Dairy Exporter July 2021 by NZ Farmlife Media

Learn, grow, excel

July 2021

Just one hit

The most family friendly job

Keeping your team P free

Ahuwhenua Trophy Young Maori farmer winner Quinn Morgan

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70 TAKING A LEAD ON WATER QUALITY

CONTENTS MILKING PLATFORM 10 Anne-Marie Wells is feeling a sense of accomplishment 11 Niceness to others is needed during these difficult times believes Niall McKenzie 12

Carla Staples is happy after a successful 2020/21 season

13 Gaye Coates was flabbergasted after her bank decided to call time on their business relationship.

UPFRONT 14 Confidence in European cooperative giant erodes 12 MILKING PLATFORM: CARLA STAPLES

18 Red, white and blue tape in the UK 20 Fonterra opens 2021-22 with $8 midpoint

BUSINESS 22 Leadership skills a “life gap.” 25 Leadership through emotional intelligence 27 Ready steady...calving 31 Don’t get held up by hackers 34

NZ Sheep milk industry has ‘headstart’

SYSTEMS 36 Friesian freedom from twice a day milking 40 Future Farm trials lower carbon system 36 FRIESIAN FREEDOM FROM TAD MILKING 4

44 Regen ag coach questions winter crop reliance 46 Meeting lower carbon with more per cow milksolids Dairy Exporter | www.nzfarmlife.co.nz | July 2021

SPECIAL REPORT: BUILDING A PORTFOLIO 50 “Find your rhino”: latch on to opportunity

BUILDING A PORTFOLIO

54 Invest to get ahead 56 Understanding capital and income

“Find your rhino”: latch on to opportunity

Invest to get ahead

58 Getting the best milk price

Understanding capital and income

60 Tips for investment and protection

Smoothing the milk price ride

Tips for investment and protection

62 Harvest healthy returns from horticulture

Harvesting healthy horticulture returns

Six reasons farmers make good share investors

ENVIRONMENT 66 Taking a lead on water quality 70 Sustainability: thinking, sharing, acting

STOCK

72 ‘Hands solo’ for cow collar farmer 76 Vet Voice: What is pain relief?

YOUNG COUNTRY 78 The most family friendly job

RESEARCH WRAP 82 Profits realised from emission reducing trial

WELLNESS 84 Harriet Bremner warns of the dangers of meth use

DAIRY 101 86 All change for nitrogen rules 72 ‘HANDS SOLO’ FOR COW COLLAR FARMER

SOLUTIONS 88 Slow and steady wins the effluent race 88 Datamars acquires HerdInsights 89 Milk replacer key to increasing calf weight

OUR STORY 90 The Dairy Exporter in 1971

OUR COVER:

78 THE MOST FAMILY FRIENDLY JOB Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Quinn Morgan of Galatea is a happy man after winning the Ahuwhenua Trophy Young Maori Farmer for 2021. He spoke to Dairy Exporter writer Elaine Fisher about the win and what it means for him and his young family. 5

DAIRY DIARY July – Applications are open for the AgriWomen’s Development Trust Escalator programme for 2022. The programme is running again after a break in 2021. The leadership and governance programme for women provides the tools, confidence and support to successfully lead and govern a chosen field. To find out more and to register visit https://www.awdt.org.nz/programmes/ escalator/. July 13 – The last of LIC’s Minda live training sessions reaches the bottom of the South Island. Different sessions cover MINDA LIVE and MINDA app and are being held in Invercargill on July 13 and 14, then Lumsden on July 15. Visit https://www.lic.co.nz/productsand-services/minda/mindalive-training/.

July 30 – Entries close for the NZI Rural Women NZ Business Awards 2021. Winners from the seven award categories become finalists in the supreme award which will be announced at the awards’ presentation in Christchurch on November 19. For details about the awards and to enter go to https://ruralwomennz.nz/home/ nzi-rural-women-nz-business-awards-2021/. August 10 – Applications close for DairyNZ Masters Scholarships which are awarded to outstanding graduates with a strong career motivation in dairy research and development. The scholarships include $30,000 per annum for up to two years, plus tuition fees. Visit https://www.growingnz.org.nz/dairynz-mastersscholarships-scholarship_id-269.html.

July 13 – DairyNZ’s CalvingSmart sessions reach Oxford. The practical, hands-on, training sessions are designed for new entrants to prepare them for calving. For more details visit https://www.dairynz.co.nz/events/ canterburynorth-otago/calvingsmart-oxford/. Sessions will also be held in Waimate on July 14 and Omarama on July 15.

August 12-13 – It’s All About You is a two-day personal development programme being held in Gisborne. The Agri-Women’s Development Trust is running the programme which is aimed at breaking away from everyday routine to reconnect with yourself and explore new possibilities for positive change in your life. Visit https://www.awdt.org.nz/programmes/its-allabout-you/.

July 14 – Dairy Women’s Network runs a live webinar on Focus Mastery: Communication Power. It aims at enhancing your communication and curiosity, from delivering a message well, through to the power of listening. To register, go to https://register.gotowebinar.com/ register/6614919653629420048.

August 15 – Entries close for the 2022 Nuffield NZ Farm Scholarships. Chosen scholars embark on a global learning experience with opportunities for collaboration, networking and mentoring to fast-track thinking and grow their leadership skills to the next level. To find out more and to enter visit https://ruralleaders. co.nz/application-nuffield/.

August 26 – Harness the power of a board for your agribusiness with robust processes and good decision making through a one-day course run by the Institute of Directors New Zealand in Christchurch. The course covers governance, charters and protocols through to succession planning. Visit https://www.iod. org.nz/governance-courses/rural-governanceessentials/# or call Juanita Hudson on 021346132. September 15 – Owl Farm holds its spring focus day on the Cambridge demonstration farm. Visit https://www.owlfarm.nz/. September 28 – Northland’s Extension 350 Project is holding 10 public field days across the region. The project is a long-term farmerto-farmer extension programme designed to help Northland farmers succeed financially, environmentally and as a community. Farmers involved in the programme talk about their goals and plans for achieving them and it is a chance to join their journey and learn from their experience. This field day is at Stuart Thomson’s farm on the Kaipara Flats between 10.30am and 1pm. Visit https://www.dairynz.co.nz/events/ northland/extension-350-public-field-daythomsons/. September 28 – October 2 – World Dairy Expo in Madison, United States. Visit https://worlddairyexpo.com/.

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ditor’s note

Editor’s note

The most family WE ARE ALL friendly Job STRONGER TOGETHER hy do migrants come to this country to work in

communities - maybe the dairy industry? To make money, build a career they should be paid a and improve the outlook for themselves and their similar fee to pivot to taying strong onfarm portrays an innovative families. helping Kiwis get started programme run bywas Reporoa dairy and This the guts of farmer a conversation I had with a North and settled into the cancer survivor Sarah Martelli, who helps Canterbury dairy farmer at theother SIDE conference in Ashburton many jobs available? women find their balance and build strength and last month. I always enjoy reading wellbeing to be the best theyifcan He says we be. can't get migrants into the country, that is the the 50 years ago column tracking the issues of earlier years Strong Woman ismessage an online forNew women we community need to get to Zealanders who are living on in the Dairy Exporter (pg 90). Guess what features in July to work on their fitness with a workout to do at home, struggle street in our larger cities and towns, not being able to 1971 - struggling with the issue of how young men were to be find quick and easyafford healthy goal planners to (p42). We also cover theencouraged Heald family Norsewood rentrecipes, and services nor foodand in many cases. to of take up farming and to be settled on the land connect with other women on the same journey. (p52) who have transitioned to organics, OADproblems and regen Dairy has great jobs, cheap housing, access to good schools was one of the major in agriculture of the day. Her philosophy for is totheir helpchildren women and create healthy, philosophies and are enjoying the less intensive and- although it's gratifying to see lots of perks. Some issues never change sustainable habits around moving feeding their system they havenumbers moved to, along with Yes, they haveand to work hard, but there aremore manyresilient rewards. by the of women winning awards in the 2021 Dairy bodies and their families. improved profitability. The year's Ahuwhenua Trophy Young Maori farmer Quinn Industry Awards we have moved on from looking just for If women can prioritise own dairy health and fitness, Therefriendly is morejob researchyoung to be men doneto infill thethe NZpositions! farm Morgantheir said that farming is the most family they can inspire their partners, their children and their system context, says MPI’s chief scientist John Roche, to focuses on diversifying your he has had, and he’s chuffed with it. (Pg 78). Our special report this month community around them, Sarah says (p82). figure out what will and won’t work, but he encourages Quinn brought his young family back from Australia and portfolio of investments and there is lots of great advice on She is an inspirational woman creating a moment of he and farmers to engage and learn more, towhen embrace while first aiming for the police force, his family which way and to go you want to increase your stake or you lift for many women. regenerative as a verb saying all farmers could work toin the dairy farming basket. are appreciating all of the positives of building a career and don't want to put all your eggs In this issue we take a look at the regenerative agri be more regenerative, more resilient, lowering carbon loss eventually their own business in the dairy industry. (pg49) journey some NZ farmers are already on, and that the and building carbon storage. But it's not as easy as just picking people up from the Food government has signalled they-want to join in on, If you are interested Bank queue they others will need training and a wrap-around service in getting into farm ownership or NZ Dairy Exporter in our Special Report. getting out but retaining an interest, read about George that helps them understand the industry, the work flow and The regen debaterelocating has divided the farming community Moss’ innovative idea for a speed-dating weekend for to and living in the country. @YoungDairyED in a big way - many scientists are affronted that NZ potential partners (p11). We think it could be a winner! Some ag training companies arewould doing a great job with @DairyExporterNZ need regenerative methods fromwith overseas withand retention rates. new entrants high countries employment @nzdairyexporter highly degraded soils that then infer that our help migrants settle in And- would immigration companies already NZ Dairy Exporter conventional methods were degenerative? and provide pastoral care to get them embedded into their @YoungDairyED They say the methods won't work, and that research

has already shown that, and also our farmers are already following regenerative practices. Others say that the methods are not prescribed and each farmer can take out of it what they want. It has been called a social movement rather than a science and the claimed benefits of improved soil and stock health and building soil carbon through diverse species, use of biological fertilisers and laxer and less frequent grazing practices along with less nitrogen is something that resounds emotionally with many. We have taken a snapshot of thinking by scientists in MPI and DairyNZ (p46) and portrayed what farmers using the practices are finding, including ongoing coverage of the comparative trial work by Align Group in Canterbury

Dairy Exporter | www.nzfarmlife.co.nz | July 2021 porter | www.nzfarmlife.co.nz | June 2021

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Sneak peek

JULY 2021issue: ISSUE In the next August 2021 SpecialReport: report:Farming/business A balanced diet -investment what are the options? •• Special portfolio • –How ensure a smooth transition if youtoare starting out or bowing out. • Getting rid of the bobby calf problem - how a group of farmers came up • Wildlife onfarm with a bobby-beating solution. •• Ahuwhenua winners Forming a wildlife corridor from the Hokonui Hills to the Mataura River. • Sheep milking conference coverage

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NEW ZEALAND NEW ZEALAND

ONLINE

NZ Dairy Exporter is published by NZ Farm Life Media PO Box 218, Feilding 4740, Toll free 0800 224 782, www.nzfarmlife.co.nz

New Zealand Dairy Exporter’s online presence is an added dimension to your magazine. Through digital media, we share a selection of stories and photographs from the magazine. Here we share a selection of just some of what you can enjoy. Read more at www.nzfarmlife.co.nz PODCASTS: STAYING STRONG ONFARM Sheryl Haitana chats to Sarah Martelli about her Strong Woman programme.

Thriving Southland - Ep 2 This episode Angus talks with Richard Kyte, project lead at Thriving Southland, a community group based in Invercargill working with the primary sector and rural communities. He Waka Eke Noa - Hilton Collier Hilton Collier, an experienced farm consultant working for several iwi and farming families mostly on the East Coast and Hawke’s Bay. Find these episodes and more at: buzzsprout.com/956197

Sub-editor: Hamish Barwick, P: 06 280 3166 hamish.barwick@nzfarmlife.co.nz Reporters Anne Hardie, P: 027 540 3635 verbatim@xtra.co.nz Anne Lee, P: 021 413 346 anne.lee@nzfarmlife.co.nz

WHAKAPUAWAI PROGRAMME

Karen Trebilcock, P: 03 489 8083 ak.trebilcock@xtra.co.nz

The Dairy Exporter visited the Stewart family of Ashburton when they had a big job on - planting 8000 native trees, shrubs and grasses along 2 kilometres of waterways in just three days in partnership with their milk company Synlait’s Whakapuāwai programme. Three generations of the Stewart family on hand in late April were helped out by keen Synlait staff and ecological contractors Brailsfords – with their innovative planting methods.

Chris Neill, P: 027 249 1186 waipuvian@gmail.com Phil Edmonds phil.edmonds@gmail.com Elaine Fisher, P: 021 061 0847 elainefisher@xtra.co.nz Design and production: Lead designer: Jo Hannam P: 06 280 3168 jo.hannam@nzfarmlife.co.nz Check out the video on YouTube ‘Dairy Exporter’ channel.

MILK PAYOUT TRACKER:

Average $8.06/kg MS

2021/2022 Fonterra forecast price 9

8.75

8.75 8

8.20 7.70

$/kg MS

Harry Clark Interview with Dr Harry Clark, director of the New Zealand Agricultural Greenhouse Gas Research Centre (NZAGRC).

Deputy Editor Sheryl Haitana M: 021 239 1633 sheryl.haitana@nzfarmlife.co.nz

DO YOU HAVE A NEW TEAM? Take a look at this insight into the quiet power of an introvert. The neuroscience might give you that aha moment. Take a look... www.bbc.co.uk/ideas/videos/ the-quiet-power-of-introverts/ p080fdnp Story page 22

nzfarmlife. co.nz/stayingstrong-onfarm

Factum Agri is dedicated to New Zealand’s primary industry, working with the Rural Support Trust. Each week Angus Kebbell talks with farmers, industry professionals and policy makers to hear their stories and expert opinions on matters relevant to both our rural and urban communities.

Editor Jackie Harrigan P: 06 280 3165, M: 027 359 7781 jackie.harrigan@nzfarmlife.co.nz

7.80

7.96

8.00

Mid 8.00

8.00

7.25

Emily Rees emily.rees@nzfarmlife.co.nz Partnerships Managers: Janine Aish Auckland, Waikato, Bay of Plenty P: 027 890 0015 janine.aish@nzfarmlife.co.nz Tony Leggett, Lower North Island P: 027 474 6093 tony.leggett@nzfarmlife.co.nz David Paterson, South Island P: 027 289 2326 david.paterson@nzfarmlife.co.nz Subscriptions: www.nzfarmlife.co.nz subs@nzfarmlife.co.nz P: 0800 2AG SUB (224 782)

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Fonterra forecast

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60 Open

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MILKING PLATFORM OTAGO

“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”.

Upgrade or fade away Anne-Marie Wells is feeling a sense of accomplishment after upgrading her farming software and onfarm first aid skills.

very so often, the supermarket changes where everything is placed. It becomes quite a social event as strangers in the aisles discuss the changes and how they feel they have only just got used to how it was before, the weekly shop takes longer for the next few visits, and Fitbits clock up hundreds of extra steps as we double back on ourselves because we have walked past things that were on the list without realising. This year has been the year of change for our farming software, and whilst no Fitbits have been involved, it has had a similar effect of taking longer and back-tracking through work, and like the supermarket scenario, we didn’t choose to change, we have been forced into it – upgrade or fade away. First our payroll system went into the cloud, then our accounting system. Both 10

Onfarm first aid training at the Wells’ farm includes CPR and more farm-specific issues like transporting a severed finger to the hospital for reattachment.

systems transitioned smoothly, and I was really pleased with the level of support – the data was transferred accurately, there were clear and easy instructions to help me get started and any questions I had were answered quickly. It is almost as if

they have ramped up the support team even if it is for just a short time while their clients switch over. Apart from getting the hang of navigating the new layout of the programmes, the changeover process was fairly painless. Next, it is Protrac’s turn, and I really hope we can say the same about that update . . . There may not have been a choice about the system updates, but there are a few things we do have control over. With all our youngstock at graziers and most of the cows heading off farm for winter grazing, the winter months offer a chance to give the shed an overhaul and get some other jobs ticked off that have accumulated over the season. Something else that is getting upgraded this winter is our first aid skills. Two years ago, a local workplace first aid firm came onfarm and ran a farm-tailored first aid course and it is time for a refresh. The course can take up to 25 people, so there is plenty of space for neighbouring farming teams as well as our own. The training runs for the afternoon and covers basic first aid followed by a focus on dealing with more farm specific injuries, such as concussion, electrocution, how to pack a severed finger to take to hospital, controlling bleeding and other equally unpleasant scenarios. As well as the achievement of receiving your first aid certificate, there is quite a sense of comfort in knowing your whole farm team and your neighbouring farm teams have just received their first aid certificates as well! Charles Darwin said: “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change”. I will cling to that quote next time the supermarket changes around, comforted in the fact that wherever the chocolate ends up, I always seem to manage to find it on the first visit.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

MILKING PLATFORM NORTHLAND

Stay true and be nice Niceness to others is needed during these difficult times believes Niall McKenzie.

ell, Gypsy Day came and went. It was our first time almost tripling the size of the operation while still staying in the same house. Learning the new farm comes with a small rude awakening as we are winter milking around 300 plus cows. The 40-aside dairy is two plants joined together, one 26 and one 14, with them on separate diaphragm milk lift pumps. And those pumps don’t like small stones. In the last column I talked about the hope of plenty of grass and plenty of supplement on the new 200ha. This didn’t happen as the rain was too late to help with growing conditions. But it is steadily improving now and we will hit pasture targets set by July 20. It was very nice of the exiting sharemilker to let us have the 40ha on April 20 to help us achieve our winter milk quota. It also allowed for better access to the back of the farm that we started running on February 1. On a side note, I was recently working with one of our relief milkers. I normally hose down while she puts the wash through the milking plant. I obviously didn’t do a good enough job at it as when I came back from doing another job she was re-hosing down the area I had done. I didn’t like it - it left me thinking, am I good enough? We all want to improve and not be complicit. Am I nice enough? That was my second thought. I believe that if you can be nice to others it allows you to become much more

grounded in our high speed world. What was the last good deed you did for someone you love or a random person? It is very rewarding and it doesn’t happen straight away. Recently, I felt like we got paid back for being nice. Back in 2018 when we still lived and farmed in Kaiwaka we had a young fella we know and his girlfriend that we did not know stay at our place after a big New Years bash called Northern Bass. In a nutshell, very loud bass music. Anyhow, that’s a side story. Not the main event. Anyhow, the guy we knew didn’t get out of bed until midday. So Delwyn and I were entertaining this young lady who we didn’t know from a bar of soap. She seemed perfectly nice. So, in the small chat we asked what she did and she said she works at Mitre 10 Mega but she wants to be a singer. (She had a huge sense of belief in herself). After a while chatting I said, “You should come and sing at our wedding anniversary dinner in January and we will pay you for it. I love listening to live music.” (It was my 40th birthday too). She said yes, which was great. It was a nice thing for her and for Delwyn and myself. The icing on the cake was in June 2021 that same young lady who stayed at our house as a stranger, who wanted to be a singer, went on to win the New Zealand Popstars show. Good on you Christabel. Keep on truckin’ NZ dairy farmers, stay true and be nice. ‘Nilator’ out.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Niall’s first milking in the new shed with 360 cows.

I believe that if you can be nice to others it allows you to become much more grounded in our high speed world. What was the last good deed you did for someone you love or a random person? It is very rewarding and it doesn’t happen straight away.

MILKING PLATFORM HOKITIKA

Left: Shepherd’s delight: A brilliant sunset at the Staples’ farm in Hokitika.

A milking season to celebrate Carla Staples is happy after a successful 2020/21 season onfarm, but not so pleased with the continual criticism of the dairy industry.

ell, that was the end of our third season on our property and as we enter our fourth, we can look back and see what we have achieved so far. The 2020/21 season was our second best to date and awfully close to our best, producing 430kgMS/cow and 880kgMS /ha. We are happy with these results considering we are a quite low input system, with a few tweaks and a better start to our spring weather. Hopefully we can improve on these, hopefully all the regrassing we have done over the last three years will really pay off this spring. Last winter we teat-sealed our heifers and had a great response with none presenting with mastitis as they entered the herd, and only one for the whole season, we 12

will repeat this again this winter. Winter maintenance is underway with a few jobs on the go, a few concrete repairs in the dairy to keep the dairy shed inspector happy but nothing too major. All the cows have transitioned onto crop well and are enjoying the break. World Milk Day has seen a few changes in our community, farm ownership and a few new 50/50 sharemilking positions, the road was busy with stock trucks, and people moving households. Hopefully all the Canterbury farmers were not too disrupted by the heavy rainfall the region experienced over the few days leading up to Gypsy Day, it would have made things very tricky trying to move stock, equipment and household furniture with roads and bridges washed out. We wish

everyone the best on their new properties and for a successful season. I was watching TVNZ’s Breakfast show one morning as they were talking about the new proposed movie ‘They are Us’ which as you all know would be focused on the Christchurch mosque shootings in March 2019 and in particular our Prime Minister Jacinda Ardern’s role in the tragedy. Ardern was live on television saying she had not been consulted in any form of their plans about this to date, she also went on to say it is not up to the Prime Minister to say what filmmakers make their films about! I agree with this, but as she is the main focus of the alleged movie one would think she would have an opinion, as she seems to have plenty of opinions on what we as dairy farmers can and cannot do. I think it would benefit a lot of people to reflect on how our industry coped through level four restrictions, it was work as usual for all of us and the cows didn’t know any different. Farmers didn’t take wage subsidy benefits or business top-ups, our sector carried on as normal. We contribute over $10 billion to the country’s economy and dairy are also the most dominant goods exports for New Zealand. Yet, we are still the main target for climate change and emissions policy. Come on, get real, we are not the only issue here but obviously seem to be an easy target. Don’t get me started on the whole electric vehicle (EV) and new vehicle tax debacle, it seems this Government has completely lost the plot! Then you see DoC workers charging their EV on Stewart Island with a petrol generator on TV, it’s absolutely mindblowing. Well, that’s enough ranting for now, by the time you read this calving will once again be underway for the North Islanders and not too far away in the South Island, we wish every farmer all the best for this season and fingers crossed the payout is as strong at the end of the season as they are predicting. Dairy Exporter | www.nzfarmlife.co.nz | July 2021

MILKING PLATFORM WEST COAST

For richer or poorer Gaye Coates was flabbergasted after her bank of nearly 20 years decided to call time on their business relationship.

cience tells us that humans are genetically conditioned to make attachments and it seems the DNA of farmers is especially wired to form enduring bonds, connecting us to our land, our animals and to the people and institutions that impact on our businesses. Almost two decades ago we bonded in a relationship, vowing to honour and obey, committed together for richer and for poorer. We entered this relationship for the long term, believing in the greater strengths of working in partnership. So, it came as an unpleasant surprise when after almost 20 years together, our financial partner seemingly woke up one morning with the realisation that they did not love us anymore and out of the blue advised that it was best if we look for a new bank to work alongside. As with many divorces, the disconnect came down to wanting different things, or in our case we wanted more – more lending to take on a rather large project to address some of our big environmental challenges. This wasn’t a dream concept, but a project well planned with conscious and clarified thought, discussed from the outset and clearly fenced by us with the pragmatism that comes with knowing exactly where our business sits in financial terms. In the background, adding to this disharmony was the geographical context that we cohabited with the bank. We are in the unenviable ‘best house in the worst street’ situation and bank confidence in the security of West Coast land is remarkably pessimistic despite

our better than average return on equity. Quite simply and delivered in an equally impersonal manner, our bank felt they were no longer able to do the ‘We Do How’ with us.

