Dairy News 12 June 2012 by Rural News Group

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legal pitfalls SIDE 2012 preview Page 57 june 12, 2012 Issue 270 // www.dairynews.co.nz

F TA

Crunch time “I’ve just seen many cooperatives going down the drain when investor interests start prevailing over producer interests.” – Dutch co-op expert Onno van Bekkum

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Dairy News june 12, 2012

news // 3

Share valuation the real issue – Dutch expert ANDREW SWALLOW

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News �� 3-24 Opinion �� 26-29 Agribusiness ��30-35 Management �� 36-49 Animal Health �� 50-55 side �� 56-58 Machinery & Products �� 59-65 motoring ��66

FONTERRA HAS a serious problem but, contrary to the board’s claims, it is not redemption, says a Netherlands-based cooperatives expert. “Share valuation is really the heart of the problem,” says Onno van Bekkum, chief executive of Coop Champions and a lecturer on cooperative businesses at Nyenrode Business University. Van Bekkum has produced a report for a group of Fonterra shareholders concerned at TAF’s implications for the cooperative’s future, and supplied an exclusive preview article to Dairy News. “There has been a lot of good thinking gone into this [TAF] proposal. But I fear with this impressive level of technical detail farmers might lose sight over the bigger picture,” he warns. He doubts share trading will contribute to a stable cooperative, and says he can’t think of any example where such a system has worked to the satisfaction of farmers. “I’ve just seen many cooperatives going down the drain when investor interests start prevailing over producer interests. That’s what TAF does: it deliberately creates a separate cluster of investor interests – both internal and external. You don’t want that in a cooperative. You want to keep a clear focus on producer interests.” While he has concerns at what is effectively a scheme that will encourage some to cash in their shares, it would be understandable if it was a means to raise capital, he adds. “Then at least you would build up something.” As it is, the trading of dividend-bearing units linked to shares will simply drain up to 20% of dividends from the cooperative. “If you decide to trade, why not start trading internally?” He also doubts Fonterra will be able to limit the fund size, as it suggests. “I don’t think farmers would vote in favour of TAF thinking they won’t be using the fund. There will always be moments when people are in

Onno van Bekkum says share valuation, and not redemption risk is Fonterra’s main problem.

need of cash.” He notes the blueprint itself mentions “avoiding a flood of shares into the fund after launch”. “I fear it might not be long until the constitutional limit of 20% may be reached, with or without shocks created by droughts, diseases, financial crises, etc. And then what?” The board has several options, as proposed in the risk management policy. “Firstly, buying back units, which means you’re basically back on a track similar to redeeming shares. So how much do you gain from TAF? “Secondly, introducing dividend reinvestment. Great, but you don’t need TAF for that! “Thirdly, reducing the transfer limit, which requires members to buy back a portion of their shares: I’m not sure if that would really work in practice. “Fourthly, issuing shares, to farmers presumably. Does that mean raising the limit on dry

shares? Doesn’t that mean we’re further down the sliding slope then? “Fifthly, altering the constitution to allow more than 20% in the fund. Is that what a ‘preferred option’ – to be recommended at a ‘special meeting’ for shareholders – could also be about? That, again, is risky.” Van Bekkum says he would solve Fonterra’s valuation problem without introducing dry shares. “The restricted share value was a step in the right direction.” End-of-season transaction, a rolling three season-average production/share requirement, and three years to buy in/out all make sense, as does dividend reinvestment. The fact that reducing share value to the restricted figure of $4.52/share from its $6.79 peak passed without uproar from farmers is a positive sign that shareholders, in general, are not overly focused on share value, he says. “As the leadership has begun to see, the basis of any strong capital base is retained earnings. I think these are sufficient ingredients for a robust capital structure. I would be inclined to think you might not really need TAF.” As for redemption risk, TAF effectively passes it to farmers. “I think it’s not fair simply to pass that burden on to farmers’ shoulders. It’s not particularly cooperative. It’s amazing that farmers just accept that without discussion.”

complex documents THE COMPLEXITY of the documentation supplied by Fonterra on TAF is noted by van Bekkum. “Your New Zealand farmers must be highly educated people to read this language of lawyers and accountants.”

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Dairy News june 12, 2012

4 // taf debate

TAF has never been about raising new capital FAR FROM adding risk,

Fonterra’s proposal to adopt TAF (trading among farmers) is about reducing risk and protecting the cooperative nature of the country’s leading exporter. A point missed by many opponents of TAF is that the current way Fonterra manages redemption risk, by funding it through its own balance sheet, is by no means a low risk strategy. As the co-op grows, and milk supply (backed by shares) grows, so too does redemption risk. And by redemption risk I mean the obligation on the cooperative to pay out cash to any farmer leaving the co-op or reducing his or her milk supply and, therefore, number of shares. Fonterra currently ties up about $1 billion of room on its balance sheet to cover this requirement. TAF simply facilitates what it says – it allows farmers to trade shares,

so that they can buy more shares to grow milk supply or sell shares to reduce supply or even exit the co-op if they choose. TAF isn’t and never has been about raising new capital. It was conceived and remains focused on providing Fonterra farmer shareholders with the stability of permanent capital. Under TAF, redemption risk is replaced by a fully transparent, tradeable market that delivers a well-discovered price for farmers’ shares. Only dairy farmers supplying Fonterra (and the Fonterra farmer custodian) can own shares. Using a market to let farmers buy and sell shares is a better way of farmers ‘sharing up or sharing down’, as dairy folk call it, than by Fonterra having to come up with the cash to buy out farmers. Establishing a fund

whereby non-farmers as well as farmers can buy units that get the benefit of the dividends and capital movement of shares is only required to ensure that the market in which farmers trade their shares delivers what economists call a ‘well-discovered price’. That’s all the fund is for; it doesn’t bring in new capital and unit holders obtain no voting rights or influence over the shares themselves. Voting rights in the co-op are based on milk production, and that remains with farmers at all times. TAF is anchored upon the core cooperative principle that share ownership must be in proportion to milk supply. Of course no system is without risk. So what has Fonterra’s due diligence process identified as the biggest risk of TAF? The answer is managing the size of the fund that helps enable liquidity and price

comment Jonathan mason

discovery for the shareholder market for shares. That’s why TAF includes a fund risk management policy with ongoing review of the size of the fund, and policies and procedures that would be activated should the actual size of the fund ever exceed 12% of total capital in the cooperative. The objective is for the fund to be 7-12% of total capital – just enough to make the farmer shareholders’ market work well, but no bigger than is necessary for an efficient market in farmer shares. During the board’s due diligence on TAF, Fonterra modelled a number of hypothetical scenarios in which the cooperative was hit by significant financial shock – for example, reduced production through drought or mass supplier exodus from the

co-op. This showed that managing these financial shocks under TAF was less risky than under the current system. The highpowered independent advisors appointed by the board’s due diligence committee scrutinised this modelling and found that a properly managed TAF system – including a fund risk management policy – to be less onerous from a risk management perspective than managing redemption risk under the status quo. Far from being a ‘crossing of the Rubicon’ or a risky leap of faith, a move to TAF is just the latest

step in a series of wellthought-through, always well-debated steps the dairy industry has carefully taken on its long hikoi to global success. Since reforming their share structure in 2009, to voting for TAF in 2010 to the important decisions on safeguards and constitutional parameters to be taken on June 25, 2012, dairy farmers know their business involves a careful balancing of risk. They have always carefully weighed the options and taken prudent steps. In 50 years from now, perhaps no step in that long and fruitful co-operative journey will have been

as important as TAF which removes redemption risk – one of the biggest risks and challenges for any co-operative – from Fonterra’s balance sheet and replaces it with a robust market for shareholders. That Fonterra has created a shareholder market unique in the world for its effectiveness but also its robust protections of 100% farmer control and ownership is just another – albeit complex – example of the Kiwi dairy industry’s global leadership in innovation and a commitment to forge its own destiny. • Jonathan Mason is Fonterra’s chief financial officer.

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Dairy News june 12, 2012

taf debate // 5

Complex voting pack is bad business ANDREW SWALLOW

NEVER MIND the detail, it’s the whole cooperative ethos that is at stake in this month’s TAF (trading among farmers) vote, says one of the shareholders who instigated the second ballot. “My first reaction was one of disbelief,” South Canterbury farmer Leonie Guiney told Dairy News after receiving her voting pack. “It’s so complex. Complexity isn’t clever. It’s bad business and bad governance.” Nothing in the 64-page blueprint, or 24-page due diligence report, allays her view that TAF will prove to be the thin end of a wedge that divides the cooperative. “If this goes ahead there’ll be the opportu-

nity to ‘game’ shares, and a shift away from the principles of collective risk, collective reward, and collective responsibility that our cooperative was built on. “There’ll be opportunities for individuals to gain short term from the equity that has gone into Fonterra over generations.” Traders in units will drive volatility in share price, and farmers holding dry shares will become more focussed on dividend and return on their investment, than milk price, she warns. “Farmers will have conflicting desires from Fonterra.” Guiney says the board’s attempts to minimise the risk of gaming, for instance reducing the size of the fund, prove they’ve woken up to the risk.

“They can see the potential for gaming and the potential for this to demutualise the co-op, and what for? All for a $500m fund to stop redemption risk. If anything, this has the potential to increase redemption risk.”

“It’s so complex. Complexity isn’t clever. It’s bad business and bad governance.” Rhetoric that the board is looking for a stronger mandate than the 50.1% minimum for the TAF vote to pass do not appease. Guiney says chairman Henry van der Heyden should front with

a threshold figure without delay. “He should define it before the vote, not reserve the right to define it afterwards.” Similarly, repeated assurances about 100% ownership and control don’t wash as investors in units will, unless the law is changed, have rights which mean they can exert some control in the cooperative. Guiney notes Fonterra’s submission to the primary production parliamentary select committee considering the DIRA amendment bill seeks an exemption to those rights. As for 100% ownership, those guarantees ring hollow too as beneficial rights (i.e. dividends) passing to unit holders effectively confer ownership to those unit holders. “We are having the

Leonie Guiney

wool pulled over our eyes on the 100% ownership issue. It’s why Simon Couper stood down, yet that was dismissed as just a speed bump by the board.” Given there are already mechanisms to reduce redemption risk the million dollar question remains: what is the real reason the board is so keen to implement TAF? she asks. “The booklet on my table fails to explain to me just what is wrong with our fantastic cooperative. It tells me only how many

experts we have employed to mitigate the risks this fund sets up. I can only think [the reason for TAF]

is because it will give management the opportunity to leverage the balance sheet more aggressively.”

Warning from the past a cooperative dairy company for 48 years says he’s concerned about Fonterra’s TAF proposal. John O’Connor, Wesport, says he’s worried at the way the proposal is worded so that outside and foreign investors will wield power and may not provide the financial stability that Fonterra claims will happen if TAF goes ahead. He says Fonterra is concerned about redemption risk and money flowing out of the organisation when farmers leave the industry. But O’Connor says the situation may be no different with outside investors. “Even if investors don’t have voting power they could influence the decisions. Money is powerful and they could influence decisions by threatening to or

actually taking their money out. Fonterra has been worried about the inflow and outflow of money. The money flowing out from outside investors could be just as dangerous.” O’Connor says he can’t see why Fonterra can’t raise capital itself. He also points to a similar situation in 1973, when the international food giant Kraft attempted to buy cheese factories in Taranaki. “The chairman of the dairy board at the time, Laurie Friis, was in favour of Kraft investing in New Zealand but not all board members were in favour. “I was chairman of Federated Farmers Dairy section at the time and we strongly opposed Kraft’s move into New Zealand. In the end we

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Dairy News june 12, 2012

6 // taf debate

Looking for ‘clear signal’ SUDESH KISSUN

THE NEW Fonterra

Shareholders Council chairman Ian Brown has his work cut out over the next two weeks. Fonterra farmers are mulling TAF (trading among farmers) and casting their votes and

Brown is looking for “a clear signal” to launch the scheme. Fonterra’s board unanimously backs TAF and at least 30 of the 35 councillors support it. While Brown isn’t willing to predict the June 25 vote, he acknowledges whatever the outcome unity among the 10,500

About Ian Brown IAN BROWN milks 300 cows at Tokoroa, South Waikato. He joined the council seven years ago and served as deputy chairman for 22 months. He took over last month as chairman when Simon Couper resigned over TAF.

shareholders is paramount. “If the vote is not definitive, then the unity among shareholders will be our number one priority,” Brown told Dairy News. “Everything else drops. We need a clear sense of direction from shareholders. The board is unanimous, the council has given a clear verdict and now it’s up to shareholders.” TAF is unpopular with some Fonterra shareholders. Brown says influence of outside investors through the Fonterra Shareholders Fund and the farmgate milk price are main concerns. He

believes under TAF there are stringent checks and balances in place to ensure 100% farmer ownership and control. The council will have two representatives on the five-member milk price panel, a requirement that will be enshrined in the coop’s constitution on June 25. The council will also receive regular reports from the Fonterra board on the fund size. The council engaged independent advisors for separate due diligence. Brown says many meetings were held with the Fonterra board to ensure farmer concerns were addressed.

DIRA Bill passes hurdle ANDREW SWALLOW

PARLIAMENT’S PRIMARY Production select

committee, last week, recommended the Dairy Industry Restructuring Amendment Bill, including legislation enabling TAF, be passed with changes. The seven-man committee’s recommendations include tweaking Clause 77a so if TAF doesn’t proceed, an unrestricted fair value cooperative share price can be implemented. Creating a backup option to TAF that involved regulating share price might be unfair for shareholders to consider before voting on the

scheme, it reasons. Other recommendations include measures to prevent Fonterra limiting fund liquidity and fund liability, ensure freedom of entry and exit from the cooperative in the event of TAF being wound up, and preventing legislation putting Fonterra efficiency ahead of farmgate milk price contestability. However, the committee’s report contains a stinging minority view from the Labour and Green Party members (Shane Jones, Damian O’Connor and Steffan Browning) that claims “short timelines” and limited advice on TAF “has resulted in a bill that contains risks for the dairy

industry and Fonterra.” “Independent advice... identified risks that have not been properly considered. Advice from officials with limited knowledge of co-operative company principles and objectives left many concerns raised by submitters unanswered,” the minority report warns. It questions the aim of “fair-value” share price discovery (as TAF would do) given the co-operative status of Fonterra and clear desire of farmers to have it remain a co-operative. “Many submitters requested the removal of section 77A and, while improvements have been made, we feel the imposition of such a valuation

system on a co-operative is untested. “This legislation implements fundamental change to Fonterra, a cooperative that is the largest company in the most significant export sector in New Zealand. Any reduction in control or ownership has risks for farmers and the country. “We are concerned that an immediate and unavoidable consequence of the establishment of the TAF scheme will be the loss of an unknown and uncapped proportion of the dividend stream generated by Fonterra’s profits, currently retained by New Zealand farmer shareholders, to overseas investors.

“If anything, we have strengthened farmer ownership and control with TAF.” The TAF vote is not the end, he adds. “I’m confident we’ve climbed the hill and ownership and control has been locked down. “But the fund and the fund size is the risk and we cannot let our guard down. The council will play a monitoring role to keep it within the parameters of policy. Brown is “okay” with some councillors not agreeing with TAF. “We will never get 100% and I’m not using that as an excuse. I have no fear we have not done our job well.

New Fonterra Shareholders Council chairman Ian Brown.

With a large shareholder base we get extreme views and that’s part of the healthy debate.” But Brown believes the council has listened to the dissenting voices and responded to them. Voting papers and TAF documents were sent to shareholders two weeks ago. Fonterra directors

and councillors last week met shareholders throughout the country to discuss the plan. Brown wants farmers to do their homework before casting their vote. “Get an understanding of TAF, get hold of your local councillors, talk to your neighbouring farmers, hold shed meetings.”

‘Redemption risk will increase’ ANDREW SWALLOW

RATHER THAN reducing redemption

risk, as Fonterra’s board claims, TAF (trading among farmers) could increase it, says former Federated Farmers Dairy chairman Lachlan McKenzie. McKenzie told Dairy News last week he doesn’t think the blueprint, or any of the other documentation circulated to shareholders, adequately explains the purpose of Fonterra as a farmer-owned cooperative, and how TAF will help that. “There is all this talk of redemption risk, but redemption risk has many facets. The biggest redemption risk to Fonterra is lack of milk supply and TAF has the potential to see more milk supply redemption than under the current restricted share value capital structure.”

TAF will leave the board with limited, if any, control of share value, which could rapidly rise providing a strong incentive for share redemption, he maintains. For example, if, as forecast, profit per share is 50c this year, then at a 15:1 priceto-earnings ratio, that justifies a $7.50 share value. “It’s quite conceivable that in a very short period of time we could have a $10 or $12 share. That would be a significant incentive for some to cash up and go somewhere else.” McKenzie also thinks Fonterra “doesn’t have a dog show” of controlling the size of the fund. “There will be enormous pressure from farmers and outside investors to increase it. It’ll be a blue chip investment,” says McKenzie.

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Dairy News june 12, 2012

news // 9

Kiwi milking gear for Russia peter burke

PRIMARY INDUSTRIES Minister David

Carter is lauding the signing of a deal between the New Zealand dairy technology company Milfos and a Russian company, Mercurii Holdings. The deal advances the development of ten hightech dairy farms in Russia using Milfos technology. The agreement was signed at the New Zealand embassy in Moscow during free trade negotiations between New Zealand and Russia-Belarus

and Kazakstan. Carter and Trade Minister Tim Groser were present. Carter says the deal indicates the sort of business that will be done as New Zealand develops closer relationships with Russia. “Fonterra has an involvement in Russia but of the privately owned companies this is the first deal that I am aware of. There are huge opportunities. Just flying over Russia you can see it’s flat and fertile and there are opportunities for substantial development and

therefore opportunities for companies such as Milfos, Gallaghers, etc, to get up there and sell products.” Milfos managing direc-

tor Jamie Mikkelson says the deal will mean ten farms milking up to 10,000 cows will be developed using the company’s technology.

Primary Industries Minister David Carter and Trade Minister Tim Groser with Milfos and Mercurii officials in Russia.

YOU WORRY ABOUT YOUR CURRENT HERD.

FTA talks on DAVID CARTER says negotiations to clinch a free trade agreement with Russia are progressing, but he’s unable to say when they might be concluded. An issue yet to be sorted is freer access for New Zealand’s primary exports, particularly dairy. He says Belarus is a major exporter of dairy produce to Russia and an FTA will be an issue for them. But New Zealand will not do an FTA with anyone unless it gets satisfactory liberalisation for its primary industry products. “With the collapse of Doha, an FTA with any country is the way New Zealand is going to open up the best opportunities. Russia-Belarus and Kazakstan have about 200 million people, so an FTA is potentially very significant.”

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as long as he is the minister in charge of biosecurity there will be no reduction in the efforts by the Government in this area. But he says the request by farming leaders as outlined in the KPMG Agribusiness Agenda, in which they asked for a long-term guarantee of funding, is not possible. Carter says he simply cannot give a commitment on behalf of any future government. “The request for a long term commitment by government is just not possible; no one can bind future governments.” In the KPMG report biosecurity was identified by farming leaders as the number-one issue. It was also numberone last year. Carter says he’s not surprised at this. “In every speech I give I talk about biosecurity being my number-one issue and the biggest risk to the New Zealand economy.” He says all industry groups now realise the benefits of the Government Industry Agreements (GIAs). The industry and the Government are better aware of risk before it arrives and better ready to respond to risk if it arrives. But while the pasture-based industries may accept GIAs, there is ongoing disquiet in the horticulture sector.

