of its original design.

A distribution uniformity test revealed that overall the pivot was also performing well-below its potential with only five or six nozzles in the correct position on the pivot against the design.

“For spending not much we got a huge improvement in terms of getting the right amount of water on more evenly.”

They also looked at their paddock records in MINDA Land and Feed and, coupled with their own knowledge of the state of paddocks, they targeted the regrassing programme to the poorest performers.

By March the new paddocks had already grown 50% more grass than the remaining worst paddock.

“When we look at our pasture harvested figure this season it looks like focusing on those two areas has delivered an increase of about 400kg DM/ha – from 12.8t DM/ ha to 13.2t DM/ha,” James says.

During their system re-think last year they also looked at stocking rate for the current season.

“Once we’d identified the things we wanted to do to make sure we were

growing and harvesting as much feed as possible we looked at stocking rate and again questioned our reliance on palm kernel.”

It’s been a cost-effective supplement but there was a level of risk attached to it.

“If it suddenly wasn’t there we’d have to rely on grass silage and that can be expensive and of varying quality.”

Given they were tightly managing pastures, harvesting high-quality pasture with the cows, dropping out bought-in feed meant lowering stocking rate, James says.

By dropping 30 cows and peak milking

Fodder beet on the platform Fodder beet gives options through autumn because it’s available as additional feed if there are irrigation restrictions.

It also makes the transition from milking to wintering more seamless.

Getting cows to condition score five by planned start of calving is not an issue since cows will put on weight on the high energy feed.

That’s helped simplify drying off decisions later in autumn to managing pasture covers rather than cow condition.

That said, James does ensure any lighter cows are managed earlier through lactation and put on once-a-day milking after Christmas.

“We can’t have six different mobs transitioning on the fodder beet at different times so we do try to keep that tail-end small and the bell-curve as tight as possible when it comes to cow condition.”

Managing cows through spring with fodder beet right on the platform helps with what is a bottleneck in terms of workload too, James says.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

SYSTEMS

FARM FACTS

Owners: James and Belinda McCone Area: 128ha total, 119ha effective Peak cows milked: 367 crossbreed Production: 480kg MS/cow Supplement: 450kg DM/cow palm kernel, 150kg DM/cow autumn fodder beet onfarm Irrigation: 80ha pivot, 40ha long line sprinklers Farm working expenses: $3.65/kg MS 2015-16, $3.40/kg MS budgeted 2016-17 Farm dairy: 30-aside herringbone (cup removers front 13 cups)

Belinda and James McCone check the fodder beet.

368 cows they reduced the stocking rate to 3.07 cows/ha and have limited palm kernel to 450kg DM/cow.

They’ll feed about 100kg DM/cow of home grown silage having made 40t DM off the milking platform.

That’s a similar quantity of silage cut on the milking platform as the previous season but the lower stocking rate meant they’ve been able to regrass 18% of the farm so far this season, adding to their ability to grow high-quality pasture.

The increased pasture production thanks to regrassing and re-tuned irrigation along with the cut in cow numbers and reduced bought-in feed costs have all helped cut costs for this season to $3.60/kg MS based on production of 480-485kg MS/cow.

James says they’re on track to achieve budgeted costs and production but warns that pulling back cow numbers has made it more challenging to manage feed quality through high-growth periods.

“There is a real management risk at lower stocking rates. If the feeding management isn’t dead-on then you could very quickly end up in a worse position than you were in at a higher stocking rate.

“The critical thing is having the skills to run the system as efficiently as possible.

If you drop the stocking rate there’s some very real risk – if you expect your per-cow production to go up and it doesn’t, your costs stay the same and your debt servicing is the same, you’re looking at a bigger hole than before.”

There are more decisions to be made managing surpluses than deficits and that’s why it’s even more important to be checking cows and the status of the paddock covers through the day and not just when getting the cows in.

“You’ve got to have people 100% focused on feed quality, residuals and cow behaviour. All staff take responsibility for monitoring feeding and are expected to ask the questions:

• ‘Are the cows up on their break or are they spread back out? Have they hit an even residual, can we get a bit more into them before milking?

• ‘If the paddock’s still clumpy is there a good reason such as rain or mud? Will I starve these cows by making them clean this up?’”

Because pasture quality is paramount, James will get the mower out to tidy up a paddock if needed. He prefers to mow in front of the cows but will also go in behind them.

“You have to be making decisions every day at a lower stocking rate so the skill-set of the people you have making them is very important.”

It can be even trickier at a low payout because you have to deal with the added pressure of not wanting to get into a feed hole and having to put supplement in.

“When the payout’s good and you do the farm walk and the forecast is looking good you might drop a paddock out and be aggressive to keep feed quality.

“But when it’s low you might be inclined to wait that extra day or two to see how the weather goes because you don’t want to risk having to put in extra feed.

“It’s a fine line because when you’ve dropped stocking rate and the aim is to lift your per-cow production, you know chasing a high per-cow (production) you can end up wasting some grass to do it.

“You really have to be comfortable in yourself and your ability to get that right.”

Cutting costs

When they were reassessing stocking numbers they also looked hard to see if there was a critical point at which they could reduce labour costs but they weren’t able to do that.

They have two full-time staff – Hamish Kilpatrick as manager and Marcelo Menna – and use casual or part-time labour to

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

help in peak periods, bringing their total labour to 2.5 full-time equivalents.

In light of dismal milk returns additional culls have released some cash from the balance sheet and the use of sexed semen allowed the sale of an extra 35 artificially bred heifer calves along with a few bull calves last spring.

‘You have to be making decisions every day at a lower stocking rate so the skill-set of the people you have making them is very important.’

James says they’ve looked hard at all their costs, trying to take 5-10% out of each line.

There’s buying power in the larger family group and that’s helped with some bulk purchases.

Maintenance phosphate hasn’t gone on any areas where Olsen P levels are already adequate and effluent has been applied more precisely from an underslung line on the pivot.

Repairs and maintenance have been slashed and some preventative animal health such as teat sealing heifers has been taken out.

Two of the regrassed paddocks have been put into the tetraploid Italian or short-term ryegrass Feast II. James expects it will give better coolseason production and, providing the fodder beet yields 25t DM/ha or better as it did last season, the couple has the option of keeping 90% of cows onfarm this winter.

“If we found cheap-enough grazing we could send more cows off but based on the feed budgets we’ve done we can keep 90% at home.”

That’s helped drag budgeted costs for next season down to $3.40/kg MS. 47

SYSTEMS

Weeding out the problem in plantain and clover Cheyenne Stein cheyenne.stein@nzx.com @CheyStein2 Plantain and clover crops are becoming increasingly popular but weed control can be a challenge. Mat Dorward, forage and cropping advisor for H&T Agronomics says there are ways to tackle the issue and new developments in plantain cultivars look promising.

Plantain is a broadleaf weed that was bred and developed as an alternative pasture when it was discovered it had a high nutritional value.

“It’s not clover – that’s the issue. There are plenty of on-label clover sprays such as Thistrol or Pulsar. Plantain, on the other hand, is actually on the “weeds controlled” on a lot of those chemicals.”

This means plantain reacts to chemicals such as phenoxies, a family of chemicals that when sprayed on broadleaf plants, induce rapid and uncontrolled growth, resulting in the plant “growing to death”.

The development of PG742 is likely to offer slightly better thistle control options, Dorward says. PG742 is an Agricom-bred plantain that has some phenoxy tolerance, allowing some phenoxies to be applied, which isn’t the case with Tonic plantain.

“PG742 is only new to the market, so we’re still testing the waters, but from what we have seen in trial work, thistle control looks promising.”

Weed control in establishing plantain and clover crops When it comes to establishing a crop of plantain and clover, early weed control is the key for a successful crop and the common spray recommendations for broadleaf weeds haven’t changed much.

“Bentazone has been widely used in the

Plantain facts • Higher palatability than ryegrasses • High protein and mineral content • High digestibility of 75% (vs. 55% for ryegrass) • Rapid fractional degradation rate (2.5 hours to 50% degradation vs. six hours for ryegrass) • Responds best to rotational grazing but can also be set-stocked • A prolific re-seeder, meaning the crop will often get stronger as it gets older • Increased cool season drymatter production 48

last three to four years. It’s quite a soft chemical and is off-label for plantain but when applied under the right conditions – small weeds, lots of water, warm growing conditions – if you get all those ducks in a row then the results are generally very good.”

When weeds are too big or growing conditions are less than ideal (too cold and moisture stress), there is poor uptake of the chemical, producing average results.

“If you get weed control right in the first year, it allows the crop to establish a lot better, which gives you benefits in terms of growing more drymatter (DM) but also benefits in terms of weed suppression and ground cover, making it difficult for weeds to establish in the second year.”

Dorward says if you don’t get weed control right in that first year of a crop, you will be chasing your tail as weeds get larger and harder to control. Grass weed control is on-label and generally pretty successful with the sprays such as Clethodim and Haloxyfop-P. “Weeds are competing for space, moisture, light and nutrients, so you need to be eliminating them to allow the crop to flourish and increase production.

Although in a low payout year this can be tough, Dorward says skimping on weed control, particularly during the establishment phase, would put farmers in a worse position later down the track, and end up costing money, quality and drymatter for years to come.

“It’s no different to a pasture system – the first three months are important for the longevity of that crop and sets it up for the years to come. We need to educate farmers that they are running an intensive system which requires more inputs, like spray and fertiliser, than a pasture system but it will generate greater returns.”

Weed control in established plantain and clover crops Plantain doesn’t compete well with naturally seeding grasses such as browntop and Yorkshire fog which can limit production of plantain, meaning control of grass weeds on an annual or bi-annual

basis is important. Broadleaf weeds and thistles are a big issue for both establishing and established crops and requires a bit of lateral thinking when it comes to tackling them. Bentazone is still largely used as the base chemical, however spiking with other off-label proprietary products in order to overcome the poor uptake of Bentazone alone can help, particularly on hairy thistles such as scotch thistles.

“With established crops you generally have more grass weeds and bigger thistles which are harder to kill. So we are using Bentazone with different spikes depending on the paddock and weed situation.”

The main thing to remember is every paddock is different and you have to treat it that way, Dorward says. The rate and type of chemical recommended varies year-to-year and for weed type and size, temperature and growing conditions.

“We have found that in some cases Bentazone and a spike followed by topping a few weeks later proved really effective on large scotch thistles, which can be hard to control. Bentazone tends to have a better uptake on waxy thistles (nodding, variegated, winged). With hairy thistles like scotch thistles the uptake is pretty poor, hence why we have had to play around with spikes.”

Spring control of thistles can work well but is often a difficult time because of high feed demand and often a lack of spare paddocks. Late autumn control of thistles can be most effective because thistles are seedlings and feed demand is slightly lower than in spring.

“Farmers often stay off their paddocks in the winter to set them up for calving or lambing so pre-winter can provide a good opportunity to control weeds.”

Dorward says the key message for weed control on established plantain and clover crops is sometimes it has to be approached with a bit of innovation, particularly when it comes to thistle control.

“Every paddock is different. There is no blanket spray recommendation that you use on every plantain and clover paddock. That’s where a good rep comes into play who has a good understanding of chemicals, spray timings etcetera.”

Key messages for plantain and clover crops • Spray weeds early • High water rate • 15C air temperature • 12C soil temperature • Active growth to ensure better chemical uptake • Spraying when weeds and thistles are small • Consult with your agronomist to get the best advice for your crop

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SYSTEMS

Field day in giant buttercup-infested paddock.

Mowing down buttercup Anne Hardie verbatim@xtra.co.nz Two years down the track, the giant buttercup trials continue to show pre-graze mowing as an effective, non-chemical tool in the war against the weed.

At a field day in Golden Bay in March, buttercup-weary dairy farmers viewed the results of a range of herbicides as well as pre-graze mowing in trial plots on two farms.

It is two years into a three-year trial to find effective methods of control for the weed, which has become resistant to some herbicides, while other herbicides destroy the clover population in the pasture.

AgResearch principal scientist Graeme Bourdot said herbicide treatments containing aminopyralid, such as T-MAX, effectively killed the giant buttercup but also killed all clover in the pasture.

Flumetsulam herbicides such as Preside did a reasonable job of getting rid of the weed and left the clover undamaged.

“But the pre-graze mowing came out on top.”

The beauty of pre-graze mowing was the cows could then eat the weed as well.

Usually cows leave a ring of pasture around the buttercup plant, probably because of its bitter taste, Bourdot said, which reduced the available pasture in the paddock even more.

Once mown, the precursors of the toxin 50

volatilised out as gas, removing the acrid taste.

Evidence so far suggested repeated pre-graze mowing reduced the amount of giant buttercup in the pasture. In one paddock, the buttercup occupied 50% less of the pasture sward after repeated pre-graze mowing. Bourdot said more trials were needed to work out just how many mowings were needed to push the buttercup out of the pasture or keep it at an acceptably low level.

The fungus sclerotinia sclerotiorum was also introduced into the trials this year, with variable results, but Bourdot said there was room for improved formulation of the product, so the jury was still out on its effectiveness.

One of the reasons for the project, which is funded by the Sustainable Farming Fund, DairyNZ and Ravensdown, is the emerging resistance to herbicides in giant buttercup populations. A range of products are on the market with label claims that include buttercup, but they span only four mode of actions (MOAs) and most of them kill clovers, leaving farmers little scope for rotating between MOAs to avoid resistance, he said.

Hence the keen interest in pre-graze mowing as a further tool in the fight against giant buttercup. Some farms have huge buttercup infestations and the Golden Bay farms with the trial plots average close to 20% of the sward.

FarmWise consultant Brent Boyce

said there was huge opportunity to lift profitability on farms with high levels of buttercup infestation, using good regrassing, spraying, grazing and mowing management. That could give the double whammy of increased energy in the pasture and better utilisation of that pasture.

“The opportunity to lift profitability is massive, even with a low payout.”

Based on information from the project, he recommended farmers use the tools that worked for them, including spraying with clover-friendly chemicals such as Preside, spraying fencelines with Tordon or aminopyralids where clover was not a priority, and using targeted mowing to aid pasture quality and utilisation.

Though the giant buttercup experiments are in Golden Bay, Bourdot said it tolerated a wide range of climatic conditions and had already spread around much of the country, including raising its bright yellow head in Southland which was previously considered free of the pest.

It is estimated giant buttercup costs the country $155 million in lost farm revenue each year and when the payout was higher, it was reducing farm profit for some individual farmers by as much as $1000/ha.

The project has one more year to run and Bourdot said they would seek further funding to extend it so further trials could be carried out with pre-graze mowing to control the weed.

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GETTING ORGANISED THE LEAN, EFFICENT APPROACH

52 LEADING LEAN CHANGE 54 PURATA GETS INSYNC 57 TIME FOR A TUNE-UP 60 MAKING WORK MORE EFFICIENT 62 PINKIES SERVED ON PRODUCTIVITY PROBLEMS 66 TOP TUNE-UP TIPS AND EASY WINS

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SPECIAL REPORT 51

Leading lean change Anne Lee anne.lee@nzx.com @Cantabannelee

Lean management is often described as a management approach aimed at continuous improvement and the elimination of waste but defining it in one sentence is no easy task, possibly because it’s much more than one simple idea – it’s also a way of thinking.

The approach began with Japanese car manufacturer Toyota and developed over time within that company and others after World War II. Staff were asked to find ways to improve a particular aspect of the manufacturing process and by a teamled approach found more efficient ways to get the job done that in turn reduced waste in time and materials and led on to other improvements.

Lean management includes a number of tools explained in more detail in the following pages: • 5S’s – Sort, set, shine, standardise and sustain • Waste hunt • Standardised operating procedures • Visual controls But Hamilton-based lean management consultant Alan Sawyer says lean management is much more than the tools alone and it’s vital they’re used in the context of understanding the fundamental beliefs behind lean management.

“Successful lean management is implemented at the bottom and supported at the top so it’s critical that management understands how to lead a change to a lean approach.

“The challenge is people see the tools and grab at those but it starts with a much deeper belief and understanding of how to run an operation.

“Without that understanding the whole thing can break down and everyone reverts to the old way of thinking and doing things.

52 SPECIAL REPORT

Lean management consultant Alan Sawyer.

“People become cynical and reimplementing becomes that much harder,” Alan says.

While the aim is operational excellence the place to start is ensuring a strong, stable foundation in the business.

That comes from having well-trained people and well-maintained equipment using proven, standard methods.

To make those improvements they need to be able to solve problems and get to the root cause of them but they also need to look at systems and materials to ensure they have the right equipment in the right place at the right time and in the right amount to get the job done efficiently and effectively. (See figure one.)

That’s where some of the tools come in. They’re used to help achieve that stable foundation – ensuring people are properly trained, there are processes to make sure equipment is well-maintained and in order, and proven standard methods of operating are developed and people work to those standards, Alan explains.

He says problems arise in many organisations because of what he calls the leadership gap – where leaders and managers in the business are faced with problems but blame the people, or see equipment is broken and

just spend money on fixing it rather than getting to the root cause of the problem.

That can happen if there’s a short-term view of how long they’ll be in their role – they want to move on and move up rapidly, if they have a mindset that they don’t want to get left ‘holding the bag” or be seen to be responsible for poor outcomes.

Some people get into the trap of constantly thinking up new initiatives almost as a smokescreen.

“It’s that vicious cycle people get into where they’re just constantly fixing up issues. Key to breaking that cycle is firstly stabilising the operation – having well-trained people, well-maintained equipment and using standards to work to that are audited.”

In training lean leaders Alan teaches them problem-solving skills so they can stop and get to the root cause of problems themselves but also so they can train their staff to do the same thing.

“They need to be able to work out why there’s a gap between what should be happening and what is happening and that’s about asking the right questions in the right way – asking the five why’s rather than the five who’s,” he says.

It takes practice to become proficient at that.

That stops the blame game and turns

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Lean leaders

Leaders are coaches 1. Provide challenge 2. Help solve problems 3. Strengthen the system develop people 4. Continuously improve

the process into a valid problem-solving exercise.

It might be that a staff member is at fault but by asking why, further questions are asked of the training process or even the recruitment process and improvements can then be targeted at the root cause of the problem.

STANDARDS

Having standard operating procedures is also key to getting to operational excellence but something that, again, can mean a cultural change for the business if used within the lean approach, Alan says.

“It means you have a standard, you work to the standard but you are also trying to improve the standard.

“Leaders will help the team develop the standard, they’ll coach the standard but they’ll importantly make people accountable to the standard.

“If people aren’t working to the standard then the leader has to ask why – is it that the standard isn’t quite right, have they drifted away from it because they haven’t been held accountable?”

One of the traps can be that people see standardised work documents or operating procedures posted at the

point of use on someone else’s farm and think let’s use a template approach, fill that in for us and people will adopt it, Alan says.

But what they find is even if people adopt it initially, they quickly return to what they did before.

“That’s why it is a cultural shift. It has to be done in the context of the wider lean approach. People need to be coached and held accountable.”

Being held to account can mean team members ticking a box to show they’re followed the process but that too has to be audited on a regular basis.

Within the lean approach systems are also put in place to encourage the team to think about how processes can be improved, and how problems that come up can be solved.

That’s the very important continuous improvement cycle that comes from the team.

They’re the people using the processes, the people dealing with the

Critical success factors: • •

• •

• •

Develop a lean culture by coaching leaders Use lean management tools but understand why and where they fit into the lean management system and how they help support the culture.

Standardise work practices and hold people accountable Teach the team to problemsolve rather than stepping in to do a quick fix Plan-do-check rather than plan-do-plan-do Stick with it.

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problems and the people who can come up with solutions and innovations if coached well.

LEADERS AS COACHES

That’s where leaders in farm business are coaches in the lean approach and as good leaders take people with them.

They need to be heading in the right direction for that to be successful so leaders have to be aligned to the company’s values and be seen to be living them not just paying lip service to them.

They respectfully provide the challenge but also help the team solve the problem so the system is strengthened.

They should be developing people and in that way helping them continuously improve.

Lean leaders are responsible for: 1. Delivering business results; 2. Developing people; 3. Role modelling behaviours.

The secret is points two and three are the means of achieving point one.

OPERATIONAL EXCELLENCE SAFETY, QUALITY, COST, MORALE

JUST IN TIME RIGHT PART, RIGHT TIME RIGHT AMOUNT

PEOPLE CONTINUIUSLY IMPROVING

STOP AND FIX PROBLEMS (ROOT CAUSE)

OPERATIONAL STABILITY WELL TRAINED PEOPLE, WELL MAINTAINED EQUIPMENT, WORKING TOGETHER TO ACHIEVE A STANDARD

SPECIAL REPORT 53

Purata gets insync Anne Lee anne.lee@nzx.com @Cantabannelee

L

ean management at Purata can be distilled to one simple phrase, the company’s general manager of farm operations Andy Millar says.