‘We were told that they were there to still work alongside us, that our exemplary behaviour would ensure that commitment remained. In the end, this wasn’t so.’ This hurt. Farmers face no shortage of difficulties in achieving a sustainable farm that is productive, profitable and resilient. At the heart of effectively meeting this goal is our relationship with our bank. Ours had partnered alongside us during some of our most challenging times in business. They were with us over the process of our dairy conversion and we achieved more from this than we ever promised. Together, we have worked through some difficult financial scenarios presented by drought, low milk prices and a struggling dairy company. We survived and continued to grow, despite the circumstantial odds against it. And, we stuck by them despite their naïve fumbling with that ill-advised financial derivative – swaps. We forgave and moved on, both learning I hope that while ultimately the power lies with the larger institution, sound judgement doesn’t necessarily follow in quite the same unilateral way.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Like any long term marriage, the success of the relationship had always been in the commitment to honesty and communication. We had never been afraid to have brave conversations and to have them early. We didn’t expect our view points to always be the same, but we did expect there would always be robust processes of discussion, deliberation and consensus to work on our financial “how’s”. Last year, when the rumours heightened around changes in agribusiness lending, we sat down with our rural manager and asked what those changes meant for us. We expressed concern that the commentaries were suggesting that the implications of bank sentiments were going to impact negatively on farmers. We were open and honest about our goals for the future. We were told that they were there to still work alongside us, that our exemplary behaviour would ensure that commitment remained. In the end, this wasn’t so. Our relationship with a bank is one of necessity. We need a financial partner and we are fortunate to have a choice in selecting who that new partner will be. And while we have a list of “must-have” criteria such as a commitment to our TEAM (together everyone achieves more) mantra and two-way communication, we will try to look through a prenuptial lens of realism. Banks are large inanimate institutions who sell a product with a priority on mathematical matrixes and insensate policies established in a concrete building far away. Their business predisposition is genetically not inclined to enduring attachments with people. I will try to remember this less than human response as I put together the soup and scones for the inevitable lunchtime visit by the next personable rural manager. • First published Country-Wide July 2021. 13

INSIGHT

UPFRONT RESTRUCTURING

Retiring Royal FrieslandCampina (RFC) cooperative chairman Frans Keurentjes – ‘Royal FrieslandCampina is in better shape than five years ago’.

Confidence in European co-operative giant erodes Netherlands-based Royal FrieslandCampina (RFC) paid one of the highest milk prices in Europe for many years. However, the results have been under strong pressure for about three years. Many profitable businesses have been sold and confidence among members only seems to be eroding further. What is going on at RFC? Jelle Feenstra from Langs de Melkweg spoke to retiring chairman Frans Keurentjes, who stepped down on June 16.

isappointing results in China that seem to never end. Numerous profitable business units sold. A cheese division that is failing to make serious profits. Difficult discussions with members about ever-increasing sustainability requirements. A relatively disappointing milk price for the past three years; these 14

are just a few of the many points on which RFC is not winning. The dairy co-operative is in severe trouble. Frans Keurentjes, who recently stepped down as chairman of the dairy co-operative after five years, sees it differently. “FrieslandCampina is in a stronger position than five years ago,” he says.

Q. RFC has recently been only taking backwards steps. The milk price went down, member obligations and associated interest are gone and one business unit after another was sold off. It looks like a complete dismantling. A. “I understand that the outside world and many members view it that way. But

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

we know very well what we are doing. If you see the bigger picture, it fits, it is all good and logical to explain. I am convinced that we have set the right course.”

with maximum synergy benefits, which, thanks to a combination of expertise and chance factors, also scored like crazy in China. Everyone wanted to be part of FrieslandCampina around 2015.”

Do you ever have any doubts then? "Of course I have it (doubts). Every day, including on my dairy farm. Last week, to mow grass or not to mow? To use that bull or not? To buy land or not, to build a stable or not. But you also have experience, intuition, advisors, you look at others. Based on that, you build a course and you always let it be tested. Well, that is no different at FrieslandCampina. It has to be right today, it has to be right this year and it has to be right for the next generation.”

Where did it go wrong? “Too much complacency. We paid too little attention to the changes around us, and relied on the success of the merger for too long. Meanwhile, the competition also became stronger in China. Add to this the fact that after the abolition of the European milk quota, an enormous mountain of milk came over us in a very short time. Then a relapse is inevitable.”

Then take us into that bigger picture. “That starts with the merger between FrieslandFoods and Campina in 2007. That was a direct hit. A company was created

You became president during that period. “That was in 2016. And now I come back to the bigger picture. Professor Jan Rotmans held up a mirror to us and said: we are not in a time of change, but in a change of era. FrieslandCampina is a

fossil, an old-fashioned mammoth tanker. But you must become a modern and progressive fleet of small, co-operative companies that help and strengthen each other. A plea for exploiting the diversity of members within the co-operative. After that we also concluded: things need a major refit, both the co-operative and the company have to change radically. From then on we started building a new cooperative, which has resulted in various reorganisations, structural changes and personnel changes to this day.' What changed for the farmers? ‘We launched the Milk with Added Value strategy for the co-operative. The message was and is that member dairy farmers must be prepared to adapt their farms to the wishes of society. Some have trouble with that, just as they also have trouble that we have become increasingly active in this direction.'

Continues p16

Is your team prepared? Daily checks Wet weather Plan B

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dairynz.co.nz/wintering 15

A Dutch dairy farmer contracted to FrieslandCampina with his children.

“We paid too little attention to the changes around us, and relied on the success of the merger for too long.”

You also gave space to various small milk flows and you shook up the company with the strategy 'Our purpose, our plan'. But it seems a bit like you guys keep on reorganising, while the financial results are getting worse and worse. "Looks like”, you're saying it right. The reality is that it is a logical sequence of steps that we are taking. The picture may be reinforced by the fact that the corona pandemic has brought the last major reorganisation forward by a few years. But we have been doing what we agreed upon for five years now. Believe me, this will soon mean a future-proof FrieslandCampina, which ensures that from 2022 we have structurally lower costs of more than €100 million per year. A FrieslandCampina that can operate successfully even under very challenging market conditions, as we know them today.'

For real? “Both the co-operative and the company are in much better shape than they were five years ago. The co-operative has been greatly modernised. I speak to many colleagues from foreign dairy cooperatives: they say: how is it possible that you can talk about major sustainability programmes, about the introduction of special milk flows, about all things that cause a lot of hassle among our farmers. You even dare to enter into a collaboration with environmental organisations, which they find extremely modern and contemporary. So these are chairmen who have the same perceptions as us, but who say: how am I going to share that with the co-operative?” And the company? “It has also been significantly modernised and made stronger. The culture has changed: it's about winning in the

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Cows graze in a meadow.

market, it's about market share, it's about innovations, it's about cost awareness. We are currently scoring in all those areas, while we have been in a period with plenty of headwind for two years now. Close the borders of Hong Kong, Covid-19, you name it. Everyone at FrieslandCampina is aware that we have to take extra steps and that success no longer comes to us, as in the golden age. And we didn't make a loss last year, did we? While Covid-19 and other setbacks did give rise to that. So I'm very optimistic about the future. The company is in pole position. If the market conditions are better later, we will reap the benefits.”

ROYAL FRIESLANDCAMPINA CHANGES FINANCING OF COMPANY

Netherlands-based Royal FrieslandCampina (RFC) will drastically change member financing from 2022 on. Current obligations are converted into member certificates. Lenders enforced this change

and the fact that a lot of capital is in the factory with retired farmers is also addressed. After much murmuring, the members council recently voted in favour of the proposal. RFC has been working with member bonds for years. These bonds were traded a few times a year through an internal market and retired member dairy farmers could hold these bonds, and gave a return of 3% interest. However, two problems have arisen in recent years. The first is that the bonds have always been seen as part of RFC’s equity, but this is under strong pressure due to the tightened supervision of European banks. RFC was therefore forced by its lenders to set up an alternative financing structure. The other reason is that many retired members have kept money in the business while the young and growing farmers have less and less money in the business. On average, the former members die earlier and more often, with their bonds barely being taken over by young farmers. They do not have the money available or are not

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

willing to invest in their co-operative. They are now forced to do so with an adapted system. RFC will work with delivery certificates. Each member contributes €8.00 per 100 kilos of milk. For most RFC members, that’s not a big change. The amount for their annual milk supply corresponds to the capital they have already built up in the co-operative. The biggest difference is that they no longer receive interest on part of their assets in the co-operative, as they have done up to now. For about 15 to 20% of the members, however, this already means that they have to invest serious extra money in the co-operative in order to continue to supply the same amount of milk. To pay for this, RFC offers its members an interest-free loan that they can repay in twelve years. Many members are not happy with these conversions, but they do understand the underlying problems and in the end the grumbling about this arrangement was not too bad among the largest group of members. 17

GLOBAL DAIRY BRITAIN

Red, white and blue tape focused countryside policy which farmers fear will bring increased production costs ix months on from the UK’s and make their produce uncompetitive in departure from the cosy protection world markets. of the EU, British dairy farmers are However, government ministers claim facing the harsh reality of world the changes will lead to a ‘renewed’ market trading. agricultural sector producing healthy food For many farmers, the real driving for consumption at home and abroad, and force for leaving the EU was their hatred bring about environmental improvements of its myriad rules and the red tape that across the country. governed every aspect of farming. It’s so complicated that it includes a But even as British Prime scheme to pay older farmers who can’t Minister Boris Johnston lit cope with the change a NZ$200,000 a symbolic red tape bonfire lump sum to get out of farming. to celebrate freedom from Nearly four in 10 British farmers EU rules, a massive heap are over the age of 65, and the of new paperwork landed payments are an enticement for with a thump on farmers’ them to retire ‘gracefully’ to let doorsteps. Instead of just red in new blood with new ideas and Tim Price. tape, farmers are now faced a willingness to sacrifice yields for a with even more red, white and blue tape. better environment. The first shock was the announcement Brexit has also brought extra paperwork of rules for the new environmental-based for British dairy exporters to the EU. support system which replaces the EU’s Instead of seamless trade as when the UK farm support system. Under the outgoing was still a member of the EU bloc, there EU Basic Payment Scheme (BPS), farmers are now acres of paper forms to fill in got taxpayers’ money based on the for every single product that crosses the amount of land they farmed. That meant channel. Some dairy exporters have found the richer the farmers, the bigger the grant the process so slow and time consuming they got. that they have stopped exporting to EU The new Environmental Land countries. Management (ELM) system will pay Cheesemaker Simon Surrell was left with farmers for running managed schemes a NZ$500,000 Brexit hole in his business as which enhance the landscape. It includes a direct result of the UK’s departure from adapting farming techniques to help the EU. He lost 20% of his NZ$8m annual wildlife thrive, planting woodlands to sales overnight after discovering he needed help the country move towards its carbon to provide a NZ$360 health certificate on neutral goal and even flood prevention every retail order to consumers in the EU. schemes. He said he was prepared for barriers It’s part of a strongly environmentallyon EU sales to his wholesale business but

Words by: Tim Price

there had been no warning there would be no exemption for direct consumer sales. “This came as an almighty shock, like a rear-end hit in a car accident because I wasn’t expecting it,” he said. New opportunities for New Zealand dairy exports to the UK are likely to emerge following the announcement of a trade deal between the UK and Australia. The 15-year transition to a zero-tariff, zeroquota trade deal is the first trade deal to be negotiated from scratch since the UK left the EU. It is seen as an important step towards the UK joining a wider Asia Pacific freetrade agreement. It’s expected that a similar deal allowing NZ dairy and meat exports to ramp up over coming years will be on the table soon. UK farmers are furious about the terms of the Australia trade deal. They fear there are no safeguards to stop British farmers being undercut by cheaper imports. Already facing spiralling production costs, and a new support system without a food production focus, UK dairy farmers feel badly let down by the Government. National Farmers Union president Minette Batters summed up their mood: “A tariff-free trade deal with Australia will jeopardise our own farming industry and will cause the demise of many, many farms throughout the UK. “It is wholly irresponsible for the Government to sign a trade deal with no tariffs or quotas on sensitive products and which therefore undermines our own domestic economy and businesses. “It is also incredibly concerning that the Government is in a ‘sprint’ to sign up to a trade deal with Australia that would have serious implications for British farming and would seemingly offer incredibly little benefit to the economy.” Away from the doom and gloom of politics, there’s good news that the British public has turned to dairy-based foods during the Covid-19 pandemic, significantly boosting sales of cheese, butter and cream. Overall spending on dairy rose by 7.8% during 2020 compared with a year earlier, according to Britain’s Agriculture and Horticulture Development Board.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Pasture & Forage News

July 2021

Fix thin dryland pastures If some of your pastures have thinned out in winter, or suffered treading, spring is a good time to oversow Captain CSP into those areas.

Making plantain (even) better – breeders on target to make further advances Captain CSP (cool season plantain) raised the bar for winter growth when it was released two years ago, but the team behind it is already well on its way to creating something even better. Farming doesn’t stand still, and neither does plant breeding. Several advanced new plantain crosses are currently under careful scrutiny at Barenbrug, bred for more winter growth than Captain, as well as higher overall yield and increased persistence. Winter growth is a key objective because winter is when the risk of nitrate leaching is highest. The more DM a plantain grows in winter, the more soil N it utilises, reducing N loss to waterways and improving environmental outcomes. Captain has more winter growth than other plantains available, so it also provides extra feed when it is most needed on farm. But we know there is plenty of room for improved performance with plantain, not least because it is such a variable species. Cool season growth, for example, ranges from completely winter

dormant to higher than Captain, so we can select aggressively for this trait. We have also recently discovered wide variation in the chemical profile within plantain, that will influence the metabolism of N, which again supports improved selection. These compounds and the role they play in N mitigation are not yet widely understood, nor their overall impact on farm systems; our science team continues to study these. Persistence is a key trait for many pasture species, and plantain is no exception – typically it is recognised as a short-lived crop, although wellmanaged Captain CSP will thrive for up to three years. But we are going to improve that, combined with targeting higher overall DM yield, because that’s what farmers have been telling us they want. In short – stay tuned. Our plantain story is only going to get better.

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@BarenbrugNZ

In summer-moist or irrigated areas you can use ryegrass, but that’s not suitable in dryland situations. Research has shown plantain seed can be broadcast or direct drilled into thin pasture in midlate spring – this will help those pastures keep producing until they can be renewed. There is no point doing this if pasture cover remains dense, even if it has lots of weeds! Plantain (like any seedling) needs bare ground to germinate. Results can be variable, with a key factor being the time between oversowing the seed, and the first grazing afterwards. A recent study found grazing at 21 days after seeding resulted in 41% less plantain plants at 78 days than grazing at 42 days after seeding. The first grazing needs to be light, so young plantain doesn’t get defoliated and can continue to grow into the space provided by grazed ryegrass. Captain suits this situation, because it establishes relatively quickly.

INSIGHT

UPFRONT MARKET VIEW

Fonterra opens 2021-22 with $8 midpoint GDT Prices - past 12 months 7,500

Words by: Amy Castleton

6,500

GDT PRICES - PAST 12 MONTHS GDT Prices - past 12 months

onterra has announced its opening milk price for the 20215,500 7,500 22 dairy season as a range of $7.25 - $8.75kgMS, with a midpoint of 4,500 $8/kgMS. The $8 price is the highest on 6,500 record for an opening price. In the 201314 season where the co-operative paid a 3,500 5,500 record $8.40/kgMS to farmers, Fonterra opened at $7/kgMS. 2,500 Chief executive Miles Hurrell 4,500 commented that the improving global economic environment and strong 1,500 3,500 demand for dairy, relative to supply, are Aug 20 Oct 20 Dec 20 Feb 21 Apr 21 sitting behind the strong forecast. He noted that global demand for dairy is 2,500 continuing to grow, especially from China. WMP SMP Butter AMF At the same time, growth in global milk 1,500 supply is muted, and the global supply Aug 20 Oct 20 Dec 20 Feb 21 Apr 21 of whole milk powder (WMP) is constrained. However, there are a number WMP SMP Butter AMF of risks, including Covid-19, the impacts of governments exchange rate of $0.721 US commodities certainly aren’t low, though winding back economic cents to the NZ dollar. The we have seen a downward push over recent stimulus packages, foreign exchange rate has potential to months. exchange volatility, changes swing over the next little while We did see a bit of a decrease in both in supply and demand patterns as the economic effects of the WMP and skim milk powder at the June Amy Castleton. in the dairy market, and potential pandemic continue to be felt and 15 GDT event, resulting in WMP prices impacts of any geopolitical issues. most countries try to get back to dipping below US$4000/t on average. The NZX forecast for the 2021-22 season something of normal life. WMP has been priced over this level since was $8.18/kgMS at the time of writing, A one cent move in the exchange rate the spike in March. The dip may see a well within Fonterra’s range, and higher typically equates to a 10 cent move in the bit more demand return to the market, than the midpoint. milk price. outside of China, as more price sensitive At this point, this forecast is largely Furthermore, we still have plenty of the regions will be more open to pay slightly based on dairy commodity futures trading season yet to run and we all know that lower prices. This should be supportive for on the NZX Dairy Derivatives market, plenty can change in the span of a season! relatively stable WMP prices. which continues to indicate relatively high Global Dairy Trade (GDT) hasn’t put on Overall, the dairy market still feels commodity prices for the majority of the much of a show for several events now, stable, with supply and demand reasonably season; albeit with a downward trend to with the last six events seeing small moves well balanced. We’re unlikely to see any the forward curve for all four commodities. in the price index. The last five GDT events significant drop in prices, instead it seems The Derivatives market does anticipate a have been down slightly. However prices we will see a slow decline over coming larger drop in prices around September or remain at relatively high levels, particularly months. October, as New Zealand heads into peak for milk powders. Butter and anhydrous milk production. milkfat are starting to be closer to historic • Amy Castleton, senior dairy analyst at The NZX forecast accounts for a NZ:US averages than ‘high’ – prices for these NZX Agri. 20

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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It might seem counter intuitive at first, but we have seen the results on the farm, and we would argue that we are getting better and better by changing our systems and moving away from the status quo. Hopefully, this will become the new status quo.

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BUSINESS ONFARM LEADERSHIP

Leadership skills a “life gap” Canterbury dairy farmer Theona Blom has built effective teams through communication, leadership skills and a personality test. Anne Lee paid her and husband Johan a visit to find out more.

t’s not fair to say the teaching of leadership skills is missing from farming – it’s missing from life, Canterbury dairy farmer Theona Blom

says. “It’s a life gap, not just a farming gap,” she says. Theona and her husband Johan are contract milkers on Southern Pastures’ 900-cow Kowhai Farm near Hororata. Creating happy, effective teams by building communication and leadership skills is something Theona has been focused on for several years. Originally from South Africa, she was an accountant and Johan a scientist working with farmers for a government agricultural department. The pair came to New Zealand 14 years ago with Johan initially working as a dairy assistant at Tokoroa before moving up the ranks to herd manager and then farm manager in Cambridge and then on to where the couple were 50/50 sharemilking 200 then 270 cows. In 2015 they were Central Plateau Sharefarmers of the Year and five years ago 22

an enjoyable place to work – where people get along with each other, have a bit of fun and can be learning and growing along the way,” Theona says. She’s availed herself of the tools and resources offered by DairyNZ and admits she’s fascinated by the people side of the business and understanding what makes people tick. In particular she’s enjoyed helping people learn more about themselves, their personalities and communication styles as well as fostering leadership.

FARM FACTS

• Location: Te Pirita • Owners: Southern Pastures • Contract milker: Johan and Theona Blom • Cows: 900 crossbreed • Supplement: 1t DM/cow, including 40kg/cow grain • Farm dairy: 60-bail rotary, • Automation: Protrack, auto cup removers, auto teat spraying.

they became NZ citizens. About then, they started looking to the South Island for further opportunities to grow. The move to Kowhai Farm gave them that with what was initially a 750-cow, contract milking job, now 900 cows thanks to a 60-bail rotary farm dairy replacing the 40-aside herringbone the season after they arrived. With a larger herd comes the need for a bigger team and the need to have the team working effectively together. “More than that, you also want it to be

PERSONALITY TEST When people join the team, Theona invites them to take the DOPE bird personality test. It stands for dove, owl, peacock and eagle and helps give an insight into personality types not just for the person taking the test but also for other members in the team. “Sometimes, at first, they might be – nah, I’m not really into that – but everyone has found it helpful. “I sit down with them and explain the

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Theona Blom and 2IC Johan Scheepers – developing leadership skills for the next generation of leaders is a big positive for the sector.

results and it can be quite an eye opener for them – to get a bit more understanding of themselves. “It gives an idea of their characteristics and shows them their strengths as well as pointing out areas they could work on but it also helps them get rid of that sense of blaming themselves people sometimes have. “They can see the things they might see as weaknesses are simply characteristics, they’re not right or wrong and there are ways to work on them.” They can also see those characteristics can be strengths too if they view them with a different mindset. Doves, for instance, might feel they get overlooked and lack confidence but through the test they see it’s in their natural personality to be quieter and that their ideas are still valuable so working on confidence and assertiveness will be beneficial. Johan and Theona’s 2IC Johan Scheepers (Skippy) joined their team four years ago as a dairy farm assistant, coming directly from South Africa to the job. He’s an eagle, based on the test, and says understanding his own traits and those of his team mates has made a huge difference. Theona’s interest in the people side of the business saw her join DairyNZ’s new workplace design project which is looking at how to create great workplaces for 2030 and as part of that she and other farmers suggested that leadership training for staff, not yet in leadership roles, would be a big

DOVE:

PEACOCK:

OWL:

EAGLE:

The peaceful dove. The dove is people-orientated, loyal, friendly, hardworking and a great team player but tends to avoid change, confrontation, risk-taking and assertiveness.

The showy peacock. The peacock loves talking, being the center of attention, has passion/ enthusiasm and is happy/ optimistic. Peacocks can be accused of talking too much, and aren’t good with detail or time-control.

The wise owl. The owl is logical, mathematically minded, methodical and sometimes seen as a perfectionist. The owl can be slow to make decisions and inflexible if rules and logic says otherwise. Owls are not big risk takers but love detail.

The bold eagle. Eagles are dominant, stimulated by challenge, decisive and direct. Eagles can be blunt/ stubborn, can lose sight of the big-picture and can be insensitive to other people’s needs. Eagles are natural achievers.

Find the dove, owl, peacock, eagle (DOPE) personality test: https://richardstep.com/self-tests-quizzes/dope-bird-personalitytest-printable/

bonus for the sector. She suggested the resulting pilot course to Johan and both the Bloms and Johan say it has been transformational. “Having the understanding of personality types put together with the leadership course – well it’s life changing really,” Johan says. “The first time I did the personality test I didn’t really think it was for me, but as I learnt more it started growing on me and I had to admit she (Theona) was onto something.

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“Then, when I started the course and we started learning more about operating above and below the line, about our reactions and being self-aware as part of the emotional intelligence part of the course, a lot of things really made sense. “We had two hour Zoom meetings and had small break out groups on Zoom too so we could talk about situations we had going on in real life. They also had one on one sessions with leadership coach Sha Perera so they could get good practical advice 23

“When things go wrong – and let’s face it, they do – the important thing is not what’s happened but how you react, how you deal with it.” Left: Johan Scheepers with Sam Houston from Read Industrial servicing the milking plant – leadership skills are used every day, in all kinds of situations.

and work out how to put the theory into practice. “Along the way we used the EdApp with quick scenarios and questions on what we were learning – they were good because you had to think about how you would use what we were learning in those scenarios,” Johan says.

EMOTIONS AND REACTIONS As well as understanding more about themselves the course also helped participants learn about others and being aware of their emotions and reactions and how to manage a situation. “I’ll admit it, I could be pretty quick to fire up and the way I deal with things now is quite different. “When things go wrong – and let’s face it they do – the important thing is not what’s happened but how you react, how you deal with it. “Instead of exploding, it’s about taking that moment to stop, maybe even walk away, think it through and then come back and have the conversation.” He’s also learned how different people are and that just because someone has a personality where they don’t speak up much that doesn’t mean they have nothing valuable to say. Doves really aren’t going to react well to an abrupt, shouty manager, he says. “All of this – the course and the personality testing – it’s not just for work – these skills are for life, for every aspect of your life,” he says. When he contemplates what he’s learned 24

and how that’s changed his mindset and how he reacts he agrees there’s a bit more dove and owl in the eagle now. The long reach of these leadership and communication skills shouldn’t be underestimated, Theona says. Good leadership and the ability to create an effective team environment not only makes for a pleasant day, it gets results. “We share a lot of information with our team and have goals for each season. “Our reproduction results for instance are something we’re proud of because we’re making good progress and that’s thanks to the team and their attention to detail.” Over the past three years the sixweek in-calf rate has gone from 66% to 75% and the empty rate is down all while shortening the mating period and significantly cutting back on treating anoestrus cows.