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Dairy News june 12, 2012

10 // news

Aussies buy Kiwi heifers for export RICK BAYNE

AUSTRALIA IS buying New Zealand

stock in its struggle to keep up with demand for export heifers particularly to China. Australian export companies are also sourcing heifers from other countries to meet the demand. The supply shortage has led to higher prices but the industry is warning these are not sustainable. Elders International Group general manager Tony Dage says demand for heifers remains strong, particularly from China, and supply continues to be the key challenge. “We continue to source more cattle outside Australia to meet demand and this diversification of procurement will continue.” New Zealand, Uruguay and the US are the main procurement areas outside south-east Australia; Russia, Pakistan and Turkey follow China as core customers. Elders International Trading will trade about 70,000 dairy and beef breeding animals across the globe this year – about 40% more than last year. “We will move about 40,000 Holstein/ Friesian cattle this year,” Dage says. The price received by farmers has been increasing over the past two years. Recent dairy orders bound for

China out of Portland, Victoria, have averaged A$1400 per head for Holstein cattle. China wants unmated heifers and the market ranges from 8-17 months old and 200-400kg live weight. However, Dage warns current prices are not sustainable. “Cattle pricing will, in my opinion, need to adjust back to levels that encourage our offshore customers to stay committed to us. We are getting resistance from offshore customers now and we need to be sensible to ensure the volumes continue and the market is sustainable.” Elders International Trading is predicting the core Chinese market will remain solid over the next few years “assuming we see some of our costs of procurement reduce,” Dage says. The Chinese Government is focused on pedigree and biosecurity. Dairy consumption in China is expected to double over the next decade as the country aims to be 80% self sufficient in food and agriculture. China is massively expanding its agricultural production, including subsidies for new farms and support for importing genetics to boost production. Dairy Australia manager strategy and knowledge Joanne Bills says China accounts for at least 70% of Australia’s heifer export market and has increased

Kiwi heifers are ending up in Chinese farms via Australian exporters.

its proportion of the market by nearly 10% over the past year. China is building up its internal capacity and at this stage its production system is based on Friesian genetics, she says. Elders International Trading says it is also receiving strong enquiries from new markets.

Early sale to boost cashflow MORE AUSTRALIAN dairy farm-

ers are selling heifers at an early age to boost their cashflow. They are selling to export traders in a trend restricting moves to rebuild milking cow numbers. Dairy Australia manager strategy and knowledge Joanne Bills says the national herd has remained stable at 1.6 million for about five years. But the latest National Dairy Farmer Survey reveals more farmers are selling heifers to traders at a younger age. “In the current climate they don’t want to take the risk of holding on to them and feeding them for a few years in the hope they can join the herd. “From an industry perspective we would be happy if farmers were con-

fident they could get a return in the future and recover their costs, but I can understand why they would be wary given the conditions of the past decade. It is challenging national herd re-building.” Bills says farmers look on young heifer sales as a new and integral part of their business model to generate a stream of income. “They are looking to sell earlier to help their cashflow. The heifers are identified for the export market and sold to specialist rearers who get them to the right age for export.” The 2012 survey shows the proportion of heifers sold was double the previous year at 10% of the total herd. Farms in Western Australia and Tas-

mania reported the highest sale rates at 20% and 18% respectively. However, the 2012 Situation and Outlook report shows dairy heifer exports for the 12 months to February 2012 fell 8% to 70,300 compared to the same period last year. Bills says the survey shows absolute numbers down, but a higher proportion of farmers are selling some heifers even if they were not immediately exported. The numbers are expected to have increased again recently due to farmer concern about next season’s milk price. The survey showed 31% of dairy farms sold heifers. Some 80% of sales were for export and 20% were sold domestically.

Core database ownership resolved DAIRYNZ AND LIC have reached agreement for the transfer of the core database to the dairy industry-good animal database. The two organisations had argued publicly over the matter. Following LIC shareholder agreement and legislative change, the dairy industry-good animal database will be run by DairyNZ. LIC chief executive Mark Dewdney and DairyNZ chief executive Tim Mackle announced the agreement last week. Dewdney says LIC fully supports the transfer of the core database and

has negotiated with DairyNZ to effect the handover. “LIC has operated one database with two components – the core database on behalf of the dairy industry guided by an access panel which is a subset of the LIC database which comprises 18,500 fields of IP developed and paid for by LIC shareholders. “This agreement with DairyNZ will see the core database pass to an industry-good body which is the right thing to do for the industry. “The LIC database remains with LIC,” says Dewdney. Mackle says the agreement is

LIC ceo Mark Dewdney (left) and DairyNZ chief executive Tim Mackle have resolved a difference over core database.

another milestone for the dairy industry, ensuring value creation for dairy farmers. “LIC has done a fantastic job for the

industry over many years by making New Zealand dairy cows more productive through genetic improvement. The time is now right for DairyNZ to pick up the baton and safeguard national breeding objectives by looking after the core industry information on animal evaluation,” says Mackle. The change follows an independent review, the Anderson Review, on the future of the core database. The Anderson committee recommended the core database should be run by an independent dairy industrygood organisation. The agreement between LIC and

DairyNZ means DairyNZ will also run the animal evaluation scheme and provide breeding worth for sires in New Zealand on behalf and for the benefit of all dairy farmers. This change will not affect LIC’s commercial operations and LIC will supply cow breeding worth figures directly to farmers and to other herd record providers under commercial arrangements. LIC shareholders will vote on the transfer later in the year, and following legislative change the running of the database will move to DairyNZ about the middle of next year.

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12 // news

Relief at market rebound ANDREW SWALLOW

LAST WEEK’S GlobalDairyTrade rebound of 13.5% is a sign the market is bottoming out say analysts, though they caution it’s only one result and dairy commodities aren’t out of the woods yet. “It was certainly a positive overall outcome but there were some mixed messages,” Rabobank senior dairy analyst Hayley Moynihan told Dairy News. “There was a strong rebound in skim milk powder and AMF but whole milk powder was

lacklustre by comparison.” Anhydrous milk fat (AMF) rose 24.4% averaged across the now monthly contract positions, lead by a 43.6% lift in the price for August delivery to US$3393/t, while the December contract was up just 5.1% at US$2,860/t. Skim milk powder (SMP) was similarly at a premium in the near positions, rising 28.4% to average US$3135/t for August, but only $2724/t for November (there was no December offering) while WMP was up 12.3% at US$2784/t in August, and 7.4% at US$2939/t for

December. “What we can take from that is buyers probably had to come back to cover their short-term needs but are still reasonably cautious about the global economy and are not keen to purchase too far forward.” Moynihan notes SMP monthly averages hide “quite a large variance” between New Zealand product and US (Dairy America) or European (Arla). For August delivery, the latter’s medium heat product made just US$2605/t; Dairy America’s was US$2750/t, and

Fonterra’s US$3535/t. “Some of it is because of different product specifications but it appears some purchasers prefer a particular product either because of its origin or the company.” Even prior to last week’s auction there were signs dairy prices were stabilising in northern hemisphere markets and while there’s a limit to how much should be read into one auction, “put it all together and one conclusion is it’s either the bottom of the trough, or certainly very close to it and we would expect to

Skim milk powder led the increase in global dairy prices last week.

see prices start to improve or at least plateau from here,” she says. Volume offered at last week’s auction, a maximum of 29,515t, was back 26% on the previous sale’s 40,150t when prices over-

GDT results of recent months.

Sale date

Offered

Tonnage sold

Average winning price (US$/t)

Change

June 5 May 15 May 1 April 17 April 3

29,515t 40,150t 34,120t 33,378t 26,701t

28,719 39,795 33,125 32,122 26,589

$2,899 $2,619 $2,843 $2,983 $3,277

+13.5% -6.4% -2.4% -10.1% +1.6%

all fell 6%. Also on the supply side, Moynihan notes growth in US production has slowed and, after a strong start to the season, Europe has passed its peak. That surge in northern hemisphere production, colliding with the tail end of a bumper season here, is what had been pressuring markets. BNZ senior economist Craig Ebert says this latest GDT result will “calm a lot of nerves”. “It doesn’t mean we’re

out of the woods yet but it’s certainly a relief.” That relief comes not only from the dairy market’s rebound, but the New Zealand dollar’s recent easing, given it had been defying gravity in the face of falling commodity markets up to about mid April. Continuing – and in some cases increasing – economic difficulties around the world mean the fact GDT prices went up at all is “really encouraging,” he adds.

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Ag news pioneer honoured a strong following among farmers and advertisers. Hight later launched Rural News and Dairy News, now leaders in their field. The path he opened has since been trod by other

agricultural publishers and the farming community is now one of the best-served business sectors in the country in respect of free news and technical information.

Brian Hight

ONZM gong for Gent

of the day to allow access to the rural mail delivery service, something that demanded many meetings in Wellington. Farm Equipment News then quickly established

subscription funded, for the agribusiness community and did not hold farmers’ interests as their priority. He sought to rectify this by launching Farm Equipment News in 1974, sending it free to all farmers on rural delivery mail runs. The paper’s revenue came only from advertising. Hight had to persuade the postmaster-general

N PR E O W

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COMING close to having to sell the family farm, Northland dairy farmer Greg Gent has risen through the ranks of dairy industry governance and into several other sectors. That exemplary career path was recognised last week in the Greg Gent Queen’s Birthday Honour’s list with Gent being made an Officer of the New Zealand Order of Merit in the Queen’s Birthday Honour’s list for services to the dairy industry and corporate governance. “It was a pleasant surprise when the letter came through a few weeks ago,” he told Dairy News. “I felt quite humbled.” His career started in banking but in the late 1970s he was given leave of absence to go home and look after his terminally ill father and the family farm at Ruawai. Finding he liked farming, he decided to stay on through what turned out to be tough times in the 1980s. “We’d had to pay 45 cents in the dollar in death duties. We did manage to hold onto the farm by the skin of our teeth but we know what it’s like to be broke.” He and wife Anne have since grown the business to four farms with 1100 cows combined, employing three managers and one sharemilker. His governance career started in 1993 with a seat on Northland Dairy Company’s board, where 18 months later he became chairman until it merged with Kiwi in 1998-99. He ranks helping to get Northland’s payouts on a par with the rest of country among his greatest achievements. “It always used to be 20-30c below.” Fonterra’s evolution, following a difficult first couple of years, to the cooperative it is today, is also up there. “What it delivers to the nation is something every Kiwi should be proud of.” He stood down from Fonterra’s board last year as he felt he’d “done what I was put there to do.” He’s currently chair of FMG, a ministerial appointee on the Northland Health Board, a director of Southern Cross, northern region chair of BNZ and vice president of Equestrian Sports New Zealand. While there has to be rigour in the selection process for directorships, like many, Gent is concerned “the pendulum has possibly swung too far” in demanding a proven track record for board positions. “It makes it difficult to bring someone through that shows a lot of potential but has little experience.” The citation accompanying Gent’s ONZM says he is well regarded for his style of steady, selfless leadership, and tireless advocacy for Northland farmers.

Dairy News june 12, 2012

14 // news

Report maps out dairy’s progression path pam tipa

A NEW report on the progression path in the dairy industry is no “magic bullet” but aims to stimulate ideas and innovative thinking, says Federated Farmers Sharemilkers chairperson Ciaran Tully. “We wanted a snapshot of what was going on and an indication of how people are getting ahead. “If they can’t get a shot at sharemilking, we are looking at what they can do…. They can buy property, look at leasing farms or buy cows and lease them to the owners and that sort of thing. “The report is to provide bit of stimulation from others if people out there have hit an obstacle.” The report ‘Ensuring a viable progression path

in the dairy industry’ was released last week at the joint meeting of Federated Farmers Sharemilkers section and the Sharemilker Employers section.

guy on the farm and the man in the trenches is still able to build his equity,” Tully says. On another issue Tully says Federated Farmers

“We wanted a snapshot of what was going on and an indication of how people are getting ahead.” Tully says the report will be disseminated throughout the industry particularly through DairyNZ and some of its progression groups and it is hoped it will promote discussion. One of the most innovative solutions put forward recently was a farmer with a 1000-cow herd allowing a sharemilker to go 50/50, by buying into the stock so they could build some equity. “The owner has a good

has heard anecdotal evidence that some equity managers have trouble “growing their piece of the pie” but would like to get more feedback on this. “There’s a phrase we heard from Canterbury, ‘the golden handcuff’. That’s whereby somebody buys into in an equity partnership with a low percentage of ownership and in the worst case scenario they don’t get the funds from the dividend and their income to

A new report has highlighted ways of progression in the dairy industry.

Ciaran Tully

increase their share. “There’s concern about the exit clauses in some of those [equity manager partnerships]. If you leave

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the partnership, you can come unstuck there if you haven’t sorted out your exit terms fully. “The big heads up for everybody in the industry is ‘do your due diligence and become more professional’ because there are 90 people applying for some of these sharemilking jobs now and if you are not at the top of your game you are not going to get a look in.” Tully says the report shows owning you own herd means over time you can build about $1 million more equity than staying on wages. That $1 million can make a big difference in terms of farm ownership; “There aren’t many farmers who will say they will take $1 million less for their property.” In a second initiative last week, a memorandum of agreement was signed between Federated Farmers and the Arbitrators and Mediators Institute of New Zealand (AMINZ). This will strengthen the relationship between the rural sector and the country’s professional agency for dispute resolution.

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Helping settle disputes THE ARBITRATORS’ and Mediators’ Institute of New Zealand (AMINZ) and Federated Farmers signed a memorandum of agreement that will strengthen the relationship between the rural sector and the country’s professional agency for dispute resolution. Under the new agreement, the sharemilking industry endorses conciliation as the most costeffective method of resolving disputes relating to agreements covered by the Sharemilking Agreements Order 2011. The agreement sees Federated Farmers again agreeing to AMINZ administering the National Panel of Conciliators. The panel consists of the country’s leading conciliators, all of whom have in-depth knowledge of the farming sector. AMINZ – the professional body for arbitrators, mediators, adjudicators, conciliators and other dispute resolution practitioners in New Zealand – will operate the panel with assistance from the Sharemilker Section and the Sharemilker Employers sections of Dairy Farmers of New Zealand, (an industry group of Federated Farmers). AMINZ will make appointments from the panel on request from sharemilkers or sharemilker employers who are in dispute over a sharemilking agreement. In addition the panel will continue to be a resource for sharemilkers and sharemilker employers to find a professional who can assist them with their disputes. “We are delighted to be solidifying our relationship with the rural sector,” says AMINZ chief executive Deborah Hart.

in brief Award winners at Fieldays THE THREE winners of the 2012 New Zealand Dairy Industry Awards will be at the National Fieldays this week. They will be promoting the awards programme, meeting sponsors and finding new ideas and technologies to assist their businesses. New Zealand Sharemilker/Equity Farmers of the Year, Enda and Sarah Hawe, New Zealand Farm Manager of the Year, Mick O’Connor, and New Zealand Dairy Trainee of the Year, Nathan Christian, will be in attendance.

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Dairy News june 12, 2012

news // 17

Unfair focus on dairy PETER BURKE

POLLUTION IN some

urban waterways is potentially greater than in rural areas, says the Taranaki Regional Council chairman and Fonterra director David MacLeod. Commenting on a ‘ditry dairying’ story recently on the Dominion Post front page, MacLeod acknowledges there are problems in rural areas but says the daily media tend to focus on the dairy industry. “It’s a bit of a tall poppy syndrome because the dairy industry has been so successful,” he says. MacLeod says another contributing factor is the ‘greening of society’. “This has heightened over the last couple of decades so people are much more vigilant over

what’s happening in the environment. There’s a heck of a lot of land in dairying that people can see and hence the fact more people are vigilant on what’s happening in the environment and in particular what’s happening on the dairy landscape.” However MacLeod believes the dairy industry does have a few farmers who have to lift their game. “That’s proven by the prosecutions seen the Environment Court, but I think it should be kept in the context of the number of dairy farmers…. It’s a huge industry and by far the majority of dairy farmers are excellent custodians of the environment. Within any industry you can some find who don’t comply with the rules and the challenge is to get all within the dairy industry

lift the game of the few to produce better environmental outcomes.” MacLeod says the time has come to get tough with the “10% of laggards” who are not complying with the rules. Fonterra now has strict rules and timeframes for farmers to

meet to achieve environmental standards, he says. Taranaki Regional Council is reviewing its freshwater plan and is considering putting in tough rules to deal with those who fail to meet their environmental responsibilities. David MacLeod

Watchdog accepts farmgate milk pricing policy THE COMMERCE Commission has approved Fonterra’s farmgate milk pricing. In a ‘dry-run’ review the commission says its initial conclusion is Fonterra’s setting of the farmgate milk price is not inconsistent with the purpose and principles of the milk price regime set out in the DIRA Bill. It now seeks submissions on its initial conclusions. The Dairy Industry Restructuring Amendment Bill 2012 (the DIRA Bill) proposes the commis-

sion monitors and reports on the extent to which Fonterra’s setting of the farmgate milk price is consistent with the purpose and principles of the milk price regime set out in the bill. Prior to the DIRA Bill being passed into law, the Minister for Primary Industries asked the commission for a non-statutory dry-run review of how Fonterra sets the 2011-12 farmgate milk price. The review is intended to show how the Governmentproposed milk price monitoring

regime would work in practice, before Fonterra’s planned move to TAF, says Commerce Commission deputy chair Sue Begg. “It’s important to understand that the DIRA Bill, and our dry-run review, are not concerned with the retail price of milk, only Fonterra’s farmgate milk price. “This is the price Fonterra pays dairy farmers for their raw milk and is worked out using a pricing methodology set by Fonterra. It is this pricing methodology – and

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Fonterra’s application of it – we are reviewing. “Most of Fonterra’s current assumptions appear to be practically feasible for Fonterra to achieve and reasonable for efficient processors to replicate. The assumptions do not preclude all efficient competitors from potentially competing with Fonterra in the New Zealand farmgate milk market, and will provide incentives for Fonterra to operate efficiently,” says Begg.

Dairy News june 12, 2012

18 // news

Benefits to flow from river study MASSEY UNIVERSITY has set up a project to gather more scientific data on New Zealand rivers, a move the leader, Dr Ian Fuller, says will benefit dairy farmers. A grant of $80,000 to the Innovative River Solutions Centre, and Fuller says he hopes the centre will be permanent. The project is intended to bring together specialist researchers from disciplines such as ecology, hydrology and geomorphology, and apply that expertise to solving river problems. Specialists will get together to solve river problems. “The project will have something to contribute to dairy farmers. It’s more than just about Fuller hopes the centre will become a science hub water quality, it’s about living successfully with rivers whose expertise people can use. He envisages runand an holistic approach to managing a river. ning courses on river management – something attrac“For example what goes on in a river channel that tive to farmers wanting to know how to better manage runs through a farmer’s property is conditioned by waterways. what’s going on upstream where there may be a range He sees it working with farmers, regional councils of problems. These could include the nature of the and other river groups to identify issues and help find rock, land use and other issues and all this requires an solutions. integrated response and understanding of that catchFuller is particularly keen to work with legislators. ment to find solutions.”

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Tall in every way PETER BURKE

THE MAN who did much

lios of agriculture, science, education, foreign affairs, national development and trade. He excelled as trade minister. In the late 1970s New Zealand was fighting a rearguard action to

to retain access for New Zealand dairy products to the European Union in the late 1970s and early 1980s died recently. Sir Brian Talboys devoted virtually all his working life to things agricultural. He was born in Wanganui and after gaining a BA at Victoria University he worked Brian Talboys as a stock and station agent. He later became the assistant retain market share for editor of a farming magacheese, butter and lamb zine. During WWII he served mainly in the UK. Talin the RNZAF and when he boys was forever heading returned, settled in South- to London, Brussels and other European capitals to land as a farmer. put the New Zealand case He was elected to and he did this brilliantly. Parliament in 1957 and Without his diplomatic throughout his political skill New Zealand would career held the portfo-

never have won the concessions it did from the EU. Talboys was in every sense of the word a gentleman, intelligent and a great leader. He was deputy prime minister to Rob Muldoon and could have been prime minister if he had joined a coup to roll Muldoon. But that was not Talboys’. He was an imposing figure and well liked across the political spectrum. He brought dignity to the rough-and-tumble, hard-hitting politics of Muldoon. Talboys retired from politics in 1981 and held various positions in business. The New Zealand dairy industry of today has much to thank him for.