“It’s as simple as we want to get better every day.”

Continuous improvement through Purata’s lean management approach, InSynC (Innovation through Synergies and Continuous Improvement), is a culture or way of working rather than just a thing, he says.

“We use the tools lean management provides us with, but the most important part of it is developing the culture of lean within the team.”

Purata, formerly known as Synlait Farms, embarked on the InSynC programme in 2012, adapting the management approach from manufacturing to fit its dairy farming context.

It was championed by former Purata managing director Juliet Maclean and

54 SPECIAL REPORT

Aiden O’Leary using two-way radio communication

senior managers but several, including Juliet, have now left the company.

Andy has been in the business since 2013 and says the turnover did create challenges but because it is a cultural “way of thinking” it continues on regardless of changes in personnel.

That’s not to say it’s effortless.

Sustaining improvements is an integral part of the lean approach and Andy says it takes a high level of commitment from senior management to ensure all team members see the theory in action and the culture percolates through all levels of the business.

“Getting people within the business to buy-in to the approach means showing them what’s in it for them, and that’s actually quite easy because through InSynC or lean, the company, the team and the customer all benefit,” Andy says.

That’s where what’s almost a mantra to Purata team members comes in.

“Safer, easier, better, faster.”

By continuously improving the workplace and processes they are more assured of being safer at work, their work life becomes easier, its better and more enjoyable and the work gets done faster

so they get to go home earlier.

At the same time costs are controlled and the business becomes more efficient.

“It also helps make it a great place to work,” Andy says.

Having buy-in means the continuous improvement process is team-led rather than management-driven.

That team approach means people become very engaged and that’s a big positive across a range of areas.

“People retention within the company has been one of the big wins,” Purata people and performance general manager Josie Mackenzie says.

Industry statistics show turnover in the dairy industry at about 57%.

“We’ve got it down to 27% at Purata,” Josie says.

Improved people retention has significant tangible and intangible benefits, Josie says.

The cost to recruit and train a new team member can be equivalent to 3040% of their salary.

But having people stay in the business also adds to efficiencies and allows for promotion within the business.

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Keep it lean

Purata human resources manager Josie MacKenzie with B24 manager Aidan O’Leary.

The process of continuous improvement itself allows efficiencies to be created onfarm and within the business and to achieve that people look for, identify and reduce waste.

“That focus on reducing waste is always important but in the current low payout environment it’s even more so because it really does drive efficiency and having everyone in the team thinking that way already is a big positive.”

Defining what waste actually is as a concept was one of the first steps in the InSynC process.

It’s not limited to the typical loss of something physical such as leaving an animal health drug to go out of date, it’s also wasting efficiency because a machine is poorly maintained, wasting time because someone has to wait for instructions for the next job, or heading out to do a job in the paddock but not taking all the tools needed.

It can be wasting resources, having too much of a product on hand and in storage or not getting the job done right first time because the process is wrong or someone isn’t trained properly.

By taking that wastage out it’s possible to reduce costs and improve profitability but at the same time cut out the frustrations people experience going about their daily tasks.

Andy says as a corporate farmer with scale, the company is also asking how it can reduce waste by not looking at individual farms in isolation.

“For instance, we could be feeding out on one farm and making silage on the next one so we need to think about this

in a wider context.”

Purata has an ambitious A2 milk development programme that could also benefit from InSynC. It has 4500-5000 A2 cows across several of its 13 farms.

“We’re looking at having A2 cows in one hub, enabling us to create efficiencies and reduce wastage.”

Putting a number on the savings or gains made through InSynC is difficult but there have been significant tangible benefits in farm dairy running costs and consumables as well as the reductions on turnover.

Milk quality has improved too with the average annual bulk somatic cell count down to trending down from 200,000cells/ml and sitting at 120,000cells/ml.

INSYNC ON THE FARM

Irish-born Aidan O’Leary manages two of Purata’s 13 farms and is a selfconfessed big fan of InSynC. “It’s not so much what we do but how we do it,” he says.

He’s been in the business almost a year and a half and manages Te Pirita farms B24 and Treevale that combined milk 1270 cows.

“I didn’t know much about the whole InSynC concept until I came on board here but it quickly became one of my favourite things about the business.”

Aidan’s enthusiasm and commitment to the approach has helped ensure the InSynC culture is embedded in every aspect of farm activities.

He’s been in New Zealand for five

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Lean management theory uses a “5S” approach to achieving continuous improvement but two years ago the company added another S to the list – safety.

“We added it to the list so to speak but it’s not an add-on, it’s absolutely part of what we do and part of our lean journey,” Purata people and performance general manager Josie Mackenzie says.

It became number one in what’s now a 6-S approach.

“It’s the first item on the agenda with anything we do and underpins everything in the business,” Josie says.

In that way it’s also embedded in the other five S’s: • Sort • Set • Shine • Standardise • Sustain When people are sorting – going through a particular work area for instance – they will be looking to reduce waste and taking out anything that’s not required in that area.

In doing so, they reduce clutter and create a tidier, safer work environment.

The same goes for when they “set” because everything is assigned a designated place.

At daily farm team meetings, it’s the first agenda item and anyone can and does point out any new hazard or make suggestions for how something can be done in a safer way.

Josie says that as people see it being referred to in everyday activities – as an agenda item on meetings and within visual charts and operating procedures also frequently used within the InSynC and lean approach – they begin to think of it as a normal part of their work day.

It also becomes a cultural aspect of their working life.

“It’s been very noticeable through this InSynC journey. Any negative attitudes people had to health and safety have changed.”

SPECIAL REPORT 55

Brian Bueno writes up a new idea as farm team member Tess Goes looks on.

years and says, hand on heart, it’s the most enjoyable work environment he’s experienced.

“I inherited very well-run farms and InSynC gave me a chance to really stamp my mark on them and has helped get even more efficiencies out of them.”

Both farms, Treevale and B24, have three permanent full-time team members and uses two casual people over peak periods.

Each has a 40-aside herringbone farm dairy and both farms are grassbased supplying Synlait on its grass-fed contract.

They’re also both A2 farms with milk destined for infant formula.

Milk quality is paramount and Aidan admits he’s extremely fussy when it comes to procedures in the farm dairy.

InSynC is a natural fit for him but he says it hasn’t been a battle bringing other team members on board too, even those who aren’t naturally fastidious or systems-oriented.

“They just see so many benefits pretty quickly – even guys who might be naturally fairly messy see how much head space it creates getting rid of clutter and how much easier everything becomes.”

Working through the 6-S’s as they’re applied onfarm Aidan says safety truly is number one and his farm teams are right behind that.

One of the team members, for instance, came up with a simple improvement that everyone loves, because it stops them hitting their heads or getting smacked elsewhere by the lever used to let the row go during milking.

The solution – to put a simple rubber sleeve on each handle – came up in a daily meeting held as part of the InSynC process.

Although the team member was new he felt comfortable enough trying to explain the problem and solution, although ultimately he led everyone out

56 SPECIAL REPORT

to the pit to show them what he was talking about.

It can take a bit of time before people feel comfortable and find their voice so it’s important that managers are patient and encouraging, Aidan says.

“Any one of the team can chair the daily team meeting, which follows a standard agenda of health and safety items, what’s going well and what can we improve on and are there areas of waste that need to be dealt with?”

Minutes are taken and kept in a diary that’s accessible to everyone, although there’s also a move to record it on the farm computer.

“We work on a six-on two-off roster and when people get back from their days off the first thing they do is go back over the record of the last two meetings to see what’s been discussed.”

Any significant items are texted to the whole team on the day so everyone is kept informed even if they’re off that day.

Visual tools are important and each farm office has a TV screen where a slide show that changes weekly is displayed so ideas from other farms can be shared.

A laminated board hangs in the farm office where team members write up any bright ideas they have for safety and improvement to processes onfarm.

The team can discuss them and agree they’re great ideas but the important thing is to action them, Aidan says.

That’s why the board also has a box to tick to say it’s been implemented.

When an area is worked on specifically, the 6-S process is followed.

Aidan says the first step is to sort out what does and what doesn’t belong in a work space. Items are tagged if they don’t belong, rubbish is discarded and misplaced items moved to where they do belong.

Next is to set – so items are placed in a logical, tidy fashion to make them safe and accessible. Shadow boards for tools, racks for electric fence reels or simple

holders for spray cans in the farm dairy have all been used as ways to set the tools needed for a job or process.

Shine doesn’t just refer to ensuring equipment is clean but also means wellmaintained.

“Shining could mean having a set routine for greasing farm equipment.”

Those routines and procedures can become part of standardising.

By working through the process ideas are shared and any waste or frustrations identified, so the standardised procedures mean the task is performed efficiently and the same desired outcome is achieved every time.

Vat wash procedures are an example of where Aidan and his team have set standardised operating procedures for their particular plant and situation, while also taking on board regulations and company requirements.

Visual tools, including photographs, are used to show how taps should be set up, for instance, and are displayed at the site of the action along with written instructions.

The next step, sustain, is possibly the one that takes the most dedication.

“When you make improvements you see the changes and that motivates people but then you have to make sure those improvements are sustained and things happen as they should every time.”

Having new people come into the team could create challenges for sustaining improvements but InSynC is a big part of the induction process for new team members across Purata.

“Because it’s in everything we do they quickly pick up the InSynC language and get on board with the approach,” Aidan says.

Each farm is audited on their 6-S approach and results kept across the business.

That helps sustain improvements and keep motivation going too.

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Will Clarke with staff Suranga Durage, Miguel Herrera and Gareth Ward, and the pink Post-it notes.

Time for a tune-up Claire Cameron claire.cameron@pinnacledairy.co.nz

F

or south Otago farmer Will Clarke the opportunity to participate in the FarmTune programme offered

by DairyNZ was one he couldn’t resist.

The Clarke family own a self-contained dairy farm just south of Clinton, in south Otago. They employ five full-time staff on the dairy unit, and although only partway through the programme, they all agree the benefits are already clear.

FarmTune is a DairyNZ initiative that uses the “lean management” principles that originated in the Japanese manufacturing industry to embed a culture of efficiency and continuous improvement into a farm business. The primary focus of lean management is – as the name suggests – reducing waste in the system to become more efficient and therefore leaner. Efficiencies can be achieved through a systematic and continuous process of identifying and reducing waste.

The introduction of lean management to the dairy sector began when Synlait Farms (now Purata) in Canterbury applied the concept to their farms. Venture Southland, the agency responsible for economic and community development

initiatives in Southland, also ran a mini-pilot programme about the same time. Based on the success of these programmes, DairyNZ decided to develop a programme tailored specifically for dairy farms. Canterburybased consultant Sarah Watson is contracted to develop the FarmTune and to co-ordinate the roll-out to a wider audience at a national level.

FarmTune introduces farmers to key “lean” concepts and helps them implement them in their own businesses through a step-by-step process.

“Last year the FarmTune progamme was piloted across 10 farms in Southland and we had great results,” Sarah says. “We took the feedback from participants in that pilot and improved the programme into the version that is now being delivered to participants in Southland, Canterbury and Waikato.”

The Southland FarmTune Programme consists of 10 farm businesses, with 15 dairy units between them. It involves a series of eight workshops and includes onfarm activities that involve the whole farm team, delivered over a three-month period. A key principle of FarmTune is all employees are empowered to take responsibility for maximising value and minimising waste through all the processes in the business.

“It’s not about the boss putting a system in place – the team have to own

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

the systems and have input into them,” Sarah says.

Another key point emphasised in the course is “people don’t fail, processes fail people”. Where there is wastage it isn’t the person’s fault, it’s a problem with the process.

A major outcome of Farmtune is improved use of time.

“This means either staff can go home earlier or they can focus on other areas that need improving and refining,” Sarah says. She also adds the focus is on continuous improvement, saying “there is no end to it – lean thinking becomes embedded into the business and the team have to constantly be looking for ways to improve and refine systems”.

The course starts off by defining what waste is and how to find it. Participants then develop a ‘process map’ for the milking process on their own farms.

“We have 15 key steps in our milking process, from getting the cows from the paddock to the dairy, milking them, and shutting them away. Some of these steps are happening simultaneously.

For example while the first herd is being milked the second herd is moving to the dairy,” Suranga Durage, assistant farm manager for the Clarkes, says.

Once the milking process is mapped out in detail the next task is to identify waste that occurs in the milking process.

“Each time we have an issue with the

SPECIAL REPORT 57

FARM FACTS

Farm Owner: Clarke Agri Limited Location: Clinton, South Otago Milking area: 315ha Production: 450,000kg MS from 940 cows at peak Full-time staff: Five Dairy: Fully automated 50-bail rotary Suranga Durage, Miguel Herrera and Will Clarke on the farm.

milking process we write it on a pink Post-it note and stick it on the process map at the point where the issue occurred,” Will says.

The issues are referred to as OFIs – an acronym for ‘opportunities for improvement’. The staff were surprised they found 98 OFIs in their milking process.

“It just goes to show how many minor things can crop up that you don’t really think about until you have to record them,” herd manager Gareth Ward says.

The OFIs might seem minor but collectively they can add up to a lot of time, cost, and frustration for the business, and addressing them can improve efficiency and make the process

Key principles of lean management • • •

• • • •

Focus on the system and the people Identify and understand how the work gets done Manage, improve and smooth the process and workflow Remove non-value adding steps and waste Reduce variation and sustain changes Involve and equip the people in the process Take action to continue improving

58 SPECIAL REPORT

work better for the whole team. Farm staff also record the start and finish time of each milking on a chart in the dairy. This lets them monitor how often milking exceeds the targeted time for completion, and helps keep them focused on looking for ways to improve the process.

The Southland programme is now at its half-way point and the current focus is to identify the root cause of each OFI. “We have put our OFIs into a spreadsheet and we then identify the root cause of each issue,” Will says.

FarmTune teaches participants how to drill into the root cause of each problem to find the key reason for the issue happening. The root cause needs to be correctly identified before an appropriate solution can be found.

“We’re not at the point yet where we can jump into finding solutions but we have made a few small changes to our milking process based on what we’ve already found,” herd manager Miguel Herrera says.

They have also started to re-organise storage places by eliminating clutter and having a designated place for everything in and around the dairy and workshops.

This will reduce the time they waste looking for the tools and equipment they need to do a job. Will says the ultimate goal “is to walk into the workshop and find any piece of equipment we need in under 60 seconds”.

Although there is a reasonable time commitment involved in attending workshops Will says with a bit of extra planning it has been manageable.

“It hasn’t been too bad. We’re in a quieter time of the season now and the benefits to come will far outweigh the

time and effort that we’re putting in right now,” he says.

Gareth adds “the whole team is on board with this programme and we are looking forward to reaping the benefits of working smarter not harder.”

The Farmtune programme is aimed at teaching and showing the how-to of the lean management approach so participants can apply lean management thinking to their individual situations.

By the end of the programme they will be able to use the lean management approach to map any process in their business and identify waste in that process, identify the root true cause of waste and problems in the process, and apply repeatable solutions to remove the waste and improve the process.

They will also have developed a culture where everyone in the team is focused on continuous improvement and using their initiative when they do their job to achieve small, incremental changes every day.

Will predicts FarmTune will be “an absolute game-changer” for his business.

“We expect to see savings across the board. A more efficient business means everyone has time to do important jobs, there’s less frustration, less time being wasted, and staff will be happier in their jobs.”

Farmers who would like to start implementing some lean management concepts in their own business should sign up for the Waste Hunt Challenge through the DairyNZ website. If you are interested in participating in FarmTune or would like more information about it contact Sarah Watson on 021 800 887 or email sarah@peoplemad.co.nz.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

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Making work more efficient Anne Lee anne.lee@nzx.com @Cantabannelee

DairyNZ’s FarmTune programme is all about making the working day more efficient and ultimately more enjoyable – saving money and creating win-wins. PeopleMAD consultant Sarah Watson is leading the project for DairyNZ and says the programme is based on lean management, adapting the tools typically used in the manufacturing sector to the New Zealand dairying situation. It’s been piloted on farms in Southland, Canterbury and Waikato and

is to be made available to farmers across the country. Sarah says the programme doesn’t just teach theory, it helps farmers work through their own processes with their farm teams so they get to put lean tools into action for their own situation.

At the same time, they’re coached on what’s behind the tools and the concepts that support the actions.

“It’s a commitment to a way of doing things that’s integrated into the culture onfarm, not a quick-fix.

“It’s helping farmers develop a way of operating that works for them and their teams and that’s what gives it the strength and longevity needed for continuous improvement – it’s

personalised and helps build a positive team culture onfarm,” she says.

Within the programme, farmers and their teams are asked to choose a process onfarm such as vat washing, setting up for milking, or calf-rearing, and map out that process listing the steps they go through.

As they do, they identify waste – areas where time is wasted or specific problems might happen that mean the processes can and do go wrong.

“They identify areas of frustration, the ‘pain points’, the waste. It might be waiting for cows because gates haven’t been set up right or discovering late in milking the refrigeration

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hasn’t been turned on.”

The process and frustration points are mapped out using sticky notes, using one colour for the process and another for the frustrations that ultimately create waste.

“The farmers we are working with find it’s very powerful seeing that visually,” Sarah says.

The next step is to analyse why those things go wrong and what’s behind the frustrations, and that means going to the root cause of the problem. Finding the real basis for the problem means looking deeper than the initial frustration itself and can mean asking ‘why’ repeatedly.

Once the root cause is identified a procedure or action can be put in place to deal with that frustration.

Sarah says once the team has mapped the process, identified the frustrations and come up with solutions, the next step is to map the process again the way they would like it to run.

It will include key actions along the process that ensure the frustrations don’t occur. Each of those key actions may require a mini process on their own and can be drawn up on a laminated board.

It’s critical to define: • what needs to be done • who is responsible and provide a place to check off that it’s been done.

Standard operating procedures might evolve from this process. These are useful for training people, and shortened

Getting to the root cause Ask why, then ask why again Example: The milk processor has penalised the farm with a milk quality grade.

Why? Turns out the vat wash wasn’t done properly for two milkings.

Why? Staff member responsible couldn’t find the right detergent.

Why? It had run out.

Why? No one had ordered more in time.

Why? The herd manager was on days off when it ran out.

Based on that analysis, a better system is drawn up for monitoring chemical stocks and a process designed for re-ordering.

BEFORE: The milking process mapped out in blue sticky notes, with the frustrations and things that can go wrong in pink.

AFTER: The milking process as it should be.

or pictorial versions of these can be displayed at “point of use” – visual indicators to remind people of the process and expectations, displayed at the point the activity takes place.

Vat wash procedures, for instance, can be written up, laminated and posted next to the chemicals and taps that need to be used in that process. Photos can be included to make the explanation even clearer.

Having the farm team involved in the process of mapping, finding waste and then coming up with solutions gives them a sense of ownership in the outcomes.

Their ideas for ways to improve a process and make it more efficient need to be taken on board and considered with an open mind. Often the best ideas come from those at the coalface, and need to be considered when examining the process.

Sarah says far from making people into robots by having them strictly follow the procedures and processes, the lean process is about including and empowering them.

“There are benefits from a health and safety perspective, and it’s a great way to engage members of the team, which also helps build a strong team culture onfarm.

When it’s done well it frees them up and takes so many frustrations out of their day.”

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Helping the reluctant starter If the process has been followed and someone isn’t fully buying into it ask these five questions.

• Do they have the knowledge?

• Do they have the skills?

• Do they have the tools?

• Do they have the right method (process)?

Do they have the resources?

If you can answer yes to all these questions then it’s not a matter of “can’t do” but “won’t do”. Maybe then the recruitment process hasn’t been right.

Most often, though you’ll find at least one answer is no.

Some people will think they’re already good at a process and that new methods don’t apply to them.

Some may think the process takes away their control.

Keep working with them and address any concerns they have – some people take longer than others to cope with change.

SPECIAL REPORT 61

Pinkies served on

productivity problems Steve Searle

I

t requires real honesty to look for the bottlenecks, delays, inefficiencies and stuff-ups at our place of work, a fair amount of humility to accept that a system change is needed and some confidence to put the changes in place.

Any summary of work delays over a period of months will probably reveal a pattern of slip-ups and in a dairy the stops and starts can be from many causes – a teat sprayer has stopped spraying, the cups keep falling off, healthy cows got in the penicillin mob, another late start … and still the cleanup to go.