WHATSAPP GROUP They use Whatsapp – a phone communication app – and have a group for the whole farm so everyone can see what’s being communicated between people. That keeps everyone in the loop and means those returning from days off can quickly scroll back over the previous days to see what’s been happening onfarm. They hold formal monthly meetings and use visual cues, posters and diagrams to reinforce messages both practical onfarm and cultural aspects such as their values. Theona says leadership growth takes time. “It’s not something you just learn and then know, you have to keep working on

it every day, sometimes lots of times in a day,” she says. How people react, how they communicate with others – their selfawareness, self-management and then their social interactions based on their understanding of themselves and others can make or break a team. “It’s like passing the ball – if you pass it badly then it’s so much harder for the next person to catch it, you can’t just depend on their skills to catch it and be mad if they miss it,” she says. “It can be hard to get people to see the value in this ‘softer’ stuff but when they start seeing the results, they get it. “I think if we as farmers want to be a preferred workplace by 2030 it’s something we have to think about. “What does leadership look like for me? What does it look like in my team? It’s our responsibility. “I think any personality type can be a leader – it’s in all of us but some of us might have more to work on and be aware of than others and some may need more support. “We can all take a leadership role in our daily lives even if we’re not the boss. We can use those skills and think – what’s been entrusted to me today, how can I be a leader with this?”

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

BUSINESS LEADERSHIP

Leadership through emotional intelligence Words by: Anne Lee

Leadership and development coach Sha Perera has been running leaders pilot courses as part of DairyNZ’s workplace design project. She says emotional intelligence is a key leadership skill.

on’t worry if it doesn’t come naturally, you don’t have to be born a leader to be a good one – the skills to manage a happy, effective team can be learned. Sha Perera is a leadership and development coach who specialises in mindset, emotional intelligence (EQ) and performance. She’s been running emerging leaders pilot courses as part of DairyNZ’s workplace design project and has seen some big transformations in course participants. The courses have been targeted at 2IC level, giving the next generation of onfarm leaders the skills and training very few ever get. “So often people are promoted to leadership because of their strong technical skills or time in the job. They lack the tools

and strategies to lead effectively, and this results in stress, on both the leader and the team, and an overall loss in confidence.” The course took a deep dive into the concept of EQ because it’s a critical part of how people interact with each other. Understanding and building EQ can hugely enhance communication and effectiveness of teams and create an all-round, happier, more productive workplace, she says. EQ is about how you manage, understand, use and notice emotions in

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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others but also how you use your own emotions in ways that are productive. There are four areas of EQ: • Self-awareness - understanding your own emotional triggers, patterns of thought and strengths and weaknesses. • Self-management – having emotions under control and being able to lift yourself out of unproductive emotional patterns. • Social awareness – awareness of emotions in others, perceiving, understanding and acknowledging how others feel. • Social management – leadership skills and the ability to manage emotions when interacting with others or even the ability to support others to manage their emotions.

“It’s not possible to create trust, influence and manage others effectively if you have little self-awareness or you’re unable to manage yourself”. Sha says each area builds on the last one and it’s important to build the pathway to EQ in the right order. “It’s not possible to create trust, influence and manage others effectively if you have little self-awareness or you’re unable to manage yourself”. Understanding how emotions are formed can help self-awareness and selfmanagement. “We take a little look at the brain and how our emotions are created from how we react to different situations. “If we see the situation as a threat then

we are negatively triggered. “But if we see it as useful then we generate a reward state, which leads to positive behaviours and actions. It’s often referred to as operating “above or below the line”. Sha says that just understanding these different processes can help people master their emotions because they can take a step back from the situation and use strategies to bring emotions under control.

USING MINDFULNESS One such tool is mindfulness and participants learn a grounding technique that helps them to pause and not be as reactive in challenging situations. Sometimes the strategy may involve walking away from the conversation. “That’s not avoiding it, it’s about putting space and time between you and the situation to allow you to get your emotions back under control and enable a more positive conversation.” People learn that even though it seems that the situation is causing the stress it’s actually internal processes that have caused the emotions and once they’re under control we can deal with the situation, make decisions, solve problems and communicate effectively. “If you’re operating above the line, you’re in a winning headspace that centres around ownership, accountability and responsibility. “When you’re operating below the line it’s about blame, excuses and denial.” Once people have a better understanding of themselves and their emotions, they can then move onto improving their social awareness, understanding body language and non-verbal cues. They can discuss issues with empathy and are better able to work with people from diverse backgrounds.

A large part of the training is also on developing core leadership skills in communication, delegation, conflict resolutions and building relationships.

EFFECTIVE DELEGATION According to Sha, delegation isn’t just about handing over a task. “It’s about empowering and growing other people, teaching them skills and then managing the process. “We show people that to delegate effectively they have to set their team members up for success, they can’t just give the job over without making sure they have the ability and the resources to do it. “And that’s something, as leaders they should be doing well before the busy calving period starts – it’s very hard to train and delegate at the same time.” Sha advises 2ICs to do this during the quieter times. “Understand what the team’s capabilities are, who can do certain tasks and who needs training first, do the training and make sure everything they need to do the job is available to them well before the jobs have to be done. “Delegation is new to most people at a 2IC level and is a vital skill for them to learn as they take on leadership roles.” Sha says the leadership course is being delivered using a blended approach of online group workshops (initially necessitated by Covid-19 lockdown), one on one coaching to talk through specific needs, a smartphone app that delivers a short dose of daily learning, 360-degree feedback as well a reflection journal and short quizzes. The course takes place over a threemonth period, giving participants a chance to learn, then apply that learning and get help from Sha or people within the group.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

BUSINESS PREP FOR CALVING

Ready, steady... calving

Stay in control this season will follow – the calves will be cared for, the cows milked, the pasture and feed managed – and with less stress and greater ease than when you focused on ‘tasks first’. DairyNZ has plenty of information and videos on getting prepared for calving, help with rosters, getting staff settled into their new job, and also a spring survival guide. Visit www. dairynz.co.nz

Words by: Sheryl Haitana

ACTIONS FOR MANAGERS

Here are a few simple actions that you can do as a manager to help build the platform for a successful calving: • Get your team involved • Make sure your roster is achievable • Discuss and plan any upskilling your team members will need • Ensure all the appropriate PPE gear and tools are available for your team • Make sure the whole team is eating well • Share what goes through your head as a manager • Hold regular team meetings • Work as a team and lead by example • Watch for signs of stress and fatigue • Keep timesheets for all employees • Keep talking, coaching, and providing feedback – celebrate success

ave you got meals in the freezer and the pantry stocked? Are the calf sheds cleaned out? Have your organised fair staff rosters? With calving just around the corner, prior planning will prevent burnout and reduce stress for your staff. Don’t leave jobs to the last minute, like getting the new calf shed shavings delivered three weeks after the calves start hitting the ground. Getting staff prepared for calving is also crucial. Make sure they are upskilled and new staff are orientated with your farm and procedures. Putting your team (that includes you and your staff) first, then the results

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

with GEA CowScout collars. Healthier cows are proven to stay in your herd for longer, and thanks to CowScout collars, you can act faster than ever before if there are potential health problems. • • •

•

Detect metabolic disorders early in newly calved cows Identify non-cyclers and possible slipped cows Gain the ability to treat sick cows early, reducing vet costs and recovery times Improve in-calf rates at mating with accurate and timely heat detection Work with user-friendly software

Treat every cow as an individual with CowScout. Call us for an on-farm consult - 0800 GEA FARM. gea.com Driving dairy efficiencies? We can help.

Getting cows off winter crop

BEING FIT AND HEALTHY THIS CALVING Are you and your staff fit and ready to run around picking up calves? Research shows a lot of farmers are great at looking after their stock, but often neglect their own diet. Having the right ‘fuel in the tank’ is essential to keep you going through the day. When farmers are busy or stressed, eating well is even more important to stop them getting sick and provide the energy and nutrients they need for their physical and emotional health. Nutritionist Sarah Percy worked with Farmstrong on practical tips on how to eat well and maintain energy levels when you’re going hard-out during the busy season. Create a food bank - When you cook a casserole or soup, cook a double or triple batch and freeze half. Stock the pantry - Have plenty of quick options such as tinned fish, tinned tomatoes, frozen veggies, rice and potatoes so that a balanced meal can be whipped up from pantry items. Cook once, eat twice - Do a double batch of your meal and use the leftovers in a different dish the next day. Remember to snack - When you are doing physical work throughout the day regular snacks are important to top up the fuel in your body and maintain your energy levels. Keep snacks in the glove box of your ute, take a backpack if you are heading out on the farm on foot or leave food at strategic places on the farm, so you don’t get caught short. Grab a break - Coming in for a break also creates the perfect opportunity to have a nourishing snack to keep you going for longer. Along with a cuppa, grab a healthy snack. Stay hydrated and stick to water - You need to prioritise drinking water – coffee, tea, caffeinated soft drinks, and energy drinks all contain caffeine which is a diuretic so they dehydrate the body. So, if you are a tea or coffee drinker, have a drink of water while you’re waiting for the kettle to boil. Look after yourself - Remember, the number one asset on any farm is the farmer and the people who work for you. Eating well can bring real benefits to your business. • For more tips and information on getting fit for calving this season visit www.farmstrong.co.nz 28

Above: Providing some high energy snacks and fruit in the cowshed for your staff means they have a healthy option to snack on during calving.

Research shows a lot of farmers are great at looking after their stock, but often neglect their own diet.

Once cows are close to calving, drafting them off crop and back onto pasture is important for a few reasons. Mineral imbalances in some crops can cause an increase in metabolic diseases, like milk fever. A cleaner calving environment reduces the risk of infection for both cow and calf. The calf needs to get the required ‘liquid gold’ colostrum from their mum - this is more likely on solid ground and not having to choose to shelter over feed, due to any wet paddock conditions. It’s worth using all the information you have available to observe cows close to calving. Daily observation of animal signs such as ‘springing up’ and swollen vulvas, alongside their expected calving dates, will ensure cows are removed from crop promptly and are able to calve in the right conditions.

THE CALVING ENVIRONMENT Calving in a paddock with shelter gives calves a good start in life, providing more comfort and warmth to benefit their health. If calves are too cold, they are less likely to stand up to drink that precious colostrum from their mother. Providing a safe and sheltered environment for cows to calve on will give them the best start to their lactation, improve general health and reduce the risk of future mastitis.

FARMER CASE STUDY Southland farmers Suzanne and Maurice Hanning tap into their knowledge of their farm for their wintering approach. The Hanning’s farm currently has 650 cows on its 230ha and nearby support block. They have their calving set up planned with their animals at the heart of their farm decisions. Suzanne explains that calving on crop is something they take steps to avoid. “To avoid calving on crop, when we dry off we put our cows into calving mobs based on scanning information and artificial breeding dates. These mobs have around 120 or 130 cows per group. “We check our cows at least twice a day, every day, to see if any of the animals are showing calving signs. Often the person moving the back fence checks all the cows, casting their eye down their row to see who could be close. Then we are able to decide if any cow needs to be moved.” Now is an important time for us all to be considering what changes can be made onfarm, so we can make a difference this winter. • More at dairynz.co.nz/wintering. Dairy Exporter | www.nzfarmlife.co.nz | July 2021

How can Allflex Cow Collars benefit your farm? Mating – catch silent heat, no cyclers and identify the optimal time to inseminate. People – find a better work life balance for you and your staff. Animal health – get distress notifications, to help identify sick cows earlier. Management – monitor your entire farm’s wellbeing, including rumination changes.

To find out more, visit www.thegamechanger.farm today. Dairy Exporter | www.nzfarmlife.co.nz | July 2021

WELL INSULATED.

GOOD CALL. At FMG, we know that over a quarter of all our milk claims are due to chiller failure. It’s this kind of specialised rural knowledge that allows us to pass on valuable advice to farmers. Advice like recommending dairy farmers insulate their milk vats to protect them from heat gain and reduce stress on the chiller system during early summer. We also advise things like checking milk is entering the vat at the required temperature, or that you alter milking times where you can. At the end of the day, if we can help you avoid loss through chiller failure it reduces stress, lost production and downtime. So why not get in touch with FMG to see how we can help you make some good calls on your farm. Call us on 0800 366 466, or go to fmg.co.nz

We’re here for the good of the country. FMG0915NZDFP_I

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

BUSINESS CYBER SECURITY

Cybercrime is targeting dairy farmers and holding their technology systems to ransom. How do you protect yourself?

Don’t get held up by hackers Words by: Anne Hardie

t can be as simple as clicking on a suspicious email and before you know it, a hacker has access to your farm computer system and can shut you out for a ransom. FMG manager advice services Stephen Cantwell says the better technology gets, the more dependent we become on it and the greater the impact when hackers attack. That was highlighted by the recent ransomware attacks on the Waikato District Health Board and Australia’s largest

meatworks, JBS, with the latter paying out more than $14 million to its attacker. At the farm level, farmers have found themselves unable to milk the cows after hackers shut them out of their own system. It happens and Cantwell says there are probably more successful cyber attacks than just the reported cases because those who get hacked or scammed are often too embarrassed to admit it. They shouldn’t be, he says, because it can happen to anyone, especially as hackers become increasingly sophisticated. Nearly 8000 reports of cyber security

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

incidents were reported in New Zealand during 2020 – up 65% on the previous year – and $16.9 million was lost to attackers. “It’s so easy when you get so many emails to click on something before even realising what it is.” Many rural businesses have computer systems that are used for personal use as well and he says that increases the number of emails and type of emails for hackers to target. Phishing emails and credential harvesting which is getting username and password combinations made up 46% 31

of the cyber security incidents reported to CERT NZ for the first quarter of this year. Emails usually encourage you to take action such as clicking on a link or opening an attachment, leading to a virus or a hacker potentially taking control, stealing your data or holding you to ransom. Cantwell says one dairy farmer was locked out of their computer system and all it controlled when a hacker managed to get control. In that case, the farmer had a reset button and backups to all the information that enabled them to continue milking and not pay the ransom. He says it is really important to make sure those backups work by checking them regularly. There have been cases when people thought they had backups, but when they needed them, they weren’t working. Paying a ransom is not a wise option, says CERT NZ incident response manager Nadia Yousef. There’s a high chance you still won’t get the data back after paying the ransom and the system may get reinfected. Hackers are constantly scanning the internet for vulnerable systems and computers and grab any opportunity, she says. For that reason, it’s vital to keep software and devices up to date. It may be annoying every time an update pops up on the computer requesting a response, but it is the most important thing you can do to protect your system from cyber attacks. Those updates are designed to fix problems and she says it’s important to click yes. Ensuring you have backups to your

information via say, a portable USB device or in the cloud, is the next essential factor to avoid the repercussions from an attack. Yousef says financial data, critical documents – everything you need to keep the business running if you get ransomware in your system, should be backed up. “If you don’t have those backups, the choices you are left with is you have to start again or pay the ransom, which we don’t advise.”

“. . . one dairy farmer was locked out of their computer system and all it controlled when a hacker managed to get control.” DON’T USE THE SAME PASSWORD When it comes to passwords, they need to be unique and strong enough to deter hackers getting into your computer system or phone. Yousef says most of the incidents reported to CERT NZ could have been avoided with better passwords. People often use the same password across multiple accounts and she says that makes them vulnerable to cyber security attacks. An attacker only needs that one password to access all their private and financial information. It’s paramount to use different passwords for different sites and she suggests using a passphrase with three

CERT NZ’S TOP TIPS FOR CYBER SECURITY FOR YOUR BUSINESS • Install software updates • Implement two-factor authentication (2FA) • Backup your data • Set up logs • Create a plan for when things go wrong • Update your default credentials • Choose the right cloud services for your business

• Only collect the data you really need • Secure your devices • Secure your network • Manually check financial details Find out more about these tips at: www.cert.govt.nz/business/ guides/top-11-cyber-securitytips-for-your-business/

or four random words, plus added numbers and special characters. Rather than worrying about remembering several passwords, she advises using password managers which is software that keeps all your passwords. It’s basically like a digital safe. The software for password management is built using strong encryption methods and security practices, then regularly reviewed by independent security researchers. It goes without saying that you then need a really good, strong password for the password manager. The password manager can be stored on your local drive or computer, in the cloud, or with your browser. “Make you and your organisation as less of a target as possible,” she advises. “They want to go for the easiest. “The more we live online, the more cyber security is going to be an issue.” This can be an expensive issue. In the first quarter of 2021, six of the 339 incidents that CERT NZ responded to involved more than $100,000. Two of those were about unauthorised access, two were about invoice scams, one was about website compromise and one was about an investment scam. Invoice scams are getting increasingly sophisticated and Cantwell says rural businesses often have invoices with large sums and they deal with a number of different suppliers. Invoices may look legitimate, but the account number has been changed. Once the account has been paid, the hacker moves it on quickly which makes traceability difficult. “Have processes in place. If you get an invoice from someone you pay regularly and you notice the account number is different, it pays to pick up the phone and check. The first time you are paying any large account, check the account number over the phone.” The same applies to requests from banks or New Zealand Post or similar – get on the phone and check it out if in doubt, he says. The world is a very small place when it comes to criminal cyber activity, with attackers only an email away. Farms are increasingly dependent on technology and when it is taken out of the equation by an attacker, potentially on the far side of the globe, Cantwell says life becomes very difficult.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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Call now 0800 482 747 Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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www.primepump.co.nz 33

BUSINESS SHEEP MILK

it into high value nutritious products and the sheep milk industry can really leverage off that reputation.”

SUPERIOR NUTRITION PRODUCTS

New Zealand’s high value dairy milk reputation is a winner for sheep milk producers.

NZ sheep milk industry has ‘headstart’ Words by: Sheryl Haitana

he New Zealand sheep milk industry has a 5-10 year headstart on potential global competitors, says Spring Sheep chief executive Scottie Chapman. Chapman spoke at the seventh annual Sheep Milk Conference held in Rotorua in May, with about 150 attendees. He said the main resistance to getting more sheep milk products on shelves is lack of consumer knowledge, both in NZ and offshore. Once that knowledge grows, consumers are more educated, and demand increases, competition could eventually come from European sheep farmers. “If we got ridiculously expensive, Europeans can always come through and produce it in the medium to long term. 34

But I don’t think that’s a short term issue. “I think we have a 5-10 year runway of getting the brand NZ out there first.” Spring Sheep remained mindful of taking on new suppliers slowly while the company established its markets, in order to minimise volatility. “If you are supply pushed, that is usually what breaks a new industry and stops it continuing to be something great.” The company’s growth was building on what consumers wanted, providing quality products, controlling supply to stay below demand and not being reliant on just one market. Tuning into consumers was key. Good nutrition was becoming increasingly popular globally with people wanting to be more healthy, he said. “NZ has so many good bovine producers with experience of taking milk and turning

Spring Sheep chief operating officer Nick Hammond agreed NZ’s strength was in the superior quality of product its farmers could provide. “I’ve been through farms around the world and none come close to the quality I see on our NZ farms, or the beauty of them as well with that grass fed story.” The high standards on NZ farms meant making nutrition products like infant formula, where safety is so critical, was somewhere the sheep milk industry had a big part to play, he said. The grass fed and low environmental footprint story for sheep would also appeal to consumers. Methane was a real opportunity for the sheep milk industry. Spring Sheep tested stock last year with a big variation in low and high emitters in the sheep genetics. “I think there is an exciting opportunity, particularly while we are so new in our genetic programmes, to be world leaders in that space, '' Hammond said. Maui Milk chief executive Leah Davey said there were also brilliant opportunities for the sheep milk industry to explore beyond infant formula, such as aged, sports and pet nutrition. NZ primary industries in general had to capture more of the high value from its nutritional products. “NZ needs to aim a lot higher. We traditionally only capture 15-20% of the value we create from our primary industry. We need to do a much better job of moving up that value chain.” The grassfed dynamic, the animal welfare story and its impact on sheep milk composition needed to be further explored, she said. “We think there is a lot more to go in understanding the nutrition difference that NZ delivers over some global alternatives.” Once the data was there the industry had to educate the domestic and global market about sheep milk, she said. Work would be needed to break down barriers to get consumers to try sheep milk products and get the message across about the nutritional advantages of the products.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

A better New Zealand depends on smarter farming.

It’s also why the expertise of your Ravensdown agri manager is on hand to serve the needs of your farming business. Supporting smart farmers like you and your rural community to prosper and thrive.

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Dairy Exporter | www.nzfarmlife.co.nz | July 2021

RAVJUL2021-DX

And Kiwi farmers are world-class.

SYSTEMS OAD

“You want life to be enjoyable. Not having to milk cows in the afternoon is great.”

Friesian freedom from TAD Andrew and Phyllis Ford switched their Friesian herd to once-a-day (OAD) milking so they could spend more time with their daughter, Abigail. Despite some challenges, the Ford’s have no regrets. Anne Hardie reports.

ost farmers switch to oncea-day (OAD) milking for lifestyle or practical reasons; Andrew Ford also wanted the challenge of taking their twice-a-day (TAD) Friesian herd through the transition and beyond to see what they could achieve. Dairy farmers who headed to Nelson for the OAD Conference in May visited Andrew and Phyllis Fords’ dairy farm on the outskirts of Richmond where the Ford family has been milking cows for 55 years. The herd is one of just three remaining on 36

“You want life to be enjoyable. Not having to milk cows in the afternoon is great.” the Waimea Plains and until eight years ago, milked 365 days of the year to supply town milk. Andrew returned to the farm in his early 20s and later bought the farm from his parents. He acknowledges he’s probably the

last generation to farm the highly-prized horticulture land with its hefty irrigation costs. The Waimea Community Dam being built in yonder hills will supply crucial water to the plains, but it’s costing the Fords just over $5000/ha to buy shares for 63ha and then an annual charge of $1000/ ha. The costs have continued to rise as the dam progresses and Andrew says it’s probably getting to the stage where it is uneconomical to milk cows on the plains. The farm covers 72ha with 10ha of that

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

FARM FACTS:

• Owners: Andrew and Phyllis Ford • Location: Waimea Plains, Tasman • Milking Platform: 62ha • Herd: 195 Friesian cows • Milking frequency: OAD • Production: 86,000kg MS, 439kg MS/cow • Operating profit (2019-20): $2,865 (EFS)/ha

Left: Andrew, Phyllis and Abigail Ford. OAD means more family time with Abigail. Right: Abigail touches base with one of the cows. Right below: Milking the Friesian herd OAD was a challenge as much as lifestyle choice.

is designated for the young stock, while a couple of nearby lease blocks grow supplements adding up to 400t of silage and 500 medium bales of hay this past season, graze R2s through winter and half the herd. Going way back, the family milked Jersey cows, but the herd struggled to keep up with winter milking and they moved toward Friesian. Today, the cows average 550kg liveweight including the two-yearolds and are showing the benefits of OAD milking. “You really don’t have to fatten the cows in winter,” Andrew says, with cows half a condition score more than they were on TAD. When they decided to switch the herd to OAD four years ago, they were milking about 200 cows at 500kg milksolids (MS) per cow, with their last season on TAD producing 99,000kg MS. This past season they milked 195 cows at 439kg MS/cow for a total of 86,000kg MS.

MASTITIS WAS A CHALLENGE

“I certainly wouldn’t say we’ve mastered (OAD) or are highly successful and there’s been lots of challenges along the way.” Mastitis was one of the challenges, though funnily enough it wasn’t a problem the first season they switched from TAD. That first season the herd rose just slightly from its last TAD season average of 133,000 cells/ml to 154,000 cells/ml, though Andrew says there was still mastitis popping up. The second season it rose higher to 202,000 and then 237,000 in the third year before dropping to 168,000 this past season. This last season they used Mastatest to find out exactly what the bugs are and get a more targeted antibiotic to treat mastitis cases. This coming spring they plan to test more cows again. They’ve culled plenty of cows with a history of mastitis and Andrew says OAD milking has highlighted problems that went under the radar on TAD. At the OAD field day, it was pointed

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

out that mastitis grows mastitis and cows with mastitis spread it through the milking plant. One of the advantages of OAD is that the cows are only going into the dairy once and that literally halves the opportunities for mastitis to spread. One farmer said he gave a $20 note to any staff that picked up mastitis as incentive to look for problems. Views differed on whether to use dry cow therapy and teat seal to lower the risk of mastitis, though it was also pointed out that the writing was on the wall to have less reliance on antibiotics. It was suggested that teat seal may produce some wastage, but cows self corrected.

