Dairy News 11 Sept 2012

Crafar farm saga heads to Supreme Court. Page 3

keep sludge out No risk of blockages Page 63

easier life for cows

$3m funding boost Page 49

september 11, 2012 Issue 276 // www.dairynews.co.nz

baby formula fiasco Cowboy exporters jumping the gate to China.

Page 4

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news // 3

Farm buyers dreaming of a white Christmas peter burke

CHRISTMAS MAY have come and

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Time to improve financial management skills. PG.36

gone before the sale of the Crafar farms is settled one way or the other.

Hours before Shanghai Pengxin and Landcorp were due to sit down with the receivers KordaMentha to sign the papers to settle the deal, Hardie Pene, representing the two Ngati Rereahu trusts Tiroa E and Te Hape B took legal action to stop the settlement.

Ngati Rereahu has been trying to buy two Crafar farms near Benneydale; they were also part of the Sir Michael Fay-led consortium that unsuccessfully tried to take legal action to stop the sale.

Fay walked away after the last round of legal action, saying it was not worth trying again, but Pene is unrepentant about taking this latest step. It involves applying to the highest court in the country – the

Supreme Court – for leave to challenge the previous decision of the Appeal Court.

This gives Pene and his legal team 20 working days to file their submissions and prove the substance of their appeal – which they say they have already done. That submission is then given to Shanghai Pengxin and Land Information New Zealand, the other two parties involved and they have a further 15 days to respond. That’s effectively two months.

At that point the Supreme Court has to decide whether or not it will accept the appeal. If it rejects the appeal – that’s it. But should the court uphold the appeal, it will involve yet another period of time in court during which the judges make a decision. Dairy News has been told that in a worst-case scenario it could be Christmas or later before settlement is finally reached – one way or the other.

Due diligence delay LANDCORP CHIEF executive Chris Kelly says as a result of the appeal being lodged it has postponed due diligence on the farms.

No one is prepared to go on record, but a number of people interested in the sale process have expressed anger and frustration at Ngati Rereahu’s decision to take another legal step.

There are fears this could damage New Zealand-China relations. Many believe the iwi’s legal move is a stalling tactic to get Shanghai Pengxin to sell them the two farms they want at their price. Ngati Rereahu argues the issue is bigger than this.

Pene confirmed that Ngati Rereahu has received ‘outside’ financial help to lodge its appeal, which could end up very costly. It will cost about $12,000 to prepare and lodge the initial submission; if it goes to court a QC (lawyer) could cost $30,000 a day.

Pene says his iwi believe they are hard done by so have lodged the appeal. “The judge [at the earlier hearing] didn’t look at all the

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evidence placed before the court – such areas as business acumen and the privilege of ownership of sensitive farmland in the country. We don’t think the law has been properly applied and accordingly we have decided to appeal it.”

Though Fay is not appealing, Pene says Fay had his own views on a number of matters, some of which they agree with and others they don’t.

“We believe our case is sound and has merit although some people may disagree. But we will certainly challenge the earlier decision,” Pene says.

Meanwhile a spokesperson for Shanghai Pengxin, Cedric Allen, says it is naturally disappointed at the appeal being lodged but says the iwi group is quite entitled to exercise legal rights.

But Allen says this latest delay will not force Shanghai Pengxin to pull out of the deal. “We’ve been in this too long to pull out. We don’t think the appeal will succeed, but we’ll just wait. It all looks a like groundhog day; the goalposts keep receding into the distance.”

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Dairy News september 11, 2012

4 // news

Baby formula export probe SUDESH KISSUN

NEW ZEALAND infant

formula exports to China face growing scrutiny.

MPI is investigating whether proper procedures for such products are being followed. And the marketing tactics of some importers in China are causing concern for authorities and exporters here.

Auckland supermarkets were caught last year selling baby milk formula to Chinese exporters thousands of cans at a time while rationing them to other shoppers. This bulk trade was unknown to export authorities at the time.

An MPI spokesman told Dairy News it has been investigating infant formula exports to China for some time but will not comment further until the investigations are over.

A premium has attached in China to New Zealand-made dairy products since the melamine tainted-milk scandal in 2008, when six children died and nearly 1000 were hospitalised after melamine was added to formula supposedly to increase protein content.