It’s possible to take it on the chin,

62 SPECIAL REPORT

blame someone and box on but the likely result, “lean management” specialists say, is the inefficiencies causing delays and wastage downstream can easily become embedded as a matter of habit.

In the Tokoroa farm dairy office of sharemilkers Brian Vergeest and Sheryl Hamilton, their farm’s “value stream” chart for the milking process has 16 key steps represented by blue sticky notes and 61 pink notes attached with comments on the causes of delays.

The chart spans almost the full width of one wall and is the first stage of an efficiency review under FarmTune – a “lean management” coaching programme being trialled in the Waikato and Canterbury by DairyNZ to improve

FARM FACTS

Sharemilkers: Brian Vergeest, Sheryl Hamilton Location: Tokoroa Farm area: 358ha total Contour: Rolling Development: Forestry to dairy conversion Herd: 1000 crossbred cows Production: 486,000kg MS 2014-15 Dairy: 54-bail rotary Staff: Three full-time, one part-time Peak milking time: Five hours AM, four hours PM Challenges: Cold climate, 640 metres above sea level.

Feed crops: 25ha swedes.

farm efficiency and reduce working costs, as already demonstrated in a pilot programme in Southland.

For two months the Tokoroa farm team have posted complaints and problem comments about the milking process – Brian writing on 20 of the pink stickers, Sheryl signing a similar number and the remaining third coming from their three staff.

“The more pinkies we get on there, the better. Every day you think ‘we have a got an issue here’ but the idea is to write a note rather than see the problem in isolation and only look for the quick fix.”

Brian’s day starts at 3am to milk the 1000-cow herd that he and Sheryl, who have both been sharemilking for 18 years, half-own. Any time savings in the

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

milking process would offer the biggest benefit when milking five hours each morning and four hours each evening.

Their herd’s milk production is already at the top end and last season produced 486,000kg milksolids (MS), which is an average 485kg MS/cow and 1350kg MS/ha – a performance significantly better than the LIC/DairyNZ average for South Waikato of 389kg MS/cow and 1152kg MS/ha.

This was achieved despite 85ha, almost a quarter of the 358ha forestry conversion farm, being planted in pasture only three years ago.

But they see huge potential for FarmTune to create more efficiencies that will lower costs and further improve productivity.

Brian sees the notes representing opportunities for improvement rather than a negative count.

Some problems have to be fixed immediately, such as the teat sprayer filter being cleaned so milking can resume, but for long-term savings they want to formulate ways to prevent delays and wastage.

Other problems, like lame cows, might require outside help.

“I know it’s not related to how the cows are being handled. In co-operation with the farm owners we have had a lameness expert, a guru, in to help us sort this out. He has taken videos and will be back with his proposed solutions.”

The Waikato programme has the entire staff from 10 farms attending fortnightly workshops at Karapiro conducted

by Sarah Watson of Christchurchbased PeopleMAD (Management and

Development), previously a team leader for DairyNZ’s people development team, and Ian Lines of Cambridge-based Lean Group.

Their eight four-hour workshops coach the farm teams on how to apply the principles of lean management to improve the workflow of processes such as milking, feeding out, calving and treating animals.

Waikato FarmTune co-ordinator Jo Sheridan, a former DairyNZ farm consultant widely known for facilitating farmer discussion groups, visits the chosen farms to assist with their use of value streams.

“It would be easy to say at the start ‘I have a solution’ but the first step is to look for problems in a value stream,” Jo says.

After two months and halfway through the course each farm had value streams for at least one major work procedure, such as milking, and on the Tokoroa farm’s dairy office wall there’s a milking subset – a separate value stream – charting the process elements and delay comments for separately handling cows that are lame or being treated with penicillin.

“The idea is to go as deep as you can to find more about the problems before you start trying to solve something.”

Vehicle manufacturer Toyota, a leading corporate exponent of lean management, describes this step as “material and information flow mapping”.

The FarmTune workshop days demand a full commitment from farm teams,

especially those having to travel an hour or more to Karapiro after the morning milking and after four hours of tuition making the long drive home to the evening milking.

“It’s a big day but staff participation is really good and everyone is enjoying it. We are identifying the issues and the good thing about it is there’s no finger pointing,” Sheryl says. It’s about the job and not the person.”

On their wall chart, so far, there are five pink sticker notes about late morning starts to milking but it’s a problem with no simple answer, Brian says.

In the autumn the cows seem tired of being milked, they’re not urgently full of milk and seem reluctant to head through the open gate for the dairy race.

A task like opening the gate into the race would seem straightforward but two sticky notes on Brian and Sheryl’s wall chart show something as basic as staff not noticing missing gate bungees can disrupt the morning start.

Brian totally owns his own problem of sometimes leaving his cellphone on the kitchen bench and not being contactable – one note says the helicopter pilot was kept waiting for the go-ahead to spray but couldn’t get confirmation.

An obvious solution is to make sure Brian carries his phone but he can’t always hear it ringing, as when riding a quad bike, so maybe there’s perhaps the need for a second mobile phone on the same number … and a spare phone charger at the dairy office.

A further step along the milking

The ‘value stream’ taped across a wall of the dairy office has attracted lots of problem notes in the past two months for sharemilkers Sheryl Hamilton and Brian Vergeest.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

SPECIAL REPORT 63

Tokoroa sharemilkers Sheryl Hamilton, left, and Brian Vergeest discuss with FarmTune co-ordinator Jo Sheridan the changes being considered for their milking process, starting with moving cows from a paddock towards the dairy yard.

The 5S’s process described as “milk into vat” has comments about cup removers – the cords that pull the clusters away from the udder – being cut “too long or too short”, which means the clusters are at different heights to reach, find and attach to the next cow. After a busy milking session the second herd is coming into the yard and again there are sticky notes about lateness and technical problems, such as the pulsator not working properly and a blockage in the in-dairy feeder line.

Young cows have been mixed with the older mob in the yard, the yard entry was not hosed clean after the second herd and there’s a problem with cow identification tags – all comments that Brian regards as an attempt to sort out a better way of doing things.

“The ear tag can be away from you, it’s faded and dirty and hard to read and you’re busy so your number 9 can look to someone else like a 7 or a 1. Maybe we should put an ear tag in each ear and at times have two people recording cows.”

Eventually the notes along their value streams will be transferred to spreadsheets that become the basis of a ‘living document’ for guiding each farm process.”

In summarising the FarmTune programme, Sheryl says a key advantage is it allows them to revisit and formalise every aspect of the key processes on the farm that were previously done based on their own experience and common sense.

“This will make it far easier for our current and future staff, and for Brian and I, to undertake each task based on best practice.”

Sarah Watson is the FarmTune project manager and a director of business consultancy PeopleMAD.

64 SPECIAL REPORT

A key lean management tool is ‘5S’.

It requires an application of the following initiatives: SORT – Decision Making Remove impediments. Identify what you use and need in an area, remove items that are not required or rubbish, repair broken equipment. Sorting is about removing anything you don’t need in the work area so you don’t need to work around it, saving time and taking away the risk of double ordering items because you can’t find them.

Eg, fencing equipment doesn’t need to be kept at the dairy, or empty chemical drums that haven’t been recycled or that broken pump that you haven’t got around to fixing yet.

SET – Empowerment Be organised – things you use regularly are easy to see and readily available where you use them. Giving these items a permanent home makes them quick and easy to find when you need them, saving time – no more searching for things.

Eg, the spanner you use for adjusting the pulsators or the knife you use for removing the leg bands from marked cows.

SHINE – Ownership Clean, inspect and maintain – taking pride in your environment, keeping it clean, with frequently used items put away in the right place. Shine makes it easy to see if equipment is safe and in good working condition. Equipment is easier to maintain if it is clean. The result is fewer breakages, less chance of delays from breakdowns, nicer work environment.

STANDARDISE – Behaviour (individual) Do the Same task in the same way

– setting staff up for success because it’s clear how jobs get done and who is responsible.Standardise means everyone takes the same approach so results are more consistent.

This takes pressure off the owner or manager to always be there or always having to check whether things have been done right.

Relief staff should be able to do the job the same way as well. Standardise is critical for compliance. and health and safety.

Eg, written procedure for treating mastitis cows which includes photos, procedure available at the point of use to act as a visual reminder for staff to help them get it right every time.

SUSTAIN - Culture (collective behaviour) Keep up the changes – maintaining these changes happens when the team culture has everyone taking responsibility and valuing the benefits of 5S. Including taking responsibility for putting things away when they have finished with them, cleaning equipment properly and checking for wear and tear, following the procedures to ensure a consistent result.

Eg, marking treatment cows the same way so everyone knows and recognises where in the treatment cycle the cow is. Or following the correct method of mixing the teat spray and filling it up at the end of milking so it won’t run out during milking causing delays.

You can’t do just one or two of the 5S’s – sustained success for the whole team comes from understanding the benefits and committing to the process, that is committing to doing all of the 5S’s.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

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“One of the first things I would highlight,” says Graham, “is that farmers don’t have to make significant decisions alone. There is a wealth of support and advice on tap. And more often it’s free for the asking.”

“Whether you’re fine-tuning your cleaning and sanitising systems, or looking to improve cost efficiencies, it’s worth bringing in some expertise.” Graham explains. “I’m doing that for our farmers on a regular basis, which is where our Farm Source partners like David

and Ecolab come into play.”

Getting products and processes right can come down to a raft of factors, from the brand of equipment in the shed, to the quality of a farm’s water supply. So if you’re making hygiene calls, the experience of a Territory Manager like David can be a real help.

“We’re more than happy to come out and review a farmer’s operation,” says David. “In fact, it’s preferable, as I can run through shed equipment and procedures first-hand with the farmer. If there are efficiencies to be had, or a more suitable sanitisation product for the job, we’re usually quick to spot it.”

“There is a wealth of support and advice on tap. And more often it’s free for the asking.”

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Another factor that’s affecting milk quality decisions at the moment is the drive to cut costs – and it’s an issue that both Graham and David have strong views on. “Times are hard, so it’s totally understandable farmers need to minimise costs,” comments Graham.

“But it pays to do your homework first. Some low cost products can give you inferior results, and a subsequent milk quality drama can easily negate any saving you made in the first place.”

Instead of settling for lesser solutions, David maintains there are other ways to retain quality products and still gain cost efficiencies. “One of the things we recommend is to pay attention to the use rate of a product. A use rate of 1:9, for instance, will go a whole lot further than 1:3. It can mean cost efficiencies without the risk.”

“Something else our customers can consider are our free on-site audit services. In a teat spray audit, for instance, we’ll thoroughly evaluate mixing procedures, spray application and so on. It’s a great way to identify unnecessary product wastage like over use or making mixtures too concentrated.”

Perhaps one of Ecolab’s lesser-known service offerings is its training modules. David will tell you it’s one thing to update farmers on products and processes, but that information has to filter through to staff too – particularly part-timers like weekend employees. This is where staff training can really help. Ecolab’s modules encompass a range of topics on dairy hygiene and chemical safety, which can be particularly handy for new staff members. And again, it costs nothing for customers.

As Graham says, it’s this level of support that can make all the difference to a farm’s milk quality. “I know when I’m placing the Ecolab orders, my farmers are getting more than a solid product. It’s the back up David and his team provide – and that includes a comprehensive after-hours service. If you get something tricky crop up on your milk docket, it’s great to know you can have someone on site troubleshooting in a matter of hours. That’s invaluable.”

If you’d like to get in touch with Graham or David, here are their details: Graham Hodder Fonterra Farm Source TSR 027 226 3738 graham.hodder@fonterra.com David Blayney Ecolab Territory Manager 021 462 649 david.blayney@ecolab.com

Or if you’re outside the Wairarapa region, call Farm Source on 0800 731 266 or Ecolab on 0508 732 733.

Top tune-up tips and easy wins: Show days to spread ideas “Show days” are held on different farms on regular basis at Purata, helping spread ideas and innovations born out of InSynC to other farms in the business.They’re seasonally themed and give an opportunity for training too.

Favourite InSynC tool: Label maker.

Purata’s Treevale and B24 farm manager Aidan O’Leary’s favourite tool for InSynC is a label maker. All the major parts in the milking plant are labelled, even the direction of milk flow.

Anyone can walk in and know where things are, and when you’re giving instructions everyone’s in no doubt about what they’re working with.

Farm hazard board A farm map on the farm safety hazard board and magnets that can easily be moved to new positions, such as showing where the effluent irrigator, tractor or hedge-trimming contractor is working. It’s easy to see at a glance what is happening out of the ordinary that could be a farm safety issue.

66 SPECIAL REPORT

Visual tools Laminating sheets of instructions around processes in the farm dairy makes it easy for all staff to follow the same procedure. Vat wash procedures, for example, have set standardised operating procedures for the particular plant and situation. By taking photos and writing instructions underneath all staff can easily follow the correct procedure.

These visual tools are used to show how taps should be set up, for instance, and are displayed at the site of the action, attached to the pipework and handy to refer to.

Put it away Tidy up and organise by sorting out what does and what doesn’t belong in a work space. Rubbish is discarded and misplaced items moved to where they do belong then items are placed in a logical, tidy fashion to make them safe and accessible.

Shadow boards for tools, racks for electric fence reels or simple holders for spray cans in the farm dairy can be used as ways to set the tools needed for a job or process. Everyone knows where to find them and it becomes obvious is they are missing or run out and need replacing.

Bright ideas board Encourage all the team to write up bright ideas for the farm and have a board with whiteboard pens (that work) available for all staff to contribute as and when they have good ideas. The ideas then need to be acknowledged, discussed and incorporated into the programme.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

ENVIRONMENT

Farming to the beet

Northern Southland dairy farmer Aaron Wilson with this year’s Suga Beet crop.

Karen Trebilcock ak.trebilcock@xtra.co.nz @KT_at_Exporter

F

arming in the Waimea Valley near Balfour in northern Southland means dealing with hot dry summers and cold snowy winters, but it’s not only what happens above the land that causes headaches.

The inland valley soils are low in carbon so little nitrogen is absorbed. Instead, nitrogen bubbles up in groundwater springs and elevates nitrogen levels in the river which is a tributary of one of Southland’s major rivers – the Mataura.

Aaron Wilson milks about 900 cows at a low stocking rate of 2.2 cows/ha but is worried even a low stocking rate will one day not be enough to lessen the farm’s impact on the environment.

Last year he won Environment Southland’s Individual Environment Award, recognising his use of fodder beet for wintering and also for starting the Balfour Water and Land Group in 2013.

It got him thinking and he decided to do a Kellogg Rural Leadership Course to see if he could come up with some way to stop

the “nitrogen cascade” through his land and into the waterways.

And he did – a feedpad set-up where the effluent is collected in a holding tank before passing through carbon-filled containers where bacteria convert nitrates anaerobically into nitrogen gas. Solar panels and electricity would power heating tubes to keep the bacteria working even when it’s cold.

In bad weather the holding tank stops too much effluent entering the carbonfilled containers and overwhelming the bacteria, and by keeping the containers sealed off from the air and with a constant flow of effluent passing through them the bacteria produces inert nitrogen gas and not nitrous oxide, which is a greenhouse gas.

The carbon for the bacteria could be woodchips and the containers could be plumbed to use gravity to move the effluent from the holding tanks through them.

Although his idea is only conceptual, it’s got the attention of several scientists also working on the problem of removing nitrogen from waterways.

“I would like to get a lab version

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

working, to see what it could do, and maybe one day on farm as well,” Wilson said.

But with his farm working expenses at about $3.60/kg milksolids and debt servicing another $2 on top of that, the current payout is not going to allow him to get a digger.

And he’s cautious about the benefits of a pad. His initial idea was to stand the cows off on it for half the day, capturing half the nitrogen that would have gone into the groundwater but once a feedpad was built, he could carry all the feed to the pad and not have cows grazing winter crop in the paddock at all.

And then, he might as well put a roof on it.

“We’re the country that invented the jet boat and the electric fence but this generation is growing up looking overseas for answers and I don’t think farming like they do in Europe is the answer for us,” he said.

“If farmers know the problems they will come up with the solutions themselves that will work for them. It took me a few hours on Google and reading books to figure out a feedpad that might work. I 67

Aaron Wilson with some of his milking herd in the Waimea Valley.

haven’t got a university degree, I’m not a scientist. I’m just a farmer.”

That “just a farmer” tag is also something he’s starting to think about.

“The Kellogg course really showed me that farmers can sit around a table with others and hold their own. We’re pretty clued up on things.

“What we need in all this turmoil happening at the moment is to look for opportunities. We will be stronger at the end of it and we could lead the world once more in low-cost dairying. We’ve just got to figure out how.

“Things are broken now but we need to focus on a game plan that will see us through the next 10 to 15 years and we need to forget the negativity and get back on our feet.

“We need to know whether we should be making more milk or less milk or doing something completely different.”

He believes New Zealand’s clean, green image and story is not just important for tourism, but also for milk powder.

“We can’t bring 40 million people to NZ every year, but we can take NZ to 40 million people worldwide.

“And how we do that is our unique story. How we farm the land, how we care for it and how each generation

68

wants to leave it in a better state than the generation before.

“If the world knows that our milk powder is the best milk powder in the world, that it’s made by cows eating grass on farms owned by families that care, then that must add something to its value.”

Wilson knows a bit about family-owned farms. His parents, now retired in Balfour but still directors in the company, first owned the land and two of his three kids want to farm it, even though they’re still at primary school.

“One is dead keen on tractors and the other on stock so it could work out to be a good combination.

“Although whether they want to take it on will be up to them. They have to want to do it.”

The sheep and beef farm was converted in 2007 and now a 54-bail rotary is working to the max to accommodate the 900 cows on the 400ha platform. There’s also a neighbouring 180ha and a 70ha runoff nearby at Lumsden.

It allows the farm to be completely self-contained, making its own hay and balage with the cows wintered on fodder beet.

New cultivar Suga Beet has also been grown for the past few years with Wilson

importing a lifter from Holland several years ago.

“We lift it every day in the autumn and spring and feed it to the cows in the paddock. By lifting it every day we don’t lose the leaves.”

The crop is high-energy and lets him have high days in milk with winter only 60 days at the Lumsden runoff.

“It also lets me transition the cows on to the fodder beet before they get to Lumsden without any worries.”

As well, the Suga Beet means they don’t have to buy palm kernel or grain on the spot market.

“With such a low stocking rate we only have to have a good rain in the summer and we’ve got too much grass.

“If we grow 45kg drymatter/day/ha we’re in surplus so if we bought palm kernel on contract to get the lower price we could end up not using it.”

The solution of Suga Beet which can be left in the ground until needed, or stored on a concrete pad, is working so far and making Wilson think about what else he can do to make the farm economic in low payout years as well as how to reduce nitrogen entering the waterways.

“If you have problems you find solutions. That’s part of our pioneering spirit. That’s who we are.”

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

B&DEL0024C

delaval.co.nz

ENVIRONMENT

Downturn prompts silage suggestion Andrew Swallow Why, when every cost in dairying is under scrutiny, is so much balage still being made, a former silage contractor and large-scale cropping farmer is asking.

Jeremy Talbot, from south Canterbury, recently called three local contractors to get a quote on ensiling 20ha of grass, either as balage or pit silage.

“There wasn’t much difference between the contractors, but you’d be shocked at the difference in cost between the methods,” he said.

“And it’s not just about the cost: the pit silage will keep much longer, is cheaper to feed out, and will be much better quality if it’s made properly.”

Averaging the quotes from the three firms, which were based on a 2-3km cart from paddock to stack and 28% drymatter, fine-chop pit silage came in at just 7.5c/kg drymatter (DM) covered.

Tube-wrapped squares were 20c/kg DM and rounds 29c/kg DM, while individually wrapped squares and rounds were 21c/ kg DM and 30c/kg DM respectively (see table).

“Admittedly that includes cartage for the balage but there aren’t many people who make the bales and feed them in the same paddock, so you’ve got to account for that cartage somewhere.”

Talbot said international manufacturing standards dictated bale-wrap must deteriorate under UV so it biodegraded within two years. Consequently, balage was often worthless beyond that, forcing a use-it or lose-it scenario.

In contrast, stack covers aren’t subject to the same requirement and well-made pit silage could be put away for decades if needed.

“Those farmers paying 30c/kg DM just to make balage with grass they’ve grown could be buying in maize or cereal silage for much the same money, feed and ensiling included,” he said.

“These feeds increase production when fed with grass because they balance the diet better and, because they reduce the overall nitrogen content of the diet, they

Making fine-chop pit silage costs less than a third of what balage does, so why are so many dairy farms still baling, cropping farmer and large-scale contractor Jeremy Talbot asks.

reduce nitrate losses in urine so it’s better for the environment.”