Many cows hitting the magic BCS 5.0 PETER BURKE

MOST COWS around the country appear to be hitting the magical body condition score (BCS) 5.0, says DairyNZ. Regional team leader Craig McBeth told Dairy News that anecdotal evidence from his staff suggests cows are in better condition than for some years. The good season has helped. “I also think DairyNZ promoting the value of getting cows to BCS 5.0 has been taken on board by farmers. We have promoted the science that shows cows with BCS 5.0 are more profitable, more likely to get in calf again easily and contribute less wastage to the farming system.” McBeth says farmers are now better planning their feed requirements, making decisions about drying off cows at an appropriate time, assessing their covers and supplements and have feed budgets that lead to good decisions. This been one of the better seasons. Even the situation in Southland picked up in autumn and production lifted, he says. “We’ve had fewer

Cows around the country are in good condition, says DairyNZ.

animal welfare problems than in years of feed shortages and drought, when stock were struggling to get enough to eat. “Cows in good condition and well fed are healthier and better than other animals. A nation with a high level of nutrition has fewer health issues than countries where there is poor nutrition. Cows are no different.” McBeth says in past, difficult seasons farmers started to rely more on supplements such as PKE. But this year farmers have a lot of grass silage stored on their properties. The better weather has also prompted many farmers to rethink their supplements policy and many are now focusing on growing more feed on their farms as opposed to buying it in. He says with the good season there is no evidence farmers are milk-

ing right to the end and extracting the last litre of milk from their cows. He says inevitably some farmers will try to get some extra litres in the vat while the payout is better than predicted for next year. That’s a choice farmers have to make. But he points out the latest news on the dairy global auction front is good and this will help boost farmers’ confidence. McBeth says the profile of once a day milking (OAD) has improved. It’s now starting to be widely accepted as a valid way to farm or as a good management tool. In the past it was used only as a last resort to deal with problems. “It’s now talked about a lot more openly as a management tool that can be used as an overall strategy to maintain condition on cows while keeping them in lactation,” he says.

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Dairy News june 12, 2012

20 // news

Education first step with NAIT offences ANDREW SWALLOW Moving stock off farm from next month without NAIT tags will be illegal.

MOVING STOCK off farm, or bringing them home for calving, with-

out NAIT tags will be illegal from next month, as will a failure to record that movement. But National Animal Identification and Trace-

abiliy scheme chief executive, Russell Burnard, says in the first instance enforcement action is likely to be educational rather than punitive.

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“Technically it will be a breach of the law, and we recommend farmers don’t get into that situation, but initially our focus will be on education,” he told Dairy News. “We’re not going to come down on them with a sledgehammer.” All farms carrying cattle must be NAIT registered by July 1, be they winter grazing properties or milking platforms. Any cattle beast moving off a farm must be NAIT tagged and that movement recorded on the NAIT system. Burnard admits NAIT hasn’t tallied the number of dairy farms that have registered to date, but says anecdotal evidence is that it is already over 50%, and he expects a late surge as the July 1 deadline looms. “We’ve had close to 5000 people to our roadshows over the last three weeks which is significantly better than we thought.” That comment was made with the last handful of meetings still to be counted late last week. Advertising and promotion at National Fieldays will also help swell numbers registering in the run up to July 1. Of an estimated 35,000

holdings that need to be registered, including beef farms, grazing properties, and temporary graziers’ premises, such as arable farms, just under 20,000 had done so as of last week. The July 1 implementation date means all calves born after that date, other than bobbies, will need a NAIT tag by 180 days of age or when moved off farm, whichever comes sooner. “They should be tagged by the dairy farmer, not the rearer.” NAIT’s definition of a bobby calf is anything under 30 days that goes straight to slaughter. “For those you will just need a direct to slaughter tag, as normal.” Cull stock deemed too dangerous to tag with a NAIT compliant button can be moved direct to slaughter subject to a total levy of $13, which works out at a marginal cost of $5.55 given such stock would require a slaughter tag, and be subject to NAIT and Slaughter levies totalling $7.45 anyway. Sending cull stock to saleyards without a NAIT tag will not be an option. “If it is just too hard and dangerous to tag them, then they will have to go direct to the works.”

Take control of cashflow GARETH GILLATT

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businesses says Dairy Training Ltd general manager John Troutbeck. Troutbeck recently ended a nationwide tour presenting 12 workshops for DairyNZ on cashflow monitoring and budgeting. He noted more interest than in previous years. About 144 people attended this year, a number Troutbeck would like to see grow because farmers do not traditionally follow budgets all year. “When you look at the assets and figures dairy farmers hold that’s pretty worrying,” he told Dairy News. The workshops attracted first-time business people and farmers of 20 years experience. “A couple of older guys who’ve only just started doing this now wished they’d done cashflows when they first started.... It’s about working on the business as well as working in the business.” Troutbeck teaches attendees how to handle budgets and cashflow with an Excel-based management system developed by DairyNZ.

Dairy News june 12, 2012

news // 21

Why Fieldays matters to townies MOST NEW Zealand-

ers are townies these days but still value the rural sector. And that’s why the National Fieldays are such an important annual event, says the University of Waikato’s inaugural chair of agribusiness, Jacqueline Rowarth. “New Zealand is one of the most urbanised countries in the world – 86% in 2010 and growing at 0.9% a year,” she says. “Most people no longer have connections with the land, but research shows the majority of New Zealanders agree that if the rural sector is doing well people in the urban sector will be better off. Conversely, only a minority of rural New Zealanders are convinced

Cull a cow for charity

of the importance of urban New Zealand.” Fieldays provides the ideal nexus for rural-urban understanding, says Rowarth.

“Waikato really is the Silicon Valley of agribusiness.”

Jacqueline Rowarth

“This country is too small for disconnect. We are only 4.4 million people, but we feed approximately another 20 million overseas, and there is potential to supply even more food with the application of innovation, creativity and technology to the agri-

food value chain.” Rowarth is spearheading the University of Waikato’s agribusiness research and teaching programmes, which complement existing research strengths in terrestrial and freshwater ecosystems, and other areas adding value to land-based industries. She says the Univer-

sity of Waikato is perfectly situated to contribute to innovation in the sector. “Waikato really is the Silicon Valley of agribusiness,” says Rowarth. “The herringbone milking parlour, the electric fence, inline milk sampling, and added value milk ingredients all came out of Waikato.” She says innovation is

fostered by the fertile mix of businesses and organisations in the region, including Fonterra, Ballance Agrinutrients, TruTest, LIC, DairyNZ, Shoof and the Gallagher Group among others, plus a clutch of Crown Research Institutes, industry bodies, Waikato Innovation Park and the University of Waikato, she says.

NORTHLAND FARMERS are being encouraged to support Project Promise when culling stock from their herd. An initiative for farmers to donate the proceeds of a cull cow to Project Promise has been set up with stock agents and meat works. Terry Ward from the Project Promise events team says “one of our supporters came up with this idea and we think it’s a great way for farmers to support Project Promise. It’s coming into winter and farmers are de-stocking. “When farmers contact their stock agent to sell stock they can donate the proceeds of one or more cull cows or stock for local or international markets. They just need to mention to their stock agent that they want to donate stock to Project Promise and we have a process in place with the meat works.” Project Promise, brainchild of the Northland Community Foundation, is raising funds to build a cancer treatment centre for Northland in Whangarei. The unit will make life easier for many Northland cancer patients and their families, though some must still travel to Auckland for some treatments, including radiotherapy. The project reached $1m in April.

Diploma proviDes awarDs confiDence. Putting her farm business up for scrutiny by a team of national judges says much about the confidence Donna Griggs has gained since completing her National Diploma in Agribusiness Management through AgITO. Donna and husband Steve were the Northland winners in the Farm Manager section of the Dairy Industry Awards this year. As first time entrants in a fiercely contested competition, Donna says that win, combined with the foundation her Diploma has given her in business skills, have bought a major confidence boost. It is also a win she is not so sure they could have captured, were it not for the time and commitment made to the Diploma over the past 18 months. The couple are nearing the end of their variable order contract on an intensive 480 cow operation south of Whangarei, before taking up a new job in the district in June.

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“The Diploma gave me the skills and the confidence to do some in depth budgets and cash-flows, including sensitivity analysis across different cost and payout levels and to present those figures knowing what I was talking about when we were assessed.” It is a competence that has not only boosted her confidence, but that of their bank manager in their ability to push ahead in their dairying career. “The bank knows that we know what we are doing, and that they are seeing figures that are robust and valid.” Success breeds success, and Donna believes the confidence gained in completing her Diploma gave her and Steve the self belief to enter the Dairy Industry Awards, and in turn that success has put them in a positive space as they look

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forward to taking up their new position. In a competitive job market they were delighted to be asked to apply for their new position by the farm owners to run a herd that sits in the top 5% of the national herd BW. Specific modules within the Diploma have helped the couple maintain a steady course in building up savings and holding to firm financial goals. Donna believes the taxation module in particular is an invaluable component of the degree well matched to the variable order stage in their career. “We were able to manage our tax liability through livestock trading, year one sees you setting up, year two is where you try and save but also face that terminal taxprovisional tax impact, but we were able to manage it well with what I learned.” As the predicted payout slides and the world appears less certain than it did even at the height of the global financial crisis, Donna is also thankful for the emphasis the Diploma places on risk management and mitigation. The wider global aspects of agribusiness are covered, but also on-farm risk management. “A big one for us was the health and safety component, with two staff working with us. We now know exactly what is required of us as employers, and what the implications are for not ensuring we have plans and procedures in place, it is one area that can trip a lot of people up at this stage when they start to employ staff.” Donna and Steve are looking forward to taking on a seasonal herd that will bring a better balance to their busy family life, a core reason for why they opted to go farming. They remain keen to stay in Northland, hoping to take on a 50:50 job in the near future.

Dairy News june 12, 2012

22 // world European co-op Arla will soon have owners in six countries.

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UK farmers back co-op mergers UK FARMERS are backing the merger of cooperatives Arla and Milk Link. The merger will create the largest player in the UK dairy market, which will have a combined turnover in excess of $4 billion. It will process 3 billion litres of milk per annum, almost one quarter of total UK production. NFU dairy board chairman Mansel Raymond says the merger will lead to a stronger future for the industry. “This is a hugely significant event and is the result of the patience, faith and commitment of Milk Link members who have been investing in their own future over the past 12 years,” he saiys. “UK farmers have looked on enviously at the apparent disparity between UK and mainland European milk prices, but also at the strength of larger European dairy cooperatives which have used their scale and efficiency to command market leading prices and build market leading brands. This merger puts Milk Link members in a far stronger place with a more secure future.” Arla Milk Link UK, the result of the merger, will be a corporate member of Arla Foods Amba with two positions for UK directors. This will be a European board to lead a European cooperative, in which UK farmers will have an equal stake, he says. Along with its merger with UK’s Milk Link, Arla is also joining forces with German co-op Milch-Union Hocheifel (MUH) propelling it into the top three dairy co-ops in Germany. If the merger is approved by shareholders Arla will become one

Size does matter FONTERRA CHAIRMAN Henry van der Heyden says size and scale is the key behind Arla’s merger moves in the UK. He says in a competitive dairy market, it’s important to grow. “Definitely Arla is on the move,” he told Dairy News. He says for Fonterra, the strategy refresh spearheaded by new chief executive Theo Spierings is designed to maintain the co-op’s competitiveness in the global market.

Merger facts ■■

The mergers will mean that Arla Foods will grow from 8,024 cooperative owners in Denmark, Sweden and Germany to 12,300 cooperative owners in Denmark, Sweden, Germany, Belgium, Luxembourg and the UK.

■■

Going forward, Arla will weigh in more than 12 billion kgMS against 9 billion kgMS today

■■

The name will continue as Arla Foods amba.

■■

The cooperative owners of Milk Link and Milch-Union Hocheifel will continue to be cooperative owners of Milk Link and Milch-Union Hocheifel. These two companies will be corporate members of Arla Foods amba in line with the model used in the merger with the German Hansa-Milch in 2011.

of Europe’s leading dairy groups represented by owners in six countries: UK, Sweden, Denmark and Germany, Belgium and Luxembourg. The two planned mergers will immediately increase Arla’s revenue by $2 billion per year. Milk Link chief executive Neil Kennedy says the merger will bring together two successful, growth orientated farmer-owned dairy businesses with highly complementary positions in key markets, brands and customer bases. “It reflects and reinforces Milk Link’s position as the UK’s leading dairy business and recognises and rewards the ongoing loyalty and com-

mitment of our members,” he says. Raymond believes the merger lit a clear path for their potential future. “The injection of a new force in the UK market for milk at farmgate will likely have positive implications for the wider UK dairy farming industry,” he says “The Arla Foods Amba operations in the UK will have a broad and robust dairy category offer, which has the potential to command better returns for its members and suppliers – this is the strengthening of a UK business.” The cooperative owners of Milk Link and Milch-Union Hocheifel will continue to be cooperative owners.

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Dairy News june 12, 2012

24 // world

Murray Darling plan triggers backlash THE AUSTRALIAN

Dairy Industry Council says the Murray Darling Basin Authority has shown contempt for regional communities with the release of the Basin Plan. ADIC chair Chris Griffin says it was little different from the damaging guide to the Draft Basin Plan released in 2010. “The new MDBA chair Craig Knowles last year assured regional communities that he wanted to work with them to come up with a Basin Plan that genuinely balanced environmental, social and economic needs,” he says. “It is just plain insulting for the authority now to dismiss thousands of regional Australians as having nothing worthwhile to contribute to a

plan that directly affects their economic and social wellbeing.” Griffin urged Federal Water Minister Tony Burke and State Water Ministers to address the fundamental flaws identified in the draft plan, and not abandon regional communities. ADIC Basin Taskforce chairman Daryl Hoey says the Basin Plan released late last month would remove slightly more water from the southern Basin than was proposed in the Guide 18 months ago – 2289 gigalitres compared with 2274 gigalitres. “Today’s outcome is a betrayal of the community’s goodwill to give the MDBA another chance to work with regional communities and get this right,

after the debacle of the Guide,” Hoey says. “A cut of this size is as unacceptable now as it was 18 months ago – especially in the face of the authority’s own evidence that similar or better environmental outcomes could be achieved with less water by investing in environmental works and other measures instead of buybacks. “It is also shocking that the authority has conveniently dismissed the integrity of all socio-economic studies – even its own commissioned studies – that do not support its fanciful claims that regional communities will not suffer any serious or lasting impacts.” Hoey says he was particularly concerned about

Daryl Hoey

misleading information in the socio-economic summary report delivered to the state and federal water ministers. He says an example was the claim that irrigators only face a 19% reduction in water, after accounting for infrastructure savings. However, this is a proportion of all water diverted in the Basin, including for Adelaide, other towns, manufacturing and mining, as well as agriculture. “In truth, the reduction

will be about 30%, based on ABS data of actual irrigation water use – and the Government is only targeting irrigators’ water for purchase for the environment,” Hoey says. “Further, the authority has failed to tell Australians the whole story by including colour-coded maps showing that the environmental benefits of recovering 2400GL would be little different to 2750GL, according to its own studies.”

Consultation process ‘a sham’ THE DRAFT Murray Darling Basin Plan has drawn fire from every stakeholder. State Governments, farm groups and irrigators say little has changed from the original plan released 18 months ago. Environment groups and the Greens – who the Federal Government rely on to hold office – say the plan does not release enough water to ensure the health of the river system.

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Victorian Farmers Federation president Peter Tuohey said the MDBA’s consultation process – which involved travelling around Australia to listen to concerned parties at community forums – had been a sham. “They’ve failed to listen to our call that all further water for the environment be recovered by more efficient watering of wetlands and river operations – not just buyouts of irrigators’

water,” Tuohey says. “Failure to include these measures means the Federal Government will just rely on buyouts.” Tuohey says the revised draft Murray Darling Basin Plan handed to State Water Ministers does not include crucial changes

Have you herd about our dairy sheds?

needed to minimise the impact of draining water out of irrigation communities. National Irrigators Council chairman Gavin McMahon says the plan does not include an environmental watering plan to explain where the water will be used. “How the Government has come up with any number when it doesn’t know and won’t know for at least another three years how, when, where,

why or what it wants to water?” McMahon says. MDBA boss Craig Knowles believes environmental works – which could achieve desired environmental outcomes with less water through new infrastructure - would be considered as part of a review of the basin plan in 2015. But the VFF has said that’s not good enough. “We want these changes enshrined in the final plan, not left to some distant review,” Tuohey says.

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Dairy News june 12, 2012

26 // OPINION Ruminating

EDITORIAL

Easy pickings by know-nothings

milking it... Get your act together

FEDS’ SHAREMILKER section chair and its communications manager need a dose of their own medicine. Late on May 29 the pair put out a media release headed ‘Getting our Gypsy Day act together’, with lots of sensible advice for farmers about managing the movement of stock. The time it was circulated meant it was probably too late even for daily papers to include on May 30, so at best it would have been published on Gypsy Day itself, when the last thing a farmer on the move would have been doing is reading the paper. So who is it needs to get their act together?

Flip-flop on honours

FIRSTLY, CONGRATULATIONS to Dairy News’ publisher Brian Hight for his recognition in the recent Queen’s Birthday Honours list. Hight was made an Officer of The New Zealand Order of Merit for services to agricultural publishing. Former Fonterra director Greg Gent received the same honour. Secondly, congratulations to former deputyPrime Minister Michael Cullen for his knighthood. Perhaps we should just forget that he was part of the administration that did away with the royal honours system; he obviously has.

Lucky to be a cow

LUCKY, A seven-year-old dairy cow in Wisconsin, had been walking with a limp for several weeks when veterinarian Sara Gilbertson was called. Instead of prescribing painkillers, Gilbertson tried an unusual new therapy – a chiropractic adjustment that included a full-length spinal massage. Cow comfort has bcome a key concern for farmers in the US, who have known for generations that contented cows give more milk. The traditional techniques for keeping cows happy aren’t complicated: feed them well, keep the temperature comfortable and give them room to move around. But some dairy farmers are turning to a new array of creative options intended to keep cows as mellow and productive as possible. Some farmers have installed waterbeds for their cows to rest on, while others play classical music. And some hire animal chiropractors to give older cows a tune up and correct minor issues in calves, all part of the effort to ensure maximum milk output.

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Milk helps trim obesity

A NATURAL ingredient of milk appears to protect mice from obesity by indulging them with abundant high-fat meals while keeping them fit and energetic, scientists say. Researchers in Switzerland who examined the effects of the milk compound nicotinamide riboside (NR) say their study of mice may lead to new ways of protecting people from obesity and metabolic disorders as they age. NR appears to be a new member of the family of vitamin B compounds. The results of the buy drinking milk alone is unlikely to produce these benefits. “You need a higher amount [of NR] than what is present in milk,” says Johan Auwerx, who led the research and is studying the mechanisms of metabolic disorder.