A growing number of New Zealand companies export own-brand formula to China but the product is sourced from only a few processors here. GMP Pharmaceuti-

Rural News 15x3 Dairy News

cals, Auckland, recently opened a factory supplying about 20 exporters.

One GMP customer, Cowala, used a picture of Prime Minister John Key to advertise its product.

The picture was taken at GMP’s factory opening.

Another exporter, Abid, used a picture of the Prime Minister, mispelling his name as ‘Jhon Key’ next to a quote ‘I Love abid’.

GMP New Zealand manager Minesh Patel says the company is not marketing or selling infant formula. “We have written to all customers saying do not use any of our plant opening photos without our permission,” he told Dairy News.

Board of Directors, Shareholders’ Council, Directors’ Remuneration Committee Notice is hereby given that the following three elections will be held concurrently in 2012 for Fonterra Co-operative Group Limited.

Election of Three (3) Directors

Shareholders’ Council (14 Wards):

Election of One (1) Councillor in each ward

Directors’ Remuneration Committee:

Election of Two (2) Members

Invitation for Candidate Nominations Nominations are called for candidates to stand for these three elections. Fonterra shareholders are eligible to stand for all three elections. Nomination forms and candidate handbooks can be obtained from the Returning Officer.

Nominations must be received by the Returning Officer by 12 noon on Friday, 28 September 2012.

Elections for Shareholders’ Councillors Elections will be held in the following 14 wards for the Shareholders’ Council: Ward 2

Whangarei

Ward 4

Southern Northland

Ward 5

South Auckland

Ward 8

Hamilton

Ward 9

Morrinsville

Ward 11

Western Bay of Plenty

Ward 14

Te Awamutu

Ward 17

Eastern Bay of Plenty

Ward 20

Northern Taranaki

Ward 23

Egmont Plains

Ward 26

Hawke’s Bay

Ward 29

Tasman-Marlborough

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Ward 35

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sidered best quality. Some Chinese marketers will use any marketing trick to promote their ‘NZ brand’ whether genuine or not.

This is a widespread problem. The Infant Nutrition Council, the New Zealand government and the Chinese government are all aware of this.”

Carey says it is helping in MPI’s investigation.

Though infant formula

Simon Page

trade from New Zealand is properly regulated, “some

middle men are getting around the regulations”.

‘Brand NZ’ not the last word BIOPURE HEALTH, a New Zealand company, recently started selling infant formula in China. It has opened three stores in Chengdou.

Founder Simon Page says processing, canning and retailing are done by New Zealand companies. Some Chinese retailers buy New Zealand product and package it in China.

Speaking from China he told Dairy News that Chinese consumers want authentic New Zealand milk and are prepared to pay a premium.

Commenting on the damage to ‘brand NZ’ by

‘cowboy’ traders, he says authorities must address the issue.

But ‘brand NZ’ is not very well known in China, “so Chinese companies claiming their products are New Zealand-made – when they are not – is a bit irrelevant because down the road are many more [companies] selling fake made-in-Germany/France/Holland milk products because those countries and their products enjoy more awareness and status in China than does New Zealand-made.”

Cashing in on global demand

Notice of Elections Fonterra Co-operative Group Limited

Board of Directors:

The Infant Nutrition Council, representing most Australian and New Zealand infant formula exporters, knows of widespread concern among members.

Chief executive Jan Carey says New Zealand milk and ‘brand NZ’ are highly prized by Chinese consumers.

“The New Zealand brand is trusted and con-

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Warwick Lampp Returning Officer – 2012 Fonterra Elections Email: elections@electionz.com Election Hotline: Free phone 0508 666 446

SOARING DEMAND overseas for New Zealand infant formula is behind a new $9 million investment in Auckland.

Using infant formula base powder sourced from New Zealand dairy cooperatives, GMP Pharmaceuticals produces about 300,000 cans of infant formula every month for about 20 customers The company hopes to make and package 10 million cans of infant formula, mainly for the Chinese market by the end of this year.

The new factory was recently opened

by Prime Minister John Key. GMP New Zealand chief executive Minesh Patel says the company is also looking at supplying infant formula to Vietnam, Japan and Korea. But China remains its biggest market due to the free trade agreement and demand for safe and quality food for children.

After the melamine scandal in 2008 when six children died and nearly 1000 were hospitalised, Chinese consumers have become wary of local products. Most are turning to

safe and quality products from New Zealand.