Alternatively, dairy farms could grow some maize or another cereal for ensiling on the milking platform as part of a grass renewal programme.

“If they did this it would help balance feed supply over the year, and improve the farm’s water use efficiency. Ryegrass stops growing at around 26C regardless of how much water you throw at it but maize loves that heat. Because these crops are so much more efficient users of water you could cut irrigation requirement 40-50%.

“This system of conserving spring grass while feeding out wholecrop silage made the previous summer or autumn, then using the conserved grass to bridge the summer feed deficit, works in wet, dry and normal years and produces about 20% more milk. What’s more, because increased starch in the diet boosts milk protein, that milk’s worth 10-15% more and you reduce the farm’s environmental footprint

Grass ensiling quotes Average quote

Cost per kg drymatter

Fine-chop in pit:

$20/t inc cover

7.5c/kgDM

3x4 sq bale tube-wrapped:

$42/bale

20c/kgDM

Round bale tube-wrapped:

$41/bale

21c/kgDM

3x4 sq bale individual wrap:

$44/bale

29.4c/kgDM

Round bale individual wrap:

$42/bale

30c/kgDM

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because the cows aren’t excreting so much nitrogen in their urine.”

Talbot acknowledged in the current climate bank managers would need some convincing that buying in feeds such as maize now, or funding a crop next season, was the right thing to do instead of culling cows but he was adamant in the short, medium and long-term it was the most economic and environmentally sustainable thing to do.

‘There wasn’t much difference between the contractors, but you’d be shocked at the difference in cost between the methods.’

“We’ve got to change our ways and at the moment Dairy NZ has only got it half right. Yes, you need to maximise use of pasture, but you also need to make best use of that pasture and that means being smart about when and where you use it and, if necessary, feeding something else with it.

“As renowned economist Keith Woodford recently pointed out in his blog, it’s essential to maintain production in this downturn and it’s the system 3 and 4 farms that will survive because they have the greatest ability to pay interest on their debt.”

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

DAIRYNZ

New tool for dairy farmers protects waterways Matt Highway There is a lot of pressure on farmers at the moment, including a requirement to manage waterways. DairyNZ’s Riparian Planner has come at a good time. It helps farmers see how they can manage their waterways over a few years and budget, plant and fence over the long term.

We have been trialling the online Riparian Planner tool with dairy farmers to create fencing and planting plans for waterways.

Farmers say to me they really appreciate the tool’s simplicity and accuracy and being able to work within a budget.

Tough times for farmers because of a low milk price, ongoing dairy farming regulations and building attention on the state of New Zealand’s waterways, combined with farmers wanting to do the right thing, have resulted in budget pressures and increased stress. A planning tool makes life easier.

Despite the stresses dairy farmers are under, I continue to see some great work by dairy farmers managing their waterways.

Fencing and planting around lakes, ponds, streams, rivers and drains to create riparian zones helps filter out sediment and nutrients before they enter waterways, prevent land erosion and increase habitat for native wildlife.

I met with one farmer who didn’t want to plant all his waterways this season – his short-term focus was a stream that required a riparian plan as part of a consent condition. I demonstrated how the tool could plan for separate waterways and how he could choose to design his plan around a one to five-year time frame.

The Waikato farmer was John Bluett, a tough critic who understands waterways are a complex issue. John has dairy farmed for 36 years and belongs to the dairy section of Federated Farmers and

KEY POINTS

A riparian planting plan: • is regionally tailored • takes less than an hour to complete • meets farmer obligations to have a riparian management plan by 2020 • can be regularly updated as onfarm situations change • is accompanied by comprehensive riparian planting and planning information • is perfect for farmers who are not sure where to start.

John Bluett and Matt Highway check out the riparian planning tool. the Waikato Healthy Rivers Farmer Engagement Group. John decided to focus his plan on areas where planting would have maximum environmental return, where the water is accumulating before going into the stream, rather than planting everything.

The tool’s flexibility means plans can be designed in sections by separate waterways and focus on a particular area of each waterway. A riparian plan can be rolled out over a few years so by planning now and taking a long-term approach to riparian zones, farmers can budget in changing times.

The easy-to-use online Riparian Planning tool creates a unique-to-your-farm plan which outlines costs to help prioritise tasks around fencing, planting, maintenance and managing riparian zones into the future. Once completed, the plan includes costs, actions and a timeline, a plant list, a map and details on how much fencing to buy, where to plant, site preparation and animal and plant pest control.

John was impressed by the tool’s accuracy, the time saving and planning and how it gave the number of required plants, costs and exact measurements of areas.

Dairy farmers can use the tool to create their own riparian management plan or with a rural professional.

DairyNZ plans to further promote the Riparian Planner with rural professionals so they have another tool in their tool box to help farmers in these challenging times.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Using the planner

A riparian management plan takes less than an hour to complete, depending on its complexity and how the riparian zone will be managed.

The tool’s map feature makes planning easy – simply enter the farm supply number and zoom in on the property to mark existing waterways including lakes, ponds, streams, rivers and drains; select each waterway’s current state by width, fenced area and vegetation type and tick if it has weeds, exotics, natives or grass.

Finally, select if each waterway is fully or partially fenced and choose what to achieve over the next one to five years.

The tool’s flexibility means plans can be designed by budget, time frame and waterway.

You can save your plan, so as the riparian zone develops or anything changes onfarm, simply revisit the Riparian Planner to update any details for future planning.

Get your plan now at dairynz.co.nz/ riparianplanner The Riparian Planner was developed

by DairyNZ and Landcare Research with input from regional councils and key environmental experts.

Matt Highway is DairyNZ senior developer, sustainability team.

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STOCK Tane and Rachel Little and their daughter on their Kowhitirangi dairy farm.

Focus on cost

Being a monitor farm means opening up your operation and decision-making to regular scrutiny.

West Coast farmers Tane and Rachel Little told Anne Hardie about the reasons behind their decision to focus on a low-cost system.

W

est Coast farmers Tane and Rachel Little have always run a low-cost system, partly because of the debt they have carried since buying the farm six years ago, but also because they see little point in buying production.

The couple milk 310 Jersey cows on a milking platform of 130ha at Kowhitirangi, a lush dairy-dominant valley inland from Hokitika with a rainfall that can be a West Coast “low” of 2.5 metres one year and 3.5m the next.

They’re one of four monitor farms on the West Coast and it’s their eighth year in the spotlight, with the annual field day held in February for local farmers to analyse and quiz the motives and results of their farming system.

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Last season, the farm produced 376kg milksolids (MS) per cow and 867kg MS/ha, following a low-cost system that equates to DairyNZ’s System 2. Its net imported supplements amounted to 457kg/cow and the cows were wintered on the milking platform and adjoining support block.

Out of necessity and desire, the Littles have run a low-cost system, with farm working expenses last season working out at $3.32/kg MS and an operating profit of $2.41/kg MS, or $2075/ha. Debt still has to be paid and this season’s lower payout is going to be tough, with little room to cut costs without limiting production.

However, they are constantly monitoring and budgeting to maintain their low-cost structure.

Tane’s parents bought the farm in 2000

FARM FACTS 2014-15

Effective area: 162 Milking platform: 130 Breed: Jersey Cows: 300 MS/cow: 376 MS/ha: 867 System: 2 Stocking rate: 2.3 Planned start of calving: August 8 kg N/ha/year: 70 and employed him as a manager until he and Rachel formed an equity partnership with them in 2008 before buying them out two years later. Three years on they bought the 60ha dairy farm next door, which needed to be redeveloped. It pushed costs up initially as they regrassed, fertilised and developed it further, but now half that farm has been included in the milking platform, with potential to milk cows on the rest of it as well.

In the meantime, they are bringing home their grazed-out heifers from a nearby grazier to use that 30ha and save costs. Like most farming decisions, numerous factors needed to be considered before they came to that decision. They’ve been fortunate to have a good grazier very close who looks after the heifers well and once they give that up, it’s probably gone forever, Tane points out. Increasing cow numbers to utilise the land puts pressure on their system, especially with an 18-aside herringbone dairy, and while the payout is low the figures don’t stack up to milk more cows, he says.

“We’ve been number-crunching the figures to work out which is best. At the moment we winter-on all the cows and graze-off the R1s from May 1 to May 1 with really good graziers and you have to weigh that into the equation.”

A quick snapshot of the farm shows

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

STOCK The annual monitor farm field day at Kowhitirangi.

it produced an estimated 9.7 tonnes drymatter (DM)/ha last season and basically utilised the lot, with its best production in recent years reaching 12.7t.

The average pasture cover last season was 1930kg DM/ha and it consistently has poor winter growth that continues into the start of calving.

The weather can also take its toll on mating and Tane says they will either have a tough month leading into mating or during mating, with about 10% of the cows ending up empty.

Last year was a particularly tough year, with the lowest pasture growth for all four monitor farms since the project began. The Little’s Kowhitirangi farm was the only one that managed to maintain days in milk and that was because the new block began to contribute to milk production.

In Kowhitirangi’s climate, Tane says farmers concentrate on limiting pugging rather than residuals, because that’s the reality. The climate can be fickle from year to year too, especially through late spring and early summer, so it’s hard to plan ahead. Though the valley gets a lot of rain, it also needs a lot of rain, Tane says. Dry spells can bite and the soils can dry out fast.

Palm kernel has been used to top the cows up when there’s a pasture deficit and about 18 months ago they got a good contract for the supplement from a local retailer that provides them with 150t a year.

“We’re only feeding it to the milkers when needed, so we start and stop it through deficits in pasture production and that’s working really well. And we’re holding enough back to be able to feed through winter which means crops was a cost we could cut out.”

In the past they have grown swedes for winter on the new block as part of its regrassing programme and that will probably continue in the future once the

palm kernel contract comes to an end.

A covered standoff pad caters for 200 cows in rough weather while a gravel feedpad with troughs and other gravel areas are all used to get the cows off the paddocks. They can switch the cows around to give them all time under cover and respite from the weather. Deluges of rain drain away quickly since gravel is never far below the surface of the silt and gravel soils.

It was suggested at the field day they could calve later than the August 8 start date because of the low average pasture cover at that time of year, usually about 1700kg DM/ha, or aim to leave more pasture cover for the beginning of August to encourage more growth, using the adage more grass grows grass.

But Tane isn’t so sure, because there’s a cost involved to save or grow more grass for that time of year when the cows aren’t ready to consume more.

“You either take it out of the end of the previous season or spend more on fertiliser. And our cows physically can’t eat that much just after calving. The milkers eat the most grass but I don’t find it makes much difference if they’re eating mostly pasture or a mixture of supplements.”

All their silage is made on 30ha of the developed block and that produces enough for spring when grass growth is still slow.

Since they have secured the palm kernel contract, less nitrogen has been applied to pasture so they don’t waste feed.

Tane says you have to get the timing right with the weather when applying nitrogen or risk flushing it down the valley, along with the money spent on it. Last season they used just 70kg N/ha compared with the other monitor farms which were 237-285kg/ha.

“I find palm kernel easier than nitrogen and we’re growing enough grass, so nitrogen is something to take out. We used

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

to be around 150kg (N/ha) and once I’d committed to palm kernel I didn’t want to waste feed. If I don’t need that nitrogen, I don’t put it on. We’re growing enough grass anyway and if you grow more grass you have to do something with it.”

Animal health costs and breeding are also low on the farm at $47/cow for animal health last season and $33 for breeding and herd improvement.

“Most of that is because of getting on top of things early and identifying cows that need to be culled.”

In the breeding programme, shortgestation straws were trialled last year for the later cows and that worked well.

“We mate for replacements at the beginning of mating and then put the bull out for a break for a couple of weeks. You lose your focus otherwise and start putting up cows you aren’t sure about. Then I used the short-gestation straws and they calved two weeks earlier than normal, so it’s pretty good technology.

“It will be good when they have it the same length for beef breeds to get those beef-cross calves.”

One expense they haven’t cut out is labour, which combined with fertiliser and feed made up 82% of their farm working expenses last season. The couple employ one staff member; Filipino Dan Quinit, who worked on dairy farms back home and in Japan before arriving in Kowhitirangi. Tane says they wouldn’t want to be without him now.

It means they get away from the farm regularly and Tane says that’s crucial, especially when times are tight.

“It means you’re not chained to the place. Between December and the end of February I was away from the farm for a week every month and I think I’ve worked out it’s cheaper to be on holiday. I spend more when I’m on the farm.”

Lifestyle and family are important and when they found themselves short staffed at the beginning of December in the 201415 season, they dropped to once-a-day (OAD) milking for the rest of the season so they could spend some of summer with their three children. This season they dropped to OAD milking in the middle of February for the benefit of both cows and people.

Though it doesn’t have the same appeal as their lifestyle choices, being one of the West Coast monitor farms has proven worthwhile as well. The project carries out weekly pasture walks on each farm, collects all the relevant data, analyses it and produces graphs, tables and trends so all that information is at their fingertips.

The yearly interrogation at the field day means they have to give the reasoning behind their decisions and have it questioned. After seven years, they’re getting pretty used to that.

73

VET’S VOICE

Lameness and calving Richard Laven

Lameness in dairy cattle has been associated with many causes, including prolonged standing on concrete, excess carbohydrates in feed, wet environments, and stress from poor handling, but in dairy cattle there is one crucial factor which is the most important and that is calving.

Calving massively increases the risk of claw horn disease – non-infectious lameness such as white line disease and sole bruising. Environments and diets that increase lameness risk in calved heifers have no such effect in heifers of the same age that are not pregnant or calving.

Additionally, when pregnant heifers are reared in cubicles (free-stalls) with concrete passageways there is little evidence of damage to the hoof but if they are kept in cubicles after calving, hoof horn haemorrhages – the first stage of claw horn disease – become much more common.

Calving is a trigger that allows other factors, such as prolonged standing on concrete, to have an impact on lameness.

So what’s happening? As part of the process of calving there are changes in the pelvic ligaments that allow the calf to be born more easily. These changes are not limited to just the pelvis but happen throughout the body, including in the feet.

It is these changes that mean a calving cow is at increased risk of developing the initial changes, which will eventually result in clinical lameness.

As can be seen in Figure 1, the pedal bone (P3) (the last bone in the limb) is

Figure 2: The tourist in a hammock.

supported by a ligament attaching it to the wall, and also by a mix of connective tissue and fat. At calving these relax and allow the pedal bone to move.

Calving itself doesn’t produce the haemorrhages; the decreased support for P3 means it is easier for outside factors to produce haemorrhages. The best analogy for this is the “tourist in a hammock” (Figure 2).

In the left-hand picture, the attachments are tight and the range of movements of the hammock is small. In the righthand picture, the attachments are loose and small movements by the occupant lead to big movements of the hammock.

Severe stresses, such as wind, can produce movements large enough to lead to significant injury!

Stresses that wouldn’t cause significant problems in mid- to late-lactation cows

Figure 1: Pedal bone support

The support apparatus of the pedal bone. Just before calving this becomes loose and unstable, so the pedal bone is able to move. In walking cows the movement tends to be lateral and down, on to the tissue producing the white line. Haemorrhages (bruising) develop and can be seen at the hoof surface as white line haemorrhages several weeks later.

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can cause damage in early lactation which ends up as claw horn disease. Because the ligament laxity effects last for 4-6 weeks; it is crucial that stresses are minimised from four weeks before to six weeks after calving to reduce lameness.

Under New Zealand conditions, this means minimising time spent standing on concrete, on the feedpad or collecting yard, minimising walking distances particularly on poorly-maintained tracks, and avoiding stressors such as underfeeding, changing groups, and pushing and shoving from dominant cows.

This is particularly important for heifers because they, and their hooves, haven’t experienced the stresses associated with being milked before so when the system goes wrong they’re often the worstaffected group. In large herds, it might pay to milk a separate heifer group with just a few cows to guide the heifers through the process.

It is important to realise claw horn disease is a slow disease so problems at calving might not be seen as lameness until five months later. The damage to the horn-producing tissue from the pedal bone can take up to a month to become significant enough to affect horn production and once horn production is affected it can take months before the damaged horn becomes weight-bearing and claw horn disease is observed Calving and lameness are closely linked because calving increases the impact of almost all risk factors for lameness. If you focus on reducing lameness risk factors during the late dry period and the first six weeks after calving, this will have a significant impact on the number of lame cows in your herd.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

STOCK

SugaBeet lolly scramble

Karen Trebilcock ak.trebilcock@xtra.co.nz @KT_at_Exporter In its third season of feeding lifted SugaBeet to milking cows in autumn and spring, the Southland Demonstration Farm at Wallacetown has proved the figures stack up, but only just.

With cows on the farm year-round, fodder beet has been used successfully for many seasons as a winter crop to reduce the amount of pasture taken out of the milking platform.

However, offering enough high quality grass in the spring has become a problem, especially as the farm increased its sixweek in-calf rate from about 60% to 70%.

“This clearly increased demand in the critical early part of the season yet our pasture growth wasn’t increasing at that time by nearly enough,” Southland DairyNZ consulting officer Nathan Nelson said.

“The farm’s management team wasn’t overly excited about putting in more palm kernel or crushed barley into the system because of the cost of the feed but also because we would have had to put a significant investment into infrastructure to feed the 3-4kg needed per-cow per-day and it wasn’t achievable in our view.”

So they gave SugaBeet a go.

SugaBeet is a new sugar beet variety with a bulb drymatter (DM) of 23-26% so it can be lifted and stored for long periods of time. Uniform bulb size and crown height aids lifting. Bulbs consistently have 12 megajoules of metabolisable energy

(MJME)/kg DM. Planted in mid-October, it is lifted twice a year, in March and August when weather conditions are right, yielding about 18 tonnes DM/ha in the autumn and 22t DM/ha in the spring.

Lifting costs $1050/ha and the unwashed beet is stored on concrete. The leaves are left in the paddock and eaten by the cows with about 10% wastage.

The SugaBeet is fed to the cows, unchipped and mixed with silage, in a feed wagon on to pasture starting with 1kg DM/ cow/day offered and no more than 5kg DM/cow/day at peak feeding.

“Feeding it out is like being at a lolly scramble for kids,” farm manager Barry Bethune said.

Offering it with silage lessens the effect of the low-protein beet.

“All beets have very low fibre and phosphorus and high sugar so anything above 5kg a day and you would probably see the cow health and production affected,” Nelson said.

Autumn feeding has the added advantage of doubling as transitioning on to the fodder beet winter crop on the farm.

Beet needs 10 to 14 days of transitioning and if not done correctly can cause rumen acidosis, resulting in rumen damage and death.

On the downside, it’s a 15-month crop, taking 12 months to grow and another three months until new grass planted in the spring can be grazed.

“Paddocks selected for SugaBeet are growing towards the bottom of our pasture recorded dry matter yields at 9-10t DM/ha/ year which would be about 11-11.5t DM/

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

ha for the 15 months so the SugaBeet is giving us a net gain of 11t DM/ha,” Nelson said.

Spraying the old pasture, cultivating, fertiliser, pre-emergent spray and two postemergent sprays, and seed costs $3265/ha for the demonstration farm.

If the second post-emergent herbicide spray is not needed, it’s reduced to $2750/ ha.

Including lifting, Nelson says the true cost of the SugaBeet crop in energy for the cows was 3c/MJME which compares with 2.9c for palm kernel ($240/t on the farm), 4c for silage (34c/kg DM in the stack) and 4.3c for barley ($440/t DM).

Nelson said with lifting the crop a quarter of the cost of the feed, the farm had considered feeding the SugaBeet where it was grown but utilisation would be lower.

“There is also the added cost of damage to the soil structure, nitrogen and phosphorus losses and possible cow lameness.

“It’s a high-yielding crop and feeding any high-yielding crop has all of these problems when it is fed where it’s grown.”

The farm might plant a winter Italian annual or winter oats on paddocks where the Suga Beet has been lifted in the autumn instead of waiting until late spring to sow permanent pasture.

“This would mean the overall yield for this land would be higher and so the figures would look a lot better,” Nelson said.

“We’re still learning.”

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COMMUNITY PLANNER

Planning for local outcomes

Olivia Smith – enjoying working with people and the environment.

Anne Lee anne.lee@nzx.com @cantabannelee

I

f Olivia Smith ever had concerns a career as a planner would mean being stuck at a desk in an office all day, they certainly weren’t well-founded.

The 29-year-old, from Alexandra in central Otago, began work for the Canterbury regional council, Environment Canterbury, as a planner before becoming a zone facilitator.

Her role as a facilitator is a pivotal one in the Canterbury Water Management Strategy (CWMS), a strategy that’s taking a collaborative community-driven approach to water management.