IT IS sad and annoying to pick up the Dominion Post and see on the front page another expose of ‘dirty dairying’. While the story on the number of prosecutions of farmers nationwide for environmental breaches is probably correct, it is what happened a year ago, not what’s happening now. The mainstream media delights in picking on dairy farmers and whenever possible attaching to them the ‘dirty’ label. That’s sad because every day in every city and town in people are dumping oil, paint and other muck down stormwater drains and so to highly prized rivers where it kills fish. Local authorities are putting money into building new offices rather than fixing outdated, ineffective sewage treatment plant. How many of these stories do we read on the front pages of newspapers? The mainstream media for the most part are silent on these issues. Farmers get prosecuted but local authorities get off the hook because a fine will ‘cost ratepayers’. The demonising of the rural community shows how wide is the gap between town and country. The reality is the vast majority of farmers are now cleaning up their act. At last we are seeing good leadership on this by Federated Farmers and its new Bruce Wills-led team. Fonterra is somewhat belatedly getting in tune with public opinion and forcing it’s suppliers to clean up their act or not have their contracts renewed. If the Feds, Fonterra and others had been more proactive and taken a harder line earlier, showing better leadership on environmental issues, we wouldn’t be seeing some of the bad press dairy farmers now get. The reality is the Land and Water Forum has brought together once-warring factions which now are working intelligently to buttress the environment on dairy and sheep-andbeef farms. Most farmers are getting the message. Those who haven’t are feeling the disdain of their peers. So they should. – Peter Burke

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Dairy News june 12, 2012

opinion // 27

Don’t stifle co-op growth Glenn Holmes

AS AN owner and cooperative member of Fonterra I am pleased and relieved that we now have the information to enable informed analysis and consequent logical decisions to be made about TAF. I believe that as the months of research and deliberating by the Fonterra board and Shareholders Council have progressed, we have had the negative impact of impatience by some shareholders. The unfortunate downside of that impatience is that some of the early comment has not been fully informed. Given that 100% farmer control is not negotiable, in my view the central issue then, as it has always been, is ‘redemption risk’. Redemption risk has always been present, but in the recent volatile times that risk played out to the detriment of the shareholders remaining in Fonterra. It was those who didn’t sell down or sell out their shares in the drought year that bore the brunt of the increased borrowing Fonterra was compelled to do at high interest rates. That to me is not what the cooperative spirit is about. Consequently it is imperative that we share-

holders put TAF in place so that this situation never arises again, as it could in another year of climatic extreme. As a shareholder who wants to see Fonterra grow and keep its important place in the world dairy export market, I desire our cooperative to have a strong and reliable balance sheet so that opportunities to enhance and expand the business we are good at continue. We want to be in a position to act on those opportunities, not watch them pass us by. Farmers in New Zealand have been good in the past at growing their businesses, so we should embrace the opportunity to continue that growth through a cooperative that is highly regarded in the world dairy market. The support of the shareholder base is crucial for our company. There have been robust controls, limits and rules put around all aspects of TAF. This system will enable a more flexible but cooperative treatment of shareholding by Fonterra. The consequence of not voting for TAF is to stop the growth curve Fonterra needs to remain a global force in the dairy market. We shareholders hold the responsibility for enabling our co-op to grow. We cannot turn back the clock. The status quo in my

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view is not sustainable; consequently we need the vote to be a YES. • Glenn Holmes is chairman, Waibury Farms Group.

Saying no to TAF means turning down growth opportunities, says Glenn Holmes.

Dairy News june 12, 2012

28 // opinion

No better time for vote ian brown

Trading Among

Farmers (TAF) stands as the most important decision in the history of our co-op. For your Shareholders Council, maintaining 100% ownership and control of Fonterra for our farmer shareholders has

been at the centre of our decision making process. As your representatives, and Fonterra suppliers and shareholders, your council has held 100% ownership and control as a non-negotiable throughout and is confident this and other fundamentals, including maintaining the integrity of the farmgate

milk price, will be maintained under TAF. This comfort comes with the knowledge that protections of these key shareholder concerns will be enshrined within the constitution and/or the various legal documents used to govern Fonterra under TAF. This added security

led the council in late May to resolve with an overwhelming majority to support the introduction of TAF and it expects, based on the information currently available to it, to be subsequently able to pass the fifth precondition at the appointed time. This resolution was made after a two-year con-

sultative journey during which time the council conducted a robust and fully independent review of TAF to ensure the protections contained within preserve 100% farmer shareholder ownership and control. This has included maintaining independent legal advisors who tested the principles Ian Brown

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of TAF and the safeguards included against New Zealand law, and seeking other expert counsel where necessary. As is fundamental in such a process, the council and its advisors worked alongside the board to provide a shareholders’ perspective during the development of the TAF concept. This consultative approach between the board and the council was the key to both parties reaching alignment on the implementation of the new capital structure. During this process the board agreed to add the extra layers of farmer shareholder protection the council deemed was necessary to provide shareholder comfort under TAF. These include board consultation with the council on fund size management, enshrining in the constitution the purpose of TAF and the council’s right to appoint two members to the milk price panel (one of whom must be independent). The board also proposed to amend the constitution by reducing the size of the shareholders’ fund threshold from 25% to 20%, the amount of dry shares on offer from 25% to 15%, and a cap on the amount of wet shares an individual shareholder can put into the fund to 33% of their total shares. With our focus throughout the due diligence procedure on ensuring that TAF would not threaten 100% farmer shareholder ownership and control or the integrity of the milk price, and on the ultimate size of the Fonterra shareholders fund, the considerations outlined above are of significance in the final package. We believe these changes will provide greater protection to

shareholding farmers’ rights of ownership and control. They will also better enable the council to monitor TAF from shareholder farmers’ perspectives. Furthermore, the Shareholders Council’s resolution to support the introduction of TAF is made without pre-empting our right to a final decision on TAF. Prior to the council formally resolving that TAF be implemented, the board will provide to the council a final report showing how the pre-conditions have been met. This is expected to take place in July. With the council comfortable with the TAF proposal as it currently stands, our role now moves from one of consultation to representation. There is now a total focus by the council on communicating with farmers to make sure they understand what TAF is and what they are being asked to vote on. Councillors throughout the country have been meeting with shareholders to provide the details of the council’s position, and attempting to provide clarity on TAF where required. It is every shareholder’s right to seek the same level of confidence in the proposed capital structure that council has and with shareholders now in possession of all available TAF information it is vital they read the literature provided. As shareholders we have the ultimate control over where Fonterra travels. Our primary means of exercising this right of control comes in the form of our vote and now is the time to use it to ensure it maintains its power. • Ian Brown is chairman of Fonterra Shareholders Council.

Dairy News june 12, 2012

opinion // 29

TAF a financial cancer in co-op platt gow

ventures made later have stood the test of time. We also inherited the old New Zealand Dairy Group philosophy of discarding the traditional nominally priced fixed shares. Fonterra shares are artificially revalued

way to share our incomes with new, non-dairy shareholders. The bulk of major dairy expansion within New Zealand is tapering off. Our share values at present are much lower than at their highest levels previously. Seeing overseas

AS A lifelong dairy farmer, now away from the day-to-day pressures, it is sad to see Fonterra still unable to show the leadership which would unveil fully the changes that will be made to our constitution if the meeting on “History shows no examples June 25 says ‘yes’ to the of dairy cooperatives winning TAF proposal which has been incubating for years. when outside share capital is The minimal details introduced.” released until last month have magnified the comanalysts description of annually at considerplexities and possible the board’s proposed TAF able expense and effort. options of TAF. This has dry share float in NovemThis valuation is the changed in emphasis to ber described as a not-tomain factor in quantifynow mean Trading with ing redemption risk, which be-missed opportunity for Non-Farmers. A cona large capital gain windincreases as the share cept like this was voted fall for the international value rises. This risk is out – dumped – in 2007, investment community debateable, possibly only followed by huge supreally concerns me. Not theoretical, but is negligiport later for just Trading Among Farmers, to sighs of relief from many shareholders. There is a feeling of betrayal now, fed by consistent lack of specific detail and growing political pressure. To a dairy farmer, the price for the farm milk is major. History shows no examples of members of dairy cooperatives winning when outside share capital is introduced. Kerry milk prices have followed a very different trajectory from its dividends and capital growth. This is probably why we haven’t heard the Kerry example still being quoted to us lately. Fonterra had a Platt Gow remarkable start. Remember our dairy ble with the old type nom- only will they be sharscene at the turn of the ing a part of the income inally priced share. century? Two boards of we now have, but if share At the farming level, directors, who between values rise as they predict, them controlled the Dairy revaluing shares annuwhat effect will that have Board, fighting each other ally to reflect company on the costs of new dairy performance has been – one with a weaker balsupply, higher productivjust another unwanted ance sheet going full ity or ownership costs? burden. Milk solids must steam, the other stronger Fonterra’s competiveness but more conservative. No have their full shareholdsense was made of that sit- ing per kilogram to supply for milk supply throughout the country would also uation until all sharehold- milk. This is a major cost be lessened. in beginning or enlarging ers voted and Fonterra I doubt there is any supply. They were touted happened. Many of those other profession in New as being of value at retiredirectors were more dedZealand that needs a wider ment or exiting dairyicated to their own comrange of in-depth skills ing but dairy farm sales pany’s growth than their than dairy farm manageshareholder’s cooperative without the shares simply ment on today’s scale. The have the price reduced by interests – a lesson still challenges are great and not learned by our current the value of the shares. It increasing, with compliwould be much more in board. cations and requirements shareholder’s interests to Compromises were growing almost daily. Fonexplore options to accept made. We got a chairman from one and a chief exec- a fixed low value share per terra is magnificent, with its very obvious reliabilkilogram of milk solids utive from the other, but than to persist in finding a ity, volume and above all the international joint

quality in the international scene. Its auction sets world prices for commodity milk products. When you visit Fonterra establishments overseas, their staff enthusiasm is contagious. A great job is being done. Our family is in its fourth generation of dairying in the Edgecumbe area. Lots of floods and an earthquake destroyed our factory for a year while our tankers roamed over much of the North Island. There has been TB, lepto and brucellosis to overcome plus an amalgamation of our three companies into Bay Milk Products and before all that a commercial problem with purchasing outside businesses which hit rock bottom and we were later the first dairy company in New Zealand to have two outside directors on our board – plus a specialist chief executive to get us in the black again. It’s been a bumpy ride. It is historic, but remembered. Our Fonterra board: where will we go next? It’s persistence to accept share investments from the financial community – that is what TAF is really about. We must accept that every dry share (or ‘unit’) sold outside reduces the proportion of payment we are used to receiving. A cooperative lives on its ‘wet’ shares. Historic examples of dry shares accumulating illustrate difficulties where matching outside investor expectations means siphoning off the milk price. I feel a sense of shame that Simon Couper, who has been straight up and down, has resigned as chairman of the Shareholders Council. He thought, talked and worked to create a sound decision on TAF but specific parameters were too elusive. The answer to me is clear. Our board is moving away from a supplying shareholders board. TAF will be a financial cancer in our cooperative – we won’t notice it at first, but when we do it will be too late. Even a fabulously expensive financial opera-

tion may not cure it. There can be only one way to vote on June 25 and that is ‘NO’. Then we may be able to concentrate on useful things. I hope every shareholder will vote personally

and individually and not rely on a proxy because this vote will determine the future of our cooperative. • Platt Gow headed the Gow Family Trust between 1948

and 2000. The trust milks about 1000 cows producing 370,000kgMS on 287ha. The Gow Family Trust, now in its fourth generation of dairying, is headed by his son Matt and daughter Shona.

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Dairy News june 12, 2012

30 // agribusiness

Do your homework before PETER BURKE

AN EXPERT on devel-

oping trade with China says there are limitless opportunities if people go about it in the right way. Graham Kearns, executive director of the New Zealand China Trade Association, told Dairy News the main thing for new entrants into the Chinese market is developing ‘guanxi’ – good relationships and trust with potential business partners. Kearns has spent a lifetime in the export sector and for 20 years has worked in exporting goods to China. He says though the global economic situation may detract, the fact China is intent on growing domestic consumption is good news.

There will be a lot more growth in middle-income wealth looking for premium products, particularly food and beverage products, he says.

Graham Kearns

Kearns says next to developing good relations with potential business partners, exporters need to understand what is really important to the Chinese. “Quality is important and so is security of product; price is

probably less important. “New Zealanders going to China have to look at the market before they even consider where they are going to go. They need to look closely at the second- or third-tier cities because they are of a size New Zealanders can manage. They have populations of three-five million, rather than the larger cities such as Beijing with a population of 20 million.” Some New Zealand companies have failed to make it in the Chinese market because they simply didn’t do their homework. “People from Lion Nathan suffered by going in there and thinking they could teach them how to make beer. The Chinese had been making beer for 2000 years.

While the global economy falters, China’s domestic consumption is growing.

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Dairy News june 12, 2012

agribusiness // 31

entering Chinese market “It’s important to understand local customs and how their society is structured.

New Zealanders often don’t understand how the Chinese operate. There are a lot of cash

investing in farms is the right thing

transactions and a backflow of information as well money. To be successful New Zealanders have to have someone there who understands the market and who is very trustworthy.” Many people can help companies export to

FONTERRA IS doing the right thing by establishing its dairy farms in China, says Kearns. He says it’s great that Fonterra is using its intellectual property and experience to increase dairy production in China. It’s very important for New Zealand to be seen to be helping the Chinese, he adds. “If we are helping them to develop their market it helps us develop our exports to that market.New Zealand cannot supply China’s needs in dairy products so they are going to have to produce product locally,” he says. Kearns says it’s important that New Zealand is open to Chinese investment. He says what’s not widely understood is that Chinese investors are long term investors. “They are not the three year turnarounds. They are the 20 – 25 year investors and all they want to do is to secure a supply for the future. They don’t want to manage whatever is down here, “ he says. Kearns says the anti Chinese reaction by some New Zealanders to Shanghai Pengxin’s bid to buy the Crafar farms is a bad thing. He says if the government were to have some clear policies on restricting land ownership that would be fine. “But having this almost yellow peril type thing which is endemic in some of our parents and even us baby boomers as we were growing up has got to go. The Chinese have three trillion dollars in reserves and they have got to put it somewhere so why shouldn’t we get a piece of it,” he says. Kearns says while New Zealanders must learn how to do business with the Chinese, there is also a need for the Chinese to understand our political system. He says this is one issues that his organisation is work through with the Chinese. He says their officials were upset when a single judge effectively overturned the governments decisions on the Crafar sale. He says there was a real risk that Shanghai Pengxin could have pulled out had it not been for some excellent work by New Zealand officials to inform them about the system in New Zealand and as a result they stayed with the deal.

China for the first time, such as New Zealandbased Chinese working in China, and other expats who can help with information and networking. His orgamisation has good networks there. The food and beverage market is wide open

to New Zealand, but firms should be careful not to under-price their goods and ensure they get into the high-value premiumproduct range. New Zealand companies should not compete with other in that market – ridiculous given there is plenty of

room for everyone. Though the Chinese market will flatten out, with annual growth of 5-7% it is still a land of opportunity. A market plan should take in the whole of Asia – not just China, Kearns says. “India is a differ-

ent type of market but it offers different opportunities. Unfortunately they don’t have the infrastructure China is building, but that’s going to come. Indonesia has massive growth and it’s closer than China and very friendly towards New Zealand.”

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New Zealand needs to help China develop its local dairy market.

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Dairy News june 12, 2012

32 // agribusiness

Future farmers show off skills WHILE THE country’s

top young farmers were locked in battle to find the National Bank Young Farmer of the Year in Dunedin, our future farm-

ers were also in action. The TeenAg and AgriKidsNZ grand finals were held at the Forsyth Barr Stadium in Dunedin on May 25, along with

the National Bank Young Farmer of the Year contest. The top three teams from each regional final travelled to Dunedin to

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School’s Danny Brooker (16) and Tom Monteath (16). Brooker and Monteath won the grand final title as TeenAg overall winners for 2012 saying “all the hard work paid off”. They also enjoyed the more competitive nature of the grand final compared to the regional final. “The grand final is a lot more competitive, the quality of the event is a step up from regionals,” they say. Brooker and Monteath say they will defend their title in 2013. “We’re not too sure if we’ll win again, we’ll give it a shot though,” they say. Otago/Southland’s Richard Gardyne and Robert Gregory, Gore High School placed second and third place went to Christchurch Boys’ High

School’s Tom Gore and Roy McKenzie. Brooker and Monteath each got a prize pack including a $200 bank account at The National Bank, an advanced driver training voucher, a bush jacket from Swanndri, and $100 vouchers from CRT and Farmlands. In the AgriKidsNZ raceoff, teams of three had to use mats to get their team from point A to B without touching the ground, assemble a wooden photo frame and have their picture taken, decorate a pavlova, identify different juice flavours and fit the front tyre to a bike. First was the Tokonui Redbands from Tokonui Primary School: Prue Buckingham (11), Jessica Dermody (13) and Lachlan Crosbie (12). The Tokonui Redbands

also won the AgriKidsNZ grand final champions for 2012 – “heaps of fun and a cool experience”. To prepare the kids each hosted a practice day at their farm. Overall runner up was Aorangi’s sheep, beef and dairy team: Emily O’Reilly, Hamish Scannell and Elizabeth Hampton; third place winner was Kamo Intermediate’s Issac Osbaldiston, William Bliss and Mercury Nisbet representing Northern. Each member won a $100 bank account at The National Bank, a Swanndri jacket, and $50 CRT and Farmlands vouchers. Youth development manger Rosie Todhunter is pleased with how the grand final event ran. “We are so lucky to have so many volunteers and helpers who made the event hugely successful.”

Tokonui Redbands – Jessica Dermody, Lachlan Crosbie and Prue Buckingham.

Co-op works on road safety

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test their skills against the best in their age group from around the country. All 43 competing teams fundraised and some even sourced sponsorship to make the trip possible. TeenAg (aged 13-18) and AgriKidsNZ (aged 8-13) teams vied for a spot in their respective Race Off; which emulates the Agrisports module in the main contest. These were age appropriate and included animal welfare, butchery, seed to feed, horticulture, dairy, construction and first aid. A major difference between this year’s TeenAg grand final and last year’s was a written exam. Competitors sat a 50-minute exam counting for 30% of their overall score. The exam was n four sections: breeding value, general knowledge, financial knowledge and true/false questions. The exam was set by ex grand finalist Aidan Gent with Tim Cookson, past contest chairman, overseeing the module on the day. The top seven teams in the TeenAg preliminaries competed in a raceoff event. In teams of two competitors had to pump and fit a bike tyre, build a layer of a compost bin, identify different flavoured juice, assemble a planter box, pitch a tent, fit a horn to their bike and give a toot to finish. The winning team was Christchurch Boys’ High

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FONTERRA HAS for a second successive year won an award for improving traffic safety at 70 factories and offices in New Zealand and overseas. The Impac-sponsored award for ‘Best significant health and safety initiative by a large organisation’ recognised the co-op’s efforts to get all its 17,000 employees safe home every day, says group general manager health and safety Nicole Rosie. “Moving and operating vehicles [cause] most near misses by a big margin, out-stripping by three to one the next most-common near misses – unsafe storage and stacking – which we are also tackling.” The co-op was recognised last month at the Safeguard New Zealand Workplace Health and Safety Awards at SkyCity Convention Centre in Auckland. New traffic management stan-

dards control the movement of vehicles and people on Fonterra sites. Regional champions had to identify risks and propose solutions covering entry and exit, vehicle flow, pedestrian separation, rail traffic and loading/unloading. The standards will be applied over three years, with 27 out of 73 global sites having already completed traffic management assessments. Plant and equipment designs are also involved. The standards build on other recent traffic safety initiatives including ‘in-barrel’ filming to show the co-op’s 1350 New Zealand tanker operators how liquid loads move under different driving conditions. This has helped reduce tanker rollovers so far this season to three in 88 million km driven. Five years ago a rollover occurred every 5.3 million km.

Rosie says Fonterra’s health and safety push is yielding results. In April 2012 the co-op recorded its lowest injury rate for all operations worldwide. “This recognises a lot of hard work by our frontline people, supported by our board, business leaders and the health and safety team. “We are on track to reduce by three quarters the number of people injured at work in 2012, compared to five years ago.” An employee-led safety plan at the TipTop ice-cream business and safety improvements at the Whareroa testing laboratory were also finalists in the categories for NZ Safety Best. The Safeguard New Zealand Workplace Health and Safety awards are now in their eighth year, with judges from the Department of Labour, ACC, the New Zealand Council of Trade Unions, Safeguard, and a health and safety practitioner.