GMP is the first New Zealand company to apply strict pharmaceutical standards to infant formula.

International consumers need to know they are giving a safe high quality product to their children, Patel says. “We hope to set an industry benchmark here,” he told Dairy News.

“New Zealand occupies a unique position on the international stage.

People trust the New Zealand brand and know we produce some of the world’s highest quality dairy products.”

Patel says GMP is adding value to New Zealand milk powder and boosting the national economy. The plant employs 40 people.

“GMP is helping New Zealand take advantage of the skyrocketing demand for value added dairy products, while maintaining the high quality international consumers expect from New Zealand products.

“The brands we work with know

the importance of leveraging New Zealand’s clean green image and come to us to ensure their products live up to expectations.”

GMP Pharmaceuticals is already producing value added dairy and health products for export to 20 countries.

The company is the largest customer for New Zealand colostrums, buying about 100 tonnes annually.

Infant formula base powder makes up 85% of the final infant formula product. GMP also buys other dairy ingredients such as lactose from the co-ops.

GMP is New Zealand’s largest pharmaceutical manufacturing and testing facility specialising in health supplements, so was well placed to meet the logistical requirements for the infant formula exports.

But building a facility that provides pharmaceutical standard dairy formulas on a scale large enough to meet international demand was not easy.

“It required over a year’s planning and a large investment in infrastructure, experience and technology.”

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Dairy News september 11, 2012

news // 5

A2 Corp eyes more suppliers pam tipa

A2 CORPORATION pays a premium for its A2 milk of 8-10% above the farmgate price of standard milk, says managing director Geoff Babidge.

And if expansion plans – here, and for infant formula into China and the United Kingdom –come to fruition, it could be looking for more New Zealand suppliers, he told Dairy News.

It was important for New Zealand dairy farmers to see the company has been able to demonstrate commer-

cial success and is continuing to build momentum, Babidge says.

In New Zealand A2 Corporation has been in discussion with its sole remaining non-exclusive licensee Northlandbased Fresha Valley “about how we can both work together to find the opportunity to further grow the business, particularly the A2 fresh milk business in New Zealand. We’ve progressed in those discussions. That could provide opportunity for further farmer supply.”

Also in respect of New Zealand, Babidge says “I can’t overstate the opportunity with the manufacture

The makers of A2 milk may soon be looking for more New Zealand suppliers.

of infant formula [for China] and the agreement we have in place with Synlait sourcing A2 milk from A2 cows to supply to the Synlait manufacturing facility at Canterbury.”

Babidge says the first production run of infant formula is to occur this December and A2 is “very advanced” on appointing an in-market distributer for the product in China. “Those are key initiative and opportunities which have relevance for New Zealand farmers.”

At this stage A2 believes it has sufficient producers to meet demand. “We try and develop a supply base ahead of the curve but the interesting thing will be how quickly the A2 infant formula does take off.

“We’ve got some positive view about the potential there. But it could also ramp up still further and we could be chasing some supply quickly…. We hope we will have that issue to deal with.”

Cows either produce A1, A2 and/or a

Success near home helps growth A2 CORPORATION posted an

after-tax profit of $4.4million for 2012, up 108% on the previous year.

Revenues for the year grew 48% to $62m over the previous financial year, driven primarily by the growth in a2 brand milk – dairy milk without the A1 gene.

The company believes its a2 brand milk’s share of the Australian grocery fresh milk category grew to 5.8% in the last quarter.

Managing director Geoffrey Babidge says the company’s strong trading performance in Australia

was encouraging and is underpinning progress in a number of global markets.

“Our strategic growth agenda is to build sustainable advantage by drawing on the increasing credibility of the a2 brand proposition and prioritising markets that have characteristics which support premium dairy product offerings,” the company says.

Progress is shown by its impending launch in the UK and anticipated entry into infant formula in China.

The Australian business performance was a standout for 2012, helped by “increased investment in marketing and communication including the a new ‘Thank-you a2’ media campaign, public relations and social media initiatives and increased activity with the health care-professional community.”

A2C commissioned its A$8.4m milk processing factory in southwest Sydney in late February 2012 and is now producing to expected levels. It continues buying the balance of its milk from

combination of both proteins. In herds in New Zealand, Australia and the UK, 30-33% -- up to one-third of cows – are testing pure A2.