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One of her friends joked she’s a professional socialiser, and while her job is certainly a lot more than that, being able to communicate, bring people together and empathise is an absolute necessity.

Olivia holds a Master of Arts degree in social geography from Otago University.

It followed a Bachelor of Science, also from Otago, majoring in physical geography with a minor in management.

When first deciding what to study when she embarked on her degree she wasn’t sure where her study would take her.

She toyed with all sorts of ideas – from becoming a lawyer to an early childhood teacher – before she realised it was the interface between humans and the environment that really interested her.

She completed planning papers as part of her degrees and admits she found “talk of the policies and rules a tad dry”.

“For me, my perception of ‘planning’ changed once I escaped the world of academia and entered the real world.

“After working in several roles, I jumped at the opportunity to work on a collaborative planning project at Environment Canterbury, focused on water quality in the Waitaki region.”

Olivia says the role appealed because it wasn’t about textbook planning, but getting out in the community to develop a plan to deliver local outcomes.

“In my role as a planner I quickly realised that the aspects of the job I enjoyed the most were always centred on people.

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Olivia Smith – huge respect for community efforts.

“I love getting to know people in the community, I enjoy the challenge of communicating technical jargon in a way people can relate to and I get satisfaction from helping people agree on solutions to some pretty contentious issues.

“Helping to develop these relationships is central to the role of a facilitator, so I just knew it was the right transition for me.”

The CWMS is a new way of developing water management solutions, including rules and on-the-ground actions, which gets people around the table to work out first what the community wants in terms of environmental, social, cultural and economic outcomes.

It’s collaborative but that’s not to say it’s easier than the old adversarial approach that involved a “rules-down” approach where the rules were set and then the discussions began – mainly via courts and through environmental lawyers.

Typically most people want the same outcomes but it’s the “how to get there” that creates the challenges.

Olivia says the CWMS places local communities at its heart and provides a clear path for people to get involved and have their say.

“The strategy is also about working closely with runanga to ensure cultural values are recognised, valued and protected by the wider community.

“The CWMS encourages people to have conversations about their values, aspirations and solutions – I think it’s about having these tough conversations earlier rather than later, so people have time to work through differences to find a solution.”

Zone committees are made up of council and runanga representatives and appointed community members. That selection is done with their background knowledge

and ability to collaborate in mind.

Each zone ultimately comes up with a zone implementation plan (ZIP) that details the outcomes and the “how to” with the process to come up with the ZIP taking up to two years of meetings.

Olivia’s in awe of the work that goes in from community members who she says are absolutely committed to the process and achieving outcomes that will be good for the environment in both the short and much longer terms.

“I have huge empathy for what farmers are going through in this process. It can be incredibly frustrating and stressful for everyone involved – grappling with the enormous amount of information in what’s really a fast-moving space when it comes to the science, particularly nutrient management.

“Committee members devote many, many hours out of their lives to the process and I have huge respect for the fact they’ve invested so much time and energy into getting it right.”

Getting consensus means give and take from everyone involved – community members, farmers, runanga, interest groups, regional and district councils.

Each month Olivia facilitates zone committee meetings in the Ashburton, OrariOpihi-Temuka and Pareora zones.

Her role is to ensure committee members have a clear sense of direction, have the information they need to make informed decisions and to help them resolve strategic issues.

She also liaises with various community groups, runanga, stakeholders and internal staff whose interest and work is relevant to the committees.

Being able to bring information to the committee from the council is important as

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is her ability to help committee members understand the planning process and Resource Management Act. The zone committees she works with are at different stages of the CWMS process.

The Ashburton zone committee has developed recommendations for water management for the Hinds Plains area. These recommendations have recently been through the RMA process to become a plan change to the Land and Water Regional Plan – Plan Change 2.

The fact the decision of the independent hearing commissions generally reflects the recommendations developed by the community shows collaboration is working, Olivia says.

While there are still likely to be some challenges to the plan, the next step for Olivia is helping the committee ensure the recommendations are implemented.

That’s exciting because it’s less about talking and more about doing, she says.

Maintaining productive relationships with the community, runanga and stakeholders is important to make sure innovative projects like the Managed Aquifer Recharge Project in Hinds progress.

That project involves directing lownitrogen water into an aquifer to dilute it, to achieve water quality outcomes.

A key challenge further south, in the south Canterbury area, is helping communities explore ways to bring additional alpine water into the region without compromising water quality outcomes, she says.

Other regional councils around the country are watching Canterbury’s progress with its new approach to planning closely.

It’s also attracting international attention, which bodes well for Olivia in terms of future YC career options.

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OVERSEAS WORKERS

HelpX host Kerry Semmens and Scottish helper Tom Murdoch.

EASING THE OE Anne Hardie verbatim@xtra.co.nz

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ravelling overseas on the big OE can churn through your savings at a nauseating speed as you head from one tourist spot to the next and often get only a glimpse of what it is like to actually live there. Or you can search for host families in countries around the world who offer food and accommodation in return for a few hours work a day.

Tom Murdoch is a 19-year-old Scotsman from a dairy farm near Glasgow who is in the middle of a three-month stint on a dairy farm in Nelson’s Sherry River, working for equity farm managers Steve and Kerry Semmens.

For free accommodation and food, he helps out on the 800-cow dairy farm for four to five hours a day and gets to experience the New Zealand dairy industry compared to the 120-cow herd back home that is housed for seven months of the year. He’s also part of a local family and gets to know other locals, 80

explore the area, go fishing and is anticipating his first-ever pig hunting adventure.

He’s following in the footsteps of his older sister who was also hosted by the Semmens several years ago when she headed to NZ to experience and explore the country.

The siblings sourced their host family through the website HelpX, which lists farm stays, homestays, ranches and even sailing boats that invite volunteer helpers to spend some time with local people. Another popular option is WWOOF, which stands for willing workers on organic farms, around the world, that similarly offers food and accommodation for wwoofers in return for a few hours work a day. In NZ there’s Backpacker Board and Farm Helpers in NZ (FHINZ) – as they say, “don’t leave home ‘til you’ve seen the country”, or maybe different farming experiences in NZ. Overseas, you can find host families in rural settings in an extensive list of countries and find anything from a 12,000ha ranch in Argentina to helping with dog sled teams in the Yukon, a sheep farm in England’s

Yorkshire Dales or an organic farmstay in the French countryside. The world really is your oyster when it comes to finding travelling adventures through host families.

For Tom, it’s a chance to see NZ, but also dairying in a different climate and scale to back home. His family milks 120 HolsteinFriesians that calve and milk throughout the year and spend seven months inside because of the harsh Scottish climate. The cows graze on about 81ha, while a bigger chunk of the farm – 121ha – produces silage and barley to feed the cows through the seven months inside.

Now he’s working with an 800-cow herd and if he’s on the morning milk, he can be finished his HelpX hours by mid-morning.

That gives him the rest of the day to explore the region and check out not just the tourist spots but all the hidden treasures that the locals have told him about. As well as short working hours during the day, he gets a day off a week where he can head off in the “wee motor home” he bought for his excursions.

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“I’ve got friends in NZ working full-time and they haven’t seen much of NZ yet.”

He’s not getting paid, but this part of his travels isn’t costing him much either, and if Steve and Kerry are short-staffed there’s the chance now and again of working more hours and making a bit of money.

His trip began in Western Australia, driving tractors as much as 100 hours a week during the grain harvest, so when he arrived at his HelpX job in Nelson, it was a chance to relax a bit and get a bit of sightseeing finally.

“It’s a good way of trying something new.

NZ is quite famous for its dairy industry, so I thought it would be good for learning.

“I’ve learnt a few life skills since I’ve been travelling too. I think it’s a good time to travel, when you’ve younger, because you’re not tied down and haven’t got long-term relationships.”

Kerry and Steve have been hosting helpers since 2006 and it was a natural progression from their own experiences as travellers.

Kerry hails from another part of Scotland and met Steve when she backpacked to NZ, while Steve travelled for four years overseas, varying London-based work with milking cows on an Israeli kibbutz.

Consequently they have an affinity with backpackers who Kerry says are generally good workers and fun to have around the home.

“We’ve always found that people who have the gumption to get away and travel have a bit of go about them. They’re not coming to NZ to watch telly; they want to get a bit of Kiwi culture.”

They have three children and generally get three or so helpers through the year for varying amounts of time. In the past they often helped with the kids, especially at calving time, when the kids were young and Kerry was tied to the house.

“It’s good for your stress levels and sanity.

And it’s great for the kids because they’re

“IT’S A GOOD WAY OF TRYING SOMETHING NEW. NZ IS QUITE FAMOUS FOR ITS DAIRY INDUSTRY, SO I THOUGHT IT WOULD BE GOOD FOR LEARNING.” asking different questions around the dinner table.

“If we didn’t have Tom here, we would have to look for casual labour. Tom’s happy to fit in with the roster because he gets time off for travelling. He’s got flexibility.”

In fact, they like Tom so much they offered him a full-time job, which he had to decline because of his commitment to the family farm back in Scotland.

The Semmens usually employ four fulltime staff but are down to three because one is on maternity leave, so having a HelpX worker helps fill the gap and they’ve also got someone to cover when their other staff take holidays.

“I think it’s also good to get foreigners on your farm to show them the good side of NZ dairy farming.”

Both hosts and helpers join organisations like HelpX and WWOOF and create a listing or profile that can receive reviews or references. Hosts sometimes search for helpers with specific skills, such as the ability to ride horses, agriculture or horticulture, carpentry or caring for children.

HelpX started in NZ in early 2001 and, like WWOOF, most hosts are lifestylers with blocks of land that need helpers for a myriad of tasks from making compost and general gardening to making mud bricks and cheese-making. Hosts might only need a helper – or pair of helpers – for a week, or for months. It just takes a little time

sifting through the numerous listings to find something special.

Though most hosts offer accommodation and food in exchange for a few hours work a day, every situation is different and it pays to clarify the details before accepting. Some might only want help for a couple of hours a day and ask helpers to provide and cook their own food.

Helpers might stay in the family home or have separate accommodation. It might be possible to work a couple of eight-hour days and then get a couple of days off to go on a longer adventure.

Like any job, paid or not, a lot depends on how well everyone gels and while one experience might be the best part of the big OE, another could provide a good tale to tell, if not an enjoyable one.

Kerry says they’ve never had a bad experience with their helpers over the years and the family has enjoyed hosting travellers from around the globe and getting to understand their cultures as much as their YC helpers want a taste of Kiwi culture.

Check out: www.helpx.net www.wwoofinternational.org And in New Zealand: www.fhinz.co.nz www.backpackerboard.nz

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TRACTOR MAN Cheyenne Stein Cheyenne.stein@nzx.com @CheyStein2

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career in agriculture wasn’t in Shaun Bradley’s blood, but he’s certainly making his mark in the industry now. The 27-year-old grew up in a sawmilling family on their lifestyle block in Mataroa and says he got into the agricultural industry by way of family connections.

“When I was in year seven I moved with Mum to Palmerston North. I spent a lot of weekends at my cousin Nicky Allome’s dairy farm over in Woodville, and that’s where it all started.”

In 2005, after leaving Palmerston North Boys’ High School at the end of year 12, Shaun was offered a job on the Allomes’ farm as a general hand, and says when he first started “it was hard work learning the ropes of the farm”.

“I hadn’t milked a cow in my life. The first few weeks I would be out in the paddocks grubbing thistles thinking what have I got myself into, but as time went on, I learnt a lot and got more responsibilities.”

After two-and-a-half years, Nicky and husband Ben bought a dairy farm in Woodville, milking 140 cows, and asked Shaun to manage it for them. After a year Shaun decided it was time to do a bit of travel, expand his skill-set and indulge his love of tractors.

“I shifted back to Taihape and worked as a contractor over the summer months, then in winter I headed to Australia for seeding and would come back for more contracting in summer here in New Zealand.”

After two years of going back and forth between NZ and Australia, he headed down to a new seeding farm in Esperance, Western Australia, where

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they seeded 17,400ha. England was next on his list, heading over for the harvest with a bunch of other Kiwi lads. Another harvest spent in Australia and Shaun decided it was time to return to NZ soil and started working for Nicky and Ben again.

“They needed a full-time tractor driver and just sort of a general hand. I did that for a couple of months then the position of manager at their drystock block came up and I took that on.”

The drystock block was 270ha and has grown to 370ha in the time Shaun has been there. During this time Ben, Nicky and Shaun went into business together, forming their contracting business, Bradley Agri.

“I’m in it 50:50 with Nicky and Ben. We contract back to all the farms that Ben is involved with. We are two years into it now and growing slowly and steadily.

“Growing a business is tough on its own – throw in a low dairy payout and it’s a bit of a ride, all a great learning experience though.”

Shaun has a positive attitude and says the

first few years are laying the foundations for a successful business.

His core focus with the business is servicing the 600-700ha of farms Ben is involved with, comprising three dairy farms and four runoffs.

“It’s just making sure everything gets sprayed-out on time, crops go in on time. I used to really just love driving a tractor when I was younger, especially in Taihape where there are plenty of hills. Now days I’m quite into the cropping side of it and learning how to turn a poor-producing paddock in a highproducing paddock.

“Ben and I sit down and work out what all his dairy cows need for the whole season, what we need to put in, how much and when and then getting soils tests – that whole process from step one to step 10 I’m involved with which I really enjoy.”

Running a drystock block and a business means Shaun has had to delegate some dayto-day farm tasks, but says he is lucky to have a stock manager he can rely on and trust to keep things ticking along.

Laying the fundations of a successful future

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“Tristan Bates does all the day-to-day work here and once a month Ben, Tristan and I all drive around the farm and make a plan which Tristan then implements, and I will check in a few times a week to make sure it’s all going okay.”

Young Farmers has also played a big role in Shaun’s life. He joined the Fitzherbert club when he was 17 on the advice of Ben and Nicky, to meet new people and get more involved with the industry. He has been a member ever since and is now a well-known face not only at club level but nationally.

“I was an active member for the first few years and then got suckered into a few roles and ended-up being club chairman for a few years.”

During his time as chairman he says there was a big generation change, with the older crowd moving on and a younger group of people coming through ranks. The club grew to about 35 members. When Shaun returned from his overseas travels he saw the opportunity to jump in and give the next level a go.

“I went for regional chairman of the Taranaki-Manawatu region and was elected.”

Shaun’s time as regional chairman oversaw a period of change with changes to committee structure, the introduction of new roles and competition weekends to name a few.

“We completely re-designed the strategic plan for the region and changed the committee structure. It used to rely on two or three people doing all the tasks. Now we’ve changed it so the responsibility is spread across five or six people, and introduced new roles like the leadership development officer, publicity officer and competitions manager.”

Shaun held the role for two years but recently stood down to let someone new with fresh ideas to step up.

“I didn’t go up for re-election this year.

There’s always a risk of becoming old and

stale and I had done a lot in my time as chair so it was time to pass the torch on.”

He says they set up a good structure and laid the foundations for the next person to follow on with and “build their bit”. Although no longer at the helm, Shaun says he’s still around to give people advice and he’s keen on staying an active member of the organisation.

“GROWING A BUSINESS IS TOUGH ON ITS OWN – THROW IN A LOW DAIRY PAYOUT AND IT’S A BIT OF A RIDE, ALL A GREAT LEARNING EXPERIENCE THOUGH.” “I made a lot of friends through Young Farmers, learned new skills like leading a team, running events, learning how to delegate. I particularly enjoyed the national committee meetings where all the regional leaders would meet a few times a year and discuss the plans for all members going forward. I enjoyed helping develop a strategy for the whole organisation.”

He says he would like to get involved in the contest side of things as a regional manager but for now, is going to take a moment to take a breath and figure out what the next step is.

Young Farmers didn’t only help him with his professional life, but also his personal. He met

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his partner, Young Farmers field officer for Tarankai-Manawatu and his stock manager’s sister, Megan Bates through Young Farmers with the pair starting off as “just friends”.

“We were quite good mates for a year. I had to prove my worth, she’s a pretty hard stick to break.”

The couple have been together for two years and run a calf-rearing business together that is another way of building their asset base and building equity for the future.

“Megan’s the chief calf-rearer and we rear about 100 calves every year. I just do as I’m told really.”

Between running a drystock farm, building a new business, their combined commitments with Young Farmers and a calf-rearing business there’s often little time left for other things, but Shaun says they relish the chance to get off the farm for a bit and enjoy their love of the outdoors together.

“It’s important to have that time off-farm, it keeps me sane and gives us something to look forward to. We both have our scuba tickets so we do that a lot over summer and are off to Vietnam soon for a month. We’re leaving the phones at home and just getting away for a bit.”

Shaun says he’s lucky to be in a position to do that and having a reliable stock manager in Tristan is the key.

“Everything’s set up so we can do that. We have a reliable person in Tristan and Ben is always there as well. I can go away and not be worrying about everything 24/7.”

The possibilities are endless for those who work hard, a sentiment not lost on Shaun and Megan. The couple say although making room for some down-time is important, they are focused on continuing to work hard and to their strengths in order to get ahead in the primary industries, and they are well on their way to doing just that. YC

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MENTAL WELLNESS

Managing your wellness Jackie Harrigan jackie.harrigan@nzx.com You are never too young to learn how to manage stress and mental well-being.

That was the message DairyNZ wellness programme leader Dana Carver gave to the Tasman Young Farmers conference in Christchurch in February.

Whether it’s the stress of student debt, study schedules and exams or the stress of a dropping dairy payout and staffing issues, everyone can make their lives better by understanding their stressors and actively managing their wellness.

While resilience is a hackneyed term, Carver, herself a farmer, says resilient people understand life always changes, they budget well, they know how to spend time on what’s important based on their critical indicators, and they celebrate wins and success.

Eighty percent of stress is good stress, she says, which fosters challenge and motivation, but excessive stress creates negative feelings.

It is normal for stress levels to fluctuate up and down during life, but if the body is in excessive stress for two weeks it changes both physically and mentally, Carver said.

“Under prolonged excessive stress, the body secretes chemicals that cause high blood pressure, depression and anxiety, heart disease and weakened immune system, as well as an inability to concentrate and make decisions and stick to the plan.”

Carver stressed the three key points for keeping yourself well: • Take notice - recognise where you are on the stress and burnout scale • Understand why you are there • Know your trigger signs.

The good news, Carver says, is resilience can be improved, with 50% of a person’s resilient outlook dictated by genetics (how upbeat or able to bounce forward rather than 84

bounce back your parents were), 10% dictated by what happens to you and a huge 40% how you choose to deal with it on a daily basis.

Farming is stressful and those stresses are not going to go away, so farmers old and young need to learn to be resilient and sharp by having strategies to help them deal with the stresses.

Be safe and have a plan Farmers who have a plan of how they are going to deal with stresses and survive the next two years will cope much better than those “who have put their heads in the sand”, she says.

“Even if it’s not a pretty plan, and if you can’t make your own plan then get help to do it.”

“If the thought of planning is overwhelming, break it down into how you are going to cope with the next week, and map out each day – make it into baby steps.”

Rest and take notice There are three parts to rest, Carver says.

Workers need a break every four hours, and there is a reason the government has legislated for this.

Everyone’s body needs a break from the focus that tenses us up – go for a walk, have

a cup of tea, or sit down and take a break, Carver suggests.

Rest also means eight hours of sleep a night, she says, and while there are three weeks in dairy farming when farmers will miss this at the height of spring and they will be tired, for the rest of the season they need to target 7-9 hours of sleep every night.

The third one is having a holiday – it’s about getting off-farm and doing something completely different.

“If your adrenaline is running all the time your body gets adrenal fatigue which causes a lot of the health problems – if you don’t shut down from all of the work then your body gets addicted to it.

“When you are on holiday make sure you turn your phone off and relax so the adrenaline can drain from your body.”

Taking notice is directed at people to encourage them to slow down, to be in the moment and realise what makes them happy and what they love.

‘It sounds cheesy, but stop and smell the roses – if you take the time to do that, it will actually help your wellness.”

She talked about a farmer who was ready to walk away from farming, but realised what he loved about farming was the evening change of light, when the animals were playing in the paddock – and he decided to take that 20 minutes each day to reconnect with what he loves.

“Spending that time made the difference between him stressing about the farm and remembering why he was there, what he loved about it and it meant he remembered why he was farming and why he wanted to continue.”

Be active and eat well “We have 649 muscles in our body and if they are not used they will die.”

Carver said many farmers don’t like the

Here is what works …

(aligned with MHF principles based on UK Foresight project) Five factors for wellness

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gym, but are not using all their muscles anymore.

As far as eating well goes, Carver suggests everyone should, at the end of each day, review what they have eaten that day.