LESSONS LEARNT

In hindsight, Andrew says they probably didn’t do their homework well enough for the transition from TAD to OAD and though mastitis didn’t show up in the somatic cell count straight away, it was there. Fluctuations in the milk vacuum 37

didn’t help and three years ago they replaced it with a second-hand milking plant for their 15-aside herringbone dairy. It raised discussion at the field day, with the advice to farmers contemplating switching from TAD to OAD to ensure the milk line in their system could handle the massive amount of milk produced at a OAD milking. Andrew says they also had a few too many cows that first year at 220 and other farmers at the field day agreed it was best to stick to the same numbers when transitioning from TAD to OAD. Another piece of advice was to keep plenty of replacements available in case they were needed. As well as carrying more cows, the weather wasn’t playing ball that first season. It barely stopped raining through spring before drying out in summer. The herd started out alright, producing 1.8kg MS/cow/day, but by October production was down to 1.5kg MS/cow/day. The cows were being given palm kernel but weren’t lapping it up as they should, until molasses was added to increase their intake. They completed the season at 390kg MS/ cow and a total of 85,000kg MS compared with about 500kg MS/cow on TAD and the previous season of 99,000kg MS. That equated to a 22% drop in production per cow and 14% in total production. Less bought-in feed is put into the system on OAD and includes some of the silage from lease blocks, plus palm kernel which added up to 70t this past season. In the past they fed the cows apple pomace from March through to September, but the local juice factory closed last year and so they filled the autumn gap with silage this year after they stopped feeding palm kernel in March. Waimea Plains has fertile soils and the Fords have no trouble growing 17t of drymatter (DM) a year. It’s a good climate and through winter they can still grow 20kgs DM/ha/day which is why they retain half the herd on the milking platform, with the other half on a nearby lease block. Irrigation is essential in summer and the entire farm is watered by either pivot, rotorainer or K-line, with restrictions brought in most years as the region dries out. 38

Andrew, Phyllis and nine-year-old Abigail.

Farmers at the OAD Conference check out the herd.

CALF REARING DONE DIFFERENTLY

Climate and soils enable them to calve July 23 onto paddocks still growing grass, but when it comes to calves, Andrew rears them a little differently to most farmers. They usually rear about 55 replacements and the calves are kept in the six-bay shed for eight weeks before they get out on grass. About 75% of the milk in that time is stored colostrum, with the later calves getting more whole milk from the vat. At two weeks they are getting milk just once a day to get them eating pellets – which is cheaper than milk. They are given hay as well and then at eight weeks they

are let out in the paddock with a mild sedative. The latter is to protect the calves from themselves because the excitement of being let out in the big wide world can be quite chaotic. Having raised calves inside and outside, Andrew reckons they do better when they are reared inside. Part of that he attributes to keeping them off pasture and intestinal worms, which is why they don’t need a drench at weaning. The calves then rotate around the paddocks at the back of the farm, interspersed with occasional grazing paddocks the cows graze to help keep worm burdens low. In fact, Andrew doesn’t

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

remember the last time he bought drench. The calves are the result of LIC’s A2 Friesian team which are a mixture of genomic and daughter-proven bulls. The Fords have chosen A2 simply to keep their options open. Before OAD milking, they selected bulls with good udder scores and Andrew says that probably helped the switch from TAD to OAD for the Friesian cows. The cows are big producers and in early January averaged 540kg MS per cow, with some producing more than 600kg MS. Although the Friesian herd has performed well on OAD, the Fords have opted to use crossbred genetics over the yearlings for the past two years. It’s aimed at increasing the BW of the herd. In the past, the herd had a reasonably high BW, but when the system was reranked, the herd’s BW dropped and now sits at 105. Using crossbred bulls will help lift the herd’s BW and he thinks the resulting crossbred cows will probably suit their system better now. The downside is they will have bobby calves again or will have to find an outlet for the crossbred calves. The Friesian bull calves regularly go to a local farmer at market rate and last year they were worth $100. Going ahead they are using sexed

“We want to be profitable, but profit isn’t the only driver. You want life to be enjoyable. Not having to milk cows in the afternoon is great.” semen to get their replacements, with the tail end of the cycling cows put to beef bulls. Reproduction has been a bit of a battle, even on OAD. Back in the days when they milked through winter their empty rate was as high as the mid 20s and this year it has ended up at 14% despite the cows being in top condition throughout. They usually have a nine-week mating, but this year they went 10 weeks, with a short-gestation bull at the end. A third of the empties this year were previous carryover cows which have now had a second chance and will be out of the herd. Andrew says the carryover cows have provided options on the farm and always milk better than the two-yearolds coming into the herd. But they have decided they won’t keep carryover cows in the future to try and improve reproduction in the herd.

PROFITABLE MOVE

All considered, the decision to move to OAD has been a good one for the Fords. For the 2019-20 season, the farm had an operating profit margin of 29.6% and that worked out as an operating profit of $2,865 (EFS)/ha and $2.35 (EFS)/kg MS. Their FWE for that season was $4.48/kg MS which compared with the DairyBase benchmark for the top of the South Island of $4.77/kg MS. DairyBase has 42 farms in that group. “We want to be profitable, but profit isn’t the only driver. You want life to be enjoyable. Not having to milk cows in the afternoon is great.” Theoretically it provides more family time and getting away from the farm with nine-year-old Abigail, though Andrew jokes they still haven’t mastered the lifestyle aspect yet and wonders how they managed when they milked the cows twice a day. They have one full-time staff member on the property, Warren Thomas, who has been with them for 20 years now. He was originally taken on to pull out an orchard at the rear of the farm and stayed. Seventy-seven-year-old Peter Crichton has been on the payroll even longer. He joined 30 years ago as a relief milker and still heads to the farm every second week to milk the cows.

Abigail touches base with one of the cows. Dairy Exporter | www.nzfarmlife.co.nz | July 2021

SYSTEMS CARBON EMISSIONS

Future Farm trials lower carbon system A trial at the Dairy Trust Taranaki Gibson farm has led to herd de-intensification, lowering of nitrogen and imported feed. Jackie Harrigan reports.

he Dairy Trust Taranaki Gibson farm has finished the first year of a three year farmlet study looking at the production, economic and GHG ramifications of a future style lower carbon system. Called the Future Farm, one farmlet has de-intensified to 2.5 cows/ha, lowered N application to 75kgN/ha, and cut imported feed to 300kg DM/cow. In the trial, it has been run with a randomised group of cows alongside the ‘Current Farm’ group of cows run at 3.1 cows/ha, 190kg N/ha applied, and 700kg DM imported feed per cow. After a year, the results were presented at a Step Change field day in late May. The path to net carbon zero shows some ambitious targets for dairy farmers, DTT general manager Debbie McCallum said, so 40

it’s important to try out potential systems on the research farm and show farmers how the system works and how the figures stack up. “We have the ability to take a few risks and try things out and provide answers for our farmers.” Changes to other partner farms from different Taranaki soil types and rainfall environments have been modelled on similar changes to see the effects of the system changes on their metrics. After a year, the Future Farm herd had produced more per cow, due to 15 extra days in milk, but were 16% down in kg MS per hectare, so milk income was 17% behind the current farm. Farm working expenses were down 21% with less N fertiliser and lower per

FUTURE FARM EFFECT SNAPSHOT:

• N input: -91kg N/ha • Pasture growth: -1.4t DM/ha • Milk production: -211kg MS/ha • Operating profit: -14% ($657/ha) • Total greenhouse gases (GHG): -21% • Methane: -13% • N loss: -10kgN/ha = 22% cow costs, buffering operating profit to be reduced by 12% on a $7.70kg MS milk payout. At a payout of $5/kg MS, the operating profit on the future farm was only $80/ha different to that of the current farm, but at $8/kg MS, the difference was around $720/ ha difference in operating profit. Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Left: Debbie McCallum, Operations Manager, Research, Demonstration & Innovation on the Dairy Trust Taranaki (DTT) farm. Above: Whareroa factory viewed from the DTT Gibson farm.

With a very good pasture growing year, the lower stocking rate and longer pasture sward meant the herd struggled to get started in the early spring, she said, but the rest of the year was “not too bad” because not so much N fertiliser was going on through the peak growing periods, Debbie said. Utilisation was down from 90% to 84% for the Future herd, so the team did some deferred grazing as they had used up the silage conservation budget. The pastures were allowed to grow to around 7-8000kg DM/ha and then the cows grazed them off similar to a crop paddock - after milking funnelling into the deferred grazing for a few hours and then moving through to a normal paddock. It took three or four grazings to get the pasture back to normal levels using the dry cows to get the residual back to normal, but by May all evidence of deferred grazing was gone. “The deferred grazing worked well and the clover came back after the first grazing and there was no need for bloat oil,” Debbie said. “It depends on the summer rainfall and can be a good system to react to the season

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“We are trying to increase the amount of clover, with falling N fertiliser levels, and to introduce plantain in the pastures for increased forage and to dilute urine N.” and is a good way to renovate pastures and encourage a new population of ryegrass plants while adding to the drymatter yield.” The key to good pasture utilisation was doing weekly farm walks, Debbie said, with individual paddock scoring and having good information on a weekly basis to know what the pastures were doing and to keep the cows fully fed.

FUTURE HERD MATING PLAN

Mating for the Future herd started five days earlier, to put more pressure on the pastures in early spring when the stocking rate was lower. The date will be moved another five days earlier this season. The Future herd also has the aim of reducing the bobby calf pool, Debbie explained, so their mating plan was quite different to the current herd. The current herd have six weeks of Friesian semen and six weeks of Hereford short gestation semen, whereas the future herd have higher BW daughter-proven Friesian sexed semen genetics for the first 5-6 weeks, followed by Wagyu for 2-3 weeks and then Hereford Short gestation AB genetics for a further three weeks.

PICKING UP PASTURES

The trial protocol includes an oversowing programme in conjunction with Barenbrug seeds that will see 30% of the Future farm oversown with clover and plantain the first year, with a further 30% in the two following years. “We are trying to increase the amount of clover, with falling N fertiliser levels, and to introduce plantain in the pastures for increased forage and to dilute urine N.” Lifting per cow production will help to close the gap in profitability, she said. Barenbrug agronomist Janelle Gwillum said the best way to establish the clovers was using a shallow drill, scratching the surface to 0.5cm and adding a mix of 5kg plantain and 2kg Kotuku large leaf clover /ha. 42

REDUCE FOOTPRINT AND KEEP PROFIT? Results for Year 1: 2020/2021 Pasture Production

Current system Future system

Cows/ha

3.1

2.5

Kg N applied /ha

166

Pasture grown (t DM/ha)

16.8

15.4

Imported feed (t DM/ha)

0.7

0.01

Total feed offered (t DM/ha)

17.5

15.4

Estimated feed eaten (t DM/ha)

15.8

12.9

kg MS/ha

1281

1070

kg MS/cow

407

418

Days in milk

273

288

kg LWT/cow (January)

513

517

kg MS as % LWT

0.8

0.81

Current

Future

% difference

$9864

$8216

-17%

% Utilised Milksolids Production

Economics Milk income (@$7.70/kg MS) Stock sales

$695

$579

$10,558

$8795

-17%

Total FWE expenses

$5201

$4095

-21%

Operating profit/ha

$5357

$4700

-12%

FWE/kg MS

$4.06

$3.84

Operating profit/ha @ $5/kg MS

$1898

$1819

Operating profit/ha @ $6/kg MS

$3179

$2886

Operating profit/ha @ $7/kg MS

$1160

$3953

Operating profit/ha @ $8/kg MS

$5741

$5020

Total income

Milk price Sensitivity

GHG & N Loss summary

Current

Future

% difference

Total GHG/ha (t CO2-e/ha/yr)

12.5

9.9

-21%

Methane (t CO2-e/ha/yr)

8.3

7.2

-13%

N2O (t CO2-e/ha/yr)

2.7

-26%

CO2 (t CO2-e/ha/yr)

1.4

0.7

-50%

GHG / kg MS (kg CO2-e/kg MS)

9.8

9.3

-5%

N loss (kg N/ha)

-22% -27%

N surplus (kg N/ha)

223

162

NCE%

25%

29%

Current

Future

Soil carbon and organic matter (Spring 2020) Soil C level (%ww)

8.6

8.7

Organic matter level (%ww)

14.8

15.1

(Typical concentrations of C in NZ allophane soils = 6-10)

GHG RESULTS

Taranaki allophanic soils are good at holding carbon and nitrogen and the Future farmlet showed higher soil carbon and organic matter levels than the conventional farm. The GHG results showed total GHG/ha dropping 21% and methane in CO2 equivalents reducing by 13% which is basically a result of increased efficiency

as the N surplus also reduced by 27%. In future, the challenge will certainly be improving cow production, Debbie said, saying that increasing by 34kg MS/ cow will improve that difference in the bottom line. “Bringing the calving forward by five days will help, as will the better quality pastures with the improved legume and forage content.” Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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SYSTEMS WINTER CROP RELIANCE

Regen ag coach questions winter crop reliance Otago-based Siobhan Griffin suggests dairy farmers could use bale grazing which would help with paddock recovery times. Karen Trebilcock reports.

egenerative farming coach Siobhan Griffin is questioning dairy farmers’ reliance on winter crops in the South Island. “I have not found a farmer who can show me on paper that it pays in the first place if all opportunity costs are included,” she said. “For example, a 250ha dairy farm where cows are not wintered off, with 10% in fodder beet, could be losing out on tonnes of feed, as the 14-month crop has to be planted in September. “You have no grazing available for a full year starting in September when you planted the crop plus one and a half to two extra months while you wait for the 44

renewed paddocks to be ready to graze. “Last year some paddocks in the south couldn’t be renewed until December so they weren’t grazed for the first time again until February.” She said in 14 months, 338 tonnes of dry matter of grass could have been grown on the 25ha (11.5T DM/ha). “This opportunity cost could be higher because the 14 months covers two months twice (September and October) when the paddock is not available for grazing and they happen to be the months where pasture normally starts to grow very quickly.” If 20T DM/ha of fodder beet was grown per hectare, 500T DM overall, the winter

crop has still grown more feed (162T DM), but Siobhan said the cost was high. “Assuming costs of $2300/ha, the extra 162T DM has cost Regenerative farming $57,500 or $354/T coach Siobhan Griffin DM, not far below the cost of feed grain.” If the season had not been kind, and a 15T DM crop was grown, then it would only be an extra 37T DM compared with if the paddock had been kept in grass. “However, this is assuming your pasture was grazed at the three-leaf stage.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

“If the soil structure is not damaged during bale grazing, these paddocks will quickly pick up in the spring flush and there is no need for resowing.”

Left: Growing fodder beet is a 14-month crop. Right: There are other costs with growing winter crops such as resowing afterwards, potential soil damage and nutrient losses as well as animal health issues.

“If your cows are always on the edge and grazing at the two-leaf stage instead of at the three-leaf stage because 25ha is tied up in crop, you could lose 225T DM of potential grass production on the 225ha not in crop,” Siobhan said. “A Lincoln University study found the annual yield difference between grazing at the two-leaf stage and three-leaf stage is 1.1T DM on irrigated pasture. “Your opportunity cost for missing out on the blaze of growth may be less if not on irrigation so determine how much you really are losing by allowing one paddock to rest to the three-leaf stage consistently before grazing all season long and compare the growth to your others to get a real number for your farm. “We are using a one-ton opportunity cost in this example to get you to start thinking.” DairyNZ, for any given liveweight cow, has proved an increase of 200 kg DM/cow will return an extra 25kg of milk solids. “Growing an extra tonne per hectare on the 225ha, plus using the 25ha of crop paddocks for grass production adds up to an extra 563T DM. “That is 70,375 kg MS or, at an $8 payout, $563,000 opportunity cost to have 25ha out of the grazing round while the cows are milking.”

FODDER BEET COSTS

As well as growing less grass that can be turned into milk, she said there were other associated costs with growing fodder beet such as resowing after crop, potential soil damage and losses including soil loss,

• Opportunity Lost: 700 cows on 250ha • $57,500 to plant 25ha fodder beet ($2300/ha) • 338t DM of pasture lost on the crop paddocks (14 months) • 225t DM of pasture reduction on the rest of farm = 563t DM pasture to grow 500t DM of fodder beet • 563t DM grass = 563,000kgs x 25 kg MS/200kg = 70,375kg MS x $8/kg MS = $563,000 + $57,500 planting cost. = $620,500 total cost to grow 500t DM fodder beet or $1.24/kg DM

animal health issues related to feeding crop such as mastitis and lameness as well as stock standing in mud on crop needing more energy to maintain body weight. “It’s not fun for livestock or the people caring for them.” However, in most of the South Island, grass doesn’t grow in the winter, in some places for as much as 100 days or more so fodder beet and other winter crops provide necessary feed. “So, how can you feed your cows over winter instead? “In the earlier fodder beet example let’s assume you have 700 cows. You need to feed 4kg DM of hay or balage per day with 10kg DM of beet to balance the diet. “The 500t DM of beet fed at this rate would last 70 days so you will need 200t DM of hay or balage to go with it which can be made onfarm or you could buy it in. “However, another option is bale grazing

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

over winter which means no crop has to be planted and all of your 250ha on your dairy farm is available for milk production. “Instead of the fodder beet, the extra tonne per hectare you have grown by consistently grazing at the three-leaf stage is built into your feed wedge, or winter stockpile, for the 70 days of wintering, supplemented with the hay or balage you would have normally fed with the fodder beet. “The amount of extra grass you’ve grown (563t DM) is more than the fodder beet if you got a 20t/ha crop. “You could argue that one tonne of dry matter of fodder beet is higher in energy than one ton of dry matter of hay or pasture. But is the nutrition balanced? “What if you harvest only the top half of your pasture sward where the energy is the highest? This allows residual to be trampled down to feed the soil biology so your pasture performance gets better every year and so does animal health. Leaving the higher residual also prevents pugging.” She said bales could either be spaced out on drier paddocks on enough area to avoid soil damage or a feed pad or barn could be used with on-off grazing. Either way, if the balage or hay is bought onto the farm it becomes a nutrient gain for the soil. “If the soil structure is not damaged during bale grazing, these paddocks will quickly pick up in the spring flush and there is no need for resowing. “As well, fewer nutrients have been lost to waterways as the soil has not been left bare.” 45

SYSTEMS HERD SIZES

Allowing farmers to do their best Otago-based dairy consultant Howard de Klerk says dairy farmers can meet the Climate Change Commission’s mandate for fewer cows if they’re allowed to produce more per cow using less kg DM per MS. Karen Trebilcock reports.

airy farmers can meet the Climate Change Commission’s desire for fewer cows if they’re allowed to do what they do best – farm efficiently and produce more per cow using less kg drymatter (DM) per milksolid (MS). Dairy consultant Howard de Klerk said farmers were already reducing cow 46

numbers and maintaining production by feeding cows well so they were efficiently converting DM eaten to MS. “New Zealand has come a long way in the past three decades, improving production from 260kg MS/cow/year in the early nineties to the current national average of 385kg MS, but we can do better if we’re allowed.”

De Klerk, of Dairy Nutrition & Management Solutions, is based in Otago and is an independent specialist nutritionist and dairy consultant with more than 30 years’ experience internationally and in NZ. He said a cow weighing 485kg and producing the national average of 385kg MS needed about 4500kg DM (at 11.75MJME) during lactation and 900kg DM during the dry period – about 5400kg DM for the year. “She will use about 50% of her intake just to stay alive, leaving only 50% for milk production. Half of her annual greenhouse gas (GHG) production is for functions other than milk production. “My client data from throughout the South Island, from more than 20,000 cows in numerous herds, produce on average 525kg MS/cow with cows slightly heavier at around 500-520kg liveweight. “These cows require 6400kg DM per year which is more per cow, but they produce more milk. These cows only use about 40% of their intake for staying alive and channel 60% of the diet into milk production. They use 12kg DM compared to 14kg DM to produce a MS. “With more than 1.9 million tons of MS produced in NZ, this would mean 3.8 million tons less DM required to produce the same amount of milk and GHG production could be reduced by 15% per MS by improving efficiency. “The top quartile of my client’s cows use 10.6kg DM to produce a MS which is 25% more efficient with 25% less GHG per MS than average production.” He said researchers in the Dexel days showed a cow’s dry matter intake was limited by more than pasture availability.

MAXIMISE PASTURE INTAKES

“A cow can only graze a certain amount in 24 hours and that equates to roughly 4000kg to 4500kg DM from pasture during the season which is the reason why NZ cows only produce 385kg MS/cow.” After maximising pasture intakes, the answer is, he said, energy dense supplements which increase cows dry matter intake and support better production. “Some of these concentrates fed are Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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Independent dairy consultant Howard de Klerk. His dairying clients are already reducing herd sizes and maintaining production by feeding cows well so they were efficiently converting kgDM eaten to kgMS.

waste products from other industries such as brewers grain and palm kernel. If not fed to cows they will probably be dumped in a landfill to rot and produce methane or, in the case of palm kernel, be burnt or dumped into the sea. “Recycling waste products into valuable human food sources made perfect sense.” However, many people still thought feeding supplements raised farm working expenses per MS. “I have been modelling all of my client farms’ financial performance every year and then comparing those results to reality, for more years than I care to remember. “Sometimes the farm working expenses (FWE) do increase by a few cents, but the interest costs on debt, the largest cost on most dairy farms, are diluted by the extra production. “FWE/kg MS can increase by 10c/kg MS only to have the interest drop by 20c/kg MS resulting in a lower total cost of production per kg MS despite higher FWE/kg MS. “More profit per kg MS multiplied by more kg MS sold equals more overall profit - it’s that simple.” He did warn feeding supplements to increase cow numbers was seldom profitable but feeding more to improve production per cow was mostly profitable even over a wide range of milk prices. “Lowest farm working expenses alone are not a good predictor of farm profitability – not since interest has Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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become the single biggest cost item on the average dairy farm.”

500kg LW

DMI

kgDM/kgMS

kg MS/cow

Lactation

Dry

Annual

Lactation

Annual

GRASS FEEDING MESSAGING A CONCERN

400

4539

914

5453

11.3

13.6

450

4873

914

5787

10.8

12.9

500

5206

914

6120

10.4

12.2

550

5539

914

6453

10.1

11.7

600

5873

914

6787

9.8

11.3

However, he was worried that messaging from DairyNZ, milk companies and the Government continued to be grass feeding only. “DairyNZ is still promoting data from research in Ireland and then transferred to NZ which said there was an increase in total production costs for every euro spent on supplementary feed. “The research showed that farmers who fed more supplements were also likely to use more fertiliser and the production costs per hectare did increase by $1.53 relative to the supplement costs per hectare.

“Why is it okay to burn trees and release all the stored carbon while not allowing a cow’s emissions to be offset by the photosynthesizing pasture they eat?” “However, with more inputs and costs per hectare, the milk production per hectare also improved but the cost per milk solid was no higher.” He said if farmers had to reduce cow numbers and were constrained by what they fed them, like some dairy companies are suggesting, it would put dairying under financial pressure and result in more GHG/ kgMS rather than less. “Lots of low producing cows is what has got the industry into the current predicament. You cannot design an environmentally worse system even if you tried.” He warned the industry was making the same mistake measuring of GHG emissions as they did with the Irish study. “The latest use of expressing GHG/ hectare is simply ludicrous and will damage the industry. “It will promote lower kgMS/ha, lower intakes per cow, increasing the proportion 48

of feed used for maintenance and lowering the amount used for milk production.” He said one of his clients came away shaking his head after a DairyNZ Explore Your Options field day at Dunsandel in Canterbury on lowering GHG. “The inspiring high-performance, low-footprint farm presented as the way forward was a centre pivot farm producing 363kg MS/cow or 1400kg MS/ha and 14,600kg CO2e/ha/year or 10.4kg GHG/ kg MS. “My client, who farms nearby, produces 640kg MS/cow and 2400kg MS/ha. His emissions are 19,740 kg CO2e/ha/year but only 8.2kg GHG/kg MS. “The low producing farm does produce about 25% less emissions per hectare but we don’t sell hectares overseas. We sell milk powder and per kg milksolid, the low producing farm emits 27% more GHG/ kgMS than the more efficient farm.