“The process we follow in Australia and now in the UK is there’s a herd that is segregated, and the farmer then builds that herd over time.

“We have testing arrangement in place in New Zealand, Australia, the UK and the US so we can very quickly put things in place very quickly.”

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In November 2011, the company went larger in the UK and Ireland in a sales and marketing venture with Robert Wiseman Dairies. The UK fresh milk market is about 6.5 billion L/year, so a2 fresh milk sales there could triple those of Australia.

In April 2012 it announced a deal with Synlait to make a2 nutritional powders for A2C. Synlait will source a2 milk from accredited Canterbury dairy farms and make a2 brand powders at Dunsandel.

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Dairy News september 11, 2012

news // 7

Feds pan One Plan ruling FEDERATED FARMERS has slammed the

Environment Court for the changes it’s made to Horizons Regional Council’s controversial One Plan. It warns dairy farmers could be forced off their land by some of the new rules.

The Environment Court last week released a 200-page judgment on appeals on the original One Plan. Farmers were by-and-large happy with what the independent commissioners came up with, but appeals by DOC and Fish and Game and others seem to have won favour with the court at the expense of farmers – dairy and sheep – and commercial growers.

According to the Federated Farmers Manawatu/ Rangitiki president Andrew Hoggard, the Environment Court’s deci-

sions have turned One Plan into something that will not improve the environment and is bad for everyone in the region.

Hoggard is a dairy farmer and played a key role in preparing Feds submissions to the council and later the court.

He says one of the biggest problems with the plan as it stands is that it imposes a number of blanket standards – especially on nitrogen loss targets.

Depending on what stance is taken by the council, he says, farmers could be forced off their land or find themselves hit by new costs as high as hundreds of thousands of dollars. Notice should have been taken of what’s practical on farm, rather than opting for some theoretical numbers, he argues.

“Unbelievably, a further section 42A report

stated this cost was okay, because dairy farmers would spend the money in New Zealand on mitigation, rather than on overseas holidays and imported cars. In reality, many farmers will not be spending money anywhere because they will be bankrupt and heading either for the nearest Work and

Income office or buying one-way tickets to Western Australia or Chile.”

Hoggard says the decisions by the Environment Court largely reverse the decisions of the independent commissioners who heard all the submissions on the draft One Plan.

The court has brought the One Plan back to its

unacceptable original state and it will adversely affect the region’s economy. Depending on how it’s managed by the regional council, farmers could be faced with more paperwork and a possible increase in the size of the bureaucracy to run the consent process for dairy farmers, he says.

Andrew Hoggard

The devil is in the DOC APPEAL HAWKERS Fish and Game and DOC have pretty much got their wicked way, says Andrew Hoggard.

“I recall all those government ministers who were at our annual conference talking about how regional councils need to get a bit more in line and saying all those soothing words to us.

Well maybe they need to talk to their cabinet colleague the Minister of Conservation and ask why she went the opposite way.”

DOC has pushed very hard on this and it’s pretty disappointing, Hoggard says – one government department with substantial resources pushing hard. “Where were all the other government departments? Where was MPI? They didn’t even put a submission in yet we have another government department that does. It’s pretty poor from the government really.

“What annoys me is you hear DOC whining about not having enough money to save the kiwi and not having money to do this and that. Yet they’re spending six-figure amounts on lawyers and planners to tell me how to run my 300ha and they can’t even manage all their thousands of hectares.”

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Dairy News september 11, 2012

news // 9 PKE prices are rising as other feed prices soar.

Trade talks good for dairy DAIRY

PKE price climbing

COMPANIES have welcomed news New Zealand is part of an initiative to create a regional free trade agreement in East Asia.

Trade Minister Tim Groser announced the proposed regional comprehensive economic partnership (RCEP) in late August from Cambodia. “For New Zealand, RCEP will build on the FTA we and Australia concluded with ASEAN in 2009.”

SOARING PRICES for grains and other feedstuffs worldwide are pushing up the price of palm kernel expeller (PKE) meal here.

As of last week, the popular supplement was $320-330/t ex North Island stores and slightly more in the South.

However, contrary to some suggestions, it’s not demand from the drought-stricken US that’s driven the price up, but high inclusion rates in European compound feed, says Morgan Swap, Swap Stockfoods. “Inclusion rates are close to the max.”