“Have you eaten more healthy foods like fruit, vegetables, protein, water, or have you eaten more cakes, pastries, biscuits, sugary and fattening things?”

You need to eat less of the toxic, unhealthy foods and more of the healthy, fresh and nutritious foods, she said.

“Don’t make yourself feel guilty when you go in for a treat food, because we all need treats – but you need to know what it is you are eating and think about the balance of your diet.”

The Burnout Scale THRIVING:

Surrounded by successes, alert and alive, positive and excited by possibilities.

ACHIEVING:

On top of things and motivated but tired and or forgetful and need pick-me-ups.

Learning One of the things scientists have found keeps us well is learning new things, surprising ourselves and finding out new and amazing things about the world, Carver says.

She assured the Young Farmer workshop attendees they were obviously doing this well and encouraged them to not underestimate how much effect connecting and networking and just laughing and being human with people has on a person’s health.

SURVIVING:

Managing most things, dropping a few

balls, often disinterested and irritable – rely on alcohol and caffeine.

Connect and give Excitingly, Carver says research has shown that helping somebody or volunteering and realising that they have made a difference for others creates the same endorphins as exercise.

Ironically she says that trying to do all of the five things could create more stress but she suggested everyone should have three ‘givens’ – things that they know they will always do because it makes them feel better and things that are their ‘go to’ strategies to use if they feel themselves getting unwell or under excessive stress.

After covering how to keep themselves well, Carver turned to how to make sure their friends and workmates were also well, saying sometimes people can’t see they need talk or know where to turn when they have reached the point of burnout.

Carver mentioned rural suicides, saying it affected four times as many men as women, which she thinks could be because they find it harder to connect and take notice and talk. She says it’s important to take steps to help someone you think is reaching that point.

It starts with being on their side and letting them talk, showing understanding and sympathy, not judging them, avoiding offering advice or making comparisons but not trying to minimise their pain or act like it’s not a big YC deal.

BURNING OUT:

Not keeping up, overwhelmed, lacking confidence, can be belligerent and relationship failing. Start of chemical change, may require medication to get back to normal.

BURNT OUT:

Lost mobility and-or grip on reality.

What to do

If you are worried someone might already be depressed…

• Encourage them to speak to their health practitioner • Encourage them to talk to someone about it. These numbers are good: • Rural Support Trust 0800 787 254 • Depression helpline 0800 111 757 If you are worried someone is suicidal…

• Get professional help.

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• Do everything in your power to get a suicidal person the help he or she needs.

• Call a crisis line for advice and referrals. Encourage the person to see a mental health professional, help locate a treatment facility, or take them to a doctor’s appointment.

• Samaritans 0800 726 666 • Lifeline 0800 543 354 85

A 68kw Turgo turbine produces enough power to run Graeme Berry’s farm and sell the surplus.

ALTERNATIVE ENERGY

r e w o P e h t to e l p o pe rms. Anne Hardie fa y an m r fo e ns big expe l The power bill is a ry about using loca er B e em ra G er sef farm . talked to Franz Jo ce that bill to zero resources to redu

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ater is an abundant resource around Graham Berry’s Franz Josef dairy farm, which prompted him to build a small hydro power scheme that now supplies all his electricity with enough extra to sell into the national grid and pay its cost.

It was a lengthy exercise that took years to acquire the necessary consents and ended up costing nearly half a million dollars, but that extra power sold into the national grid pays 86

the interest while the farm and dairy now pay zilch for electricity.

Graham was looking for a sharemilking job 11 years ago when he ended up buying the 123-effective hectare farm a few kilometres south of the Franz Josef township.

It backs on to Department of Conservation land that rises steeply into the Southern Alps, so the rain literally buckets down at times and the annual rainfall measures about 4.5m.

It’s basically a dairy farm surrounded by

rainforest, which makes it both picturesque and challenging.

By the time Graham had made necessary improvements on the farm, it was more like a conversion, but today he milks 252 crossbred cows at 2.1 cows/ha and last season produced 102,000kg milksolids as well as wintering the cows and keeping the young stock at home.

The trick has been keeping the stocking rate low and a bit of meal in the system to get through the tougher parts of the season.

“The first year we were here it rained for quite a few weeks and we looked at what resources we had around here. I didn’t have a clue about hydro, but I talked with a local electrician who laughed at me and said it needed more water head.”

Undeterred, he got talking with different people including the Department of Conservation, which owns the national park behind the farm where the hill provided more head for the water heading on to the farm.

Ironically, one of the few things allowable in a national park is hydro schemes, Graham says. However, working out how much he should pay for a concession to build one and how it would be managed was not so clear-cut and the process took nearly five years.

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Graham Berry and his power shed – small but profitable.

Eventually he got a concession for 35 years and has to ensure he leaves enough water in the creek that cascades down the steep hillside – a hillside that enabled him to get 140m of head over 1340m, including going through 1100m of national park.

Now a concrete intake captures water from the creek and takes it through a 250mm pipe down on to the farm where he has built a small shed housing one 68-kilowatt Turgo turbine.

The water drops out to continue back into the stream, while a transformer keeps the produced electricity at 11kva (thousand volt amps) which is the same as the main power lines. Once it reaches the dairy at the front of the farm, it’s transformed into 400 volts to run the dairy, farm and house.

“If we kept it at 400 all the way, we would have 25% loss. From the dairy, any surplus goes through a meter to feed into the grid.

You need the main lines if you want to sell it back into the grid.”

If there’s a fault anywhere, the system sends a message to the computer in the shed to stop feeding it into the grid.

For instance, one of the jets opened up fully and the machine told it to stop, while the other stayed open and fried the bearings and some electrical components. When a fault like

that happens, the power from the main grid can come into the farm.

From start to finish, he estimates the scheme has cost between $450,000 and $480,000, with a big chunk attributed to electrical components. He reckons it will only take about 10 years to pay for itself.

Power bills on the farm were usually $18,000 to $19,000 a year which he and partner Jenny Laing no longer pay, while they now earn about $25,000 a year from surplus power fed back into the main grid to Simply Energy.

So now it’s paying for itself and with interest rates low, it’s even put them ahead about $3000 a month, he says.

Looking back, he says perseverance was critical to the project’s success and while the paperwork was the arduous part, building the hydro scheme was the fun part.

“It’s just common sense. People look at it and say ‘it’s just so simple’.”

In times of low payout, the hydro scheme is adding income alongside a couple of other initiatives, such as marketing straws from his own bull.

Genetics has long been a passion for Graham and it has paid off with contract mating through CRV resulting in a young crossbred bull now in Cambridge. Another

Dairy Exporter + Young Country | agrihq.co.nz/dairy-exporter | April 2016

bull, Perivale Pike, just missed out on the Ambreed team, so Graham decided to market 2500 straws and has so far sold 600 at $4 a straw as well as producing 55 daughters for their own herd.

“The aim now is to get his daughters into five herds and have them herd tested for TOP inspection (traits other than production) to get a breeding worth.”

Graham has used embryo transplanting to maximise the genetics from their better cows, with mixed results. It’s done at the time of peak milk when the weather can be still very cold in Franz Josef, so this season they got three fertilised eggs from one cow but nothing from two others. The aim is to combine goodproducing cows with longevity.

“If you can get a good animal that can stay around for nine or 10 years, then that’s all good.”

Another strategy to keep the good genetics coming through is artificially inseminating 75% of the heifers. For the past three years he has also restricted mating to eight weeks over the entire herd without using CIDRs – artificially inseminating cows from November 6 and removing the bull on January 9.

“We’ve done it to condense calving and improve fertility, but it also gives a bit of a break between calving and mating to get cows cycling again.

“I put out two teaser bulls and anything that hasn’t been bulling is put on once-a-day to get them cycling and the bulls pick up the silent ones.”

Yet another income stream is from a small cottage that cost them about $45,000 to shift from Reefton and do up for staff accommodation years ago, and now brings in an income from bed and breakfast guests through Airbnb. Franz Josef swells from a local population of 450 residents to about 3500 a night during the tourist season and a working dairy farm adds another experience to their travels.

It has its moments, such as cows held up in the dairy because tourists are standing in the way with their cameras, but the plus side is $130 a night for much of the holiday period between October and April.

“It’s just another part of the farm to make money and you meet some really interesting people through it.”

So while the climate and nearby Southern Alps make dairying challenging at times, they’ve also provided other income sources and cashflow through the year in the form of electricity and tourists.

Today their sole employee is housed in a former butchery, converted to staff accommodation, from the days the farm sold YC meat to the locals.

87

KNOW HOW, CAN DO

Using fodder beet in lactation Terry Hughes and Jim Gibbs

Grazing or lifting?

Grazed beet has valuable leaf, and is always cheaper – this is our preference. A daily break of 5kg drymatter (DM) is easily achieved on almost every farm, because they will eat this in about 1.5 hours.

Breakouts are rare, and, like in childcare, are easily avoided with common-sense management using plenty of feed and electricity. The issues are finding platform hectares, and in herds of more than 750 cows the additional walking distance created each day could lead to a lameness issue. This has been a real problem on some big farms, so talk to an experienced operator before you plant.

Lifted beet can be harvested in large volumes by single-purpose lifters, which

88

leave only the bulb. Sugar beets are the best option for storage, because as a general rule the higher the DM%, the longer they last after harvest. The use of harvested beet is typically still cheap (about 5c/kg DM to lift) and the high DM sugar beet bulbs last in a windrow without the leaf for 3-6 months without any covers, even in warmer North Island areas.

They should be kept in windrows, not stacks, because in the warmer New Zealand weather tall, deep storage can rot quickly, a very different scenario from the United Kingdom or Europe.

The harvested beets can be transported from the platform and don’t need chopping. This makes use quick and easy by putting them out through a standard silage wagon, equivalent to grass silage feeding, for a usual cost in total of less than 15c/kg DM if grown yourself. But it does mean the leaf DM – about 20% of

the total DM yield – is lost, along with the protein and minerals in it. Up to 5kg DM daily, however, this isn’t a nutritional issue on pasture lactation diets. Harvested beet is especially effective on large farms where it can halve the cost of supplement.

Beet can also be harvested with a standard farm tractor and a beet bucket.

This is the fastest growing use on dairy farms, and it can be very economical. The beet buckets scrape up whole beet, which are then fed out through a wagon, just like bulbs. Because the leaf doesn’t store well, it must be done at least weekly in warm weather, and at most monthly in cold weather, and is often done daily on farms that use it – straight into the wagon and fed out to avoid double-handling.

As a general rule, feeding a 1000-cow herd is about one hour’s work a day using the beet buckets. It adds about 2c/kg DM to the cost of grazed beet, but keeps the

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

for error is high, and there have been some notable, expensive stock losses doing this.

• Finally, a platform growing tip – plan your beet paddock ahead and irrigate well with effluent before sowing, and then from 60 days after sowing. For beet growing, every dairy farm in NZ has irrigation – it’s just sometimes called effluent. Because you won’t typically be growing large hectares of beet on the platform, effluent can be effectively used to target irrigate across the risk period of summer and early autumn, and can dramatically decrease cost and increase yields. Cows then eat the product and spread the minerals around the farm.

• There are some great myths about lactation feeding of beet.

Some of our favourites are: • “Beet is sugar – you need starch”. No, it is an ME source of 12MJ/kg DM. Your only real need when you hear this is a new nutrition consultant.

• “Sugar beet is too hard”, or “the cows’ teeth wear out (or get tooth decay)”, or “it needs to be fed chopped in grass silage or they won’t eat it”.

• “The dirt on harvested sugar beet fills up the rumen, or steals your topsoil from the paddock”. This one is great, since a seed company did a national roadshow a few years back spruiking this.

Both 2) and 3) are invented by folk who want to sell you something different to what you have or make you buy a chopper.

They’re a sign from heaven that you should get them off the farm quickly before they cost you more money.

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leaf and is cheaper than mechanical harvesting of bulbs, and it allows the farmer great flexibility to harvest, leave in wet weather, or grow the crop more. The disadvantage is it’s a constant task to be done across the feeding periods, lacking the ease of using harvested bulb from a windrow.

What goes wrong?

Most issues are caused by poor allocation or too little space and time, and those should be reviewed. However, there are a few specific problems worth discussing for grazed vs harvested beet use.

• In herds of more than 750 cows, longer walking distances in the shoulders will increase lameness, so pick your beet paddocks close to the dairy. A grazed paddock is another fixed point in the daily feed rotation, so further than 500m from the dairy has been associated with significant lameness issues in larger herds.

• Be careful not to switch rapidly between beet cultivars of very different DM%. If the cows are eating 5kg DM of a lower DM variety – say grazing Brigadier at 12% – and are then switched to a sugar beet (25%), they will eat it just as they did for the low DM% variety – effectively doubling intakes. If allocation is correct, this can be managed on a herd level, but potential Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

The New Zealand Peru Dairy Support project is a joint initiative of the New Zealand and Peruvian Governments. The goal is to increase the productivity and incomes of small-to-medium scale dairy farmers in the Peruvian Sierra, through adoption of improved milk production, handling and processing practices, supported by more effective research and extension systems.

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The use of harvested beet is typically still cheap and the high drymatter sugar beet bulbs last in a windrow for 3-6 months.

89

Coping with copper deficiency Copper is an integral part of many enzymes, co-factors and proteins, so copper deficiency has been associated with a wide range of clinical signs from anaemia through poor reproduction to bone disorders, Massey University vet Richard Laven reports.

What signs are associated with copper deficiency in cattle?

In cattle, copper deficiency has been blamed for a huge range of problems; for many of these the evidence that copper deficiency plays a significant role is limited to non-existent. It thus pays to be familiar with the signs that have been proven to be related to copper deficiency, so that you can be sceptical when someone suggests that an unusual syndrome is caused by copper deficiency, especially when they suggest this without evidence.

Causes of copper deficiency Copper deficiency can be primary, where there is simply insufficient copper intake to meet the animals’ needs, or secondary, where other minerals, particularly molybdenum (Mo) and sulphur interfere with and reduce copper absorption. Secondary copper deficiency is associated with more clinical signs than primary deficiency, probably because the deficiency resulting from Mo intake results in insufficient copper at more critical sites.

Diagnosis of copper deficiency If animals show clinical signs that are strongly suggestive of copper deficiency, such as poor growth, then a simple blood test of ~10 affected animals should be diagnostic.

Blood samples are useful in this case because for clinical deficiency to be present, concentrations of copper in the blood should also have reduced.

However, herd health programmes should aim to prevent deficiency using regular monitoring. In such cases monitoring of blood copper is not effective as changes often occur

only after productivity has decreased.

In such cases there are two methods of determining if supplementation is needed. The first is measuring liver copper concentration; this gives you a guide to the level of copper storage and allows you to alter supplementation to meet requirements without risking animals becoming deficient.

Particularly in adult cattle, the focus is on maintaining productivity (milk and fertility), so supplementation and monitoring is a form of insurance, where you maintain liver copper concentrations at levels high enough to minimise the risk of deficiency. Ensuring that liver copper concentrations in late/ autumn early winter are around 400 µmol/kg fresh weight will minimise the risk of copper deficiency.

Liver copper concentrations higher than this are sometimes advocated on the basis that more is better. There is no evidence that increasing liver copper concentrations to >400 µmol/kg fresh weight improves productivity; furthermore, concentrations >2000 µmol/kg fresh weight are associated with clinical copper toxicity and concentrations >1000 µmol/kg fresh weight are associated with detectable liver damage.

There are two ways of measuring liver copper concentration. The first is liver biopsy in the live cow. To get accurate results when monitoring the need for supplementation you need to biopsy 12 cows. Measuring fewer cows means you are less likely to get a representative result. Every group on a different feeding regime (e.g. milking herd vs R2s) needs to be sampled separately with 12 per group.

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Alternatively, you can sample cull cows (obviously this is not suitable for young stock). Testing 12 cull cows is cheaper and, often, easier than liver biopsy, gives a good estimate of Cu status and should be the standard method of assessment of the copper status of the milking herd.

The second method of confirming that copper supplementation is needed is a farm level trial, where some of the animals are treated and some are not. This needs proper planning, with randomisation, blinding and careful data collection, but if done properly it does provide the definitive answer to whether copper supplementation is likely to be of benefit.

Supplementation of copper There are three methods of copper supplementation available: i) injection; ii) dietary supplementation; and iii) slow release bolus. All have their advantages and disadvantages. Injections require minimal handling and, if done with care, it is simple to ensure that all animals are supplemented.

Injections are cheaper than boluses, but the cost/days of effective supplementation may be higher depending upon how deficient the cattle are.

The main issues with copper injections are side effects such as tissue irritation and the potential to reduce fertility if used too close to mating. In addition, in animals where toxicity is potentially an issue, then copper injections may be more of an issue than oral supplementation as all of the injection is transferred to the liver over a relatively short period of time.

Clinical signs associated with copper deficiency

Evidence base in cattle

Nervous disease

Ataxia (swayback) because of failure to properly form nerves.

No evidence in cattle of neurological disease caused by copper deficiency – seen only in sheep-goats-deer.

Skin and hair changes

Changes in hair structure (thin and harsh) and colour (brownish tinge to complete loss).

Often only clinical sign of deficiency. However, it can be unrelated. You need more evidence than just coat colour.

Anaemia

Signs are often vague – ill thrift, poor production.

Prolonged deficiency can produce anaemia, but other causes need to be ruled out

Bone disorders

Uneven bone growth – lameness, general ill-thrift and spontaneous fractures.

Clear link in cattle. However, spontaneous humeral fractures in dairy heifers are probably because of general malnutrition rather than specifically copper deficiency.

Connective tissue disorders

May contribute to lameness, also associated with ‘flying scapula’ – dislocated shoulder blade.

Natural cases are rare. Has been linked to dropped hock syndrome (sciatic palsy), but the evidence is far from convincing.

Infertility

Delayed oestrus after calving and reduced oestrus behaviour.

The evidence is equivocal. In adult cattle many large-scale studies show no benefit. Could be more important in young stock. Treatment with injectable copper too close to breeding has been shown to decrease fertility.

Susceptibility to infection

Increased risk of diseases such as mastitis and respiratory disease.

Clear links with copper deficiency, but response to copper supplementation is a better test than blood or liver copper.

Growth retardation

Reduced growth rate without other clinical signs – especially on high Mo diets.

Other causes of growth retardation need to be eliminated before implicating copper deficiency.

Milk production

Reduced milk yields.

The evidence for a direct effect is equivocal. May be secondary to reduced immune function.

Diarrhoea

Diarrhoea on animals on high Mo diets or pastures (‘peat scours’).

Common clinical finding even before body copper is significantly reduced.

Dietary supplementation is an effective method of increasing copper status and, particularly if copper sulphate is used, often the most economic method. However, dietary supplementation works best when it is given on a continuous basis, and this is not feasible on many farms, particularly in young stock which is the group of cattle most at risk from copper deficiency.

Slow-release boluses provide consistent copper release for a prolonged period of time. These boluses provide a simple one-off treatment for preventing copper deficiency. They are particularly useful in young stock which are not being supplemented; however they are also useful for supplementing adult cattle, especially dry cows. Bolusing requires good facilities and good handling skills, and boluses tend to be the most expensive method of supplementation (on a per treated animal basis), but the impact of both of these issues is reduced by the length of action of boluses The choice of product is best made on an individual farm basis.

Choose the supplementation method that suits you best. Whatever method you use you need to be wary of copper toxicity, check copper levels before supplementation. This is especially important in milking cows as feeding palm kernel can significantly increase liver copper and thus the risk of copper toxicity especially when copper supplementation Academy regimes are added on top of feeding palm kernel.

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Table 1: Suggested problems associated with insufficient copper supplementation

DAIRY 101

Drying Miss Daisy Cheyenne Stein cheyenne.stein@nzx.com @CheyStein2

The dry period is a chance for farmers to take a breather before calving gets under way, and is a crucial time for mastitis treatment and prevention.

“The process isn’t essential,” Dr Richard Laven, associate professor in production animal health at Massey University, says.

“There are some nice reports coming out at the moment that in high-producing herds, not drying cows off at all and carrying on milking during the ‘dry period’ doesn’t cause any problems for the cow.

Their peak milk tends to be lower and they have fewer problems, so that might be something we see more of in the future.

The only disadvantage for that is around mastitis control.”

When to dry off

Making the decision to dry-off can be tricky, and this year, there are many factors to consider. Following the standard DairyNZ recommendations of drying cows as soon as their production reaches five litres or less a day might suit some but if you’re lacking feed, drying-off early is your best bet, Laven says.

“You want to get the cows into a good body condition score (BCS) for calving, so if you don’t have the feed then dry them off early. It’s going to save you money, rather than trying to stretch out the lactation and then struggling to get body condition on them with no feed.”