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Dairy News june 12, 2012

agribusiness // 35

Too many eggs in the dairy basket? peter burke

NEW ZEALAND must

be careful its dairy industry does not become a ‘mono-culture’ says Rabobank New Zealand chief executive Ben Russell. He told Dairy News the dairy industry’s success for the past 10 years is attributable to dairying having had the highestvalue land use in much of pastoral New Zealand. “But longer term it is in New Zealand’s interests to have a range of different vibrant, growing industries. I don’t think it’s nec-

essarily in the interests of New Zealand in the long term to have dairying growing and growing at the expense of other sectors.” Dairying has been growing and the sheep and beef sector contracting. “I don’t want this to be perceived as critical comment of the dairy industry. It’s not really that. There are other great success stories including the fruit and vegetable and wine industries. I think we need a range of growing industries which spreads the risk from a national point of view.”

Having said that, Russell believes the challenge to those other sectors is to do what the dairy industry has done: become the truly globally competi-

tive industry. That has to be the aspiration of other sectors. “They have to be truly competitive on a global basis and on a quality-of-

product basis. The dairy industry has done that very well and it would be great to see a whole lot of other sectors doing that too,” he says.

Ben Russell

Call 0800 657 555 to find your local dealer or rural retailer. Come see us at Fieldays. We’re in the main pavilion, site PB23.

Profitability questioned THE TRUE profitability of New Zealand farms is open

to question, says Russell. Though the value of farms has gone up, profits have been inconsistent, he says. Farmers have a lot of capital tied up in their farms and the rate of return on their equity is very low: on dairy farms it’s 3.9%, on sheep-andbeef farms it’s as low as 1.5%. This causes problems in succession planning. In a normal business, questions would be raised if the return on equity was so low. But in agriculture the reason for investing has often been capital gain which is not taxed. Now, because of the state of the global economy, it may be years before there is growth in capital markets – not just rural land. “People need to look hard at the cash returns they make out of the business, and what is the right price to pay for that business. I think capital gains tax is an anomaly in New Zealand in that profits are taxed at the full rate and capital gain is virtually untaxed. I don’t think that necessarily encourages the right investment decisions. “On a rational basis people should not make decisions based on a particular tax outcome, but rather on the fundamentals of the business.”

in brief

Built in safety feature.

A SHORTAGE of top, young Kiwis choosing farming careers is the biggest drag on the growth of farming, says Russell. Many farmers are now aged 65-plus and the country is not replenishing that void with young farming leaders, Russell says. “Young people need to see a long-term career for themselves in farming…. All of us involved in the industry – not only the finance side but also those directly involved – need to develop some sort of mechanism to attract the brightest, smartest entrepreneurs into choosing to make a career in agriculture rather than law or banking or other careers.” The present situation is a shame because agriculture is such a fantastic industry with a brilliant future.

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Dairy News june 12, 2012

36 // management

Most applaud in-shed technology PAM TIPA

MOST OF 80 farmers in two-year study by DairyNZ of early adopters of in-shed technology say the investment has been worthwhile. About 88% say it saved time and 86% said they found it simple. Fewer agreed staff on the farm find herd management easier (78%).

Only 66% said the technology was useful in helping to attract and retain staff. Technologies in the study include automatic cup removers (ACR), milk meters, drafting systems, automatic teat sprayers, herd management software, in many cases inshed feeding systems, and in some cases mastitis detection, heat detection

ts Key poin vesting in asons for in

re Have clear . technology deliver nology will t if the tech ■■ Find ou benefit. the desired forrelative per rmation on ctical ra p ■■ Use info d an chnologies t an mance of te ou y rr ca farmers to om fr ce vi ad alysis. economic an set up ing time to plan includ train t, ■■ Make a en et p ecome com p correctly, b ance, lan ule mainten staff, sched identify sup ement and risk manag ks. port networ

■■

and live weight monitoring systems. The 80 farms are nationwide; all use rotary dairies and milk largerthan-average herds (mean 770 cows). At a workshop at the DairyNZ Farmers Forum ‘Investing in in-shed technology’ the experiences of early adopters showed some of the benefits and pitfalls when investing in in-shed technology. The workshop presented by scientists Jenny Jago, Brian Dela Rue and Claudia Kamphius said it is important to define clearly what you want to achieve. Labour saving, followed by making milking easier were the two mostcommon reasons why farmers bought in-shed technologies. Performance ratings indicate some technologies have matured with farmers reporting high levels of satisfaction (e.g. cluster removers), while

Early adoptors of in-shed technology in New Zealand are happy.

others are in the early stages of adoption with variable performance.

electronic identification (EID) systems. Overall the mean milk meter fail-

tenance to realise their full benefits. If the technology is

If the technology is EID based and has a herd management system, the advice is to take the time to set up the data/information management systems at the start. One frustration is unreliable technology. Data collected from 80 farms (60,000 cows) over two five-day periods in early and late lactation (2010/11) were used to calculate failure rates for milk meters and

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ure rate was 7.1% and the mean EID failure rate was 2.2%. Many farmers were unaware some systems were working poorly and this highlighted the need for regular monitoring of technologies. The workshop said the majority of technologies are not ‘plug-and-play’ and a lot time must be invested in set-up, learning and training, and main-

EID based and has a herd management system, the advice is to take the time to set up the data/information management systems at the start. This will help prevent problems later and ensures the farmer has opportunity to use many of the features of the system. Nearly 70% of the farmers said they were comfortable with computers

and software before they started using the technology. Farmers estimated they spend just under two hours per week on data entry, checking alerts, analysing data, teaching others and learning themselves. Risk management is an important consideration. All farmers reported the technology does not operate as planned all of the time. Some failures are more important than others, for example failure of a heat detection system is significant and a backup system must be in place (such as tail paint). • For updates or be involved in research projects overseen by the DairyNZ farm automation team contact jennie. burke@dairynz.co.nz.

Case study – oestrous detection TECHNOLOGIES FOR oestrous detection were evaluated in a 2010 study at the Lincoln University Dairy Farm against the performance of an experienced operator. Using the experienced operator as a benchmark, all activity-based systems had lower sensitivity and success rates. Devices detected 62-89% of all oestrous events and 34-85% of the cows alerted by the devices were truly in oestrous. Reasons for the poor performance included a number of faulty collars and older-style devices. The results lead to the conclusion technical faults can occur with any automated oestrus detection systems. It is prudent not to rely on them as stand-alone systems until there is sufficient evidence to the contrary. Case studies mastitis detection Example 1 On a DairyNZ research farm, 27 out of 46 clinical mastitis cases (63%) were alerted by a mastitis detection system using electrical conductivity (EC) measurements at the cow level and 14,814 cow milk-

ings were alerted falsely (87 false alerts per 1000 milkings). This means 37% of all cases have to be identified by means other than the detection system and that 30 cows will be checked unneccessarily at each milking. This was using a 48 hour time-window from the date of clinical mastitis. Extending the time period to 96 hours increased sensitivity considerably (74%), with the number of false alerts per 1000 milkings remaining at the same level of 87. Example 2 In one of the few published studies (a detection system that measures EC at the quarter level) sensitivity for detecting clinical mastitis ranged from 68% to 88%, depending on what ‘gold standard’ definition was used for clinical mastitis and the detection threshold that was set (Claycomb, 2009). The false alert rate ranged from 2.3 to 7 per 1000 cow milkings. The studies ran for two-three months on two Waikato commercial dairy farms.

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Dairy News june 12, 2012

38 // management

Growing your forage know-how pam tipa

THE NEW Forage Value

Index is the missing link in a chain between plant breeding and on-farm decisions, says Dr Bruce Thorrold, DairyNZ. Although it was known plant breeding worked, no system rates pasture grasses to economic performance, says Thorrold, DairyNZ’s strategy and investment leader for productivity. “We can be confident that if we point plant breeders in the right direction good things will happen,” Thorrold told the DairyNZ Farmers Forum in May where the index was launched. “But there is a missing link in the chain… this integrated breeding evaluation and recording system that includes a profit goal for breeding.

“We also needed an index that links forage traits such as yield, quality and persistence through to profit and we needed evaluation that collects all the data and provides the information for decisions farmers are making.” The Forage Value Index is a collaboration between DairyNZ and the New Zealand Plant Breeding and Research Association (NZPBRA) and for the first time will provide an independent scienceand profit-based evaluation system for perennial ryegrasses that will allow farmers to understand which grasses are likely to give the best financial returns for their particular conditions. “The dairy industry has good systems for assessing the merits of dairy cattle and big advances have been made. But farmers and researchers have been

concerned for some time that evaluation and performance of forages has not kept up. The Forage Value Index and the supporting science will provide better information to support farm profitability and competitiveness,” says Dr Thorrold. NZPBRA president Brian Patchett says the Forage Value Index will be available to farmers via www.dairynzfvi.co.nz and rates perennial ryegrass cultivars based on seasonal dry matter production in different parts of the country. Traits such as energy concentration and persistence will be added as more information becomes available via DairyNZ and NZPBRA initiatives. Initially there will be about 15 different perennial ryegrass cultivars ranked in the Forage Value

Index, with each cultivar rated based on estimated profit per hectare (the Forage Value Index) for the region where it is grown. Additional cultivars will be eligible for a Forage Value Index later in the year after another set of information from the 2011-12 season becomes available. The Forage Value Index itself will also be strengthened over the next few years with extra traits. The Forage Value Index website will also provide information for farmers on pasture renewal decisions and pasture management. Patchett told the farmers forum that future pastures would be based on improved grasses, legumes and herbs with increased yield, better disease and pest resistances and improved environmental performance.

Bruce Thorrold speaks at the DairyNZ Farmers Forum.

The national forage variety trials had come together over 20 years and had significantly contributed to the dairy industry, although this had not received high recognition. The trials adhered to a strict regime of protocols, inspection and independent evaluations and were underpinned by a strict code of ethics. However Patchett pointed to a lot debate about what had been achieved on farm. The

Forage Value Index was the result of collaboration between the two organisations working with farmers and other experts. “We are working on joint research to improve our knowledge of such things as pasture persistence and all concerned are intent on improving pasture quality for increased productivity and environmental issues.” The aim of having forage value was that farmers receive more

profit from having pasture renewal. “In the longer term (three-five years) we will get a better forage value index bringing in new traits. We are trying to turn the plants breeders to farmer profit and they are really excited about this. “That breeding takes time but as we target it more clearly for traits and are able to measure those traits that are important, we will see that flow through,” he says.

Dairy News june 12, 2012

management // 39

About 4000 new effluent ponds will be constructed in the next five years.

Effluent courses filling fast A NEW InfraTrain training course for contractors and designers of dairy effluent ponds has places open for people wanting to get up to speed on new design standards. The course is the work of DairyNZ with InfraTrain New Zealand and Opus International Consultants. InfraTrain chief executive Philip Aldridge says the course has been set up for contractors and designers to meet rising demand on dairy farms for well-constructed effluent storage. “It is estimated 4000 new effluent ponds will be constructed in the next five years as farmers upgrade their effluent storage systems and increase storage capacity. This is a practical course for people who want to service this growing area of business.” The course looks for two days at construction and on a third day at pond design. Opus environmental training centre manager Jonathan Mackey

says practical examples and expert guest speakers are prevalent. “Our course trainers have many years’ experience in this business and were heavily involved in drafting the recently released Institution of Professional Engineers New Zealand ‘Practice Note 21: Design and Construction of FDE Ponds’. This is the first industry-wide good practice guidance document on FDE ponds we have.” The course is running in seven towns starting in June. The Invercargill course is already close to full, and organisers Opus are encouraging people to book early. “Get the advantage of being trained first and register your interest at www.nzweta.org.nz.” Those who successfully complete the course will become part of a network of trained pond designers and/ or contractors listed on the InfraTrain website. DairyNZ project manager for effluent Dr Theresa Wilson says it will

strongly support trained companies. “This is a growth area for business with dairy farmers who are increasing their storage. DairyNZ will be actively advising farmers to use companies who have gone through the training course so they can be sure they will get trained advisors.” Course details from www.nzweta.org.nz

Course dates Invercargill, June 19-21; Hamilton, June 26-28; Rotorua, August 14-16; Hamilton, August 21-23 (if sufficient numbers); Ashburton, September 4-6; Murchison, September 18-20; Balclutha, September 25-27.

Taking care of farm injuries ANY INJURY on a farm

directly costs the person involved and the business and the fines are extra costs, says Dairy Australia. Pauline Brightling, managing the ‘The People in Dairy Program’, says workplace fatalities and serious injuries from machinery use get a lot of media coverage, but manual handling injury is the biggest source of claims in farm workplace health and safety. Manual handling claims tend to be associated with repetitive work resulting in muscle or back injury. “These injuries often involve extended time off work. In addition to the

personal injury, it is inconvenient and costly to the employer. Prevention is a far better approach. “There is an emerging

duty to take care of their own safety and to ensure their activities do not affect the health and safety of others. The duty of care

Dairy farmers need not feel daunted by their work health and safety obligations. trend towards increases in manual handling injuries on dairy farms, particularly at large operations where workers may spend longer periods on repetitive tasks in the milking shed; for example cup attachment.” Under national legislation new this year in Australia, workers and others at the workplace have a

also applies to contractors and volunteers such as Land Care groups working on the farm. Brightling says the duty of care involved providing and maintaining a safe work environment, safe systems of work, safe plant and structures and the provision of health and safety information and instruction.

In practice this means duty holders must identify potential hazards at the workplace and seek to eliminate them or, if this is not possible, to minimise risk. Dairy farmers need not feel daunted by their work health and safety obligations, she says. “Most dairy farmers want to provide a safe workplace. “Sometimes the challenge can be working out where to start. It’s actually easier for dairy farmers than many other workplaces because there are a range of checklists and tools available on the web that have been custom-developed for dairy farms.”

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Dairy News june 12, 2012

40 // management

‘Well-fed cows don’t need supplements’ PAM TIPA

SUPPLEMENTARY FEEDS do not improve

reproduction when there is sufficient pasture, the DairyNZ Farmers Forum heard in a workshop.

Many farmers think supplementary feeds will improve cow health and reproduction, based on a belief the greater BCS loss in the modern dairy cow – as compared to her predecessor – predisposes her to poor health and lower

bigger cows, more milk in bigger Genetic selection has resulted . milk e cows, mor uction is ■■ The increase in milk prod to body ing ition part through energy er substilow and , gain e scor n conditio pasture. for tution rate of supplements in well man■■ Response to supplements /tonne DM gMS 80k 60is ems syst d age supplements. rove repro■■ Supplements will not imp restricted e hav s cow ss unle tion duc residuals ture access to pasture (i.e. pas ha). DM/ 0kg -160 are less than 1500

■■

reproductive success. But in their workshop ‘Feeding the modern dairy cow – is pasture enough?’ scientists John Roche and Jane Kay said there is little data to support this when cows have sufficient pasture. The association between nutrition and reproduction for pasture-based systems was recently reviewed. There are three problems with the argument that reduction in reproductive performance over the last three decades is a result of the greater negative energy balance in modern dairy cows or that the problem will be corrected by supplementary feeds in early lactation. The effect of BCS on reproductive outcomes was reported by J.R.Roche. (2007).

An increase of 1.0 in BCS loss during early lactation was associated with a reduction in 6-week ICR of 4%; therefore, 6-week ICR was 4% less in cows losing 2.0 BCS units than cows losing 1.0 BCS unit. Although a 4% difference in 6-week ICR is important, this is a large difference in BCS loss for a small difference in reproductive success. In a study in Taranaki, cows were subjected to a 50% feed restriction for

When cows have sufficient pasture, supplementary feed is not needed, the Farmers Forum heard recently.

the first 2.5 weeks of the breeding season. This restriction resulted in a 7% reduction in 6-week incalf rate. Although, again, a 7% reduction in 6-week in calf rate is important, the applied restriction was severe. BCS loss during the first four-five weeks of lactation is a function of BCS at calving (i.e. fatter cows lose more, thinner cows lose less) and cow genet-

ics; it is not influenced by nutrition, the workshop heard. Therefore, supplementing cows in early lactation will result in more milk production and not less BCS loss. The literature does not indicate that the failure of the modern cow to get in calf is associated with early lactation nutrition. However, there is compelling evidence for an effect of BCS at calving on time

to oestrus and, therefore, the number of cycles the cow will have had pre-mating; this is known to affect conception rate. Considering the modern dairy cow is thinner in late lactation, a case can be made for using supplements during the dry period to ensure cows achieve target calving BCS, thereby maximising their chances of conceiving early in the following breeding season.

Bigger bcs drawdown GENETIC SELECTION has resulted in cows that produce more milksolids, but mobilise more body condition score (BCS) to achieve this, the DairyNZ Farmers Forum heard. Modern cows eat more and have lower substitution rates; they also partition less energy towards BCS replenishment while milking. These are the main reasons for the increased milk production in the modern dairy cow, DairyNZ scientists John Roche and Jane Kay said in ‘Feeding the modern dairy cow – is pasture still enough’. However, because of the greater BCS mobilisation in early lactation and the failure

to partition energy to BCS replenishment, these cows must be dried off earlier and/or provided with more supplementary feed while dry. In well managed systems, the response to supplements was 65-80kgMS/t DM feed available. At $6.50/kgMS this is equivalent to $420-520 increase in milk revenue. Although reproduction has declined in recent decades and this is associated with greater milk production and a greater negative energy balance in early lactation, supplementary feeding has little effect on BCS loss in early lactation, the workshop heard. Experimental results do not

support a reproductive benefit from offering supplements to cows when grazing residuals are 1500kgDM or greater. Despite a greater capacity of the modern dairy cow to eat and produce milk, decision rules on the appropriateness of supplementary feeding have not changed. Supplements will benefit milk production and reproduction when cows do not have sufficient pasture (i.e. grazing residuals are less than 15001600kgDM/ha). Milk production responses to supplements will be low and, likely, uneconomic when residuals are greater than this and reproduction will not be improved.

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Dairy News june 12, 2012

42 // management

Why are those cows hanging around? feedpad in an automatic milking system (AMS) can be a useful tool for encouraging higher levels of intake of supplementary feed, according to recent Australian research conducted by the FutureDairy team. Post-graduate student Tori Scott investigated how the location of supplementary feed affected the time it took cows to move back to the paddock after milking, and the time taken to return for their next milking. Her findings suggest that a clever design for an AMS with a feedpad would position the feedpad with the flexibility to divert cows to supplementary feed either before or after

milking, depending on the need, which may change throughout the season. It could even be possible to give some individual cows or groups of cows access to the feedpad before milking while others accessed the feedpad after milking. Automatic milking systems usually have programmable drafting gates which would enable this to be achieved. Feedpad management could be modified to meet different objectives within the system. For example, the decision about which cows to feed before or after milking would come down to the desired level of supplementary feeding and the preferred flow of cow traffic through the

dairy. The first option is to offer supplementary feed after milking. “Cows with access to the feedpad after milking spent up to 25 minutes less at the dairy waiting to be milked, and about half an hour less hanging around the feeding area. Overall this meant that cows fed after milking spent almost an hour less at the dairy/ feedpad; and therefore they spent more time on pasture,” Scott says. Feeding after milking is the preferred option when the herd’s intake is predominantly pasture, and the supplement fed at the feedpad is a ‘top up.’ This option enhances cow movement through the dairy and maximises graz-

ing opportunity. The alternative is to give cows access to the feedpad just before milking. “Cows fed before milking spent more time at the dairy/feedpad but returned sooner to the dairy for their next milking. “Feeding cows before milking could be a useful tool for encouraging cows to spend more time on the feedpad,” she says. Overall, the location of the feedpad had no effect on milking frequency (the number of times a day that a cow is milked) or the time interval between milkings. “The reduction in time spent at the dairy/feedpad for cows fed after milking was offset by a longer

Australian post graduate student Tori Scott (above) studied how location of supplementary feed near an AMS (right) encouraged higher levels of intake.

time spent in the paddock before returning to the dairy,” she says. During the trials, postgraduate student Nicolas Lyons collected data on the paddock and grazing behaviour of the cows. Further analysis of the collective results is under way and is expected to provide more insight into these trends and how they may be used to manage cow flow within an AMS. More information: tel. 0428 101 372 or kendra.kerrisk@ sydney.edu.au

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Dairy News june 12, 2012

management // 45

Too many light heifers entering herds andrew swallow

Winter management key

FAR TOO many heifers are failing to reach benchmark weights by mating, with long-term consequences for in-calf rates and production, says LIC. Analysis of 105,000 heifers nationwide found on average they were 11% below target liveweights at mating, resulting in a 6% drop in the 6-week incalf rate and about a 2% increase in empties, says veterinarian and reproduction solutions manager for the cooperative, Greg McNeil. “That works out at about $100 lost per head on average and we know within that group some are 25% below weight, which costs more like $300/head.” Problems aren’t limited to the first calving either, he warns. “Even if they’re too light as yearlings, they generally get in calf at 15 months old because they’ve reached puberty.