Europe typically accounts for about 45% of Malaysian and Indonesian PKE exports, New Zealand 20-25%, Korea 10-15%, the balance spread across south east Asia, Swap says.

PKE prices at ports of origin are as high as they have ever been but lower freight rates, the strong New Zealand dollar and modest domestic demand mean prices here are still well short of the $400/t or more levels seen in the 2007-08 Waikato drought, he notes.

The Association of Southeast Asian Nations (ASEAN) has ten members. New Zealand, Australia, China, India, Korea and Japan make up the other six nations in the proposed RCEP. Fonterra director policy and advocacy Sarah Paterson says it would complement New Zealand’s existing FTAs with Australia, ASEAN and China.

“It will also complement New Zealand’s ongoing trade negoti-

ations with India, Korea and the Trans-Pacific Partnership,” she told Dairy News. “In a broader sense, this initiative also reflects a greater emphasis on trade liberalisation within the region, and recognition of the benefits of open markets, particularly for goods such as food.”

Paterson says demand for dairy imports globally is being driven by the large emerging economies, particularly those in Asia.

“However, high tariffs and other restrictions on trade are in place for agricultural products, including dairy, in a number of these markets. Trade liberalisation… will help exporters to meet the export growth targets set by the New Zealand Government.”

Westland chief executive Rod Quin says any move to open markets means more opportunity to negotiate better prices for New Zealand producers.

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WESTLAND SAYS there is “no risk around milk handling” following its decision not to collect from a Rotomanu farm where 150 cows have been culled on welfare grounds.

“We had not started milk collection from this farm for this season as calving had barely begun,” chief executive Rod Quin told Dairy News.

As for the risk of non-collection exacerbating welfare issues, he says “steps are being taken to ensure the welfare of any cows that might remain on the property.”

Dairy News understands the property involved had been leased and was carrying about 900 cows.

Cessation of milk collection is covered in the company’s code of practice protocols, which were included in terms of supply from last month.

“While the situation with this particular farmer developed prior to the code of practice being set in place we already had concerns, and efforts to assist this farmer had been made,” says Westland chairman Matt O’Regan.

“We are disappointed it has come to this. Nobody wants to see animals suffering, and it is so unnecessary when help is and has been available from us and organisations like Federated Farmers and DairyNZ. Unfortunately it appears none of the advice was taken up and the winter has seen the situation deteriorate rapidly.”

O’Regan says the case circumstances are “multifaceted” and will require careful analysis to help prevent similar incidents, though further comment would be premature prior to the outcome of the MPI’s investigation.

9/4/12 3:35 PM

Dairy News september 11, 2012

10 // news The world’s largest dairy company, Nestle launching its new dairy farm institution in Heilongjiang province, China.

China’s dairy revamp PETER BURKE

CHINA IS ‘industrialis-

ing’ its dairy industry, says Professor Keith Woodford, of Lincoln University.

He told Dairy News that in one giant leap China is trying to do in years what the West has taken 150 years to achieve – create an ‘industrial’

model for dairying.

“There is a huge change occurring in the dairy industry in China. The traditional system was peasant farming where farmers might have two or three cows. They were fed on crop waste, then taken to a local milking station where the milk would be aggregated and end up with the processor.

“The problem with that are huge imports going on.

Last year China imported system was problems in food safety; the melamine 57 million tonnes of soybean, much for its pig scandal in 2008 was of industry which is also course the trigger for change, with thousands of industrialising. One pig unit I’m aware of has children affected.”

Woodford says the Chi- 500,000 sows and produces 10 million pigs a nese Government has taken the food safety issue year.”

Woodford says China very seriously, seeking a solution in very large-scale has no problem producing rice and vegetables dairy units. for its human popula“So rather than trying but strugto aggregate up “There is a tion, gles to produce a few produchuge change enough feed ers to bigger for its pigs herds of 20-30 occurring cows, they are in the dairy and cows. It large trying to move industry in imports quantities of to an indusChina.” corn but huge trial model. quantities of soybeans, That means starting from mainly from Brazil, and a scratch, turning to units lot of alfalfa hay from the that might be 30ha runUS. ning 3000 cows, or even Woodford notes huge bigger, running 5000 cows, [with] the processor differences between the milk production systems in control of the raw milk in China and New Zealand. supply.”