INDUSTRY LEADERS ‘CAPITULATED’ ON EMISSIONS

“The industry leaders seem to have simply capitulated on GHG emissions and cows. Sure cows do emit GHG, like humans, but why are we not reading about how pastures can offset cow emissions? “I have seen a massive build-up of organic matter on dairy farms under centre pivots on very gravelly soil in Canterbury over the past 10 years. “That’s all carbon that has been captured by dairying – a massive carbon sink. It’s there for all to see. “We are told that trees which photosynthesize, take in carbon dioxide and use energy from the sun to grow, can be burnt as an energy source and be carbon neutral. Burning biomass is the future and is carbon neutral. “When pasture photosynthesizes

producing similar complex carbon structures, which are then eaten by cows processing some of that carbon into a valuable human food source and only releasing a fraction of the carbon eaten, it’s bad for the environment? De Klerk asked the question: “What’s the difference if the carbon taken out of the atmosphere by trees is released back into the atmosphere by a boiler compared to carbon taken out of the atmosphere by grass and a fraction of it released back into the atmosphere by cows? “I am not a climate change scientist nor a climate change denier, I am simply asking why is it okay to burn trees and release all the stored carbon while not allowing a cow’s emissions to be offset by the photosynthesizing pasture they eat? He also pointed out that “cows cannot make carbon, they cannot release more carbon than they ate, and what they ate was removed from the atmosphere.”

FEED COWS EFFICIENTLY

De Klerk said the best thing was for farmers to be able to feed cows efficiently so they could produce the same amount of milk solids with fewer cows. “However, I have some clients who I have advised to reduce cow numbers are now too afraid to do so due to the mixed messages about when and how cow numbers may be reduced in future. “Will a forced reduction in numbers, if it happens, consider stocking rates and cow efficiencies or will it be a blanket 10% or 15% reduction in numbers on all farms? “Will farmers who are already doing the right thing lowering greenhouse gas emissions by farming efficient cows be penalised by being forced to reduce numbers even further?” Dairy Exporter | www.nzfarmlife.co.nz | July 2021

BUILDING A PORTFOLIO 50

“Find your rhino”: latch on to opportunity

Invest to get ahead

Understanding capital and income

Smoothing the milk price ride

60 Tips for investment and protection 62

Harvesting healthy horticulture returns

64 Six reasons farmers make good share investors

SPECIAL REPORT: BUILDING A PORTFOLIO

“Find your rhino”: latch on to opportunity Dairy farmer Carlos Cuadrado urged others wanting to grow their business to behave like an Oxpecker bird and partner with a bigger player. Anne Lee reports from the SIDE conference.

ind your rhino – that’s the message from Argentina-born dairy farmer Carlos Cuadrado to those looking at ways to progress and grow their business. He likens the partnership he and his wife Gisela have with established farmers to that of the Oxpecker bird and the rhino. The rhino is the big animal that wants to get on with it while the Oxpecker helps with the small stuff. “My advice is - find your rhino,” he says. Four farmers spoke about their experiences progressing and investing with others at the South Island Dairy Event (SIDE) in Ashburton last month in a session on getting in and getting out – what those getting out want and what those getting in have. Carlos is from a dairying family in Argentina and came to New Zealand with his wife Gisella in 2002. Both have agricultural degrees and quickly grasped the Kiwi, grass-based dairy system but it took returning to Argentina in 2006 for a short stint to realise they were ready to fully commit to living and farming here and go after the opportunities they knew existed. They had arrived with nothing but working hard and taking every opportunity to learn was the first step – whether that was through courses, DairyNZ discussion groups and specialist workshops, reading, conferences or talking to other farmers, Carlos says. Getting good at what you do and building a reputation as a hardworking, good person is key, he says. It was their reputation that saw their farm owner agree

50 50

Malcolm Ellis, John Donkers and Carlos Cuadrado: find your rhino.

to take them on as variable order sharemilkers on their 900-cow farm and it was their absolute focus on building farming skills and the strictest of cost control that allowed them to build equity. Their efforts, presence in the community and results got noticed by other well-established farmers and in 2012 they were approached to join a 560-cow equity partnership with Greg and Rachel Roadley and two other couples. In 2016 the partnership bought a second farm – a 430-cow farm near Oamaru. Earlier this year the partnership was dissolved and Carlos and Gisela bought the Oamaru farm while continuing to variable order

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Kerry and Carol O’Connell and Sam and Anna O’Reilly on farm: do your due diligence.

sharemilk the 900-cow farm and oversee it for their owners who now live in Australia. “Your rhinos are out there – find out who they are and find out what they want. “You can’t tell people what they need, you have to think about what you can add to the business of the rhino.”

O’Reilly’s path to farm ownership Sam and Anna O’Reilly have also achieved farm ownership through an equity partnership. They climbed the progression ladder from wages to a small 180-cow sharemilking job and on to a slightly larger sharemilking job, both in Waikato before they

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

decided to head to the South Island for the scale they knew they needed if they were going to achieve the farm ownership goal. The first step was a 750-cow job and a massive learning curve, arriving into a snow storm with a six-week-old baby. But Sam says hard work, hunger for information and learning and building a strong relationship with their farm owners enabled them to progress with those owners to a 1100-cow farm. “All we’d had was my parents going guarantor for us and we were able to take that off then but the following year the payout plummeted and we found ourselves in a bit of trouble.” They’d already built a great reputation in the district which saw a “local benefactor” buy 300 cows from them and lease them back to them for 12 months when Sam and Anna could buy them back at the same price. “I’ve never been so tight on a budget in my life.” Later that year they found themselves at the epicentre of the magnitude 7.1 Darfield earthquake which damaged their farm dairy. Resilience, problem solving skills and valuing their team got them through as it would just over a year later when their second daughter, aged two, suddenly came down with the paralysing Guillain-Barre syndrome which meant months in Starship Hospital, Auckland, before she recovered. “While all this was going on our former bank manager, who knew our farm ownership goals, had put our names forward to an older couple who were looking for an equity partner.”

51 51

SPECIAL REPORT: BUILDING A PORTFOLIO

Sam O’Reilly, Malcolm Ellis and John Donkers: do your homework.

“The farm had been in the family for 80 years but their children had all gone into other professions. “There were a lot of meetings and interviews and it was a tough time dealing with everything that was going on but it was a fantastic opportunity. “We did our own due diligence and knew we could be in business with these people.” They did a governance course all together and the deal was sealed with Sam and Anna able to go in with 30% equity to create Carriante. Continued hard work and an eye on further opportunities saw Sam take up the operations manager’s role on a 1500-cow, two farm-dairy property for absentee owners and bring their 2IC up to manage the equity partnership. They moved to a house on the larger operation and are now 50% equity partners in Carriante. In addition, they are on track to take full ownership within the next five to six years.

“You have to have an open mind and be prepared to be flexible, look for the right people and do your homework,” Sam says. Life throws plenty of curve balls at you so learning resilience and building strong relationships can keep you on track. Anna is a trained teacher and investing a proportion of their earnings into private school education for their three daughters has been a priority. “You have to make sure what you’re doing, what you’re investing in fits with your long-term goals and your values.” Canterbury farm advisor and farm owner John Donkers has been involved helping people on both the ‘get in’ and ‘get out’ side of the equation. The family farming business Camden has partnered with several staff and young people to their mutual benefit but a big driver has been to help those valued younger staff progress. It’s resulted in some achieving farm ownership both outright and in partnership. John’s also worked with owners, including Sam and Anna’s partners, in the stepping out part. Reputation is huge, he says. “Don’t annoy the rhinos. It’s a small world, New Zealand is small and dairying is a small business and in the South Island even smaller - don’t burn your bridges, network, talk to people. “Be hard workers and smart workers – there are plenty of hard workers that haven’t made it. “Don’t underestimate how big a deal it is for farmers getting out. There’s a lot of emotion, there can be a lot of frustration at learning to let go,” he says. It must be well planned – even five to 10 years out because there’s a significant financial aspect to it and a

“You can’t tell people what they need, you have to think about what you can add to the business of the rhino.”

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Dairy Exporter | www.nzfarmlife.co.nz | July 2021

mental aspect too. It requires trusting others and a whole new level of communication if they are taking on a sharemilker or equity partner. The rhinos need to be looking around for the right Oxpeckers too, he says. Any partnership that results in a drop in annual income has to be affordable and the timing relative to market highs and lows has to be considered along with tax implications including those associated with livestock and machinery sales. If you’re investing with, partnering with or selling out to family the due diligence, planning, communication and structures need to be even more rigorously dealt with because long term family relationships are at stake.

Leasing out the farm Farm owner, LIC New Zealand markets general manager and passionate advocate of the dairy sector Malcolm Ellis says the decision to lease out the farm he owns with wife Jody wasn’t one taken lightly but it’s given them the freedom to pursue other interests while maintaining their asset, maintain their interest in farming and allowed them to see others grow. “Don’t underestimate the fulfilment a farm owner gets from seeing others succeed.” Over a 10-year period of owning two farms and milking about 1000 cows, he and Jody had seen eight couples move on to sharemilking and six have now bought their own farms. “Farm ownership has never been easy but I assure you it’s always been possible.” “Plan but be ready to be agile.” Malcolm says he spent a lot of time getting into dairying as a fourth-generation farmer, worked all hours but wanted to pursue the herd improvement passion

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Malcolm Ellis and John Donkers: helping others succeed.

through his work at LIC and Jody wanted to get back into teaching. They needed to take some complication out of their lives and had decided to lease out the farm but at the same time had been working with previous staff helping them do the numbers on going sharemilking elsewhere. Malcom says having that connection, being able to trust them with their asset and the chance to back them financially to take on the 500-cow lease opportunity all came together at the right time. He urged other farm owners to look around and identify the young go ahead people to partner with and create a win:win. “My advice to young people is make every post a winner and realise that even when you think you can’t see anyone, people are watching what you do.” • Interested in meeting potential equity partners? www. nzfarmlife.co.nz/younger-than-50-older-than-60/

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SPECIAL REPORT: BUILDING A PORTFOLIO

Invest to get ahead Dairy farmers wanting to invest in opportunities off-farm have benefited from Mark and Measure courses run by DairyNZ. Anne Lee spoke with Paul Bird to find out how dairy industry workers can get ahead financially without getting burnt.

nvestment on and off-farm can help fast track progression, diversify risk or even create pathways for succession. Whatever it’s for, investing your hard-earned cash into an asset should always be done with sound advice. But there are a few fundamental checks and balances you can do when assessing a venture, no matter what it is, DairyNZ’s Paul Bird says. He’s been running Mark and Measure courses for many years and has seen farmers invest in a wide range of things including young stock, mixed-age cows, support land, houses in town, storage units, commercial property, additional sharemilking businesses, managed funds, KiwiSaver – you name it. “What I usually say to them – and it may sound obvious – but do your homework, build your knowledge so you can do it well. “If it’s rearing calves – learn how to do that well, if it’s owning a house in town to rent out – learn all you can about the market, about your responsibilities as a landlord. “Understand the upsides and the downsides, so the risks. “They might be purely financial – what happens if interest rates change, if returns don’t meet expectation, what might be the reasons returns would be lower, are they short term downsides you could ride out or could they be fatal? “There could be other factors like finding out you actually don’t like being a landlord and renting out a house and it takes too much time and travel. “Whatever it is, make sure you fully understand it and if you can get good at it before you invest. “Some couples are great at doing up houses and love it whereas others aren’t. “If it’s an equity partnership make sure you really know who you’re going into partnership with, that your values are aligned. Know the farm, it’s strengths and weaknesses and know the numbers. “Do your due diligence well and get professional advice

to interrogate the numbers properly and make sure business structures are set up well.” Paul says building up livestock numbers has given many young farmers a good leg up, but there are multiple permutations to how this is done that will affect just how good the margin and equity growth is including whether they’re dairy or dairy/beef stock, whether they’re free or at a cost, the cost of rearing, where and how much grazing is. It can boost annual equity growth but it doesn’t come without risk either – one death can impact a margin as can timing of sales in weather affected markets. “Talk to others who have done it so you can learn from them.”

Partnering with others Paul says many young farmers have made big progress and achieved farm ownership goals by investing in the intangibles such as their own reputations. “There are a lot of creative ways people get into farm ownership and that can often include partnering with others but to make those connections you need to invest in yourself. “Your reputation is a key asset and having a reputation as a hard worker, being honest and known for your integrity – people notice that. “So, before you even think about what you might invest in there are a couple of key principles you need to think about first. “First, be good at what you do, so be good at farming and learn all you can and be good at saving because you’re going to need that saved cash to get into any venture and kick start your progression. “Second, when you’re looking at investing, think about what interests you, what you’re good at or work out how

you can be good at it and execute on that. “Think about whether investing in this area you’re interested in and good at will actually get you to where you want to go in the time you want to get there.” DairyNZ has a decision making matrix Paul discusses with Mark and Measure course participants that can help when they’re assessing an opportunity. The first step is to develop a list of criteria required for the success of an opportunity. They might include factors such as: • How the opportunity fits with your vision and long-term goals. • Enjoyment level. • Time involved – initially, on a day-to-day basis, at a management or strategic level, until returns are realised. • What are the investment returns, cash surplus, cash flow profile, capital gain? • Risk level. • Other people – does it need staff; will you be working with others or independently? • How does it match your strengths and weaknesses? “People will have their own criteria and it’s important to give those criteria enough consideration,” he says. The criteria are listed down the page with the options to be assessed listed across the top of the page. In each box you put a ranking from 0 (poor fit) to 5 (best fit) to show how the option would fit or stack up for each of the criteria. While adding up the rankings for each option can give a good picture of how they compare, some criteria may have a greater weighting than others so it’s important to assess the results carefully. It’s still useful for one option because it gets you thinking about an opportunity based on the criteria that are important to you. The next step can be to play it forward in your mind, picturing the scenarios that come with a preferred option. Think short, medium and long term impacts and think about what your gut feel tells you as well. It’s also important to understand how you get returns from any investment, Paul says. “How easily can you get out and cash up if you want to? Are you locked in for a specified time? “Getting out and timing that right can be crucial.”

Contract milkers build equity with houses Joe and Danielle Kehely, pictured, are contract milking in Northland and have invested in two houses to help build their equity as well as have an asset they can borrow against for the next step in sharemilking. Joe says he bought his first house at age 16 after saving a $35,000 deposit thanks to working hard after school and over weekends possum trapping, relief milking, rearing calves and spraying weeds. The two-bedroom unit in Tauranga was worth $175,000 back then and by the next year had already lifted in value to $250,000. It turned out to be a great investment thanks to capital gains in the region and he and Danielle were able to buy a second house in Kaitaia. They’ll likely sell one and retain the other to borrow against for their next investment in cows. Changes to the tax laws relating to rental housing have cost them about $15,000/year so this has a material effect on returns from owning investment property.“It’s something people have to be aware of when they’re looking at getting into buying a rental house,” Joe says. The Mark and Measure course they completed this year has given them a lot more skills when it comes to analysing their next steps, particularly when it comes to scrutinising returns on investments and assets. “The biggest thing is investing in your knowledge and building skills.”

SPECIAL REPORT: BUILDING A PORTFOLIO

Understanding capital and income Farmers need capital, plus income when they hang up their boots. Elaine Fisher spoke to retired farm finance specialist Don Fraser to find out more.

etirement may seem a long way off for many farmers, but there’s no time like the present to begin preparing for it – and that preparation starts with understanding the difference between capital and income, says Don Fraser, retired farm finance specialist and former dairy farmer. “It’s vital not to mix the two up. Too often when farmers retire, they take the capital from the sale of the farm and spend it, ending up with nothing left to produce an income for their retirement.” Don says consensus among many of his colleagues, including former rural bankers, is that 80% of farmers are very poor at managing their finances after selling their farms. “Believe me you do not want to end up living on the pension and from your vegetable garden. I’ve seen too many people, not only retired farmers, having to do just that.” After 52 years involved in the rural sector, Don has retired and is living at Waihi Beach, where he’s actively involved in the community. He attended Lincoln College gaining Diplomas in Agriculture and Valuation and Farm Management; worked for the Rural Bank; is a registered valuer; was a dairy farmer and since the mid-1990s, ran his own company Fraser Farm Finance, helping farmers access finance and providing them with advice. “Over the decades I’ve seen some horrendous things happen to farmers, some outside of their control, but some which were not. It’s very hard to convince some farmers that the capital they have built up in their property from their life’s work, should not all be spent on a world holiday, new vehicles and a house or lifestyle block because too often, there’s nothing left to live on, especially if one of you has to go into care later in life.”

“Believe me, you do not want to end up living on the pension and from your vegetable garden.” Investing off-farm Investing off-farm as a way of preparing for the future makes sense but Don strongly advises seeking guidance from suitably qualified specialist consultants to ensure farmers invest wisely and ring-fence their capital. “Farmers are generally very good at what they do but investing and finances are often not a strength and when they think of investing off farm, most have no idea what they are doing. “Some farmers like to control things themselves but generally it is better to get a trusted advisor,” says Don. He is an advocate for farmers surrounding themselves with good people who bring an unbiased and informed perspective to the table. An option worth considering when planning for retirement, is to sell the milk company shares and cows, buy a house in town and lease the farm to another farmer. “That retains the land for the family and provides an income. It’s easy and it’s what farmers know.” Another option is to buy houses as rentals. “The housing market has recently shown rapid gains but are these sustainable? The bright-line test, loss of tax breaks on interest and risks associated with bad tenants, plus a return of between two to three percent on investment means this option is not used by many farmers.” A hands-off and relatively easy investment is to put money into a managed portfolio such as those offered by companies like Craigs, Spicers, Milford, Forsyth Barr and ANZ. “This involves putting your money into the hands of someone else and requires a high level of trust. However, these portfolios are showing good returns of around 5% and generally have investments spread across New Zealand and Australian shares, utilities, property companies, cash and bonds.” Investing in property companies such as Oyster Property Group or Augusta Industrial Fund provides shares in specific buildings. “These companies run on 50% debt and are reliant on a rental flow and full tenancy. Most of the tenants are big brand companies. It’s a model which does not suit older buildings. Returns are around 5 to 9% but it’s worth asking that as a minority shareholder in these buildings, is your share portfolio worth what you paid for it, should you wish to sell?”

For farmers who want to invest in the share market themselves, Don suggests choosing shares in companies they know, including those who provide onfarm services and the power company they use. “Never, under any circumstance, borrow money to buy shares.”

Industrial property investment Another off-farm investment which Don describes as “a best kept secret” can be buying an industrial property. It’s where he has invested much of his money, but it does require a high level of experience and absolute due diligence. “Often the best investments are right under your nose, and I strongly advise investing in property in your local community. Pride of ownership is really important to many farmers who like to feel they are producing something. By investing in their local service town, farmers will know their tenants and can visit or drive by their buildings on a regular basis. “Before buying a building, do the research, get a good solicitor and a valuer and once you’ve bought the building, form a good relationship with your tenants. It’s amazing how much goodwill a box of beers or an invitation out for a cup of coffee generates.” Often there is pressure to leave or gift a farm to the next generation but that is not always possible. “If the capital from a farm sale is $3 million or less, then there is no succession because the parents do not have enough money to buy somewhere to live and create an income from capital. “It seems that financially successful people really focus on investing their capital wisely and protecting that capital. Those people are also well advised and have a vision for the future. “If you don’t have a plan or vision, you don’t get to go where you want to.”

SPECIAL REPORT: BUILDING A PORTFOLIO

Smoothing the milk price ride Milk futures are becoming part of farmers’ business portfolios. How do you get in on the action? Karen Trebilcock reports.

ou can’t control the weather, you can’t control when your best heifer is going to calve to make sure her calf gets up on its feet and you can’t control whether your 2IC is going to last the spring but you can control the price you get for your milk. It’s called hedging. Futures, options and derivatives is all jargon focussed on locking in your milk price for part or all of your production for this season or for several. Farmers in North America have been doing it for years as an integral part of their business for almost whatever they grow but it has only been available in New Zealand for the past five years. And it’s only available for dairy. Traded on the NZX, in units of 6000kg MS for this season and the following two, milk futures are becoming part of many farmers business portfolios with about 10% of the nation’s 2020 – 2021 season production hedged. Jarden vice president, derivatives Harry Hewitt said corporate farmers were among the first to use hedging but recently smaller, family-owned farms were also using the tools. “It starts with setting out your goals for your future. It might be debt reduction, or a new centre pivot or simply targeting a $1.50 profit per kg milk solid. “Milk price volatility is a financial risk to achieving that goal so if you can take that volatility out of the equation, it helps you to plan.” He said farmers shouldn’t think about whether milk prices were rising or falling and only sell futures when they suspected prices would fall. “It’s a crude analogy but it’s like buying fire protection insurance for your house. You don’t do it because you

believe your house is going to burn down. You do it because if your house does burn down, you’ll be able to replace it.” He said hedging allowed farmers to continue managing their businesses the way they wanted to even if the price of milk solids fell. Deciding how much production to hedge Jarden vice president, should be part of their derivatives Harry Hewitt discussions with bankers, accountants and farm advisors and it was then a futures broker would be brought in. “Everyone should be included in the conversation, so the farmer and all of the stakeholders are on the same page. “Also, it should be part of the discussion at the end of the season. How did it go? Did it achieve what you wanted it to achieve? “Farmers are using it for succession planning as well. It can help them to ease out of a farm while knowing it will still continue to operate in an efficient manner during that process. “You can buy back your hedges at any point through the season, so if a farmer finds themself in a position where they want to reduce their hedged position, they have the flexibility to unwind all or part of their hedge at any time.”

“You can buy back your hedges at any point through the season, so if a farmer finds themself in a position where they want to reduce their hedged position, they have the flexibility to unwind all or part of their hedge at any time.”

Managing your income Harry said the dairy futures market was particularly active in March and April when farmers were preparing budgets for the upcoming season. It was a similar tool to buying feed grain under contract at a fixed cost or arranging with the neighbour to buy their calves at a set price before they were born. “It’s a way to manage your income so you have increased certainty on what is going to happen during the season. It gives you a greater level of control.” As a contractual arrangement to sell a milk solid at a fixed price in the future, it has the same principles as a share traded on the share market. “There has to be a willing seller and willing buyer on the day of the trade. “Farmers are technically the ‘sellers’ in this kind of trade because they are looking to hedge an expected sale price for their milk solids. “Buyers can include various parties who would be interested in securing a price for the supply of dairy ingredients. “Buyers, be it processors, traders or end users, will also be looking to offset their exposure to the milk price.” Although Jarden and other investment companies were talking more and more to New Zealand dairy farmers about hedging their milk production, he emphasised that it was a complex subject. “It isn’t simple. We spend a lot of time talking with farmers, so they have a good understanding of what’s involved. It is not something you should try to pick up in half an hour. “It’s a mindset thing. “And it’s not one size fits all. It’s just one of many tools available, but it gives farmers more control of their business.”

Crop farmers in the US will often hedge part of their production so it covers the amount it costs to plant the crop. It ensures they at least break even. They will also buy crop insurance at the same time to make sure the crop grows to the tonnage hedged. “The US markets especially are very mature. They do a huge amount of trading in the dairy space and it’s part of their regular thinking. In the long run, that’s where we want to get to in New Zealand. “We’d like to see trades for five years into the future instead of the current three, and maybe involve other forms of agriculture too.” For the season ending 2021, between the futures and options market, as well as Fonterra’s Fixed Milk Price, about 186 million kg MS of hedging activity has taken place, up from 140 million kg MS in the 2019-20 season. “It’s already at 120 million kg MS for the season ending May 31 2022.” • This article is not to be relied upon as a basis for making any investment decision. It does not constitute financial advice under the Financial Markets Conduct Act 2013. Derivative instruments involve high levels of risk and cost. Jarden Securities Limited is an NZX Firm, a financial advice provider disclosure statement is available free of charge at www.jarden.co.nz.

SPECIAL REPORT: BUILDING A PORTFOLIO

Tips for investment and protection Christchurch-based accountancy and agribusiness director Pita Alexander shares some investment advice for the dairying sector.

Invest in good professional advice • You must get a top accountant and solicitor in your support team - there is no halfway house as regards top advice. • There is no point in a young couple in New Zealand agriculture finding their banker, solicitor and accountant difficult to deal with - this is not a business approach these three need to be on board and listened to, even if the couple do not completely agree - the top group in every business sector have found that real progress demands this strong, robust connection. • However, never forget that if you find your advisors difficult, the real answer may be that you have good advisors. • Commit your plans to paper - turning them over in your mind is useful but can’t be peer reviewed in that form - all of your key plans must be peer reviewed. • Listen to the crackerjacks in every business sector, regardless of their personality and/or presentation. Learn from their mistakes - you won’t live long enough to make every mistake so save some key time and pain.