McNEIL SAYS the time when many herd replacements fall behind weight targets is during their first winter. “People think they’ll get compensatory growth [in spring], and yes they will to a certain extent, but not to the point where they need to be.” Causes for poor winter growth include lack of feed, poor feed quality, trace element deficiencies

But it’s when they get into the herd that really puts pressure on them.” Milk production suffers and many fail to get in-calf as second calvers and are culled. McNeil acknowledges the national picture may be even worse than the LIC data suggests, as it was taken from MINDA users, so could well be skewed by the fact such farms would tend to be the

and animal health problems. In the South Island and areas such as the Central Plateau, transitioning onto winter feed crops such as brassica add another period where weight gain will be less than ideal. With some vets (Rural News, June 5) warning of high worm challenges to stock this autumn, checking the status of next year’s herd replacements this winter could be a wise move.

better managed, and more likely to ensure heifers are grown out properly. Part of the problem is people don’t set the right target weights for their heifers in the first place, because they underestimate the mature liveweight the animal should reach. “The average mature weight of all the [dairy] cows in New Zealand now is about 500kg, and even many Jersey or Kiwi-cross are moving towards 450kg, but most people use weights 30-50kg below that to calculate their target heifer weights.” Consequently, when they apply the 60% of mature cow weight rule to reach their target weights for heifer mating, they get a figure that’s too low. “They underestimate the mature liveweight so they set the bar too low in the first place, and then

they’re not reaching the bar either.” There’s also the issue that increasingly young stock are grazed away from the home farm, so they’re out of sight, out of mind. To address the problem LIC has added a programme to its Minda herd management systems – Minda Weights. “Minda Weights presents young stock weight information exactly how a farmer would want to see it – in a practical format

easy to understand and use for important management decisions such as preferential feeding or treatment. “Its web-based platform also means they can share access with other farm staff, their vet and their grazier, so everyone can monitor the animals’ growth,” explains McNeil. The programme will provide users with accurate liveweight targets throughout a heifer’s life, based on breeding values, so mature weight of parents and siblings is taken into account. The targets are calculated working back from the key dates for the herd they’ll be going into: start of mating and start of calving. “If you mate your heifers a week earlier than your cows, those dates will

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Dairy News june 12, 2012

46 // management

Huge grazing farm cuts feed waste tony hopkinson

USING AGBRAND stock feeders on a King Country farm has hugely cut feed waste. Koromiko Grazing Ltd, owned by 18 dairy farming shareholders – as far apart as Hauraki Plains, Hamilton, Te Awamutu and Taranaki – grazes each farmer’s dairy heifer replacement stock. The farm is near Benneydale, 42km south of Te Kuiti. At 21km long and seven kilometers across, this is a big operation, comments manager Dean Boros. The rising two-year-old heifers are fed on crop and haylage during May and June. In their mobs of 200 they have a daily break of swedes and four bales of haylage. This needs two men working all day to complete the task. About 3000 bales are fed out in this time. Boros was concerned about haylage wasted by trampling into the muddy ground. They were feeding 4kgDM daily but only 1-1.5kg was being eaten, he estimated. So two years ago the farm bought six Agbrand feeders, each an S5 with 26 feeding positions. “I had been told about them four years ago but I didn’t believe

Dean Boros says using stock feeders has cut feed waste.

they would work. I’ve had to eat my words, they work so well.” Still skeptical when they arrived, his first trial was in adjacent paddocks with and without feeders, both mobs being fed at the same time. “When I returned some hours later I was immediately convinced, the ‘without’mob bellowing for more feed after trampling most to waste while the paddocks with the

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feeders – still with a lot left in them – had stock well fed and contented. The wastage was reduced to almost zero.” The farm now has 16 feeders and each day’s ration of three-four big square bales are either stacked in the feeders or the strings are cut so the haylage falls loosely. Boros believes the heifers are gaining weight at 0.5-1.0kg/day. A dairy farmer seeing them said,

“They were looking fabulous and any dairy farmer would be proud to own them. If I was starting this cropping programme again the Agbrand feeders would be the first things I would buy,” Boros says. At the end of each season the feeders are cleaned and coated with waste oil and stored for the following season. Tel. 0800 104 104 www.stockfeeders.co.nz

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A well-planned operation KOROMIKO FARM is a well-planned operation.. Says Boros, “All stock arrive in early December at about four months old and are required to be a minimum live weight of 100kg and leave the property 18 months later about 430kg live weight and due to calve.” Boros was managing one of the blocks under the previous owners for six years and when Koromiko was formed four years ago he became operations manager of the whole enterprise. About 4000 calves arrive in December so there are 8000 head on the farm until the rising two-year-old in-calf heifers start leaving from May; the bulk leave in July. The farm is 3390ha with 2700ha in grass, 1600ha for the heifers and 1100ha grazed by sheep. These two areas are separate and stock do not share grazing. The balance of the farm has 100ha of pines and 590ha of native bush. The sheep block carries 3800 ewes and 1200 hoggets and 500 carryover cows. They buy in 220 yearling Jersey bulls for mating and these are carried forward to the following September when they are sold at an annual sale as twoyear-olds. Helping Boros are three stock managers, two shepherds, one general hand, a tractor driver and a full time office administrator. “All our contracting work is done by Andrew Cook, including hay making, planting crops and re-grassing the paddocks.” During winter one extra casual is employed to shift fences on crops and an extra tractor driver helps feed out. New fencing and weed control is by contractors. “The bulk of the stock are crossbred, all are EID tagged and we have about 200 head in each mob,” Boros says. The farm has 57km of lanes capable of 50km/h travel. There is now a speed limit of 40km/h for the quads as the previous 30km/h was taking staff too long to get to different parts of the farm. Helmets must be worn at all times. Boros replaces his quads every two years as they average 1300km per month. The farm has nine sets of cattle yards and 10 sets of sheep yards with trucks being able to drive to most. Rainfall is 1800mm “well spread” with a sprinkle of snow and 20 frosts each year. The farm is free of facial eczema. Each year they plant 140ha of swedes and harvest 5500 big square bales of haylage with the swedes break fed to the heifers during May and June before they leave. The yearling stock are fed on grass supplemented with hay during their first winter.

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Dairy News june 12, 2012

management // 49

Feed more to dry, pregnant cows DRY, PREGNANT cows require more feed than previously thought, says DairyNZ post graduate student Kristina Mandok. She presented her findings at a Hot Science sector at the DairyNZ Farmers forum “Recent DairyNZ data indicate current recommendations underestimate the maintenance energy requirements of New Zealand dairy cows by more than 40%,” she says “Cows require 0.94 MJ ME/kg liveweight 0.75 for maintenance. Additional energy is required for activity, pregnancy, production and body condi-

tion score gain. “This explains farmers’ experiences that cows lose body condition when fed to estimated maintenance requirements and probably explains why some cows fail to gain the body condition predicted from feeding levels.” DairyNZ experiments 2009-11 allowed an estimation of maintenance energy requirements for grazing dry cows. Results indicated much greater requirements for energy to maintain a pregnant dry cow than had been previously recommended: a 520kg cow, seven months pregnant required 117 MJ ME/ day. Adjusting for

pregnancy and activity, estimated maintenance energy requirements were 0.94 MJ ME/kg Lwt0.75, versus previous recommendations for New Zealand cows of 0.55 MJ ME/ kg Lwt0.75. DairyNZ recommends farmers note that two months before calving a 450-500kg crossbred cow needs to eat 13.5 kgDM pasture/day to gain 0.5 BCS units in a month. Another postgraduate student, Talia Grala, presented findings that oncea-day (1X) milking for a short period post-calving can have long-term consequences. Genes involved in milk

production and nutrient partitioning were measured in cows milked 1X for three weeks post-calving. The number and activity of milk-producing cells in the udder were reduced in cows milked 1X, even after they were switched to 2X milking. Genes involved in body fat storage were increased; genes involved in energy production were decreased in cows milked 1X. In summary, milking cows 1X for three weeks post-calving improved energy balance but caused long-term decreases in milk production.

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Pasture persistence works PASTURE IS still the cheapest feed, but there’s a lot to

be learned about how to renew it and then keep it persisting. A fourth field day on a DairyNZ focus farm at Gordonton, which had renewed a large proportion of its paddocks, drew a big crowd to see what had worked best and whether profitability had been improved. Wayne Reynolds described how farming on peat in the Waikato had seen significant differences in the amount of pasture which could be grown, dependent on wet or dry seasons. This produced a range of pasture production from 11.2 t DM/ha/year in dry years to 18.6 t DM/ha/year when it rained at the right times. Black beetle infestations and endophyte species in different pastures had also contributed to the variations. To gain better pasture control they had changed from culling to a system of retaining herd numbers and introducing supplements earlier, which minimised surpluses after rainfall. They had also stuck to a 28-30 day summer rotation, and cut silage rather than extend rotations. A rigid minimum residual level of 1500kgDM/ha, with frequent plate meter measuring, and any supplement levels adjusted accordingly, had seen increased production, with a careful watch kept on profitability. Final production would be up 38% on the previous year, but profitability had been slightly less than expected, due to the costs of regressing, maintaining farm working expense levels, and insufficient attention paid to keeping supplement costs down.

Adrian Parkinson, Dow AgroSciences gave explicit instructions on controlling weed infestations in newly planted pastures. Spraying with the right herbicide at an early growth stage, and preferably before the new pasture has been grazed, would give the best results, he said. This ensured the small weed plants would be killed before they had a chance to put down significant roots, and before the effect of cow grazing and trampling had had a chance to move them or their seeds around. The latter would allow a second generation to appear later. He also pointed out most pastures were now seeing quite different weed species than in earlier years. No longer were thistles and ragwort the main problems. Seedbank counts showed almost no grass seed presence, as pasture management precluded grass seed formation. Instead seeds of water pepper, buttercup, pennyroyal, fleabane and common chickweed were now predominant and producing in great numbers, with their own particular eradication problems. Richard Doney, Agriseeds stressed the two features of winter management, which he saw as spraying weeds, and not allowing pasture pugging. “Better to allow cows on pasture only until residual levels were achieved, and then standing off, in raceways if necessary,” he said. Warren King, AgResearch had good news for clay and ash farmers that black beetle numbers were going down in these areas. However, those farming on peat would have to wait for more scientific discoveries, as laboratory work had shown peat was the favoured feed over all seasons for black beetle, and test sites were still showing moderately high numbers on peat areas.

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Dairy News june 12, 2012

50 // animal health

NSW farm sets standard for milk quality NEW SOUTH Wales

farmer Paul Condon’s Sea Breeze Holsteins farm is showing dairy farmers throughout the nation how to safeguard against mastitis and enhance the economic performance of their farm. Sea Breeze Holsteins was recently recognised in Countdown’s milk quality awards as one of Australia’s best quality dairy farms for cell count, producing one of the lowest annual average bulk milk cell count for farms across the nation.

The success of Sea Breeze Holsteins has shown the significant economic benefits of not only producing high-quality milk, but also combating clinical mastitis. Mastitis is caused by infection in the udder of a dairy cow. New udder infections usually occur following the dry-off period or around the time of calving. Infection during this time can lead to mastitis early in lactation. “One of the most challenging aspects of masti-

tis is how time consuming it is to manage, especially when a number of cows require treatment at once,” Condon says. “It means managing cows in different ways, which takes time. Ultimately though, it affects the quality of the milk, and therefore our hip pocket. “We have made a conscious effort to invest in mastitis prevention to ensure our milk quality stays high, which is one of the reasons we have been successful in the milk quality awards,” he says.

Paul Condon

Condon worked with his local vet to develop a prevention strategy that would work for his particular farm’s needs. Both Condon and his vet agreed prevention is better than cure, and that a dual approach of traditional dry cow antibiotic, plus importantly, a teat sealant,

would be a successful way to reduce mastitis in the following lactation. “Although dual prevention methods of a dry cow treatment and a teat sealant can mean a higher initial investment, the overall benefits to the farm far outweigh the costs. As a farmer, not only are you

satisfied with better milk quality but you are less likely to be concerned about undetected cases of mastitis and the potential damage that may cause the herd and the farm’s profits,” said John Penry, project leader of Countdown. “The dairy industry is currently going through

a challenging period, where milk prices are at modest levels, increasing the pressure farmers are experiencing. By actively reducing mastitis and lowering the bulk milk cell count, farmers will know their produce is the best quality and they will increase returns.”

Keeping mastitis at bay WITH ENVIRONMENTAL mastitis

now the most common form of mastitis affecting Australian dairy cows, on-farm preventative practices hold the key to staying on top of this persistent bug. Environmental mastitis includes the most commonly isolated mastitis bacteria, Strep. uberis, which is found in cattle manure and survives for up to two weeks in fresh dung or contaminated mud. Dairy Australia’s Countdown programme manager John Penry says the only way to control Strep. uberis is to minimise environmental exposure and control the cow-to-cow transmission. “Environmental mastitis needs to be attacked across three stages of the lactation — at drying off, over the transition/calving period and during lactation.” At drying off cows should be treated with an antibiotic dry cow therapy to

remove existing infection and prevent infections early in the dry period before the teat canal seals. A teat sealant may also be part of the herd’s drying off management plan. During the second stage — transition and calving — the aim is to minimise the exposure of susceptible cows to faecal material and maximise cow immunity. Most infections occur within the first few weeks of calving when a cow’s natural defences are low and the udder has been in contact with mud and manure during calving. “It’s important to ensure that cows are milked as close to calving as possible and to monitor closely for signs of clinical mastitis,” Penry says. During the third stage — lactation — the aim is to minimise teat end damage and reduce the incidence of bacteria on the teat skin.

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Dairy News june 12, 2012

animal health // 51 Darold Klindworth.

Men urged to ‘think like a cow’ pam tipa

OFTEN THERE’S too much testoster-

one involved when working with cows, Australian-based scientist Darold Klindworth says. He is often approached after workshops by women asking what they could do about their husbands or partners stressing cows in the dairy. Klindworth says good stock handling could result in 5% or more milk in the vat/ silo. He was urging participants to ‘Think Like a Cow’ at his presentation to the DairyNZ Farmers Forum. “Working with the animals rather than against them makes the work safer, more pleasant and productive for everyone. The goal is to make them decide to do what we want them to do in a timely fashion and to think it is their idea.” He says cows evolved in herd environments and life was not too demanding. “They certainly were not being chased to a dairy at 5am and being pushed into cramped sheds.” However there were predators and they were hardwired to respond to certain stimuli – and this is so with the modern dairy cow. Loud noises mean that cattle must take notice. Some smells will communicate danger including urine from stressed cows and blood. Rapid movement suggests potential danger. Klindworth says most people working with cattle will be aware of the strong social hierarchy that exists in a herd but some do not use it to best effect. In Australia around milking time in the afternoon it is common to hear horns honking, dogs barking, and on occasions someone yelling. This sound is often backed up by someone riding a motor bike under the tail of the last cow in the herd. But you cannot push a herd from the rear, because the lower dominance animals are at the back. “Can we realistically believe these animals can push the more

dominant animals?” Often the animals are just being pushed closer together which brings their heads up increasing the chances of lameness. Most of the hoof is sensitive and he suggests walking on a surface in bare feet to see if it is hoof friendly. Klindworth says often cows are being pushed because the person would rather be somewhere else. “Often when they get to the dairy they are already stressed themselves. They do not value the benefits from moving cattle calmly. Stressed cows get an adrenalin rush. This will hinder good milk let down for up to 30 minutes.” As the herd moves down the laneway they are roughly in the order they will be milked in and will keep that order as they move into the yard. Entering in the middle of the yard means they must rearrange themselves. Heads will come up if the yard space is too small. Klindworth says many dairies are too small for the current number of cows. Some dairies were built for smaller cows and the current animals are too big and getting bigger. The space you want the cow to stand in to be milked must be large enough. “Pushing, shoving and belting with poly pipe stresses cows and people. Poly pipe should be banned in the dairy – at least the belting/hitting part. “If there are no space/comfort issues and milking is comfortable and pleasant then cows should enter the milking platform willingly.” Klindworth says going out too often into the yard to bring the cows in actually trains them to wait for the stimulus of someone coming out before they will enter. “Going out quickly into the yard will generally mean some cows move rapidly sideways. This quick sideways motion may lead to some chance of lameness. It also may mix up the cows’ organisation leading to further issues getting cows into the dairy. “Dark shadows, blinding lights, distractions, unfamiliar objects, shiny surfaces can all cause cows to not move freely in and out of a dairy.” 3599 Metabolizer halfpg vert.ind1 1

9/11/08 9:20:42 AM

Dairy News june 12, 2012

52 // animal health / calf rearing

Early care critical to success rob bonanno There is a lot of science to rearing calves, including understanding the nutritional requirements, air quality and disease processes, but there is also an art to rearing calves.

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A COLOSTRUM management pro-

tocol is important to ensure calves receive enough antibodies but colostrum alone does not guarantee calfrearing success. Calf-rearing facilities and abilities vary widely on farms of all sizes, and in my experience, many of the calfrearing facilities I see are less than ideal while some are grossly inadequate. I have seen some outstanding results in poor facilities and some poor results in outstanding facilities, so clearly the human factor has an enormous impact on the success or failure of a calf-rearing enterprise. There is a lot of science to rearing calves, including understanding the nutritional requirements, air quality and disease processes, but there is also an art to rearing calves. The art is the intangible “sixth sense” that a compassionate calf rearer has. It is the ability to detect a calf that is off-colour before it “crashes and burns” and taking the extra care to ensure that calves are always clean, dry and well fed. I think that the “care factor” is one of, if not the most important factor in rearing success. Ensuring adequate nutrient intake is another critical factor. It is my belief that severelyrestricting milk intake especially in the first three weeks of life in an attempt to drive early concentrate intake is actually counterproductive and malnutrition is a common cause of immune compromise and subsequently disease. There is an increasing body of evidence to support the argument that really young calves cannot ingest (or

digest) enough concentrate at one to two weeks of age to supply their critical energy needs if they are on a severely restricted milk intake. Dairy vets are constantly called out to “sort out” a calf disease outbreak. Here is the difficult truth: No drug that I can prescribe will overcome poor hygiene, malnutrition and poor air quality or cold wet calves living in squalid Third World conditions. By using on-farm diagnostic tests like the AxCss-4 Rob Bonanno kits, rapid diagnosis of Rotavirus, Coronavirus, E coli and Cryptosporidium is now easy. Early intervention to collect disagnostic samples from scouring calves and necropsy (post mortem) examination of calves which die provide valuable feedback to help us to identify the best prevention and treatment strategies. Far too often, calf disease is treated in an almost random manner with little in the way of diagnosis or record keeping. This increases the risk of violative

antibiotic residues, failure to recognise the true incidence of calf disease and treatment failure, which is common when inappropriate treatment is given. Accurately diagnosing the problem allows us to identify where the system has failed and where to target prevention and treatment strategies. Your dairy vet is the best person to advise you on vaccination and calf biosecurity issues to control diseases like Johnes Disease and pestivirus. The professional vet who is best qualified to provide unbiased scientifically verifiable advice on calf rearing is your experienced dairy veterinarian. So with calving season fast approaching, call your vet now to book a visit and get some written protocols in place. • Rob Bonanno is past president of the Australian Cattle Veterinarians Association and a director of the Shepparton Veterinary Clinic.

in brief Calf research prize A MASSEY University student working on dairy calf nutrition has won a $3000 Bell-Booth dairy research scholarship. Chelsie Hansen, Iowa, has completed a BSc at Massey University, majoring in animal science. She is now completing papers for her masters, studying ruminant nutrition, digestive physiology and research practice, and will then do a 6-month masters research project. The project will compare protein sources used in dairy calf starter diets, looking at soy bean meal, canola meal and a combination of the two. The aim is to see if these different diets affect the type of growth the calves make.