There can be a knock-on effect into the next lactation if cows don’t reach target BCS. “Your cows aren’t going to produce as much, so your income’s going to drop.

They’re not going to reproduce as well so you can get a knock-on effect for the next two or even three years.”

Drying-off needs to happen abruptly.

Switching to once-a-day milking has no benefits and increases the risk of mastitis during the dry-off period.

Drying-off properly

Historically drying-off has included large amounts of antibiotics and teat sealants but Laven says there is a shift to using teat sealants on their own. The process of the udder shutting up shop includes the natural creation of a keratin plug in the teat. However, this plug doesn’t form 92

immediately so teat sealants provide a physical barrier of defence from new infections immediately after drying-off and before calving while the udder is ‘waking up’ again.

“As a profession in the veterinary industry there is a push towards using less antibiotics and not using antibiotics on uninfected cows. So with using teat sealants alone, hygiene has to be really good.”

There have been many stories in the past of farmers having problems with mastitis because of teat seals, but often the issue of poor hygiene was masked by using an antibiotic.

“People were getting away with it because they’re putting in bacteria and antibiotics at the same time. World-wide we have to get better at administering dry cow therapy.”

Infections because of poor hygiene can also cause the mammary gland involution process to slow down, giving disease-causing bacteria more chance to get in.

Whether you’re drying off a small or large herd it’s important to administer dry-cow therapy after milking so you’re not trying to do it while milking cows.

Teat spraying after treatment to clean the teat and standing for an hour in a clean environment before putting them back on the paddock is important, particularly when conditions are wet.

“Restricting feed intake as well is important – less feed, less milk produced – and it helps reduce leakage. After this you really just need to leave the cow alone as much as possible.”

Maintenance feeding for the first 7-14 days after drying off is normally about 8 kg DM/day.

Making the most of your money

In low payout years it’s easy to run a red pen through certain items on the list, but dry-cow therapy shouldn’t be one.

Herd testing is the best thing to do to save money with dry cows because it allows farmers to select and treat the animals that require it, Laven says.

“It’s not expensive per-cow. Get a herd test, look at her mastitis history, cell counts everything. If you have a bulk cell count over 200,000 for cows and 150,000 for heifers, then you can choose which cows to give antibiotics to.”

Laven says on No 4 Massey dairy farm

they are expecting to use antibiotics on 40-50 cows out of a herd of 600.

“The milk price would have to be about $2/kg milksolids (MS) before dry cow therapy in the right cows is not economically effective.”

Taking the opportunity to cull high cell count cows is important, no matter how well-producing they are.

“She would have to be producing at least four times the herd average in order for her to be worth keeping. If you combine selective dry cow therapy and getting rid of high cell count cows, then you’ve got a low risk of spreading it to the rest of the herd and saving money.”

Selective antibiotic dry cow therapy and whole-herd teat sealing is the direction Laven would like to see the industry go.

“If you have 10-15% of your cows that usually get mastitis in the period immediately after calving, then teat sealing pays for itself quite nicely. But if people want to save money by not teat sealing the whole herd then using combination therapy on selected dry cows and being less restrictive about it is an option.”

Talking to your vet is important when exploring options for dry-cow therapy, and reducing antibiotics as a go-to remedy means better advice is being given.

“It’s a win for everybody – farmers aren’t having to spend as much on antibiotics and vets are relying on it less, meaning farmers get better advice to help reduce mastitis and save them money.”

Key recommendations for the dry period • Pick a drying-off date • Herd test about a month out from drying-off to select cows to target and choose a strategy with the help of your vet • Cull high cell count cows • Dry off abruptly • Administer chosen dry-cow therapy after last milking • Hygiene • Teat spray • Leave in a clean environment for an hour before putting back onto pasture • Feed at maintenance for the first 7-14 days after dry-off

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Mammary gland magic: The dry period

During drying-off the mammary gland undergoes the process of involution – a process by which the gland returns to its non-lactating state. This function is regulated by environmental and hormonal controls. The dry period is important for udder heath, particularly in terms of mastitis control.

“The shut down and immune response you get from drying-off gives you a much better cure for infection. So if you have mastitis you need the dry period to get that cure, and using antibiotics on top of that works much better than just giving antibiotics and continuing milking.”

‘People were getting away with it because they’re putting in bacteria and antibiotics at the same time.’

During lactation the primary function of the mammary gland is one of constant synthesis and milk secretion. During the dry period it goes through two distinct stages before involution is complete.

1) Gradual decline in milk production: This stage follows peak milk yield and is a result of programmed cell death – apoptosis. Fewer mammary cells, less milk produced.

In the first few days of the dry period, the synthesis and secretion of milk constituents such as casein, lactose and fat steadily decrease and the alveolar cells start to shrink in size.

Concentrations of immunoglobulins, lactoferrin, sodium and chloride bicarbonate and serum albumin increase as lactation gradually ceases.

2) Abrupt cessation of milk: The process of cessation of milk takes about two weeks. During this time the mammary gland continues to synthesise and secrete milk, which accumulates in the gland. The build-up in pressure in the udder along with chemical feedback by milk constituents can lead to the loss of secretory function, meaning no more milk is produced and the cow is “dry”.

“It’s a real shut down and reduction in the size and activity of the milk producing cells – there are changes in milk composition and things like lactoferrin and then the formation of the natural keratin teat seal.”

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

93

STATE OF PLAY

The final chapter of the threat to New Zealand agriculture, exports and the economy was played out at the Auckland High Court.

Random actions and unpleasant surprises Glenys Christian Agriculture, particularly dairying, is changeable enough without something completely random popping up. But that’s exactly what happened when Jeremy Hamish Kerr, whatever his reasons, decided to threaten to contaminate infant milk powder with 1080 poison.

There was plenty of criticism of the decision to keep the threats secret for some months, then at police actions when it came to interviewing 1080 protestors.

But it emerged during the disputed facts hearing at the Auckland High Court last month that Kerr had gone out of his way to make it appear as though his letters came from groups opposed to the poison, not someone like himself, receiving a substantial income from a rival product.

Much was made of his finances. On the one hand the Crown said royalties he had been receiving from Feratox, the poison he developed, had fallen off, and on the other the defence said he wasn’t under financial duress and his behaviour was completely irrational.

Chief High Court Judge Geoffrey

Venning decided financial motivation was at play, although it was hard to quantify exactly what boost to his income Kerr hoped to receive.

Feratox could only be used for ground baiting and a new aerially applied poison would have to be developed rapidly if 1080 use was curtailed. But in the interim there would be greater sales of his product.

His living expenses were well within his income but he was putting considerable amounts of money into a start-up business, Nature Support, using possum skins to alleviate back pain in particular.

Little return was being seen from that business and in order to keep it going Kerr obtained more than $100,000 of loans from a friend and helped himself to up to $50,000 he persuaded his elderly mother was a gift to her grandchildren.

Forensic accountant Shane Hussey told the court Kerr was in a relatively comfortable position, and always had the option of not developing products further and just filling orders for those already on the market.

Other employment opportunities were available to earn him up to an estimated $60,000 a year. He could have borrowed money from his bank or his two sons, and he could even have sold his entitlement to receive royalties from the sale of Feratox.

One son, Tim, a chartered accountant, who now has power of attorney over his father’s affairs, told the court if Nature

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Support had been liquidated his father would have had no liabilities. He had negotiated the sale of $30,000 worth of equipment since his father’s arrest.

While Hussey didn’t feel Kerr was under undue or dire stress, he certainly was juggling his finances, he said.

Kerr knew who his creditors were and had a cash book.

“He was ahead of many people,” he said.

“And he had options to ease his financial position to keep his creditors current.”

Hussey said many businesses were not able to pay on the 20th of the month following presentation of an invoice, and then “the squeaky wheel gets the oil”.

“We might see more of it in New Zealand with Fonterra changing its terms of payments and living off people’s credit as well,” he said.

For Fonterra suppliers the emails they were sent not long after Kerr’s arrest, requesting a 10% cut in their charges and changing the co-op’s payment terms to them from the 20th of the month following to 61 days from the end of the month in which their invoice was received, came out of the blue. Most were small-scale businesses and had long and valued associations with Fonterra and the legacy companies from which it was formed.

A big part of their dealing with a large co-operative, owned by 10,000 farmershareholders, some of whom also doubled as suppliers, was the expectation they would see out both good and bad times together.

So what appeared to many to be a quite random change in the way Fonterra did business came as a most unpleasant shock.

Protests were all in vain for many suppliers. Others won a partial reprieve, but for all the bad taste remained.

At Fonterra’s recent half-year results announcement there were apologies from the chairman and chief executive for lack of communication and a promise that appropriate measures were now being taken to clarify the situation.

But the damage had been done. In its email to suppliers Fonterra’s chief financial officer, Lukas Paravicini, said it would only achieve its full performance potential if it had efficient supplier relationships and strong alignment with those suppliers.

Its much improved financial position and early dividend payment plans for struggling farmers are good news at a time when there’s little about.

But by putting long-standing relationships under strain Fonterra might have weakened the very community standing it’s previously gone to great lengths to build, and needs now more than ever.

95

DEMONSTRATION FARM

Back to the future Brian Hockings At the end of the last financial year, Graeme Pitman, the consultant and supervisor of the Stratford Demonstration Farm, completed a comprehensive review of the recently completed trial there. At some stage I will give a summary of this.

However, because the immediate focus and concern in the dairy industry is the $3.90 payout forecast I will use some data from the trial to suggest a way forward for the industry, given all the indications are for no significant price recovery in the immediate future.

The trial compared the economic and environmental effects of two farming systems – an intensive system running four Jersey cows a hectare and relying substantially on bought-in feed (primarily palm kernel), and a more traditional, low-cost system with a stocking rate of 2.9 cows/ha, aimed at all-pasture feeding with feed bought-in only in an unseasonal emergency. Over three years, at the peak payout of $8.40 the intensive system was the most profitable with an economic farm surplus (EFS) of $5342/ha, compared to $4358 for the low-cost group, whereas for the final 2014-15 season, when payout averaged $4.40/kg milksolids (MS), the situation reversed, with the intensive system showing a negative EFS of 96

-$358/ha compared with +$594 for the low-cost system. Further analysis established the point of economic equality between the two systems was a $6 payout.

With these figures as background I’ll repeat some comments I’ve made frequently, but which have probably gained little credence against the euphoria engendered by a vista of ever-increasingly bountiful payouts projecting endlessly into the future.

‘In good times some service industries jump on the bandwagon and increase their charges and prices. Unfortunately there is generally little or no movement the other way when prices decline.’

The strength of New Zealand farming is we are pastoral farmers. Sure, we might be dairy farmers, sheep farmers, beef farmers or deer farmers as well, but while we might be good at it, livestock husbandry is not where our strength and comparative advantage is. In other parts of the world livestock farmers can get productive performances from their animals equal to or superior to us. What we can do,

and do far better than anyone else, is produce quality pasture drymatter at very low cost. This basic animal feed enables us to profitably produce low-cost animal products, despite the handicap of generally higher transport and marketing costs for the finished products.

To reiterate, we are pastoral farmers.

Our road to international competitiveness is to produce our pasture drymatter and develop systems and strategies to convert it to the most saleable and profitable animal product. To repeat my longstanding mantra, we can produce quality pasture for less than 5 cents/kg drymatter (DM), while the cheapest bought-in feed is unlikely to be less than 30 cents. This might be an acceptable cost for dairy farmers in industrial-based economies with industrial farming systems, but for us to attempt to compete with this is to effectively diminish, if not completely eliminate, our natural advantage.

There has been discussion in the media recently about the cost of production for dairy farmers, with estimates varying but generally in the $4-$5 range. This is, of course, nonsense. I have no doubt these estimates have come from analysis of the financial records of large samples of dairy farmers, so what we have is an average cost being incurred in the production of milk, not the actual working cost. Previously I have drawn the comparison with the

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Tourists don’t come to New Zealand to see polluted rivers and streams. collapse of the kiwifruit boom in the 1980s and will do so again. At its height in the ‘80s kiwifruit grossed about $15/ tray. The common rule of thumb for the economic profile of a farming business of a third, a third, a third (ie 1/3 costs,1/3 debt servicing, 1/3 profit taking) was considered appropriate at that time, so $5/tray was considered the cost of production.

However, when prices collapsed and $5 became the gross income per tray, many growers discovered that, by challenging and modifying or eliminating “essential” management practices, kiwifruit could be produced at a cost of about $2 a tray, with little or no reduction in yield. A similar scenario has developed in the dairy industry. A continuing increase in already buoyant prices promoted degrees of luxury spending, and they became locked into the system and considered essential. Closer examination reveals they are not. A good example of this would be vets reporting significantly reduced CIDR sales last spring. Also, in good times some service industries jump on the bandwagon and increase their charges and prices.

Unfortunately there is generally little or no movement the other way when prices decline.

My first experience of dairy farming was working on a 65-cow dairy farm with a basic walk-through dairy. Equipment was limited to a Fergusson TEA 24 tractor and

transport tray, a sickle-bar mower and a finger-wheel hay rake.

That farm operated quite profitably, although with very different costs and prices, and a principle reason was the very low cost structure.

As philosopher George Santayana famously stated, “Those who cannot remember the past are condemned to repeat it.”

The past, in this instance, is the gradual and insidious intensification of dairying, which has increasingly taken us away from our traditional strength of low-cost dairying.

The catch word of “sustainability” has, in recent years, become increasingly prominent – and rightly so. There can be little doubt that with the present payout levels, intensive dairying is, in economic terms, unsustainable. Sustainability also applies to environmental protection and there can be no argument that intensive dairying has contributed to at least some

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

environmental degradation. Dairy farmers certainly owe it to their fellow New Zealanders to continue trying to improve this situation. I am sure this will happen because I believe the majority of farmers care for their environment. The old argument that dairying is the backbone of the economy and therefore should be excused was always a cop-out and is becoming increasingly specious as tourism now appears to be our major industry – and no tourist comes here to look at polluted waterways.

With the very real prospect of a significant period of depressed dairy prices, the way forward must be to find ways to de-intensify, to find ways to recapture our low-cost system and give equal or better profitability – in other words back to the future. In the next issue I will look at the history of intensification, and discuss practices and ideas from the past that could be adopted or adapted for the future.

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SECURITY FOR PEACE OF MIND Tim McVeagh tim.mcv@gmail.com Times are tough enough for dairy farmers without being the victim of theft or sabotage. The open-door nature and sometimes the remoteness of dairies means they can be regarded as easy pickings.

While tools like cordless grinders have made burglary easier, security systems will often prevent crime, or allow the perpetrators to be caught and goods recovered.

Identifying the risk areas is the first step to a security system. There are six common high-risk areas: • The farm dairy: Burglars take computers, tools, and other easily removed and saleable items. Even more cumbersome and less easily removed items like hot water cylinders are stolen.

• Milk sabotage: This can occur at a number of places in the milk system from the cluster to the vat, even including yet-to-be-used milk filter papers.

• Equipment from sheds near to the dairy: Workshops are often left open and tools like chain saws and power tools are easy pickings.

• Vehicles: Quads have been targeted for many years but two-wheelers, side-bysides, and four-wheel-drives are not exempt from being stolen.

• Fuel: Diesel and petrol are common targets for thieves.

• Livestock: Calves have been taken from calf sheds.

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The Security Tool Kit: Point-to-point beams, motion sensors, and cameras are the major items in the security kit, and many firms will provide and install these. Police advice is to ask to see their Security Technician or Security Consultant Licence or Certificate of Approval, which they must have.

Point-to-point infra-red beams detect objects passing through them and are usually set across gateways and tanker tracks. Beam spans of up to 200 metres are available.

They can be solar or battery-powered.

With a booster the radio signal to the base station in the house can be up to three kilometres. Four beams can be monitored by one base station, with coded beeps indicating which beam has been broken.

Breaking the beam can also switch on exterior lighting or start a camera. A message can also be sent to a smartphone.

Mounting the beam about one metre off the ground means dogs and possums don’t trigger it, but vehicles and people entering, and cows breaking out, do.

Parabeam supply a two-beam system that ignores trucks and milk tankers while still being triggered by cattle, cars, and vans. They do this by a high beam crossing the tanker track diagonally, which is broken by a tanker before the lower beam, telling the base unit to ignore this intrusion.

A basic system from Parabeam, made in New Zealand, for a short range solar-battery system including the base station retails at $549, and can be installed by farmers.

Motion sensors can be set up inside or outside where detection of people is desirable. Their source is passive infra-red (PIR) that relies on changes in heat, so can be triggered by animals like possums, birds and dogs.

They are commonly battery-powered and the batteries can last three to five years. The more expensive units have a microwave detector as well, reducing false alerts.

They can trigger an alarm, which can have a delay to give staff time to deactivate it at a key pad. They can also be monitored through the mobile internet data network.

Because they can have a high false alert rate, they are more suited to triggering flood lights or cameras than alerting farm staff.

A camera system might not prevent theft, but can detect it so action can be taken at the time, and record it so the crooks can be caught and goods recovered.

There is a wide quality range of cameras, with the better and more expensive being full high-definition, with the clarity to read number plates and identify faces in challenging light conditions. As daylight fades, the cameras switch from colour to black-and-white, with an infrared source in the camera providing light. If lighting is activated by a sensor or beam, colours of objects like vehicles can be seen. Good lighting at night means good quality footage.

“Poorer quality systems are not highdefinition as they may use a charge couple device (CCD) of a snap camera. A snap

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Security starts with a warning. This one at a tanker track entrance warns those entering they might have sounded an alarm and staff will be checking them out, and they might be on camera. camera is not designed to run 24-7, so they don’t last as long and the image quality is not as good. They may be OK in daylight but not at night,” Geoff Tattle, ex-dairy farmer and now managing director of Couchman Alarms, said.

Cameras can be hidden or obvious.

Obvious cameras are more likely to be vandalised. Very small, unobtrusive cameras generally have poorer picture quality than obvious cameras.

Pan, Tilt, Zoom (PTZ) cameras can be mounted at a vantage point to scan 360 degrees. They can either view different areas on a programmed basis, or be manually controlled to look at a particular scene that needs further investigation.

They are comparatively expensive.

“They have been considered for calving pads to monitor calving from the house, but for the same money four wide-angle cameras could be mounted, one at each corner of the pad”, Tattle said.

Remote cameras are usually batterypowered, so these and the SD card must be maintained. Ironically, they can be stolen. While most operate on a storeand-collect basis, some send footage to smartphones.

They can have wireless links to the house, but this must be line-of-sight and less then about 2km. With out-of-sight transmission, a broadband connection or wireless broadband connection to the shed is needed.

Camera recording can be 24-7 or initiated by a point-to-point beam, independent motion sensor or the camera’s own motion sensor. Notification of the camera being triggered can be by internet or smartphone. Time and date stamping will make the recordings more valuable when used in evidence.

Commonly up to two months of footage is stored, and snapshots can be taken from reviewed footage.

While farmers can set up their camera system, some expertise is needed to get the best locations, angles, and lighting.

The system must be tailor-made to the situation at the best price.

A four-channel recorder with two cameras can cost about $3000 + GST installed. An extra two or six cameras can be added.

Cameras should be positioned where there is little movement, because this can initiate recording, although some cameras can be programmed to mask out movement of objects like trees.

While beams, sensors and cameras provide a comprehensive security system, there are a number of items or actions that will help prevent theft or help in recovering stolen items. Some of these cost nothing, and some are just common sense.

A security warning sign at the gate lets the bad guys know you won’t be easy pickings.

Dummy cameras from Uniden, at a

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

cost of about $30, can be a significant deterrent.

Locks on cupboards and doors are a pain but where public access is easy they might save being burgled. Combination locks eliminate the hassle of keys for staff.

A dog, resident at the dairy, that barks at visitors can act as an alarm if the barking is within earshot of the house.

Firearms, by law, must be locked away.

These usually disappear in a burglary.

Mark items to confirm ownership, and record serial numbers. The website www.snap.org.nz, authorised by NZ Police, records valuable items and their identification.

Locks on quads, two-wheelers, and UTVs are the only way to deter their theft. Disc locks are available for brake discs on twowheelers. Alarm locks that activate when moved will deter quad theft. Both these are made by Oxford Products. There are also specialised quad security devices like MacPhee Engineering’s Quad Loc. Remember to let neighbours and friends know if you are going to be away. They are your extra eyes and ears.

Note any suspicious activity like unusual vehicles or people in the area and let your local police know.

For other useful security advice and information, visit www.police.govt.nz/rural and also www.fmg.co.nz/advice/advice/ruraltheft.