Investments to think about • Don’t wait for things to come across your bows - almost invariably you need to swim out to reach your potential. • The purchase of land and buildings early on, if well researched and peer reviewed is usually a good move in agriculture. • Young livestock are like forestry – that is, they grow into money even when you are dithering. • There are all sorts of arrangements with young sharemilkers and contract milkers with the purchase of young dairy stock and the then follow-on grazing arrangements. Many dairy farm owners are very supportive of these structures, properly thought through these arrangements are beneficial to both parties and building up a dairy herd through this process makes a lot of sense. • The purchase by young dairy couples of a house and section somewhere over the last 20 years has generally worked well and makes economic sense. The actual annual return has only normally been in that 2% - 3% bracket if you use honest value figures but there has been another 5% - 6% from inflation gains in almost all NZ geographic areas. • Seldom over time do a couple make a capital loss with a run off block purchase. If a couple are good at this, then they should look at doing this again. • In farming, the revenue side of the business needs constant, repetitive, draining work to keep on top of things - with the balance sheet side, it will go up and down often regardless of what you do but every so often there is some heavy Henry Ford thinking required regarding capital purchase, capital sales and debt.

Invest in you and your relationship • Don’t expect much income during your five year plus apprenticeship period, this is a time of little money, long hours, humility and discipline. However, your apprenticeship is crucial. It is the exact opposite of ‘buy now’ and ‘pay later’, it is ‘pay now’ in the hope of a ‘pay back’ later. • One marriage is enough – sometimes more than enough. • Take your time finalising the right long-term partner – a relationship breakdown for a farming couple is usually worse than for an urban couple. • If both spouses are not good with money, then agriculture is probably the wrong industry for them. • If both spouses don’t naturally like work, then agriculture again is the wrong industry for them. • If you and spouse cannot agree upon your plans, then pause/stop until you can - three-day weekends have a real place regarding this issue.

Banks, inflation and interest • There is a place for bold actions that you and your spouse have worked through and has been peer reviewed - but 90% success will be as good as you will get - head for excellence, not perfection, in anything business related. • Your bank always wants security over more than you have, particularly if there is no land and buildings involved. Get used to this and manage it. You will need about 60% equity (that is cash input) on anything you want to do. • Learning to back away and eat humble pie is an attribute of a long-term top operator - if something does not work in practice, it does not matter if you still feel it works in theory. • Inflation must be pushing behind you, not pushing back in front of you, the power and importance of compound interest is very close to breathing. • Don’t let your combined interest and rent payments exceed about 26% of your gross business income unless there is a very sound solid plan as to how and when they are going to get well below this figure – above 26% you will not normally drive out at this level – praying is the next alternative.

‘Young livestock are like forestry – that is, they grow into money even when you are dithering.’

Protect yourselves and your investment A young dairying couple needs some life assurance cover. This is partly to cover their debt but also because the death of the main breadwinner in sharemilking and contract milking means there is immediately a housing issue, an education issue and sufficient living for the surviving spouse to get their children to 18 years of age and then helping with their tertiary education. How much life insurance? This will depend upon the individual circumstances but a minimum of $1 million each of pure term level term cover for a 25-year-old couple with a standard medical non-smoking cover would cost around $2620 in total (level term to 65 years). I have assisted in seven situations of early deaths like this over 40 years and in all cases, the overall cover was marginally low. Income protection insurance on the main breadwinner in a sharemilking/contract milking/ farm ownership situation again depends upon the individual circumstances, but a standard medical non-smoker cover returning, say, $800 per week would cost a 25-year-old around $930 per year. Over the years, I have found that the Cover Plus option under ACC is good but does not cover sickness etc - another issue is that sometimes the income protection is crucial for the first three to five years but after that it could be reviewed in some cases.

SPECIAL REPORT: BUILDING A PORTFOLIO

Harvesting healthy horticulture returns

Investing in a horticultural company could prove profitable for dairy farmers. Sheryl Haitana reports.

eing an investor in a horticulture company may be a better option for dairy farmers rather than trying to establish an orchard on their own, Perrin Ag senior horticulture specialist Dave Whalley says. Horticulture remains a highly attractive investment option, with the net return per hectare for crops like kiwifruit and avocados significantly more than dairy. Latest research showed the average Bay of Plenty dairy farm had a return of $2000/ha at a $6.40kg MS. Whereas, depending on the crop, net returns per hectare from horticulture range from $40,000 to over $100,000. A Gold kiwifruit crop can return $100,000-$150,000+/ha, a Green kiwifruit crop $50-$60,000/ha and avocados from $40-$60,000/ha. However, the cost of establishing an orchard is not cheap. It’s $550,000-$700,000/ha equivalent just for a Gold licence, then another $300,000/ha to build the infrastructure, canopy and irrigation. The competition for licences is cut throat, with big developers pushing prices up, making it harder for the little guy to get in, Dave says. “It’s pretty competitive. People are intensively planting, building high spec orchards, aiming to achieve a good first crop as fast as possible. It could be year 10 before you get any payback, and the rest.” An investment group like MyFarm, T&G Global, Rockit Apple JV’s or syndicates, could be a good option for a dairy farmer wanting to diversify their business portfolio, he says. Alternatively, a Green orchard can still provide a good return, and there is no licence to buy. “It’s a draft horse instead of a racehorse (like Gold). But a good producing Green block, you can do okay out of it.” Competition for land is a barrier to buying land suitable for horticulture, with land being swallowed up in housing. Traditional horticultural regions are starting to push into new areas.

That is an option for farmers to consider, but they need to consider their location in relation to packhouses, labour etc. Access to water is another key priority and getting consent can be a challenging exercise - with kiwifruit orchards using 30,000l/ha/day in summer and more in early spring for frost protection. Farmers who are setting up orchards on their dairy farm also need to be aware that using certain products and plants on the farm can impact the orchard. Rather than trying to buy new land or establishing an orchard on the dairy farm, buying an underperforming orchard is another good option. There are a lot of orchards under management of packhouses who are interested in volume and not necessarily paying enough attention to individual orchards. These are orchards that could produce another couple of thousand trays per hectare with some small improvements, he says. “A farmer could buy an orchard that’s not performing that well and turn it around.” Other horticulture options such as covered crops like blueberries, capsicums or tomatoes are challenging to make profitable without economies of scale or definite markets. Vegetables are other crops that are competing for land, but they too require scale to be economically viable, Dave says.

“ it’s REALLY IMPORTANT TO

GET THE RIGHT MINERALS INTO THESE CALVES, TO BUILD NATURAL IMMUNITY

”

Ed Grayling Rukuhia, Waikato

To learn more about Ed’s story, visit performanceready.co.nz

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

SPECIAL REPORT: BUILDING A PORTFOLIO

reasons farmers make good share investors By: Mark Lister

e have a lot of clients from farming backgrounds, either past or present. They’re great people, and many have spent decades overcoming a plethora of challenges to grow phenomenally successful businesses. Investing in portfolios dominated by shares, listed property, private equity and fixed income doesn’t always come naturally. Having less control over the fortunes of where your capital is invested is one hurdle, while diversifying far and wide is also a foreign concept for many. However, farmers that can get their head around those hurdles often become astute investors. Here are six reasons why.

They appreciate that risk can come from anywhere

Farmers can be cautious, slightly cynical at times, and even a little bit grumpy. I never hold that against them, and I think that thoughtfulness serves them well. Farmers have an awful lot of risks to consider in their line of business, many of which are outside their control. Commodity prices, interest rates and the currency are obvious ones, and while related to some degree, these are largely driven by global factors that are impossible to predict. Government policy changes are an ongoing risk, most obviously here at home but also offshore. If incentives or regulations change in other countries, that can impact the cost structure or supply response of other regions. Then there’s the weather. Even if you get everything right, a bad season can torpedo an entire crop for some farmers. Share investors have an equally long list of things to worry about, and many of these are just as difficult to predict. Like farming, investing success is as much about risk management, it is being a stock picker or market forecaster.

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They know that the long-term is far more important than the short-term

Keeping your eye on the long game can be difficult, especially when you’re in the thick of a bout of shortterm market turmoil, but it’s non-negotiable for any good investor. The average annual return from US shares in the post-war period has been 10.6% (including dividends), with positive returns in 78% of those 75 years. However, over short-term holding periods the variation can be huge. The best 12-month period was a 59.5% gain, and during the worst US shares fell 41%. It’s not dissimilar with farming. Anything can happen over the short-term and bad years are simply par for the course. Like a great piece of land, a good quality share portfolio will just about always do well over the long-term, which is what most of us are investing for. The hard bit is keeping your cool when the short-term is looking more difficult.

They understand that fundamentals always trump fads

Fashions and fads will always come and go. Along the way, prices and valuations can get out of whack, while markets can become overly pessimistic or exuberant. However, the value of an asset is ultimately a function of the cash flows and returns it can generate, even if those are some time away in the future. Investing in quality assets (be it land or businesses) that are difficult to replicate, generate solid returns, and which are exposed to long term structural growth trends will always trump jumping on the latest bandwagon.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

They have a history of innovation

New Zealand is blessed with a climate that lends itself to successful agriculture, but our farmers have also been very innovative over the years. In part, this was forced upon many after the farm subsidies were removed in the 1980s, during a period where other parts of the world benefited from more generous government support. This need for constant improvement, innovation and reflection will resonate with investors. If we look at the world’s most dominant companies from 30 years ago, few of these would find themselves on the same list today. The farming landscape will continue to evolve, as will the economy, while share markets and companies require constant scrutiny. Those who embrace change and appreciate that nothing is set in stone are best placed to continue performing.

They understand that leverage can be a doubleedged sword

The financial term for using other people’s money to invest in something is “leverage”. In a rising market leverage can make you very wealthy, supercharging your returns. However, in a flat or falling market high debt levels can do the opposite, by magnifying your losses. That’s the tricky bit when it comes to debt. It can be a great friend, but moderation is important and the concept works best when asset prices are rising. Many farmers have lived through an era of much higher interest rates, and some will have seen their peers get into trouble by overpaying and overleveraging. When it comes to analysing companies, balance sheet strength and an ability to ride out a potential downturn or recession is one of the key attributes we look for too.

Mark Lister, head of Private Wealth Research at Craigs Investment Partners.

They recognise the need for growth assets

Many farmers will remember the 1970s and 1980s, when inflation was running at an annual rate of more than 10%. Even at just 2.5%, inflation is still the enemy of investors and those looking to maintain their spending power. Over 10 years inflation of this level will reduce the value of your capital by 22%. Land has always been a great asset for those looking to insulate themselves from the scourge that is inflation. But even after you’ve sold the farm, it is crucial that you continue to protect yourself from this erosion of your wealth. Growth assets like listed property, shares and interests in private companies can help achieve this. Since 1967, the “real return” (which is the annual return in excess of the inflation rate) from NZ shares has been 4%. Shares provide returns from capital growth and dividends. Capital growth comes from a rising share price, while dividends are an income stream that is paid by the company to shareholders out of profits. Good companies endeavour to steadily increase these dividends over time, which provide investors with an element of inflation protection.

• Mark Lister is head of Private Wealth Research at Craigs Investment Partners. This column is general in nature and should not be regarded as financial advice.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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ENVIRONMENT WATER QUALITY

Taking a lead on water quality Manawatu dairy farmer Christine Finnigan started the Nguturoa Catchment group and now has a strong team of farmers working together for water quality. Jackie Harrigan went along to the catchment field day.

hristine Finnigan floated the idea of a catchment care group three times at her local DairyNZ discussion group before the Manawatu dairy farmer decided to just start it herself. Now the Nguturoa Catchment group has a thriving group of dairy, sheep and cattle farmers, lifestyle block owners and others on the Nguturoa catchment that runs off the ranges behind Linton and joins into the Tokomaru river before meandering down to the Manawatu River. Now their SUB project - ‘Seeing, Understanding and Believing’ sets out to measure trends in the ecological health, nutrient levels and sediment status of the Nguturoa stream, directly linked to waterways draining from critical source areas on the farms and other properties. Christine and two other landowners have developed farm plans to show how they are contributing to improving the waterways in the catchment as part of their farming business.

FINNIGAN FARMS

Christine Finnigan farms 160ha at the foot of the Tararua Ranges in a family 66

partnership with son James and daughterin-law Hanna. They purchased the farm five years ago as part of their succession plan and farm a high breeding worth (BW) Jersey herd at a System 3-4 level milking once-a-day (OAD). While the family can run 2.6 cows/ha on the farm, Christine says the Tokomaru silt loam is a poorly draining soil type not suited to horticulture and best suited to pastoral farming. “We have to make the best of the land and the best use is pastoral farming.” Their goals focus around profitability and debt reduction, developing the farm infrastructure (fencing, drainage, water and effluent system upgrades), and preserving and enhancing the natural features of the farm (bush remnants, streams) along with family/hobby time. The farm has an effective area of 140ha of which 56ha is rolling country with 7ha with slopes over 20%. The pastures are mainly ryegrass and clover. Effluent is stored in a pond with a capacity of 2000m3 and is sprayed regularly on the effluent block. Waterways are all fenced and almost all races and culverts divert stormwater through the

pasture. Fertiliser is applied in autumn, 400kg/ha of 15% potassic superphosphate onto the milking platform and a blend with extra potash onto the runoff. During spring about 40kgN/ha is applied following each rotation by the cows and in autumn dressings of 40kgN/ha go on each month, contributing to a nitrogen surplus of 114kgN/ha. The Linton farm has natural features that Christine and the family were keen to preserve; like the lovely stand of native

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Left: Christine Finnigan and consultant Terry Parminter water clarity testing amount of sediment moving through the catchment. Below: Wide view of the Nguturoa catchment

bush and the presence of freshwater mussels in the stream, along with kokopu (native fish) spotted in the stream on the neighbour’s farm. Everyone in the catchment relies on each other - they are all interrelated, Christine noted. “What we do in the top, the bottom and the middle of the catchment affects the whole catchment.” “One of the things that I didn’t realise was that native fish move up and down the catchment - if they are not able to get in at the bottom they will not make it up to the top.” “We need to measure water quality and use the science to know what to do in our patch.” To this end, with the help of NIWA scientists and the support of the NZ LandCare Trust, the group is monitoring the water quality monthly by testing at two sites on the Nguturoa stream. Further funding from the Our Land and Water project under the National Science Challenges has enabled the group to extend the testing to look at three individual farms and their influence on the water quality. Christine says the water quality tests on the Nguturoa Stream through their runoff shows the farm appears to be adding additional sediment and some phosphorus but that most of the nitrogen measured to date is organic nitrogen rather than nitrate or nitrite.

“Over the next year we plan to complete the fencing of all the waterways on the runoff and add riparian planting for sediment and nutrient filtration and to increase biodiversity values.” ”It’s not hard if you break it down into small bits - we don’t have to fence it or plant it all in one year - in fact we now know that temperature is influenced by trees but grass is a very good filter so there might be some streams that are better filtered rather than having trees on them. “We want to know what is going into the stream and what effect it is having on the life of the stream, especially the invertebrates, and what actions will make a difference - this will take time.” Members of the catchment group are nervous about creating a weed and pest corridor up and down the catchment. “I can see that we will be spending a bit of time on weed control.” “Blackberry and other weeds like gorse control will be the next thing to crack into on our list of risks. “We have ticked off some of the big risks like effluent areas, a standoff area, effective irrigation, minimising cropping and using wetland areas to capture nutrient.” ‘Everyone has different skills, so if we work together each of us can make a difference so that one plus one equals three.” Part of the plan is some members propagating trees in a plant nursery, growing short term trees and longer term trees, starting up a pest trap library and executing more fencing along with the monthly testing.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

FINNIGAN PARTNERSHIP: Total farm area: 160ha Eff area: 140ha Milking platform: 115ha Milking cows: 300 cows BW/reliability: 190 / 60% Production: 125000 kg MS 1100kg MS/ha 420kg MS/cow Average calving date: 28 July Drying off date: 25 May Average pasture: 13,000kg DM/ha/yr 5ha summer forage rape 5ha summer turnips Supplements made: 80/90 tonne DM PKE used: 180 tonne Heifers: grazed off Dry cows: 200 on runoff, 100 on standoff pad. OVERSEER RESULTS: Nitrogen surplus: 114kgN/ha N loss leaching: 29kg N/ha N use efficiency: 34% (efficiency of N product from N inputs) Phosphorus loss:1.2kgP/ha Total Greenhouse Gas (GHG) emissions: 1386 CO2e tonnes/yr 8.7kg CO2e/kgMS 8,663kg CO2e/he/yr Methane: (rumen activity) 68% NO2: (mainly animal dung) 19% CO2: (energy) 13%

Find your farm’s Critical Source Areas A critical source area is a small part of every property (eg 20%) or catchment area that contributes most (eg 80%) of contaminant losses. Rich McDowell from AgResearch told the Nguturoa Catchment care group field day that it is important to know where each property’s CSAs are and to apply mitigations to them based on the cost-effectiveness and ease of implementation, saying it will be 6-7 times more cost-effective than a blanket approach.

POTENTIAL CRITICAL SOURCE AREAS ON THE FINNIGAN FARM:

Top to bottom: Fenced off streams and plantings. A drone view of cows and fenced off native tree areas. State Highway 57 passes across the stream with heavy metal contaminants in the runoff.

• Effluent is currently stored and treated - for this farm at the farm dairy in lined ponds and applied to paddocks only when soils are below field capacity. • Historical effluent ponds: these may leak into the groundwater - over time these are being allowed to silt-up and this is being accelerated by adding raupo along the edges. • Silage is being stored - in this case more than 25m from the nearest waterway and stormwater runoff is kept at the silage stack. • Stormwater from vehicle races and stock lanes: on this farm stormwater runs off tracks across nearby paddocks or is diverted across paddocks to slow sediment. • Stormwater from State Highway 57: this is a likely source of sediment and heavy metals - zinc and copper. At present some of this is being diverted by NZTA through culverts and into streams running through the farm. • Water running off down steep slopes. This may be a problem if winter grazing removes the vegetative cover and pugs the soil. On this farm 2/3 of the herd are winter grazed mainly on pasture through the flatter runoff block paddocks. The rest of the herd maintain pasture cover on the milking platform and are kept on the standoff pad during adverse conditions. • Vehicles and livestock crossing waterways. All waterway crossings have been culverted. • Direct access of livestock to streams. All streams are fenced. • Streambank erosion. The waterways on the milking platform where this may be a problem are being fenced off and the riparian areas are being planted. • Cultivation during cropping. Full cultivation is only carried out when paddocks have become ‘runout’. Otherwise, direct drilling is used to reduce the risk of wind erosion.

WHERE TO FIND MORE INFORMATION To see if there is a community-led catchment group in your area, contact your regional Landcare Trust NZ office or check out their interactive National Community-led catchment groups map. www.landcare.org.nz/completed-project-item/ catchment-groups Our Land & Water National Science Challenge – Toitū te Whenua, Toiora te Wai have provided a repository of resources for catchment groups and catchment planning.

Available at https://ourlandandwater.nz/get-involved/inyour-catchment/ For training, both Landcare Trust and the Mountains to Sea Conservation Trust can be contacted. The Mountain to Sea Conservation Trust, with the support of the Department of Conservation, runs Whitebait Connection all year round across seven regions throughout NZ. https://www.whitebaitconnection.co.nz/

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Catching invertebrates from the stream With help from NIWA scientists Juliet Milne and Amanda Valois, five rounds of water sampling have been conducted, two across a full suite of sites and the other three centred on two sites, a spring fed site at the top of the catchment and in the Nguturoa stream at the bottom of the catchment.

CONCLUSIONS FROM THE TESTING WERE:

• Turbidity (a measure of cloudiness of the water related to visual clarity and suspended sediment) is consistently higher at the downstream site compared with upstream. Turbidity is highest when there is disturbance of the stream bed or bank (eg from stock access) and in wet weather due to sediment runoff and bank erosion. • Nutrient concentrations are lower at the top of the catchment Testing nitrate levels. than the bottom. The median concentrations of nitrate-N (typically the boat abundant form of inorganic N in rural streams) is particularly low but concentrations will increase aswith the move into winter when soils are wetter and groundwater levels higher. Nitrate (along with ammoniacal-N and dissolved reactive phosphorus) is highly soluble and is rapidly taken up by algae and plants which can reach nuisance levels, and at higher concentrations than seen here can be toxic to aquatic life. • E Coli: the median count at the downstream site was significantly higher than the upstream site. An indicator of faecal contamination in freshwater but warm-blooded animals such as humans,

animals and waterfowl, the E coli level is useful for indicating suitability for contact recreation and other uses such as potable water or stock water supply. Phosphate level testing. • Nitrogen: The majority of nitrogen is organic N, which occurs in many forms - amino acids, proteins and urea, and is generally associated with soil or plant material, including runoff from land where manure has been stored. Although organic N is less readily available to contribute to algal blooms in streams, over time it should break down to nitrate, nitrite and ammonia and can contribute to problems downstream in lakes and estuaries. • Ecological health: Benthic macroinvertebrates (small insects and other animals that live on the stream bed) were sampled at the top and bottom of the catchment in March, with the animals identified, and assigned a score based Catching invertebrates on NIWA’s SHMAK from the stream. Macroinvertebrate Index. The top site was in ‘good’ condition and a number of species sensitive to organic pollution, including mayflies and caddisflies were found, along with koura. The lower site was in ‘fair’ condition (on the SHMAK scale). The site had poor habitat for invertebrates, with high amounts of sediment on the stream bed and excessive algal growth (which can lead to oxygen depletion overnight). There were some very small invertebrates - side-swimmers and worms, no mayflies, but a number of fish species were present including inanga.

Wildlife in the stream includes eels.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

OTHER INFO

The Stream Health Monitoring and Assessment Kit (SHMAK) manual describes the monitoring methods for each of the indicators used in the Nguturoa SUB project in more detail. A kit can be purchased from NIWA: niwa. co.nz/our-science/freshwater/ tools/shmak/shmak-manual There are also instructional videos to complement the SHMAK manual demonstrating correct procedures for carrying out the measurements for each component of the SHMAK, including the collection of water samples and managing your health and safety around rivers and streams. niwa.co.nz/ our-science/freshwater/tools/ shmak/videos Mountains to Sea Wellington, in collaboration with Greater Wellington Regional Council, have developed a set of community-friendly resources for monitoring freshwater fish using both spotlighting and traps. mountainstoseawellington.org/ monitoring-freshwater-fish/ Land, Air, Water Aotearoa (LAWA) is an information hub providing information on the quality of New Zealand’s freshwater, displaying data from over 1100 river monitoring sites. There are also fact sheets that provide information on water quality and the data presented, as well as a link to the National Environmental Monitoring Standards website. LAWA website and fact sheets: www.lawa.org.nz/

DIY IN-RIVER WATER QUALITY MONITORING:

Riverwatch is a new water quality monitoring service, combining a waka/pod collecting data that sits tethered in the river, and software/network ability to feed continuous real-time data on temperature, dissolved oxygen, turbidity, pH, conductivity and nitrates to a RiverWatch data portal accessed through desktop and phone app. Launched June 2021. More info: www.riverwatch.nz 69

ENVIRONMENT IMPROVING LAND AND WATER

Sustainability: thinking, sharing, and acting Kaipara dairy farmer Earle Wright is a newly-minted DairyNZ Climate Change ambassador, a role that to him is a recognition of his whakapapa, his actions making change to environmental matters, and his credibility locally as a farmer making a difference to the whenua. Chris Neill reports.

arle Wright is a second-generation dairy farmer on what was a Lands Settlement Scheme ballot farm at Tapora on the edge of the Kaipara Harbour. He took it on because his brothers chose to follow other careers. Being of Ngati Whatua and Ngati Porou descent, Earle is a passionate conservation-minded farmer intent on reintroducing native flora and fauna for stronger biodiversity and harbour protection. His whakapapa takes him back to the waka Mahuhu ke te Rangi, which came from Hawaiki to land at Taporapora. The small island Manukapua (‘bird cloud’) off Tapora, which is significant to where the waka landed, is of great importance to Earle and he’s committed to its restoration. With his wife Gaeline they milk 300 cows on a 120ha platform, with a 61ha runoff and substantial areas of conservation planting. The 100,000ha Okahukura Peninsula is a challenging place to farm and subject to the extremes of Northland’s climate. Because of its proximity to Auckland, this district, which was previously remote, is undergoing significant land use change. Avocado trees are taking over dairy pasture, with consequential increases in demand for people and water resources. Earle’s roles as an Integrated Kaipara Harbour Management Group (IKHMG) flagship farmer, a member of the Dairy Environment Leaders Forum, chairman of Tapora Land and Coastal Care Group and respected dairy farmer, readily identified him as a candidate for a DairyNZ Climate Change Ambassador. DairyNZ sees the role as “an important part of helping dairy farmers and our farming communities understand how they can 70

Earle has planted an extensive wetland area - here he is in front of it in 2017.

make environmental improvements on their farms”. IKHMG and now the substantial Kaipara Moana Remediation programme are intent on improving water quality in the harbour, which aligns with Earle’s personal values and vision.