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Dairy News june 12, 2012

animal health // 53

Vets taken for granted in key Oz FMD report IT IS not a matter of if but

when foot and mouth disease (FMD) comes to Australia, according to Rob Bonanno, the past president of the Australian Cattle Vets Association. And he believes there is a hole the size of Titanic in Australia’s defence, threatening this country’s ability to respond. “You only have to watch television programmes such as Border Control to see the amount of food and foodstuffs coming into the country. “People are sneaking in sausages and salamis and raw unprocessed cheeses. FMD is endemic in the Middle East. It’s occurring regularly in our Asian neighbourhood. The Government spent millions helping push it back out of Indonesia, which was a great investment in Aus-

tralia’s border control that we should be really proud of because we don’t need it that close.” Bonanno recently appraised a 105-page review of Australia’s preparedness for FMD, which was commissioned by the secretary of the Australian Government Department of Agriculture, Fisheries and Forestry (DAFF). It

respectively — without including in the economic impact of trade restrictions. Yet Bonanno says he feels the review failed to acknowledge the most critical people in Australia’s first line of defence: its cattle veterinarians. “It’s a nice report in that it identifies risk fac-

There’s an assumption in there that I find offensive. That complacency takes us for granted. It looks like we’ve been put in the tooeasy basket. “The reality of this report is there is no point having a whole army of generals when they haven’t even made sure the foot soldiers are going to turn up.”

“The reality of this report is there is no point in having a whole army of generals when they haven’t been made sure the foot soldiers are going to turn up.” – Rob Bonanno estimated a FMD outbreak would cost between A$7.1 billion (for a small, threemonth outbreak) and A$16 billion (for a 12-month outbreak). It also reported that control and compensation would range from A$25 million to A$600 million

tors, but there’s absolutely no mention that the response to any exotic disease outbreak is almost entirely reliant on private practitioners leaving their businesses to respond. “What if the vets decide not to come? What if they can’t afford to come?

Australia has a veterinarian reserve force of about 100 people, which Bonanno says will rapidly be overwhelmed. And private veterinarians would be faced with some choices. “What happened in the UK was they were

UK cattle being disposed during a FMD scare.

using cat and dog vets because they simply ran out of cattle vets — and that would happen here in Australia as well. There’s probably only about 1200 to 1500 of us here.” In Bonanno’s co-owned Shepparton Veterinary Clinic practice in northern Victoria, they have 11 vets, seven nurses and eight reception staff to consider (1.5 support staff for every vet). “If we send five of our vets, that means about eight other staff are impacted — currently at both mine and my partners’ costs. It would make more sense for the Government to pay veterinarians who have rural practices to train nominated staff to maintain a

level of readiness [with an accredited and audited programme]. “What our practice could potentially do in an outbreak is have three vets, a receptionist and a nurse trained who are immediately able to hit the ground running as a team.” Instead, the report talks of using government department volunteers as the vets’ support personnel. “Geelong didn’t win the [AFL] grand final by turning up the night before and putting together the best group of individuals they could find. They built the team from the pre-season, and they worked together all the way through the competition, and they

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arrived on grand final day with a team ready to play. “At the moment, using volunteers would be a shambles because they’d be pulling people in from all sorts of government departments and getting them to answer phones — and the person at that first-response point needs to be good at what they do. Our support staff are trained to talk to people at a time of maximum stress — probably the most stress that we’ll ever all be under if there was a significant FMD outbreak.” Bonanno says a capable support team would help ease the extreme situation and allow vets to work faster and more efficiently. to page 54

Dairy News june 12, 2012

54 // animal health

NZVA to discuss science VETS WILL gather later

Vets will also take part in a milk quality conference.

this month at Hamilton for their annual conference. The New Zealand Veterinary Association’s ‘Heart of Practice’ conference, June 19-22, has the goal of improving animal health and welfare. About 700 veterinarians and industry professionals plan to attend, at

the Claudelands Events Centre, Hamilton, following the milk quality conference from June 18-19. NZVA chief executive Julie Hood says the programme recognises vets’ rapidly changing professional environment. It covers every area of practice – practitioners and nurses, receptionists,

practice managers and accountants, scientists, researchers and pharmaceutical suppliers, regulatory veterinarians, academics and students. Speakers will address key industry issues, provide fresh views on treatment, and offer insight on the business, people and skills management of vet-

erinary practice. “We are also delighted to have secured two well respected plenary speakers who will discuss veterinary work in its widest concept and help those in the industry enhance their own wellbeing.” Plenary speaker Dr Stephen Goldson, strategy advisor to the office of the

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Prime Minister’s scientific advisory committee, will speak on the veterinary profession’s contribution to science and scienceinformed policy. Goldson will discuss emerging trends and challenges for science and how it contributes to policy development, and related to this the “exceptionally

valuable role” veterinarians play in New Zealand. Significant collaboration is already occurring in animal health fields, but Goldson says many more opportunities exist for cooperative work between veterinarians and researchers to contribute to and inform public policy.

FMD report irks Oz vets from page 53

“As a vet, the most dangerous set of yards are the ones that you’ve never worked in before, and the most dangerous animals you ever work with are when you go to a farm where you’re not familiar with the set-up, the owner or their cows’ temperament. “I have one client who has a crush that’s a man-killer, but I know that because I’ve worked in those yards for 12 years. Now, when we go to a FMD outbreak, all that changes. We’re in unfamiliar areas, with unfamiliar farms, farmers and animals. To have a support team you trust would make every difference.” Bonanno says doing the right thing within the current report could also mean financial ruin for some. “In this report there is no mention of a vet’s liability or indemnity insurance.” He says vets know their involvement would be critical, but they feel they should be compensated appropriately and not be expected to pay for indemnity insurance, for example, out of their own pockets when not working in their own private practice. “I have to carry my own insurance, but it appears I’d be working for the Government and paying that myself. “That is, for me, almost a non-negotiable on what we need from the Government as an absolute minimum prerequisite in order to respond to a FMD outbreak. And on top of that, we need a realistic salary

that allows our vets to continue to pay their staff at home. “The bottom line is that the Government knows that in all likelihood we are going to come and they are basically treating us without respect because of that, which is frustrating.” He adds that dairy farmers could learn a lot from the biosecurity measures used by other areas of the agricultural industry if they want to keep exotic diseases at bay. Many pig and poultry operations demand visitors shower when they arrive, wear supplied clothes and shower on the way out. While that is extreme, it is also sends a clear message. “I think, in general, dairy farmers are quite naive about the biosecurity risks their farms face every day. Milk tankers, visitors and even vets travel from farm to farm — there is a lot of opportunity for infection to be spread. Farmers often let anyone walk through their calf pens without regard for their footwear or clothing. “Even most dairy farmers milk their cows, get covered in shit and then feed their calves. People could help themselves by using better biosecurity practices. Registered cattle breeders potentially have the most to lose.” Undoubtedly the impact on Australia’s registered dairy industry would be among some of the hardest hit. “It just makes you feel sick thinking about it,” Bonanno says.

Dairy News june 12, 2012

calf rearing/animal health // 55

Colostrum management makes all the difference COLOSTRUM MANAGEMENT is the single most important management factor in determining calf health and survival. A significant number of dairy calves suffer from failure of passive transfer of antibodies from colostrum, contributing to a high rate of neo-natal calf disease, including calf scours and pneumonia, and excessively high preweaning mortality rates. A successful colostrum management program requires producers to consistently provide calves with a sufficient volume of clean, high-quality colostrum within the first few hours of life. The physiology of the bovine placenta prevents transfer of maternal serum immunoglobulins (antibodies) to the calf before it is born, so the newborn calf is totally dependent on colostral immunoglobulins for protection from disease. Colostrogenesis (the production of colostrum) begins around five weeks prior to calving, so care of the cow in late gestation is vital in ensuring a good supply of high quality colostrum. Body condition, transition diet and the timing of pre-calving vaccinations all have an impact on the quality of colostrum. The quality of colostrum declines very quickly after calving and with subsequent milkings. By the third milking there is less than half the amount

Calves that have had a good start on their home property have a lifelong advantage.

of immunoglobulins in the colostrum, compared with the first milking. Colostrum management can sometimes appear overwhelming, particularly when you have a large number of cows calving each day or are facing a calf scours outbreak, so pre-planning is vital. The basics of colostrum management can fall into four categories: Cow care – body condition score, transition diet, pre-calving vaccinations

(against calf scours, Lepto and Clostridial diseases) Colostrum collection and storage – collect first milking colostrum as soon as possible after calving. Feed fresh or if there is a delay in feeding, cool to reduce bacterial growth. Keep a stock of frozen colostrum Colostrum quality – measure with a colostrometer or refractometer. Good quality colostrum has more than 50mg

of IgG per ml (a reading of 22% or greater on a brix refractometer) Quantity and timing – a rough guide is to feed 10% of bodyweight in the first 12 hours after birth (for a 40kg calf feed 4 litres, spread over 2 feeds) and follow up with another 10% in the second 12 hours. Australian Dairy heifer rearer Simon Gleeson sees firsthand the impact a good start can make on replacement

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heifers. Gleeson specialises in growing out replacement heifers at ‘Bilyana Grazing’ at Brucknell in south west Victoria and manages more than 2000 heifers each year. “Calves arrive at our property shortly after weaning and go straight onto concentrates, where we can get average daily gains of between 0.8-1.1kg/ day. Once they get to 200kg liveweight they are weaned off the pellets, onto pasture and we aim for a joining weight of around 400kg,” says Gleeson. “We find that heifers that have had a good start on their home property do really well under our system. Heifers that have done it tough early for whatever reason, are the most difficult to get to their target weights. “There has been a lot of effort by dairy farmers over the last few years to get colostrum management right and we have certainly seen this in the quality of the heifers coming through. “Lots of clients are now using scours vaccines such as Bovilis S and Bovilis E in their calving cows to prevent scours outbreaks. They are getting more calves to weaning and these calves are performing better. There are many challenges to raising replacement heifers but it’s vital that everything is done to the highest standard right from the start,” he says.

Dairy News june 12, 2012

56 // south island dairy event

Speakers to challenge farmer views ‘PEOPLE, PERCEPTION and Pride’ is the

theme of this year’s South Island Dairy Event (SIDE), challenging dairy farmers’ views on the industry now and into the future. To be held in Dunedin for the first time, this year’s conference is intended to update knowledge, review what needs to be done, and reflect on personal and industry achievements. SIDE organising committee chairman Brangka Munan says the speakers’ breadth of experience and wisdom will challenge the perceptions of the 600 farmers expected to attend, at the University of Otago, June 25-27. .“Our line-up will cover the practical side of dairy farming and will actively encourage pride. The dairy industry is vital to New Zealand’s economy, and it’s important we take

pride in our success and how far we’ve come in 100 years.

Brangka Munan

“We only need think about the expertise our farmers have gained in production, in managing animal welfare and the environment we live and farm in, the technology we’ve adopted and our extensive business management skills. “At the same time, we also need to take responsibility for the perceptions about the dairy industry, stand up to counter nega-

tive misconceptions and not allow ourselves to be browbeaten. We need to critically review our dairy practices to ensure consumers and the public have confidence in our changing industry. “That involves people skills – ensuring farmers and staff have the expertise they need to do the job safely, are skilled in stockmanship, and want to work in the industry.” Speakers will help dairy farmers adopt ‘minimal intervention’, and make sure younger farmers understand the dairy farming basics of keeping animals well fed, and in good condition, particularly during mating and calving. Otago dairy farmer Denis Aitkin will speak about the traits of the perfect cow. John Penno, founding shareholder of Synlait and recipient of the Sir Peter Blake Trust emerging

About 600 farmers are expected at this year’s SIDE.

leader award, will speak about China in BusinessSIDE, and the implications this market has for New Zealand dairy farmers.

There will also be a new media session journalist Genevieve Westcott. Motivational speakers will include Swazi clothing

business founder Davey Hughes, on his adventures and business and conservation story, and Rob Hamill, telling his Atlantic

rowing stories – challenging farmers to understand that if they’re not moving, they’re going backwards. www.side.org.nz

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Dairy News june 12, 2012

south island dairy event // 57

Keeping abreast with employment law THE SECRET to managing employment on farm is knowing what you can do yourself, and when to seek help. That’s the view of Southland employment lawyer Mary-Jane Thomas, who with colleague Rebecca McLeod

Rebecca McLeod

will present a workshop on employment law for dairy farmers at the South Island Dairy Event (SIDE). One of the pitfalls Thomas knows dairy farmers often strike is not fully understanding the employment agreement they provide new employees.

“It is important employers understand exactly what the agreement says as this is the cornerstone of the employment relationship and the first thing that will be looked out if there is a dispute.” In particular, she has found farmers can encounter difficulties during the busy periods of calving and AI when lower salaried employees may work such hours that mean they are not being paid the minimum wage. “I expect lively discussion on this point,” says Thomas. She also urges farmers to seek legal advice before they begin a disciplinary investigation and not after they have dismissed someone. “I would rather keep my client out of trouble than be the ambulance at the bottom of the cliff, when all I can do is minimise the damage.” The employment law

Research shows farmer fatigue

presentation at SIDE is aimed at helping dairy farmers be confident about being an employer. Both lawyers grew up on farms and understand the issues facing farmers today. Thomas and McLeod will speak about trial periods, and what has to be included in an individual employment contract, including fixed term

contracts, and clauses. Thomas will speak about time and wage records to minimise risks, and processes for warnings and dismissal. She’ll also outline current law based on recent employment court decisions. But she says she won’t be quoting statutes – the talk is hands-on with good practical advice. “I enjoy being challenged by

problems and questions, and encourage the farmers coming to raise their employment issues in general terms so we can discuss and if need be spend more time on one particular issue; there’s plenty of time for questions and arguments.” Written handouts will cover all the employment law basics. www.side.org.nz

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DAIRY FARMERS must take better care of themselves,

says a researcher who will speak about ‘dairy fatigue’ at the South Island Dairy Event. Rupert Tipples leads Lincoln University research as part of DairyNZ’s ‘Farmer Wellness and Wellbeing’ (20102017). His focus is the downstream problems caused by long hours and fatigue in the industry. The researchers are presently facilitating ‘change laboratories’ to help dairy farmers pinpoint problem activities and look at ways of doing better. The farmers themselves identify problems and possible solutions. The study is not aimed at measuring stress, but instead at ways of better organising specific farming activities. The workshops will later this year be extended to Waikato, then possibly to Southland. One emerging trend is the impact of debt, with the shift away from sharemilking to equity partnerships, and to corporate rather than family farming. Much debt is part of this, and a fundamental driver of working days 16-19 hours long from July to December without a break for many dairy workers. Working those kinds of hours brings fatigue and stress, impacting decision-making abilities and initiative of farmers and workers. Fatigue and accidents are also linked: tired people are more prone to errors of judgement. A study of once-a-day milking backs up this observation; one positive spinoff is fewer accidents.The effects of extremely long hours on family are not talked about, but are also a cost. And there may be a link between hours and staff recruitment and retention. Study participants are starting to see connections between issues and causes, and thinking about ways of reducing stresses while still maximising financial returns. One likely solution is to employ more staff rather than cutting costs, to give farmers more time on the business, rather than in it. www.side.org.nz

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Dairy News june 12, 2012

58 // south island dairy event

Is there an ‘ultimate’ wintering system?

Dawn Dalley, DairyNZ

DAIRYNZ IS currently analysing

Working for all New Zealand dairy farmers DairyNZ is the only organisation to represent 100% of all

six different wintering systems in a trial in Otago and Southland to pass on information on profitable and sustainable wintering. The aim is to discover which components of each system farmers need to get right to succeed with their present system, rather than trying to see if one is better than the others. DairyNZ regional scientist Dawn Dalley, heading the research, will present some of the findings at the South Island Dairy Event (SIDE), June 25-27, at Dunedin. She says it’s important farmers make informed decisions on wintering systems based on comprehensive information. The research is wide-ranging, looking at cow measurements including body condition score (BCS), animal health and welfare including lying time, financials, environmental impact and labour, plus feed quality and quantity. The research is on six commercial farms with 300-850 cows, some

owner operated, others with equity partners, one with a farm manager. Some farms use a combination of wintering systems. The six systems cover: ■■ Crop-based wintering on a support block or milking platform. ■■ Winter pasture and silage ■■ Herd Home. ■■ Loose housed barn. ■■ Self-feed wintering pad. ■■ Freestall barn. One year into the trial the information is interesting, Dalley says, particularly with feed allocation and utilisation, and what it takes to gain half a BCS. “We’ve found that some farmers working on an average condition score of 5.0 can have as much as 40% of the herd below 5.0 and are therefore at risk coming into calving and mating. The focus needs to be on developing strategies that identify these atrisk animals.”

Studies on one property showed that separating off and differentially feeding the below average BCS animals at drying off increased condition scores by as much as 1.5 over six weeks – all done within the feed budget, so at no extra cost to the farmer. Staff feedback via time recording and interviews is also providing insights into the different labour requirements of indoor systems compared to the traditional pasture or crop approach, particularly in manure management and physical demands. Dalley will use her talk at SIDE to encourage farmers to look critically at each component of their wintering systems to see what they can improve on, and suggesting they assess the issues and risks of alternative systems before they make changes. “The study has reiterated for us that there’s no ultimate wintering system, rather systems that fit best with the farmers physical resources and farming goals,” she says. www.side.org.nz

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South Island Dairy Event 25-27 June 2012 University of Otago, Dunedin

A passion for planting HELEN GILDER has a passion for

planting, and she’s using it to help green up dairy farms around New Zealand. Helen will share their story at the South Island Dairy Event. Helen and husband Peter manage Landcorp’s Waitepeka Farm, South Otago, a 1600ha (eff.) mixed livestock property they are developing into a finishing unit for dairying and dairy support, deer breeding and finishing, beef finishing and sheep breeding and finishing. They aim to leave the land better than when they started, by protecting and enhancing the environment to improve water quality – something supported by Landcorp. Their vision for Waitepeka is that all ditches/drains and riparian

offers a programme of interactive workshops and sessions designed to challenge, motivate and inspire, delivered by fellow dairy farmers, industry leaders, rural professionals, researchers and technical experts.

and the knowledge she’s built during 37 years farming sustainably, to help farmers see what else they can do to improve water quality, shelter, biodiversity and aesthetics. “We’re not just about high production; we want to show dairy farms can be intensive and high producing but still have effective farm environmental practices. It’s important to show urban dwellers we understand and care about the environment we work in so we are not judged based on bits of misinformation blown up to become fact over time,” she said. Planting provides shelter for stock, protects waterways, helps manage nutrient run-off, improves bird life and enriches the visual ‘tapestry’.