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DairySolutions

Fodder beet block fills nutritional gap

Fodder beet is an increasingly popular winter crop for beef and dairy cattle because of the large amounts of drymatter it produces, but it has nutritional gaps, Seales Winslow product development manager Jackie Aveling says.

High-sugar content makes fodder beet very palatable to stock, but it has sub-optimal protein content (13%), low fibre levels (less than 20%) and is low in phosphorus, magnesium and essential trace elements.

To compensate, the company has produced a specially formulated Cattle Fodder Beet Block available throughout New Zealand following onfarm testing.

The new block helps to overcome phosphorus deficiency and balance other minerals like magnesium and essential trace elements that are lacking in cows and

heifers on a fodder beet diet.

“A diet deficient in these minerals, particularly phosphorus, can lead to ‘creeper cows’ in the short term, and longer-term difficulties including poor milk production, reduced appetite, weight loss and poor reproductive performance,” Aveling said.

Monitor helps control milk vat cooling

An all-in-one vat monitor and controller allowing dairy farmers to have confidence their milk is cooled and held to temperature has been launched by Tru-Test.

Vat Manager Plus helps meet tougher onfarm cooling standards requiring raw milk to be cooled colder and faster.

Vat Manager Plus regulates temperature and agitation as well as monitoring critical incoming and in-vat milk temperatures and rates of temperature change. The unit, with its supporting online interface, holds memory for data recording, storage and audit requirements and provides reliable timely notification for milk cooling issues inside and outside of the vat.

Text messages and emails generated from Vat Manager Plus to multiple devices alert farmers if their milk cooling is not on track.

Early notification includes milk that is too hot, too cold or taking too long to cool, as well as wash, power and hardware faults. Tru-

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“Current practice to reduce the chance of phosphate deficiencies developing in stock grazed on fodder beet is to dust the crop with dicalcium phosphate (DCP) or use a slurry of the compound on silage or straw. However, these practices can be dusty, time-consuming, wasteful and the intake is variable.”

The new blocks come in 25kg tubs that are placed at the crop face under the fence in front of the cows.

Available from merchant retail stores, the block pays its way in terms of convenience, labour time saved, a reduction in downer costs and potential longer-term stock problems, Aveling said.

It also compares favourably with the price of a single intravenous downer cow treatment. The recommended block-tocow ratio was 1:25.

Test Group’s general manager New Zealand, Verne Atmore, said cooling problems could be notoriously difficult to detect and were often caused by sheer forgetfulness of flicking a switch, isolated power outages or hidden pre-cooling or vat problems.

“Discovery of milk cooling issues regularly happens at tanker pick-up or when the farmer receives a temperature grade. Farmers bear the cost of detecting poorly chilled milk late in the process.

They receive no payment for rejected milk and their milk production efforts go down the drain.

“Vat Manager Plus will help make latent cooling issues visible so farmers can investigate potential problems early. With tighter control of onfarm cooling and early response to issues as they happen, farmers will have better control over the quality of milk presented for sale and will maximise the payment for their efforts,” Atmore said.

“With a significant uptake of Vat Manager Plus and effective milk cooling monitoring generally we can see flow-on effects into the sector such as a greater national milk yield at current inputs and removal of waste from the dairy supply chain. In the bigger picture, we are moving towards solutions that show NZ at the global forefront of responsible dairying.”

Vat Manager Plus has been developed and manufactured in NZ drawing on Tru-Test’s technical excellence in agricultural weighing and EID systems, dairy refrigeration and data management systems, Atmore said.

It features a robust vat-side unit with temperature display easily viewable at a distance, in low light and extreme brightness, and includes high-specification system components and temperature probes to deliver superior accuracy. A 30-day history was accessible from the vat-side unit with extended online history.

Looking forward, Tru-Test has signalled a market release of Vat Manager Auto, a premium monitor-controller that will automatically turn on vat and side wall refrigeration and provide vat volume alerts.

Vat Manager Plus has a recommended retail price of $1795 plus installation.

More: visit https://www.youtube.com/watch?v=mUw0KVMJGBI Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

Polaris General to launch attack Polaris General has issued orders to attack and is throwing a massive arsenal behind the bold plan. A call to arms has been issued to hunters, adventurers and farmers, and the General has what it takes.

The new 100HP Polaris General sidex-side vehicle is a true 5-star off-road utility vehicle blending the hard working attributes of the market-dominating Ranger vehicles with the championshipwinning Polaris RZR sports series. The growing recreational hunting and outdoor market for side-x-sides has seen serious users seeking out this exact vehicle and Polaris has delivered in spades. Hunters need a vehicle that can get over rugged ground at a reasonable clip and in comfort.

The work side of the Rangers has been carried over to the General with a 272kg

rated dump box, a towing rating of 680kg via a standard 2” receiver, and the ease of electric power steering. Engine braking system and all-wheel drive provide seamless operation to provide optimal traction and control for the given terrain.

The sporting pedigree of the RZR is blended with the practicality of the Ranger by increasing suspension travel to 311mm front and 335mm at the rear for the General (254mm on Ranger) and sitting high on independent double wishbones at each corner to provide a superb 305mm ground clearance plus anti-sway bars at the front and rear. This is all designed to allow faster travel in greater comfort over more challenging terrain and is further supported with full body underside skidplate. All versions of the General enjoy

the convenience and protection from passing scrub afforded by half-doors as standard.

Two versions of the General are destined for New Zealand shores by late April, the Premium at an RRP of $26,495 including GST and the Deluxe at $29,995 inc. GST. Both versions include a 4500lb winch as standard, sport low-profile front bumper and 14” alloy wheels with tough 8-ply Dirt Commander tyres. The Deluxe takes it up a level in the performance stakes with the addition of Fox Performance Series Podium shocks front and rear, and the comfort of a sport roof, the convenience of a convex mirror and the audio bling of the General MTX Premium Soundbar with bluetooth connection.

A full range of accessories is available to further customise the General including a choice of full and partial cabins, additional lighting, a heater and gun scabbards.

There are more than 30 General-specific accessories in the range, and another 90 common-fit items to make it the ultimate hunting or farming all-rounder in allweather comfort.

To join the hunt with the all-new Polaris General, see your local Polaris dealer – locations at www.polaris.co.nz

If it weren’t for your gumboots... you’d get a t-shirt

Traditionally gumboots came up to just below the knee. However, in 1958 staff at Marathon Rubber Footwear in Christchurch – the forerunner to Skellerup – created a shorter boot and on October 21 that year the first pair of Red Band men’s gumboots rolled off the production line.

The Red Bands became an instant hit around the country.

Red Band women’s and children’s gumboots were introduced in 1997 and in 2011 the Red Band Junior completed the range. Since then the Red Band brand has grown to include leather work boots,

socks, the popular Red Bandals, caps, beanies and t-shirts.

Recently Skellerup Facebook fans had the chance to select the next t-shirt design and more than 1400 voted in favour of the New Zealand map.

Made from 100% combed cotton (for a softer feel) the new Red Band NZ Tees are now available from leading rural retailers nationwide.

Available in men’s size small–3XL, RRP of $29.99 For more information visit www.redband.co.nz

FARM NUTRITION SOLUTIONS 0800 SEAWEED

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

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PROPERTY

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GET A

GREAT START Anne Hardie verbatim@xtra.co.nz

Y

oung dairy farmers looking for their first farm have been heading to Northland for decades to find an affordable step into the industry, and a 122 hectare property near Whangarei slots right into that tradition.

Lying on the edge of the former Hikurangi Swamp, about 15 minutes from the city, gives it the balance of fertile flats as well as 30ha of hill country that is used mostly for calves and dry cows.

Its top production to date is 80,000kg milksolids (MS), or just over 860kg MS/ha, yet its rateable valuation is $2.12 million.

Add four titles into the package, good infrastructure, a 1989 five-bedroom homestead and a worker’s cottage, and Nicky Reid from Farmlands Real Estate says it becomes a great opportunity for a first-farm buyer to walk in and carry on milking.

“And at a level that you won’t get in many different areas of the country. In the Waikato you would only get a lifestyle block for that.”

Reid says the figures speak for themselves. The Real Estate Institute of New Zealand recorded 24 dairy farm sales in Northland during the 2014-2015 season and 10 of those sold for less than $2 million, averaging $15,000 a hectare.

The average milk production of those 10 farms was 61,000kg MS and the highest 115,000kg MS. “That’s a great return on investment.

This is a massive opportunity for our next generation of farmers who have been priced out of the market in higher-value areas.

“And Northland offers a great lifestyle – the coast is never far away and the snapper fishing is good. Then there is the diving, hunting and duckshooting.”

The farm has some of the most fertile soils in Northland and pastures that have been renovated, including 6ha now in chicory, red clover and a Hunter annual ryegrass which has lasted two years.

Reid describes it as an “almost grassonly” system, with no bought-in supplements most years, but 12 tonnes of palm kernel on hand this year in case it’s needed. Silage is made on the farm each year and last year 250 bales were made.

Most of the local dairy farms grow maize and produce “massive” crops, so Reid says it’s something that could be added into the system because its already producing 870kg MS/ha under a conservative grassonly system.

“We have a longer maize season and therefore some of the best maize crops grown in NZ. And the grass grows right through the winter here. It’s not often the soil temperature drops low enough to stop it.”

Calves stay on the farm until May and are then grazed off until they return to the farm as R2s in May. The vendor usually calves 210 cows from July 10 and is milking 184 this autumn.

The furthest walk for the herd is just 25 to 30 minutes to the 20-aside dairy and milking takes about 75 minutes, making the farm easily run by one person.

Compliant storage is in place for effluent and once a year a contractor completely empties the ponds. The vendor also owns a half-share in an effluent cart with a neighbour, which can be used when needed.

Races throughout the farm are in good condition and metalled with brown rock from a quarry 4km up the road. Limestone is also available locally, while lime for fertiliser is just 8km away.

The races connect 54 paddocks on the flat land that makes up the milking platform which has had a new water system installed to troughs. Water is pumped from the Wairua River, with a UV water treatment plant for the dairy, while stock water heads through 32mm main lines and then 25mm lines to the troughs.

The homestead has panoramic views over the farm and across the Hikurangi Plains, while the cottage built in 2003 is a one-bedroom dwelling with an internalaccess garage that could be converted to a second bedroom. Other buildings on the farm include a good round barn for calf rearing, and a larger fertiliser storage and implement shed.

Stock and machinery are available at valuation and the farm has 82,130 Fonterra shares. The farm will be auctioned on April 14. It can be viewed at www. farmlandsrealestate.co.nz IDDG1004. For further information contact Reid on 021 103 6277.

PROPERTY

Go West

Put simply, a 115ha dairy farm for sale near Westport has a lot going for it that starts with its location and extends to its flipped soils, good infrastructure and Westland Milk Products shares included in the price.

All that for $2.8 million makes it a great first farm opportunity, Shari McLaughlin from Farmlands reckons.

“It’s a solid first farm with motivated retiring vendors, good location and really good facilities - in a nutshell.”

The farm lies a few kilometres southwest of Westport on good soils of sandy loam on rolling contour that has been largely flipped over the years to produce a freedraining result ideal for wintering the herd. The vendor winters the 280-cow herd, using winter crops of turnips and rape.

Last season the farm produced 107,610kg milksolids (MS) and 111,811kg MS the season before, with about 100 tonnes of palm kernel bought in each year.

About 100 round bales of balage are made off-farm, while 4ha of summer turnips is grown on the milking platform. As part of

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the farming policy, calves head off the farm to grazing and R2 heifers come back at the end of July.

A central race connects the 43 main paddocks with the 36-aside herringbone dairy that has a meal feeding system in place which hasn’t been used by the vendors.

“They’ve been using palm kernel because it’s cheaper.”

A good solid three-bedroom home has the bonus of a self-contained sleepout and typical West Coast views of snow-capped mountains while close to the sea.

Ample farm facilities include a new three-bay haybarn, a six-bay shed with lock-up bay, a four-bay calf shed, storage shed and a fertiliser-palm kernel bunker.

The farm can be viewed at www. farmlandsrealestate.co.nz ID TU10621. For further information contact McLaughlin on 027 666 850.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

PROPERTY

The f o c i g ma

d n a l h t r No

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

A picturesque Northland dairy farm with a variety of contour, native bush and a multitude of uses, not to mention its proximity to the surfing paradise of Mangawhai, is for sale.

The 134ha farm with 100 effective hectares is milking 195 cows this season and in the past milked up to 230 cows for a production of 74,215kg milksolids.

About 90% of the farm is flat to easy-rolling contour with areas used for maize, cropping or silage, while 10% is medium to steep contour, including 25ha of bush.

Catherine Stewart from Bayleys says the farm has a great water supply which is springfed and situated in the native bush. Water is gravity-fed to the tanks and then pumped to troughs in paddocks.

The big opportunity for the farm is its location, she says, whether that means running a dairy farm or future property development because it’s only 10 minutes from “magical Mangawhai”.

“It’s such a great location and has the added bonus of soil mapping and an extensive fertiliser programme, so it’s a great chance for a first farm buyer to capitalise on this “And it’s got great summer shelter for the cows as they walk to the dairy with the opportunity to pick peaches along the way.”

Soils have been mapped using a machine which measured the clay-to-sand content that determines its nutrient-holding capacity.

This means fertiliser is applied only where necessary to even-up yields across the paddock. Pasture on the paddocks is a mix of rye and clover.

A circular limestone race around the farm, with two separate access races, leads to the newly painted 22-aside herringbone dairy, with bobby calf rearing facilities nearby, as well as two half-round barns set up with pens.

Other facilities include a three-bay implement shed and a half-round barn-implement shed.

The newly renovated bungalow-style house has four bedrooms and a sheltered deck overlooking the orchard.

The farm will be auctioned on April 15. It can be viewed at www.bayleys.co.nz/1812106.

For further details contact Stewart on 0800 422 959 or 027 356 5031

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Time x a l e r o t You’ve spent decades milking cows and battling the elements, but when it’s time to sell up and contemplate retirement, you want something to get excited about that makes the next step appealing.

Rockwood definitely has appeal, especially if farming, privacy and maybe a spot of fishing are priorities. The 12.9 hectare property with an architecturallydesigned home that captures a stunning outlook over a slice of Otago’s picturesque coastline and the Pacific Ocean is for sale.

Twenty minutes south of Dunedin and 15 minutes from the airport, Rockwood sits in an elevated site above the coast south of Brighton, with the quality and space to turn it into a lodge or premium bed and breakfast for continuing income.

The 385sq m McCoy and Wixon four-bedroom, three-bathroom home features quality structural elements, from the Central Otago schist cladding to the 106

copper spouting, composite slate roof, timber flooring and cathedral tongue and groove ceilings supported by recycled hardwood beams.

An annex built over the garage caters as a guest wing with a bedroom opening on to a balcony, as well as bathroom and living area.

All this is set in extensive landscaping that creates an attractive environment where birdlife is prolific and views expansive.

Cattle and sheep yards, and quality deer fencing, reflect the fencing business that has been run from Rockwood, while the vendor leases the extensive array of shedding with workshop, yard and office discretely located in a lower corner of the property. Miles Rapley from Bayleys says Rockwood has the quality and setting equal to some of the country’s most sought-after locations, but at a fraction of the price.

“Somebody could have a hell of a lot of equity left over and have a glorious place to live. It’s some of the most stunning coastline you will see, with views up the Dunedin Peninsula and south as far as Balclutha.

“And it’s a great fishery and good diving – an abundant piece of water. It’s only 20 minutes to the Taieri Mouth where you can berth or launch a boat – and of course there is plenty of storage at the property.

The proximity of the airport is a big plus for retiring couples, giving them the ability to jump on a plane to visit family or take advantage of the direct flights to Brisbane, he says.

Rockwood is for sale at $1.55 million (GV $1.45 million and RV $1.65m).

It can be viewed at www.bayleys. co.nz/63968. For further information contact Rapley on 03 467 7207 or 027 201 0567.

Dairy Exporter | agrihq.co.nz/dairy-exporter | April 2016

April Events Autumn Tactics

Consulting Officers – Contact Details Northland Regional Leader

Chris Neill

027 499 9021

Far North

Graeme Peter

027 807 9686

Lower Northland

Mark Forsyth

021 242 5719

Whangarei West

Corey Thorn

027 886 0221

Regional Leader

Phil Irvine

027 483 9820

South Auckland

Jamie Haultain

027 486 4344

Hamilton North

Jaimee Morgan

021 245 8055

Matamata/Kereone

Brigitte Ravera

027 807 9685

Morrinsville/Paeroa

Aaron Traynor

027 293 4401

Hauraki Plains/Coromandel

Willy Burnell

021 242 2127

Regional Leader

Wade Bell

027 285 9273

Te Awamutu

Stephen Canton

027 475 0918

GoodYarn Farmer Wellness Workshops continuing in April

Otorohanga

Monique Dickson

027 807 9687

South Waikato

Wade Bell

027 285 9273

Learn how to recognise and respond appropriately to friends, family or farming colleagues suffering from stress or mental illness. Workshops run from 10 am – 2 pm, and lunch is provided. Numbers are limited, register now at dairynz.co.nz/goodyarn.

Bay of Plenty Regional Leader

Sharon Morrell

0274 922 907

Western Bay of Plenty

Kim Reid

021 225 8345

Central Bay of Plenty

Kevin McKinley

027 288 8238

Central Plateau

Wilma Foster

021 246 2147

Whakatane

Julian Reti-Kaukau

027 593 4123

Regional Leader

Katrina Knowles

021 831 944

South Taranaki

Erin Hutchinson

021 246 5663

Central Taranaki

Katrina Knowles

021 831 944

Coastal Taranaki

Michelle Taylor

021 276 5832

North Taranaki

Lauren McEldowney

027 593 4122

Regional Leader

James Muwunganirwa

027 499 9020

Horowhenua/ Wanganui/ South Taranaki/ Southern and Coastal Manawatu

Scott Cameron

027 702 3760

Wairarapa

Leo Hendrikse

021 286 4346

Tararua/ Manawatu

Abby Scott

021 244 3428

Southern Hawke’s Bay/Central/ Northern Manawatu/Rangitikei

Julie Morris

021 222 9023

DairyNZ’s Tactics campaign is ramping up. A series of Pasture First workshops will take place in April to help farmers focus on tight and skilled pasture management. Visit dairynz.co.nz/tactics.

People Expo – Taranaki 21 April, Rotorua 27 April, Waikato 28 April As an employer, how can you go from good to great in ensuring a balanced and productive workplace on your farm? Learn new ways to lift performance, grow your people and create efficiencies. Registration essential, visit dairynz.co.nz/peopleexpo.

May 17-18 – DairyNZ Farmers’ Forum – the changing global environment This year’s Farmers’ Forum focuses on the changing global environment and how it will shape the future of New Zealand milk production. Gain insights from leading industry speakers on how to innovate and set-up your business to adapt to future changes. Attend workshops and learn about new technologies, tools and science. Mystery Creek Events Centre, Hamilton. Free to levy-paying dairy farmers and their staff. Entry fee for other attendees.

Register at dairynz.co.nz/farmersforum.

Discussion Groups

North Waikato

South Waikato

Taranaki

Lower North Island

Top of South Island/Westland

Interested in farm systems, reproduction, progression, pasture management, budgeting, people management, or milking smarter? We hold a range of different discussion groups on specialist areas of interest as well as other topical field days and road shows around the country. Find out what’s on near you at dairynz.co.nz/events or phone your local consulting officer.

Farmer Information Service – 0800 4 DairyNZ (0800 4 324 7969) Answers to your dairy farming questions are just a phone call away. We can also help you with: • Event information • Industry contacts • Ordering publications and resources.

Regional Leader

Wade Bell

027 285 9273

Nelson/Marlborough

Wade Bell

027 285 9273

West Coast

Ross Bishop

021 277 2894

Regional Leader

Virginia Serra

021 932 515

Hurunui

Virginia Serra

021 932 515

North Canterbury

Jo Back

021 246 2775

Mid Canterbury

Erin Christian

021 243 7337

Central Canterbury

Natalia Benquet

021 287 7059

South Canterbury

Caleb Strowger

027 593 4124

North Otago

Trevor Gee

021 227 6476

Regional Leader

Richard Kyte

021 246 3166

Central Southland

Richard Kyte

021 246 3166

South/West Otago

Guy Michaels

021 615 051

Northern/Eastern Southland

Lucy Hall

027 593 4121

Western Southland

Monique O’Connell

027 702 2219

Southern/Coastal Southland

Nathan Nelson

021 225 6931

Canterbury/North Otago

Southland/South Otago