“It’s not something that can be done alone, it requires a collective effort to make a difference.” A key element of achieving their outcomes is farmer participation in sediment reduction through stock management, erosion control, and riparian planting. The primary focus is on reducing the 700,000 tonnes of sediment

entering the Kaipara annually, which is compromising water quality and marine life. Personal success for Earle is finding whitebait returning to the streams on his farm, and returning gorse-infested land to a wetland with thriving native plants that have been established by students from the neighbouring Tapora School. The Climate Change Ambassador role adds another dimension to Earle’s interests. He expects that applying and encouraging farming practices that ultimately reduce methane emissions and sequester carbon will contribute to the local, national, and global effort to address climate change. Knowledgeable farmers acting locally with intent to enhance the environment will accumulate to achieve substantive change. “It’s not something that can be done alone, it requires a collective effort to make a difference.” More research is required to develop farming systems that farmers can adopt

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

DAIRY & CALF

SHELTERS FF O NDEDS A ST SH

Native plants established in this wetland were grown by students from the neighbouring Tapora School.

to operate profitable businesses that are environmentally sustainable. As an ambassador, Earle expects to lead by adopting new systems and encouraging other farmers to follow. Earle has a 30-year vision for the change he wants to be part of, which he breaks into three words: Thought – where every farmer’s subconscious applies an expectation of high environmental standards to all their planning, recognising environmental sustainability is critical for their business and to them personally. Word – farmers share their expectations and achievement with each other to encourage and promote adoption of land use and farming systems that are environmentally sustainable. Deed – our farming practices are recognised by consumers as meeting their high expectations of sustaining the environment while delivering a nutritious and desirable product. These elements are part of Earle’s deep cultural and personal values. He believes that individual producers must understand the world’s expectations of them, prepare themselves and their business, and then respond by delivering what markets, processors and regulators need. He connects with farmers who “want to do the right thing” and contribute to the change. However, there is frustration with being blamed for their animals’ methane outputs but not having specific models to adopt or tools to use that reduce both carbon and methane emissions. Earle is also concerned that continuing

current practices is creating a long-term detrimental effect on the land. He is keen to see farmers identify and adopt solutions to achieve the changes that are needed, rather than being required to meet regulatory control. He sees the inclusion of Māori as an important element in this process. It is likely that local Maori will have a role in the granting of future resource consents and suggests it would be prudent to have solutions that align with their values and expectations. Sharing these views with the Extension Southern Northland Dairy Cluster encouraged these farmers to reflect on their own circumstances. All of the group farm within the Kaipara catchment and recognise the need to improve Kaipara Moana and be part of addressing climate change issues. Earle addressed the question of recognising farmer contribution, noting there is a common expectation that farmers will contribute fencing and planting to remediation work. This comes on top of providing the land that is contained in the conservation area and controlling pests and weeds that thrive in areas not grazed. Earle is also recognised for his enthusiasm and willingness to encourage other landowners to engage in thinking, sharing, and acting in ways that contribute to environmental sustainability. While Earle has a long-term view of the changes required, he understands the urgency to act now and continues to promote the need and activities to improve the health of our environment.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

NG I ER DS T IN E W SH

LF ERS A C LT E SH

www.redpath.co.nz Free Ph 0508 733 72871 sales@redpath.co.nz

Fraser Hasnip says the technology takes the stress away and is allowing him to run his 300-cow operation solo. 72

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STOCK NEW TECHNOLOGY

‘Hands solo’ for cow collar farmer Pirongia dairy farmer Fraser Hasnip recently went to Waiheke for the weekend and was able to shift cows from his phone using virtual fencing technology. The smart cow collars have been a game changer and are allowing him to run his 300-cow farm solo, even during calving. He talked to Sheryl Haitana about how Halter is changing his future in farming. Photos: Emma McCarthy.

raser Hasnip used to lay in bed listening to the rain getting heavier before making the decision to get up, put his wet weather gear on and go shift the cows off the paddock. It’s an all too familiar story most dairy farmers have experienced at some point to prevent pasture pugging. Now, Fraser can simply push a button on his phone, roll over and go back to sleep, and the cows shift themselves. It’s just one of the labour savings Halter has created. No more lugging around reels and standards, putting up break fences. No sitting on a motorbike following cows to the farm dairy or locking them away. Drafting springer cows out of the dry mob is no longer a game of bullrush with a break fence in a paddock. In fact it requires no hands-on effort. “It’s been game changing. it has given us back a lot more time to run the farm so I can run it as a one-man operation,” Fraser says. Fraser’s parents Peter and Sue Hasnip own the 106ha of easy rolling country under the Pirongia mountain in the Waikato. Fraser lives onfarm with his wife Claire and two children, a third on the way, and manages the 300 Friesian crossbred cows. Recently on a family weekend away to

The collars have solar panels to charge the batteries. They take 3000 readings every minute of the cow’s activity and behaviour. Picture supplied by Halter.

Waiheke to celebrate Sue’s birthday, Fraser was able to schedule times for the cows to shift to the next break back at the farm. He could see every cow live on his phone at any time. to know where they were and if they were okay. “I did think I might be looking at the cows all the time on the phone, but I don’t. It’s given me confidence that the cows are in the right place and the cows are okay, and given me comfort when we are away.” In future, if Fraser employs a relief

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

milker, he can schedule the cows to be moved and to come to and from the farm dairy. All the relief milker has to do is make sure the gates to the right race are open. It was Peter who initially grabbed a pamphlet from The National Fieldays when Halter was in the Innovations tent and Fraser registered his interest. The Halter team put the collars on the cows last September and Fraser has been working closely with the team giving feedback on how the collars are working on the farm, as the company rolls out commercially. 73

VIRTUAL FENCE TECHNOLOGY

Fraser can see all the cows live at any time to check where they are.

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Phone: 0800 224 782 Email: subs@nzfarmlife.co.nz

The collars work by making a sound to alert the cow they are nearing a boundary or ‘virtual fence’. When the collar vibrates it signals to the cows that the boundary has been removed and they can move to fresh grass. If they go past the boundary they get an electric pulse. The pulse is only needed in the first few days, the cows then respond just to the sound and vibration in the collar. It took the cows just days to be trained to respond to the collars, Fraser says. “The cows are extremely smart, they learnt the virtual fence in two days. I used to be their signal, or the bike, that they were going to be shifted. Now they know the collar is their signal - they learn to trust the collar. They turn on the sound beautifully. It’s like they have a little shepherd on their shoulder. “I also haven’t had an electric shock for 10 months.” Fraser immediately saw how successful the cows were staying within the virtual boundaries and started taking down fences to allow easier pasture management. “Ironically, I spent lockdown doing fencing. We’ve slowly been taking down fences, they’re an impediment to grazing. We now have about five 7ha blocks.” He has kept his calving block fenced normally to help keep calves in. Fraser says the cows ignore him now when he goes to check on them in the paddock. That makes it easier to check dry mobs because they don’t make a mess wanting to be shifted when they see him. “I think it’s actually calmed the cows down more. You can walk around the paddock checking the cows and they are not worried about you. “I find I actually go to the cows more because I can walk around the paddock without upsetting them.” The time and labour saved and the stress the technology takes away has potential to help farmer’s mental wellbeing, Fraser says. “I don’t have to get up early to get the cows in, I schedule what time I want them at the shed and they meet me there at 5.30am every morning. It’s quite a big thing getting that sleep back.” He simply schedules what time he wants the cows to arrive at the farm dairy, the collars start vibrating to move the cows toward the shed and they get to walk at their own pace.

PASTURE ALLOCATION

Fraser does a farm walk every three weeks, and will do it more frequently in spring. He then loads that information into the Halter app to work out a precise pasture allocation. In the app he then draws the break for the cows of where the virtual fence boundaries will be. The app shows kg DM/cow, square metres/cow and also total area. “It calculates how much grass down to a decimal point. We’ve always farmed on averages. We don’t have Dairy Exporter | www.nzfarmlife.co.nz | July 2021

FARM FACTS

Owners: Peter and Sue Hasnip Manager: Fraser Hasnip Location: Pirongia, Waikato Area: 106ha effective Cows: 300 Friesian crossbreds Mating: 11 weeks Artificial Breeding (no bulls) Production: 127,000kg MS Pasture & Crop eaten: 15.5t DM Supplement: 0.5t/cow/year (70% palm kernel, 30% DDG blend) Crops: 5ha maize, 6ha turnips Effluent irrigation: 25ha

to anymore, we can be precise. “You can fence and manage your pasture in a new way. The breaks don’t have to just be half a paddock or a third of the paddock.” The break can be any shape, it can be drawn around areas to avoid in a paddock, such as wet areas in winter. Back fencing is also simple, meaning the pasture is not being regrazed and is growing the next day. In summer, Fraser drew breaks that would push the cows toward shade during the hottest part of the day to stop them overgrazing. He has always wanted to run the cows in two herds to give more options later in the season, but it was too difficult on his own. Peter still rears the calves, and typically they have employed extra labour until during spring. This year, Fraser will not need to employ any staff. He is now running two herds,120 of the younger and lighter animals, and 180 of the mixed-age cows in the other mob.

SHIFT TO TWO HERDS

Running two herds enabled him to put the younger or low performing cows on once a day (OAD) earlier this season and carry on milking the older cows that were still producing well twice a day for longer. “The cows have always had to be on the same milking frequency. Now I can milk the well producing girls longer into the

Shifting cows can be done over a cup of coffee by Fraser Hasnip.

season - that’s been really big for us.” As a result, they’ve had a record season this year, although the season has also been particularly helpful with a good summer and autumn. The beauty of the smart collars is he can run as many mobs as he wants. So for cavling, he can have a dry mob, a springer mob, colostrum cows and the milkers. They will all get shifted on a schedule, meaning he doesn’t need any help drafting them or getting them to and from the farm dairy. Drafting springing cows this calving will be walking around the paddock looking for cows who are bagging up, and using the app, allowing them to walk through to fresh grass by giving them a new virtual boundary. The other plus is being able to have the data records for any compliance regulation, Fraser says. They can print reports on where the cows have been, down to a heat map which shows where the cows ‘camp’ in paddocks. They can put that data into even

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

more precise nutrient application. The technology is not just an incremental change it’s flipping the whole industry, Halter business development manager Steve Crowhurst says. Cows have traditional cues of farmers, gates, dogs, motorbikes, to tell them it’s time to move. “We’ve repackaged those cues into the collar. We retrain the cows to respond to the sound and vibration.” The solar panels on the collars mean the batteries are constantly charged and working 24/7 and the collars are taking 3000 readings per minute from each cow, measuring 22 different behaviours, from walking, sitting to grazing. This data is then put through algorithms to determine if a cow is behaving differently, which sends health and heat detection alerts to the farmer. “The collars are saving a 400-cow farm 20+ hours of labour a week,” Steve says. Halter owns and maintains the collars and farmers pay a subscription fee per cow/ month.

STOCK VETS VOICE

A vet administering pain relief while disbudding horns on a calf.

Horned cattle in a crush prior to dehorning.

What is pain relief? Words by: Lisa Whitfield

by a veterinarian for a painful husbandry procedure?

usbandry procedures such as castrating animals over 6 LOCAL ANAESTHETIC months old, and dehorning, Local anaesthesia provides a temporary are provided for under new block from feeling pain. The drugs animal welfare regulations which came interfere with the transmission of pain into force recently. The purpose signals to the brain, from targeted of the new legislation is to areas where the local anaesthetic is allow normal husbandry deposited. procedures to continue to The most commonly used occur, while improving the local anaesthetic in cattle in welfare outcomes for animals New Zealand is lignocaine by providing specific guidance hydrochloride. Lignocaine HCl that pain relief must be used for stops the sensation of pain during Lisa Whitfield the acute phase while a procedure is these procedures. For the example of dehorning, carried out, and immediately after the following statement now applies: a procedure until the drug wears off. Its “A person must not dehorn a cattle beast effects last approximately 1.5 to 2 hours unless throughout the procedure the cattle on average following administration. beast is under the influence of pain relief Local anaesthetics do not have antithat is authorised by a veterinarian for the inflammatory effects, therefore do not purpose of the procedure” affect pain and discomfort experienced So what pain relief will be authorised over the days following a procedure during 76

the chronic phase while healing occurs. Local anaesthetic blocks would be considered a minimum standard for pain relief in situations where they can be used effectively.

NON-STEROIDAL ANTIINFLAMMATORIES (NSAIDS)

NSAIDs provide pain relief beyond the duration of the procedure by reducing inflammation produced by damaged tissues over the healing period. The use of an anti-inflammatory in addition to local anaesthetic for a painful procedure would be considered the gold standard regime for pain relief. (See Table 1).

WHAT IS THE DIFFERENCE BETWEEN THEM?

For the purpose of a painful procedure, the main difference between NSAIDs is the duration of action. Firstly, the use of any anti-inflammatory will be more desirable than none. Secondly, consider how long

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

TABLE 1: There are a number of different NSAIDs available

Active Ingredient

Trade Names

Length of Action

Carprofen

Carprieve LA, Rimadyl LA

48 hours

Flunixin Meglumine

Caleflunix, Colix, Conyxin, Finadyne Transdermal, Flumav Flunix, Flunixin, Fluximine, Nixine Norflunix, Phoenix Flunixin

12 hours

Ketoprofen

Ilium Ketoprofen Injection, Kelaprofen 10%, Ketofen 10%, Ketomax 15%, Key Injection

8-12 hours

Meloxicam

Buccalgesic, Loxicom LA, Melovem 30, Meloxicam Injection, Meloxidolor, Meloxivet, Metacam 20, Metacam 40, Reliven, Rheumocam 20

24-72 hours

Ilium Tolfejec, Tolfedine CS

24 hours

Tolfenamic Acid

you think the healing phase of a procedure lasts – how long do you think the burns from disbudding cause pain for? It is good to be aware of the many pain relief options that are out there. The decision around what constitutes

A horned heifer awaits dehorning.

appropriate pain relief for specific procedures will require discussion with your veterinarian, as well as the prescription of restricted veterinary medicines. For the use of local anaesthetic, you will be required to undergo training

in the appropriate use of it before you will be allowed to use it. Minimum standards require appropriate pain relief to be present at the time of the procedure, but don’t forget there is also the pain which comes afterwards from inflammation during the healing process. • Lisa Whitfield is a Manawatu veterinarian with Lisa Whitfield Farm Vet Services, Palmerston North.

Did you know?

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Dairy Exporter | www.nzfarmlife.co.nz | July 2021

The most family friendly Job A dairying job offer led Quinn Morgan to win the 2021 Ahuwhenua Trophy Young Māori Farmer Award. Elaine Fisher spoke with him to find out more.

job offer, two days before he was due to fly back to Australia, believing his quest for a career in dairying was over, propelled Quinn Morgan from farming novice to winner of the 2021 Ahuwhenua Trophy Young Māori Farmer. “ I had got knocked back on quite a few jobs because I had no farming experience and had booked a flight back to my family in Perth when Sam and Kate Moore gave me this opportunity, and I’m really grateful to them,” says the 26-year-old father of three who is farming at Galatea. Quinn did his first year as a farm assistant for Sam and Kate’s 570 cow sharemilking contract at Otakiri. Now he has a managing position for the couple in their sharemilking job at Galatea. Quinn was born at Taumarunui and lived at Whanganui until his teens when his family moved to Sydney. He met his wife Samantha in Australia and in 2019 the couple were living in Perth where Quinn was a personal trainer in a gym. They made the decision to settle in New Zealand when they returned to get married in November 2019. “By January 2020, I was on a flight back to New Zealand with a suitcase and big dreams for our future.” Those dreams were for Quinn to join the NZ Police Force but Covid-19 and recruitment caps meant there were no openings in areas, where to be close to family, he wanted to work. “Luckily I had family in farming and reached out to them. Basically, I went from couch to couch learning to milk cows and fencing to pay my board while I looked for a job.”

CHANGED HIS PERCEPTION OF DAIRYING That introduction to farming changed Quinn’s image of the industry. “Dairying is nothing like I thought. I had heard a lot of bad things about farming, but I’ve discovered it’s the complete opposite.

Quinn Morgan of Galatea is the Ahuwhenua Trophy Young Maori Farmer for 2021, with his wife Samantha.

“I’d heard the people were stand-offish, it was not family friendly and not good for the environment but none of that is true. I’ve met some great people who have helped me and it’s the most family friendly job I’ve had. “No matter the season, milking, mating or calving I’m home at the same time for breakfast to catch up with the kids and Samantha. Samantha is really into dairying too, studying for a diploma in agri business. That makes us more of a team as we can talk together about dairying and our goals to be self-employed. “Dairying ticks the long list of wants we had as a family and that wouldn’t have happened without our great employers sticking their heads out and giving us the opportunity.” Kate Moore says the decision to hire Quinn came after a referral from the Gibson family in Reporoa who had interviewed him for a position. “Quinn was among their top three applicants, and they suggested we interview him. We saw Quinn had a great attitude, including to his previous job, and was keen to learn and progress in dairying.” 79

“ I’ve met some great people who have helped me and it’s the most family friendly job I’ve had.”

Learning fast – Quinn Morgan takes every opportunity to learn more about his newly chosen career.

For Kate and Sam, taking on Quinn, and another staff member Michael Barclay who is also new to dairying, is a way of paying it forward, in gratitude for the opportunities their previous employers have given them in the industry. Kate says it also recognises the benefits people who have excelled in other professions and areas of life bring to the industry. The couple have encouraged Quinn to undertake Primary ITO training and other learning opportunities. Kate also encouraged Samantha to study for the agri business diploma and has helped her and the three children feel welcomed into the community. They also, along with Primary ITO tutor Peter Mark, encouraged Quinn to enter the Ahuwhenua award.

TEARS OF JOY “I have played sport my whole life and love the competitive edge. As a newbie to dairying, I saw it as a chance to test myself against great farmers and knew it would be a big learning curve,” says Quinn. “When I took a serious look at the award I was blown away and reached out to other past entrants and winners to ask questions. They were happy to share their time with me and then I knew it would be good for my career if I could get to the finals and help us land where we want to be in future. “The biggest thing for me was being around all the other finalists. I learnt so much and it was a great experience. When we got the call to say we had been named as finalists, Samantha cried.” There were more tears and astonishment when Quinn was announced the winner of the Ahuwhenua Trophy Young Māori Farmer award at the May dinner in New Plymouth attended by 800 people. “I didn’t know how to feel and didn’t get 80

to prepare my speech well as I didn’t think I would win. That was not about self-doubt but about the calibre of the entrants and that I was new in the industry. Standing shoulder to shoulder with so many great farmers was overwhelming. “When I won, I came to understand that this is bigger than myself. I am now a link in the chain of all past winners and like those who reached back to pull me forward, my focus now is to give back to help pull forward the next winners.” Quinn also wants to help raise the image of dairying with other young people and the wider public. “We are grateful for the opportunities winning has given us and that includes doing media interviews which I hope will help get a lot more people interested in farming. We want to shine a positive light on farming and what it has done for us by painting a true picture of what dairying is.” Changing careers and countries has taken tenacity and fortitude for both Samantha and Quinn who were apart for six months because of Covid-19 restrictions. “It was hard. Samantha and the children were in Perth and I was in New Zealand. When I left our youngest was barely walking and when I next saw him, he was running around. I am grateful that Samantha is strong and had good support from family in Perth.”

WHANAU LIFE Samantha and the children, Peyton now 4, Reign now 3 and Roman 2, spent two weeks in isolation when they arrived in NZ preparing to join Quinn on a farm and with a house Samantha had never seen. “We just love the life here. It’s a great place to bring up kids, so different from

Australia with concrete backyards and neighbours so close but you don’t even know them. Our closest neighbours here are on the next farm, but we see them a lot.” Quinn and Samantha’s long-term goal is to be self-employed in dairying. “We’d love to get our name on a bit of dirt and secure a farm but realistically the goal is to be selfemployed. Before winning the award we had a clear cut plan but now our horizons have been broadened as it’s opened up so many doors. We have to navigate which is the best way to go and that’s a good problem to have.” Ahuwhenua Judge Aaron Hunt says Quinn exemplifies all that is good about young Māori who are making successful careers in the primary sector. “Quinn has shown great commitment to his work, excellent leadership and will do a great job as a role model for other young Māori contemplating a career in the agribusiness sector. “Every day there are new opportunities opening up for young Māori as new land is brought into production and other land improved. The training undertaken by the finalists have helped them establish themselves in good jobs and provided an excellent platform for them to progress within the sector.” The Ahuwhenua Trophy acknowledges and celebrates business excellence in NZ’s important pastoral and horticultural sectors. This competition is held annually, alternating each year between dairy and sheep and beef, and now also horticulture. The upcoming 2022 competition is for Māori sheep and beef farmers. • To find out more visit www.ahuwhenuatrophy.maori.nz

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

“STALOSAN F® GIVES ME CONTROL OVER THE ENVIRONMENT THAT MY CALVES ARE IN.” Calving Manager Nicole Woodford is a strong advocate for AgriVantage’s Stalosan F. She has used it as the main biosecurity aid in rearing pens for the last 6 years. Nicole works at Ardno Farms Limited in Mossburn, Southland. She rears 500 replacement heifers, 100 Herefords to 100kg and 20 Friesian Bulls to 100kg. She also runs the bobby calves and 4-day-old Hereford sales. In a previous calf rearing job, Nicole started using Stalosan F. “At the time, we had rotavirus through the farm” she explains. “It made no sense to me to add more liquid (disinfectant) to pens that were already wet. So, I got onto Google and came across Stalosan F. Everything I read about using a drying agent with antibacterial properties made perfect sense. We ordered it in, and I have never had disease in my sheds (since).” Nicole is passionate about growing happy, healthy animals and is detailed in her biosecurity programme. With the help of one full-time worker and a few casuals through the rearing season, she runs three calf sheds. One is an old, converted wool shed with a drive down the middle and pens on either side. There’s also an old, converted implement shed and a newer 8-bay shed. It’s not easy to keep disease under control in the old wool shed. “There’s lots to combat, like pigeons” says Nicole. “We also have two to three rounds of calves come through in a season, so the sheds don’t get a rest.” The pens are cleaned and disinfected before the first round of calves, then lined with hydrated lime and a layer of Stalosan F before the wood chip bedding goes down. They dust once weekly with Stalosan F. Between calf rounds, the pens are dusted with Stalosan F and re-chipped. “If new chip is damp from being outside, we will ‘Stalosan it’ too” she adds. Nicole’s mantra is that it is better to prevent an outbreak than deal with it. “Stalosan F gives me control over the environment that my calves are in. I have dry pens, happy calves and a nice smell.” In the past, Nicole found nutritional scours would often turn infectious. Not anymore, she says. “We simply shovel the scours out and sprinkle Stalosan F over any areas where there’s evidence of scours, especially the corners (of the calf pens). As a result, we simply don’t get infectious scours.

A powerful drying agent, Stalosan F stabilises the microflora and chemical balance in animal bedding. It is non-toxic and perfectly safe for animals.

“Stalosan F is not overly expensive for what it does” she concludes. “If you get an outbreak, you’re looking at $70-80 in vet bills per calf. Stalosan F is our insurance and, at about $1 per calf*, is highly cost-effective. “I constantly recommend Stalosan F as a rearing essential. A good dusting will keep the pens dry and bacteria under control.”

Use Stalosan F in conjunction with a strong liquid disinfectant for a total hygiene solution. Stalosan F is available from rural retailers nationwide.

Learn about Stalosan F

“Last season we had rotavirus outside too, but the calf sheds were fine.