Minimal intervention herd mating FARMING WITH minimal inter-

Organised by farmers, for farmers, SIDE 2012

areas fenced off, are planted out, and that some wetland areas are reinstated. They have established six QEII reserves, and there is one DOC reserve on the farm. The pair started with a blank canvas: no plantings around the existing houses and facilities, let alone shelter for animals or riparian planting. She took hundreds of plant cuttings to kick start the process. They also observed what other farmers have done, took advice from their nurseryman and from the regional council, and attended field days. Their efforts have won them many awards, including the Otago Region Ballance Farm Environment Supreme Award in 2011. Helen is keen to share her passion

vention is one means of futureproofing a dairying business, say the organisers of this year’s South Island Dairy Event (SIDE) at Dunedin. One workshop on this topic will address managing herd mating and reproduction with minimal intervention, led by farm consultant Jeremy Savage and farmer Steve Garrett. Garrett has practised minimal intervention on his Golden Bay property for 15 years, in response to the cost and hassle of inducing cows. He will give practical tips on ‘dos’ and ‘don’ts’ to meet key performance indicators, and targets

for genetics, nutrition, and condition scoring. He underscores the importance of not overcomplicating the plan. His response to dropping CIDRs was to breed a cow that did not require CIDRs. He has found daily monitoring of cow production compared to targets, and systems to monitor cow numbers, are crucial. He advises farmers to prepare to make hard decisions on feeding cows. The farm has always aimed for a condition score of 5.0 in its cows, and feed budgets are carried out to ensure cows are fully fed every day. The key driver of reproductive performance is condition at calv-

ing; this must be met, as there are no guarantees to putting on condition during wet Golden Bay winters. Light cows are wintered separately. He also uses grains early to help with condition gain. Meanwhile, Savage has dealt with several clients similarly breeding for fertility with no intervention, and they emulate his performance and financial results. He says provided the basics are done right, minimal intervention can be a cost-effective way of sustainable farming. “There is a lot of planning involved in improving herd genetics, and there is a lot of attention to detail in the day-to-day management to make it work.”

Dairy News june 12, 2012

machinery & products // 59

Puts zest in your paddocks SUDESH KISSUN

WHEN FARMER Henry

Schipper’s vet rung him earlier this year with a proposal to try a new plant extract on his pasture, he agreed as there was “nothing to lose”. On his 107ha Hauraki Plains farm Schipper applied Biozest to half the property. He says the effect on milk production was almost instant. “As soon as the cows go on Biozest treated pasture, the fat and protein content in milk shot up,” he told Dairy News. Urine samples from treated and untreated paddocks are also said to show Biozest reduces urea excretion by 33%. Schipper, who has tri-

alled Biozest for four months, plans to keep going with it. “In fact, I will do the whole farm with Biozest this season. My milk production from treated pasture definitely went up. I think it helps the animals utilise grass better.” Schipper, who milks 300 cows, says 2011-12 was a great season and Biozest further helped push his returns up. In a bad year, he expects Biozest to offset production drop by lifting fat and protein content in milk. Biozest, a liquid, is mixed with 50-500L of water. Schipper applies about 1L of Biozest per hectare. He says there have been no animal health issues so far. Feed costs are also less as pas-

ture growth is improved. Biozest is marketed by Indigo Investment, whose managing director Nathan Balasingham describes the product as “a new generation product”. Biozest is an example of the new science ‘biomimicry’, where nature’s own process is cleverly imitated, he says. “Biozest is made from plant extracts. It is prepared by a process that preserves the potency of the cell stimulant obtained from plants. “The Biozest cell stimulant is the same natural stimulant that is present in animal, plant and microbial cells. Used at extremely low rates, it will increase the metabolic behaviour of the microorganisms

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Dairy News june 12, 2012

60 // machinery & products

Returning to say ‘thanks’ A YOUNG inventor will

return to Fieldays this week hoping to find and thank people who last year encouraged him to develop a now-patented tool. Builder Michael Jones (24) will show his 3Way Tool, an all-in-one builder’s rule, bevel and square launched in April and due for sale from July 1 in hardware stores. “Last year I spoke to thousands of people who visited my site, many of whom filled out survey forms giving me feedback on the concept and pricing. “This confirmed a market for the tool and gave me the confidence to push ahead and have my tool made in New Zealand. Now I’ve got a unique tool that can save builders 30 minutes a day on certain

jobs and the handyman a lot of frustration.” Inconvenience launched his idea. “I was working on a house three storeys up, when I realised my bevel and set square were in my van down the road. I knew there had to be another way. If necessity is not the mother of invention, laziness probably is.” He had a passion for this tool being ‘made in NZ’ because so few builders’ tools are made here. It’s proved hard work, but he’s done it, he says. At first glance the 3Way Tool might be mistaken for a normal four-fold rule, but as well as ensuring accurate measurement, it has a link arm which slides along one side to accurately measure angles 0-150°. A locking bolt secures

the angle to allow the user to instantly read the exact angle for cutting. Slots lock in the primary 90° and 45° angles. As the tool’s inventor and developer, Jones had a passion for finding a new and easier way. “For a builder like me there is a reward in time and effort in using the 3Way. For the home handyman it makes a

difficult job easy and replaces two tools.” His tool is version 2.0 of folding rules, and he hopes it will revolutionise the way builders grab angles and measure, making life easier and more productive. Jones was in the final six months of his apprenticeship in 2010 when he hit on the idea.

Michael Jones.

Trying for US market SINCE FIELDAYS 2011 Jones has gained experience of manning a trade stand. He recently took the 3Way Tool to America’s National Hardware Show in Las Vegas, with 2500 exhibitors and 27,000 industry visitors over three days. “I was a tiny bit of the largest hardware show in the US, in an area called

‘Inventions Spotlight’ set aside for 50 new inventions. I had to have the 3Way Rule recalibrated to feet and inches for this event. “The show attracts all major tool manufacturers, wholesaler, distributor and retailers in the US, and as they do the rounds you have about three

seconds to grab their interest. I was talking to Amazon, but missed the chance to talk to Home Depot. “The tool attracted a lot of interest, and I’m still following up, including two manufacturers, and wholesalers and distributors,” he says.

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Dairy News june 12, 2012

machinery & p roducts // 61

Kids can tune into calves at Fieldays stockmanship at Fieldays this week, and how to choose a calf for Calf Club. LIC will have an area at its site for rural children, with tips on how to choose the right pet. Communications manager Clare Bayly says young children are the future of farming, and Calf Club is often their entry point into a career. “Many young farmers work hard each year to select, prepare and show an animal at their local event. “Our website provides them with a guide,

but we’ve had feedback from children and parents asking for more information about how to choose a calf, because there is a lot to consider, e.g. the size of the child, the animal’s breed, build and temperament, etc. “With calving not too far away, children will soon be looking to choose their animals and although the parents or farmer will have the final say in which animal this is, it’s good for the child to learn about what makes a good calf, and how they can choose the right one for them.

People like big cats JAGUAR OWNERS like their cars, a UK survey has

shown. A study of vehicle ownership satisfaction by J.D. Power and Associates – What Car? 2012 – canvassed 18,000 individuals in Britain after an average of two years ownership. Every aspect of vehicle ownership was rated: performance, design and comfort, quality, reliability, cost of ownership, economy and dealer service satisfaction. The resulting data allowed the study to be the most comprehensive of its kind, Jaguar says. When split into model line-ups, the Jaguar XF finished second overall, a rise of 15 places within 12 months. The 2012 result marks the culmination of a steady rise in owner satisfaction, Jaguar having finished third in the 2011 survey, the company says. J.D. Power’s media partner in the UK is What Car? Magazine. Editor-in-chief Chas Hallett says the award is a great accolade for everyone at Jaguar. “This study shows customers are really satisfied with their Jaguars, a hugely important feat for any car maker.” Jaguar Cars global brand director Adrian Hallmark says it’s great to have such customer recognition of its commitment to quality, technology and a world-class ownership experience.

“Our simple guide at the Fieldays will explain it all, and it may just encourage a first step into a successful farming career.” Bayly says Calf Club is an important time of year for many rural families, so LIC supports where it can with information for children, schools and parents. A special LIC website, www.calfclub.co.nz, launched in 2003 provides

reliable information on the selection, training and showing of calves. Thousands of students log on each year, and hundreds of schools register their Calf Club events on the site also. “Teachers and parents simply don’t always have the time when their children have questions about their calves. www.calfclub.co.nz

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Dairy News june 12, 2012

62 // machinery & products

Ploughs for serious work “THESE ARE two serious pieces of machinery built for

the contractor or professional farmer,” says Power Farming machinery representative Alistair Horrocks, referring to the ES and EG model Kverneland reversible ploughs. Kverneland is acknowledged as one of the leading manufacturers of ploughs from their facility in Norway where they have been making ploughs for 130 years. They have their own foundry developing special steels and heat treatment processes that have resulted in unsurpassed quality and wear resistance. The company prides itself with its range of ploughs that can service the needs of the smaller farmer right through to the larger operator running modern high horse

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powered tractors. There are a range of options for different models such as the Kverneland Auto Reset system that is a patented Kverneland design. When working in stony and challenging ground, Kverneland ploughs can be fitted with the patented leaf springs. This unique system is maintenance free and highly reliable. Kverneland not only utilise this feature on their ploughs but also on a broad range of their other tillage tools. The Vari-Width system enables the width of the furrow to be altered, with hydraulics, on the move. Initially the width can be altered to suit wider tyres and on the move to utilise the full power and traction of the tractor. Widths can be altered from 30cm to 50cm. A #28 board is now available in New Zealand which can accommodate a wider profile tractor tyre due to the length of the board and the presentation of the furrow. The steel board also stays in contact with the soil longer to aid in rolling a more precise furrow. The ES and EG units have two separate headstock horsepower ratings. The ES model has a 200hp headstock which can accommodate 5 furrows. The EG model is available up to seven furrows with a 300hp rated headstock. The EG headstock can also accommodate a Pack-O-Matt which consolidates and levels the soil in one pass. “I would recommend that the ES needs a minimum of 150hp and the EG a minimum of 180hp to operate efficiently as they are both heavy models to carry as well as to plough with. This is a rule of thumb and can vary depending on soil conditions and terrain” said Horrocks.

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Italian maker gaining market POWER HARROWS

by Feraboli are now sold in New Zealand carrying that manufacturer’s brand, reports distributor Webbline. North Island sales manager Cameron Smith says the Italian company’s product are gaining popularity “all over new Zealand”. While Feraboli is a relatively new brand name in New Zealand, the company started making power harrows in 1973 and until recently built machines for other companies. “Now all power harrows built by the company are branded Feraboli and sold by Webbline all over New Zealand. “We have found the 3m and 3.5m machines popular with farmers and have sold a lot of the 5m and

6m folding models to contractors. “The folding models are popular with contractors because of the heavy, robust construction and the 300hp rated gearboxes make them ideal for our conditions. We have also starting selling more 5m models to farmers. We have clients with 200hp tractors who find the 5m models very easy to drive. “We have fitted several of the 3m and 3.5m models with pre-rippers allowing them to achieve two results with one pass. “Last spring we offered a special early season offer backed up with a sharp finance plan. Due to the huge uptake by contractors and farmers we have decided to bring this forward to the National Fieldays. www.webbline.co.nz

Dairy News june 12, 2012

machinery & products // 63

Record effort in Bury rather than burn new fitting range MIXING STUBBLE ‘back in’ bene-

RX PLASTICS is set to launch its LD

range of glass-reinforced nylon pipe fittings for farm irrigation, its largest yet, says designer and project engineer Chris Clay. National Fieldays will be the launch venue. One year of R&D, prototyping and tooling has gone into the project. This is the first time in the company’s history that such a

major product development process has been undertaken, Clay says. The LD products are frost resistant, making them ideal for New Zealand conditions. “This range includes [at least] 100 new fittings, [involving] precision design, tool design, toolmaking, testing and manufacturing. We have been selling LD fittings into the marketplace for 30 plus years and we know the market well. “The sheer number of individual components meant we had to contract multiple tool making companies to carry out the work, and steel had to be bought to make the moulds, which combined make up tonnes of steel.” Manufacturing will be at RX Plastics’

Ashburton factory extending its existing capacity and making full use of other machinery installed there during the past few years. The rural heartland environment suited the development process, Clay says, the company making the most of the ideal field test environment on its doorstep. “We are able to test our products in the real world, gain valuable customer feedback and ensure we are meeting the requirements of New Zealand farmers simply by working with our local farming community. “The approach has been highly successful with our well known K-Line irrigation and effluent ranges, and we are applying the same approach with the LD product range.”

He says the decision to manufacture the range in-house was made after several changes in the New Zealand LD fittings market among RX’s competitors. “Our customers are now able to buy the full range of irrigation pipe and fittings from one manufacturer with our guarantee of quality and performance.”

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fits the soil long-term, as opposed to oldfashioned burning, says Simba distributor Power Farming. Ideal machine for this task, because of its versatility, is the Simba mounted X-Press, pictured here in a 3.0m wide version. This highspeed shallow cultivator can be worked with or without tines. Without tines it can work at high speed to depths of 150mm. With the ST bar fitted (five tines) it can work down to 250mm for soil aeration, followed by the X-Press with added mixing and cultivation of stubble. The cutting angle of the two rows of opposing scalloped blades can be altered from

Simba mounted X-Press

a straight cut up to 25 degrees to suit ground conditions and material incorporation. The discs are individually mounted on the maker’s Pro-Active leaves to enable them to follow contours; they give ideal stone

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Dairy News june 12, 2012

64 // machinery & products David Croft is a fan of Valtra tractors.

‘Boy-proof’ tractors prove invincible NORTH CANTERBURY dairy farmer David

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Croft believes his four Valtra tractors are “boyproof” – meaning they’re tough, easy to operate and have never been damaged by anyone who has driven them. Croft and his wife Voray own Hillcrest Farm, a 1000ha property at Culverden, on which they milk 700 cows. They also have a 50/50 sharemilking operation that carries another 650 cows. The Crofts bought a Valtra Versu T162 in November 2011. They’ve owned eight or nine Valtras during the past 15 years and also currently own two N Series Valtras – a N82 and an N91. Their first Valtra was a 6550, one of the first Valtras in the South Island. “We like their robustness and they’re simple to operate and to service,” says Croft. While he admits he takes a look at the competitors’ products every three or four years, Croft keeps

coming back to Valtra. “We did look at one other brand this time but it had hoses in places that could be easily ripped off and I thought ‘No, stick with the tried and proven’. Valtra has given us a bloody good run.”

it’s simple enough to have anyone jump in it and do a day’s work without needing a university degree in electronics.” The Versu T162 has the Valtra ‘magic carpet’ – the Evolution seat – which offers comfort when com-

“There are a few of us old codgers who drive it and we didn’t want anything too difficult.” He didn’t look past the Versu T162, which had the horsepower he needed. Versu tractors offer easy-to-use automatic powershift, versatility and strong hydraulics. New high torque engines and roomy, user-friendly cab give operators the tools for high productivity. “We wanted to retain the nice simple transmission. There are a few of us old codgers who drive it and we didn’t want anything too difficult,” Croft says. “If you want to make it complicated you can but

bined with the enhanced cab and front suspension. “This is the only tractor we’ve got with this seat and it’s vastly different. It has air conditioning in the seat,” says Croft. He loves the torque of the Versu T162’s engine and the tractor’s great balance. “They’ve still got the towing and implement that digs four even holes. All the power doesn’t go to the back wheels or front wheels; it goes to all four wheels evenly. There’s real good hydraulic flow and it’s beautifully comfort-

able and quiet.” The Crofts use the 162 for general agricultural work. It is fitted with a loader and also undertakes some farm development jobs. Croft and Voray have owned their Valtra HiTech N82 tractor for six months and it replaced a C90. “It’s got the hydraulic clutch on it and it’s a great wee economical tractor. It has a good spacious cab and is easy to get in and out of. It does the feeding out and a bit of drilling.” They’ve had their Valtra HiTech N91 for two years and use it mainly for dairy duties, such as feeding out silage and hay and a bit of mowing. “The Valtras are ‘boyproof’. We haven’t had anyone wreck any of them. They’ve been good with breakdowns and general maintenance. That’s one of the main reasons we chose them to start with. All the servicing is easily accessible and all the consumables are realistically priced,” Croft says.

The Crofts have owned nine Valtras during the past 15 years.

Dairy News june 12, 2012

machinery & products // 65

Lely toasts 20yrs of auto milking LELY IS marking 20 years of robotic milk-

ing with an offer of a ‘celebration package’ of its latest equipment. The company pioneered robotic milking, installing the world’s first milking robot on a dairy farm in the Netherlands. Development continued, resulting in Lely’s milk quality control system (MQC) and the time for cows (T4C) management programme. “As innovators in agriculture we are proud to have provided solutions to the

customer for 20 years. We consider consistent innovation the key to the future.” The 20-year celebration package represents “20 years of knowledge reflected in our rumination and reproduction module and more special features.” It contains: ■■ Pura steam cleaning for security in udder health, food safety and the environment. ■■ Stainless steel Gravitor system: accurate, stable weighing floor, providing information on cow health.

Students in action at a fencing competition.

Fencing battle at Fieldays A NEW national fencing contest for youngsters is launch-

ing at Fieldays. The ‘Silver Staples’ is a national competition open to people up to 21 years who are currently enrolled in agriculture education. Teams of two must erect a 40m, 3-wire fence at the Fieldays event on Saturday June 16. Warwick Hay, fencing committee chairman, says the competitors will have been able to watch the previous three days heats and finals of the Golden Pliers and Silver Spades competitions, and to have met the professional fencers in those contests. “For these people, competing in front of an audience will be something new and possibly nerve wracking but the experience will put them in good stead if they wish to enter the Golden Pliers singles competition.” Ross Thompson, senior technical tutor at Taratahi Agricultural Training Centre, says it is a opportunity for students from around the country to demonstrate the fencing knowledge they have been taught. “Fencing is an important skill for any farmer. This competition will give trainees the opportunity to test their skill against others of a similar level of experience. Taratahi is looking forward to being part of the inaugural ‘Silver Staples’.”

■■

■■ ■■

I-flow selection gate including the Texas gate: manages cow traffic and treatment. Consumables box (including parts for year-round use). M4Use for easy, quick milk separation. Rumination module. Reproduction module (including free user licence for 5 years) for lower insemination and labour costs.

www.lely.com

Dairy News june 12, 2012

66 // motoring

Ever reliable Hilux MARK MACFARLANE

STRENGTH IN numbers will keep the ever reliable Hilux to the fore in light truck sales in New Zealand. With thousands of happy owners it has become the default vehicle for ‘tradies’ and farmers, and with a string of variants there is sure to be one that suits your preference. Dairy News was recently reacquainted with a double cab diesel version of the 2WD Hilux. The press vehicle came with a host of extras which included running boards, alloys, a roof rack and rear canopy which are popular with buyers who like to personalise their trucks. A single cab/chassis starts the range which is in both a 116kW petrol version with 240Nm of

Star rating for Mazda CX-5

Toyota Hilux

torque but we drove a 126kW diesel with 343Nm. Not the quietest of engines, but it is powerful and flexible enough for most loads. Inside modern farm trucks are getting more car-like in their specifications.

Durable but attractive seat coverings and almost car-like controls are becoming the norm with Bluetooth, cruise control and climate air slowly making its way in to the range in some higher spec models.

With pricing starting at $35,790 and depending on the extras, you will possibly top $50,000 for a top spec 2WD. These are not trying to compete with the Chinese offerings but a Hilux buyer is often a Hilux buyer for life. The

price is for a long-term investment banking on reliability and resale value to get the most for their dollar. Watch out for deals too, Toyota are the masters of the special offer. Contact 0800 TOYOTA.

MAZDA’S NEW CX-5, launched here in March has gained the maximum five-star rating from the European New Car Assessment Programme (Euro NCAP). And in March it was named a “Top Safety Pick 2012” by the Insurance Institute for Highway Safety (IIHS) in the US. The maker says the car, with its lightweight, rigid ‘skyactiv’ body, is among the safest in the world. The Euro NCAP rating system has since 2009 awarded a rating from zero to five stars, based on scores in four categories: adult protection (50%), child protection (20%), pedestrian protection (20%) and safety assist (10%). The CX-5 is the third Mazda to earn the Euro NCAP five-star rating since the new system came in, following the Mazda6 and the Mazda3. It joins the Mazda2 (five stars) and the new BT-50 under the Australian New Car Assessment Programme (ANCAP). Mazda engineers redesigned the new body after rethinking fundamentals of structure, materials, and manufacturing methods. They aimed to develop the ideal vehicle body.

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