*$56.25 per bag is the bulk RRP (pallet price) for Stalosan F.

0800 64 55 76 www.agrivantage.co.nz

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

RESEARCH WRAP FEEDING TRIALS

Profits realised from emission reducing trial

It also saw milk production per hectare fall from 996kg the first season to 816kg during the drought, before recovering to 936kg on the pasture-only farm. Milk production was between 25% to 30% higher on the supplement farms. Higher farmer stress levels on pasture only farms is something people often don’t consider when considering operating systems, Robinson says. The milk solid response to supplement feeding was higher on the PKE-only farm despite animals not being fed baled silage or distillers dried grains, with both responses higher than the 12 year DairyBase average. This is thought to be as a result of sticking strictly to only feeding supplement when pasture residues were too short, rather than being too liberal with supplements, as is often the case. Though the drought knocked it off its perch in the middle year, profit was highest overall on the PKE-only farm, followed by PKE-plus farm, with the pasture-only farm following up the rear.

Northland Agricultural Research Farm (NARF) manager Kelvin Horton with Northland Dairy Development trustee Kim Robinson.

Words and photos: Delwyn Dickey

ticking to just the allowed amounts of palm kernel expeller (PKE) as a feed supplement, before milk fat evaluation index (FEI) limits were reached and penalties imposed, has pushed a Northland dairy farm operation over the line as most profitable. Even though this meant drying-off cows early. The results from the recent three-year Northland dairy farm trial are important as farmers grapple with reducing greenhouse gas emissions. “From an environmental point of view, just because you’re dropping your production and your methane and greenhouse gases, doesn’t mean you’re going to lose profit.” AgFirst agribusiness consultant and Northland Dairy Development trustee Kim Robinson says. Carried out on the Northland Agricultural Research Farm (NARF) near Dargaville, the trial looked at three systems operating within a variable climate, and weighed up the pro’s and con’s of each. A pasture-only system, PKE-only, and 82

LOW COST PKE

a system using PKE plus other more expensive supplements were all trialled. “The high supplement farm did a whole lot more production, but they weren’t the most profitable,” Robinson says. Split into three 28 hectare farmlets, milk production, cost of supplementary feeding and corresponding increases in milk solids, operating profit, and the cost of additional milk produced were compared. Other considerations included extra labour and tractor hours when supplements were used, the condition of cows at mating time, along with stress levels on the farms’ manager. Having the worst drought in 100 years fall in the middle might have seemed a disaster, but Robinson says it was actually useful. “It’s good having extremes when you’re testing systems.” The pasture-only farm ran 2.7 cows per hectare compared to 3.1 cows for the supplement farms, but the weather and drought brought the most worry for farm manager Kelvin Horton as he struggled with low pasture growth and reduced milk production.

The study also highlighted the value of low cost PKE, when the lower milk response from more costly supplements, was considered. For every dollar spent on more costly supplements, between $0.66 and $0.86 was added to farm expenses. Over the three years this saw the cost of the additional milk produced average out to $5.86/kg MS for the PKE farm, compared to $8.58 for the PKE plus farm. During a true feed deficit this study shows the financial value of imported supplements. But when FEI limits are reached it also shows the higher cost of additional supplements may not weigh up unless climatic conditions are severe or milk price is very high. During the first year of the trial, when neither applied, the PKE plus farm was the least profitable of the three farms. Though less profitable overall, the pasture-only farm made the most profit when milk price was below $5.86/kg. The full results of the Northland Dairy Development Trust and Northland Agricultural Research Farm trial can be found on nddt.nz website under current trials.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Learn, grow, excel

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WELLBEING METH ADDICTION

Just one hit Harriet Bremner warns of the dangers of meth use in the dairying industry.

I Harriet Bremner and Poppy.

have never seen it (never want to), have never been around anyone or know of anyone who is associated with it but I was blown away to find out that every single one of us knows someone who knows someone, who is a regular user of the powerful drug, methamphetamine, also known as P. It is wrecking lives. It doesn’t matter where in New Zealand you are. This is a drug so powerful that even one hit is one too many. More readily available than cannabis AKA weed and even cigarettes (you don’t have to pay a dealer straight up),138,000 New Zealanders are highly involved in this $500 million dollar per year industry that is wreaking havoc on our people and our communities. I have only heard people talking about the issue with weed within the dairy industry and what farmers have had to do to try and combat it. This is what scares me so much about P, that we are naive to how easily people can become hooked and how there will be someone we know who is involved in the game. It is on the corner of our streets, in our towns and highly accessible to anyone and everyone we know, including teenagers. It is not something that requires a ‘bad’

upbringing for someone to be involved in, it is amongst people from all walks of life and it is scary to think how many of our dairy farmers could be at work while they are under the influence of such a life-absorbing drug. In 2020, Newshub journalist Patrick Gower did a documentary on weed but this he claims was easier to talk about since it has a medical angle attached to it. However, P is disliked by everyone involved; the people who produce it, sell it and buy it. In Patrick’s new documentary on P, he says that it has taken over NZ and that putting people into jail isn’t the answer - there needs to be medical intervention to help people become free of the drug. Not an easy task because ‘P’ takes away all the dopamine from your brain for 14 months. That first hit is 10 times the rush you get from something that gives you a natural high. The trouble is, you want more as you are desperately trying to fulfill that rush again. But it never happens again. Then you are left with nothing, nothing to give you the simple joys in life again and only a yearning for the drug itself. Psychologists call it ‘chasing the dragon’. The harm of this drug is that it destroys everything in your life. It takes away

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

“. . .it is scary to think how many of our dairy farmers could be at work while they are under the influence of such a life-absorbing drug.”

everything piece by piece until there is nothing left. For example, NZ pays the highest prices for P in the world ($115,000 per kilo) - hence why we are referred to as the ‘Golden Nugget’ of the P industry by the Mexican cartel. If someone is trying to fund this habit, you can see how it barrel rolls into one thing leading to another, out of desperation to buy another hit. Another scary thing about the postCovid-19 world of P is that due to it being harder to get supplies into the country during lockdown people started cooking their own. This was already happening but now it is happening on a larger scale and the effects on people’s health living in a P house is simply awful. Someone can be cooking P in a house that you own on your farm and you may have no idea. If they leave the house then the next occupants can suffer from side-effects just like they would if they were smoking it themselves. Children are amongst those affected. It makes you think, doesn’t it, that there is another world out there that could be happening on our road but we are none the wiser. So, if you have concerns about someone working on your farm, check out the places you can go for help at the end of this column.

SIGNS OF A P ADDICT

• Hyperactivity • Twitching, facial tics, jerky movements • Paranoia • Dilated pupils • Noticeable and sudden weight loss • Skin sores • Rapid eye movement • Reduced appetite • Agitation • Burns, particularly on the lips or fingers • Erratic sleeping patterns • Rotting teeth • Outbursts or mood swings • Extreme weight loss What can we do as farmers if we notice signs or are suspicious that a farm worker or someone you know is involved in P? Until now, NZ has been targeting the dealers and suppliers of this dangerous drug but there has been a change of tack recently, as simply sending people to jail is not making the problem go away. It is being recognised as a national health issue and that people need to be supported throughout their whole journey. As employers, we need to be aware of how we can support someone who we know or find out is using P to the best of our abilities. It is a case of helping one person at a time, otherwise it is scary to think that if this industry continues to grow, how many of our children will be exposed to this drug in the coming years and how many more lives will be ruined. • More info: Watch Paddy Gower’s documentary: https://www. threenow.co.nz/shows/patrickgower%253A-on-p/patrickgower%253A-on-p/S2779-415/ M46303-999 Worried that you or someone you know has a P problem? More info here: www. methhelp.org.nz/

“making milking easier and faster”

NEED HELP NOW?

To talk to someone about your or someone else’s alcohol or other drug use, or for contacts of your local counsellor or treatment provider, phone the free (from mobile or landline) and confidential Alcohol Drug Helpline: Ph one 0800 787 797 24 hours a day, 7 days a week www.addictionshelp.org.nz In an Emergency dial 111

REFERRAL TO TREATMENT

Te Ara Oranga The Northland District Health Board (DHB), police and non-government agencies work closely together to minimise the harm caused by methamphetamine. The health component is a recovery-based treatment approach based mostly in the community. People can self-refer to treatment or agencies can refer clients directly. The referral form can be found here community.northlanddhb.org.nz/NoP/ referral/

THE 5-STEP METHOD

The 5-Step Method helps affected family members where they have loved ones with addiction problems. It is one of the few methods that helps give support to family members for themselves in their own right. Email the Northland DHB alcohol & other drugs educator for more information. AODEducator@northlanddhb.org.nz Choice Programme – one day intervention group programmes A one-day education programme for methamphetamine users whose use is not yet severely affecting their lives. Learning about methamphetamines, their effects and cravings and includes skills practice and developing a relapse plan to support people to reduce or stop their use.

See our website or phone for more info.

for circular and s te ga g in ck ba e iv ct fe ef ut bo A rectangular dairy yards

K. H. McConnel Ltd. Hamilton, New Zealand

www.mcconnel.co.nz

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Phone: +64 7 849 2122 Fax: +64 7 849 2128 Email: sales@mcconnel.co.nz 85

DAIRY 101 NITROGEN LEGISLATION

Molybdenum is required by all plants to turn the nitrate they have absorbed into amino acids and proteins.

All change for nitrogen rules Story and photos by: Karen Trebilcock

uly 1 marked the start of the Government’s new rules on nitrogen. Under the Essential Freshwater package, the amount of synthetic nitrogen fertiliser applied to pastoral land is now capped at 190kg/ha/year as a permitted activity (requiring no resource consent). The cap applies to the average amount of fertiliser applied across a farm but also to every hectare of pasture and cannot be offset by non-grazed land. You can apply more nitrogen on forage crops but only if you offset it by applying lower amounts on pasture. The cap does not apply to arable or horticultural crops. The changes have been a long time coming and many dairy farmers already use way less nitrogen than the cap. However, for those who have become reliant on nitrogen, not just to fill feed gaps but for year-round production, there must be a change in farming practices or get ready to apply for costly consents. And changing from high-N to low-N use is not just a matter of using less nitrogen fertiliser. Nitrogen-fixing clover needs time

to re-establish, as much as two to three years, and pasture growth will suffer until that happens. Strategic use of nitrogen fertiliser has always been important but now more than ever. Apply it only when the soil temperatures are between 6C and 16C which is when pastures will be actively growing. N is only taken up by growing plants and if not utilised quickly it leaches through soils or is lost into the atmosphere. Little and often, especially in high rainfall areas, is best. If there are no growing plants don’t apply it, waiting for seed strike and then putting it on is the best option. Don’t put it on areas in a paddock that you know are already high – where stock camp, gateways and around water troughs. And look at skipping paddocks which are sprayed with effluent. Use coated nitrogen products as they are less likely to be leached or lost to the atmosphere before they’re absorbed by plants. Gibberellic acid (GA) can also be used. It’s not a fertiliser but a growth hormone found in plants. When applied with N, if conditions are right, it can increase the response rate. But there are other things you can do as well and soil and herbage tests are the way to start. Yellowing, slow-growing pasture can be due to lots of reasons – not just a lack of nitrogen.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

MINERAL AND ORGANIC N

Nitrogen is held in soil in two ways – mineral N and organic N. Mineral N is the stuff plants can use and includes nitrate and ammonium. Organic N can’t be taken up by plants (with a few, small exceptions) and it’s what makes up 98% of nitrogen in soils. Soil microbes, when moisture levels and soils temperatures are right, convert organic forms of nitrogen to mineral forms when they decompose organic matter and plant residues in a process called mineralisation. These soil microbes are your livestock under the ground and looking after them should be as important as looking after your livestock above the ground. Building organic N should be the aim of every farmer as it will grow more grass year on year. A total nitrogen soil test, down to 75mm, shows the amount of mineral and organic N. As organic matter changes are usually slow, it only needs to be done every four to five years. Once you know the areas low in organic N, and so potentially mineral N, they can be targeted for nitrogen fertiliser applications. But nitrogen does not work on its own, sulphur is one element that helps it

“The cap applies to the average amount of fertiliser applied across a farm but also to every hectare of pasture and cannot be offset by non-grazed land.”

make a difference. Good growth rates can happen with low-rate nitrogen applications if sulphur levels are where they should be. Sulphur is often overlooked and is usually lacking in New Zealand soils. Pastures deficient in sulphur appear pale green or yellow and it’s worse in spring when winter’s wet and cold conditions have leached it out of soils. Sulphate S is the form of sulphur that plants can use but it’s also the one that leaches the easiest so the type of sulphur you put on and when is important. Use elemental S in autumn so it stays in the soil during winter and when soil temperatures increase and bacteria becomes more active they will convert it to sulphate S providing a slow release over the growing season. Otherwise, apply sulphate S in spring or, where there are high spring rainfalls, use a mix of both. Another element often forgotten about is molybdenum (Mo). Molybdenum is required by all plants to turn the nitrate they have absorbed into amino acids and proteins. Legumes, such as clovers, also need it to complete the process of nitrogen fixation from the

atmosphere by the nodules on their plant roots. About 70 years ago it was found to be deficient in NZ, especially sedimentary soils with a low pH. However, other soil types including ash, pumice and organic soils can also be low in Mo. But farmers are usually wary of using it as high levels of molybdenum causes copper deficiency in animals, with disastrous results in the past. Soil tests do not accurately show Mo levels so herbage tests must be done. However, if there is no record of molybdenum being applied in recent years, and clovers are small-leafed or non-existent in pasture which has not had excessive nitrogen fertiliser then it could be the answer. Raising pH to the optimum 5.8 – 6.0 also helps the availability of Mo to growing plants. Also remember it is only synthetic nitrogen fertiliser which is capped under the July 1 rules – don’t forget about non synthetic forms. Effluent, compost, chicken manure and other forms of organic matter all contain nitrogen. They need different thinking and different ways of application but they still make grass grow.

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Strategic use of nitrogen fertiliser has always been important but now more than ever.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

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SOLUTIONS What’s NEW? EFFLUENT PUMP

Slow and steady wins the effluent race

rime Pump’s hard-wearing, German-engineered Wangen positive displacement pumps are making a difference on dairy farms around New Zealand. Effluent management has been in the spotlight and Wangen are helping maximise efficient transfer and minimise environmental impact. Slow-running, the pumps achieve or exceed the performance of others while reducing cost of ownership and disruptions caused by the need for maintenance or even replacement. Wangen pumps have some design advantages over others in the market that extend their useful life. According to the manufacturer, this can be up to 30 years for some customers. One of the keys to the Wangen pumps’

Datamars acquires HerdInsights

The Wangen positive displacement pump runs slower and works harder to get rid of effluent.

performance is the Cardan joint. This universal joint-like system is superior to the conventional pin joint. The pin joint wears, often rapidly, resulting in characteristic sloppiness and the need for regular replacement. In contrast, the Cardan joint operates smoothly and seamlessly, lasting the lifetime of the pump and avoiding issues related to fibres becoming wrapped around the shaft. A one-piece cartridge mechanical seal, filled with oil, rather than a traditional twopiece seal, is also far easier and quicker to fit while the oil, again, prolongs the life of the mechanical seal. An extra bearing housing between the gearbox and pump adds additional rigour to the structure and supports reliable performance.

lobal livestock management company Datamars has acquired the Irish based remote animal monitoring company, HerdInsights. Datamars has the Trutest, Zee Tags, Speedrite and Stafix brands in the New Zealand market. HerdInsights is a relatively new technology company, established in Cork, Ireland in 2017 from original start up Alanya. Since then, it has developed and launched a reproductive and health

The Prime Pump team say once an owner tries a Wangen pump they’ll never look back. That’s a view backed-up by experienced rural trade services businesses. One owner says almost as soon as Prime Pump brought Wangen into NZ, he thought it was worth a look. It rewarded his confidence. In three years, he’s seen some fairly “catastrophic” failings with other pumps of the same age, but none with Wangen. “They’re a really nice pump. Being slower running is a real advantage. It’s quiet, performs very well and it’s logical that anything running slower will last longer.” • For more information contact Prime Pump on 0800 482 747.

monitoring system for the global dairy industry and represents the first health monitoring solution of its kind for dairy cows. HerdInsights is led by a world-class management team with strong experience across the dairy agricultural sector, veterinarian and IT industries. HerdInsights solutions have a strong market presence in the UK, Northern Europe and Australia. Together, Datamars and HerdInsights represent a unique offering to dairy farmers and livestock producers. According to

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

SOLUTIONS What’s NEW? MILK REPLACER

Milk replacer key to increasing calf weight

etting pre-weaning nutrition right in calves will go a long way towards achieving future growth targets. Recent research data shows a 130kg increase in a cow’s 305 day milk yield with each 100g/day increase of average daily gain (ADG) in the pre-weaning period. With this theory in mind, if farmers can increase ADG in the pre-weaning period from 500g to 800g/day, this could mean an extra 390kg of milk, or about 32kg MS per cow. Increasing ADG can be achieved by feeding a high-quality calf milk replacer (CMR) with nutrient densities which are above traditional rates. Graph 1 shows a traditional view of feeding 1% of body weight with a lower nutrient density CMR (20:20, protein:fat) compared with a modern view of feeding 1.5% of body weight with a CMR containing 28% protein and 22% fat, like MaxCare Ultimate CMR. The first graph also demonstrates that temperature can have an impact on ADG. A 40kg calf fed 10% of its body weight, in other words, 4l/day at 20 degrees Celsius - the thermo-comfort zone of a young calf will at best gain 400g per day. The same calf at 0 degrees Celsius will potentially lose weight. For every

Datamars, this acquisition strengthens its position as the only company worldwide offering customers a complete end-to-end solution from animal identification, to weight based and activity data capture, to cloud-based reporting and insights. According to Datamars CEO Daniele Della Libera, the decision to acquire HerdInsights was made in support of dairy farmers and livestock producers who are facing increasing pressures to produce more, with less.

Graph 1: Impact of feeding rates, CMR nutrient density and ambient temperature on ADG. MODERN VIEW 1.5% BW of a 28:22 milk replacer

TRADITIONAL VIEW 1% BW of a 20:20 (CP:Fat) milk replacer

Source: Dr. Luis Felipe P. Silva (2018)

five degrees Celsius drop below 20 degrees Celsius, calves require an extra 1.1 megajoules of metabolisable energy to achieve the same result. This is the equivalent of an extra 50g/day/calf of CMR. An understanding of desired mature cow body weight (MBW) to determine the growth rate required for calves is also important. In the first six months, 50% of a calf’s skeletal growth occurs and the aim should be to achieve 85% of MBW soon after its first calving. To achieve this, these are targets to aim for: • Weaning weight: 17% of MBW.

• • •

Six months: 30% of MBW. Joining (15 months): 60% of MBW. Pre-calving (22 months): 90% of MBW. The feed conversion ratio (feed:growth) at the different stages of life should also be a consideration for calf rearers. The ratio ranges from 2:1 between birth and weaning and up to 15:1 from mating to late pregnancy. Given the efficiency of growth in the birth to weaning phase and the on-going implications of calf rearing on lifetime productivity, investing in calf nutrition is worthwhile. • Find out more, call MaxCare on 0800 629 267.

HerdInsights CEO, Brian Mulcahy says joining with Datamars was the obvious choice. “We are particularly excited to combine our industry-leading expertise with that of Datamars so that, together, we can work collaboratively to continue product development and market expansion of the HerdInsights solution; and accelerate further Datamars’ innovation in the area of livestock monitoring and performance across sectors and regions,” he says.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

OUR STORY 50 YEARS AGO IN NZ DAIRY EXPORTER

50 years ago in the Dairy Exporter July As NZ Dairy Exporter counts down to its centenary in 2025, we look back at the issues of earlier decades. 50 Years Ago – July 1971.

DAIRY INDUSTRY’S RECORD EXPORT EARNING

The export earnings of the dairy industry from milk products in the trading year ending May 31, 1971 amounted to approximately $250 million, which sets a new record, exceeding the previous record of about $150 million. Announcing this at the Dominion Dairy Conference, the Board chairman, Mr F. L. Onion, said that if the value of dairy meats was added to the total for milk products, the total export earnings of the dairy industry reached $320 million, or close to 30 per cent of New Zealand’s total overseas exchange receipts in the past financial year. The achievement is the more notable when the extremely poor seasonal conditions are considered.

ESTABLISHING YOUNG MEN ON FARMS

Just how young men were to be encouraged to take up farming and to be settled on the land was one of the major problems in agriculture today, said Mr B. Townshend (NZCDC), moving a remit at the Dominion Dairy Conference. The remit read: “That Government be asked to sponsor a scheme to financially encourage and establish approved young farmers on the land.” The dairy industry was losing a lot of young men because of lack of adequate 90

incentive and reward for their efforts in farming. Farmers were turning from milk production to beef. If farming was to have a future, the best type of young men should be encouraged into farming. He suggested that selected young men should be encouraged with better finance and realistic tax concessions while they were accumulating capital. There was a big challenge ahead of the industry and it was essential that they have between 1000 and 1200 young men coming into dairy farming each year, said Mr R. G. Calvert (NZCDC), seconding the remit.

FARMCHAIR THOUGHTS BY THE LAIRD

Cover photo: New Zealand recombined sterilised fullcream milk is popular in Barbados, as evidenced in this beach scene near Bridgetown.

I recall the all-too-brief era of very high wool prices, when many wool growers were denied the opportunity of participating in the “bonanza” by waterfront strikes. I’m not predicting that industrial unrest is likely to result in the dairy industry suffering a major loss financially, but there are signs that such a catastrophe is just possible. If it follows the pattern set at the time of the wool boom, the Federation of Labour (FOL) will claim a share of the increased prosperity due to higher returns received for dairy products. My hope is that some consideration will be given to the situation the dairy farmer has faced (in some cases unsuccessfully) during the past few years

when, along with difficult seasons, has come an increase in costs that has not been matched by higher returns. During a period when the average dairy farmer has had to tighten his belt, the wage and salary earner and the industrialist have contributed to inflation by demanding and getting bigger pay packets and sustained profit margins. I will be disappointed if these same farmers are denied the opportunity of closing the gap, at least to the extent of netting per hour of work done the same as received by the average “skilled” waterside worker or his freezing works counterpart. Unfortunately, I have the feeling that I won’t be spared this disappointment.

JERSEY PRICE SMASHED

The New Zealand record price for a Jersey cow was smashed when Mr Rion Belfield, Madeley Park, Ngarua, paid $6300 for the “Folly Sultan” cow, Big Hollow Sultan’s Bell, VHC. The sale came at the 1971 dispersal of the big Holloway Jersey Stud, owned by Mr R. N. Sterling, Matakohe. The previous record of $5460 was paid by Mr D. McIntosh, Woodville, for Big Hollow Choice Blondie, VHC, at the 1967 dispersal of the same stud. • Thanks to the Hocken Library, Dunedin.

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

DAIRYNZ

PODCAST Join the hundreds of dairy farmers listening to our Talking Dairy podcast, where we tackle topical and seasonal issues like climate change, contract milking and staff retention. Listen while you’re getting the cows in, milking, on the tractor, or wherever.

Go to dairynz.co.nz/podcast or your favourite podcast platforms. Talking dairy

Dairy Exporter | www.nzfarmlife.co.nz | July 2021

Dairy Exporter July 2021

Articles inside

The Dairy Exporter in 1971

Milk replacer key to increasing calf weight

All change for nitrogen rules

Harriet Bremner warns of the dangers of meth use

Profits realised from emission reducing trial

The most family friendly job

Vet Voice: What is pain relief?

Taking a lead on water quality

Getting the best milk price

Sustainability: thinking, sharing, acting

‘Hands solo’ for cow collar farmer

Understanding capital and income

“Find your rhino”: latch on to opportunity

Regen ag coach questions winter crop reliance

Invest to get ahead

Friesian freedom from twice a day milking

Ready steady...calving

Don’t get held up by hackers 34 NZ Sheep milk industry has ‘headstart’

Leadership through emotional intelligence

Leadership skills a “life gap.”

Anne-Marie Wells is feeling a sense of accomplishment

Red, white and blue tape in the UK

Confidence in European cooperative giant erodes

Niceness to others is needed during these difficult times believes Niall McKenzie

Fonterra opens 2021-22 with $8 midpoint

Gaye Coates was flabbergasted after her bank decided to call time on their business relationship.

Carla Staples is happy after a successful 2020/21 season