“You take a New ZeaWoodford cites the example of Modern Dairy- land cow to China – about 50,000 go there every ing, with almost 250,000 year; that cow will produce cows on about 50 farms. at least twice the amount Compare this with Fonof milk it does at home. terra – three farms with In New Zealand our cows close to 10,000 cows. produce 4000 L/year; on a China’s moves to feedlot in China the same industrialise its dairy industry is widespread, he cow will produce 9000 L.” Few Chinese would says. “I know of a procesquestion Fonterra’s decisor in the west of China sion to run farms there, who has 15,000 small he says. If Fonterra wants farmers supplying his facto be a big player in the tory. He aims to get this dairy industry there it has down to just ten supplito produce milk there. ers. He’d love to have a New Zealand farmer go up “If Fonterra wants to sell ice cream and yogurt there and set up some of to China it will be a mix these units.”

The Chinese are adopt- of fresh milk and milk imported from New Zeaing an American farmland. We can’t be a part of ing system: mixed rations that scene unless we have based on alfalfa hay, corn a fresh milk supply over and soybean – much of it there,” he adds. imported. “Overall there

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Dairy News september 11, 2012

12 // news Reinsurance money resulting from the Christchurch earthquake is keeping the currency high, says Keith Woodford.

Quakes rattle dairying PETER BURKE

THE ECONOMIC

effects of Canterbury earthquakes are profoundly affecting the New Zealand dairy industry, says Professor Keith Woodford, Lincoln University.

The September 2010 and February 2011 quakes

caused damage worth $30 billion, most of which is now being credited in the form of reinsurance money.

This is keeping the New Zealand dollar at its present high level, Woodford says. “It’s a huge amount of money that’s coming in – 2.5 times the year’s dairy cheque by way of reinsurance money, and in my

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opinion this is propping up the exchange rate.”

Woodford says the effects of the quakes plus

the price increase, but its coming on the back of an increased volume of WMP at auction. In the week

“It’s a huge amount of money that’s coming in – 2.5 times the year’s dairy cheque by way of reinsurance money.” the global economic situation have worked together in a downward effect on the predicted payout, though it is still very early in the season. “No one can say with confidence that the payout will be low; all we can say is the payout could be low.”

Despite a healthy increase in the September 4 GDT auction. Woodford says the returns Fonterra and other companies are making on their sales are well below the current $5.25/kgMS milk price forecast.

“Everything will depend on whether the current upward trend in auction prices continues over the next few months.

We still need to see at least another 10% increase in WMP prices to above $US3300 to be confident even about the predicted $5.25 milk price payout”.

WMP prices were at US$2798/T last week.

He says the good news about the September 4 global auction was not just

before the sale Fonterra increased the offering of WMP by 8000 tonnes more than planned.

“No doubt this reflects the good start to the production season here in New Zealand. But the worry was whether the increased quantities would counter the expected good signs of a lift in demand. In the current environment, everything can change in a few days.”

The pain will filter through the rural sector, Woodford says, though some of the effects won’t be felt for a while.

“For the coming year, Fonterra are keeping the advance payments up and so the immediate cashflow effect of Fonterra’s late August drop in the predicted payout will be zero.

We’ve also still got the last payment from the last season to come through.

If auction prices don’t increase further, it will be early in the New Year when the cashflow [effect] really starts to bite.”

in brief Newland joins water authority A FORMER dairy industry water and sustainability policy manager is joining the Waikato River Authority as its new funding manager.

Sean Newland, employed by Fonterra as its sustainable dairying policy manager, will contract to the authority for three days a week in his new role.

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Dairy News september 11, 2012

news // 13

Landcorp hoping to press into China PETER BURKE

LANDCORP IS hoping

to leverage off its relationship with Shanghai Pengxin, winner of the tender to buy the Crafar farms.

Chief executive Chris Kelly told Dairy News one of the conditions of the sale of farms, as approved by the Overseas Investment Office (OIO), was a requirement that Shanghai Pengxin work with Landcorp to develop business opportunities in China.

“Shanghai Pengxin is required to assist Land-

corp in their endeavours… in China. That doesn’t mean buying large areas of land or anything like that, but just to help them

hai Pengxin has access to quite a lot of state land and they are looking to develop it into either large-scale sheep or dairy

A lot of opportunity exists in China, a big farming country, but it lacks expertise in largescale farming. develop their dairy and sheep business. They have a herd of 10,000 sheep and are looking at possibly dairy development.”

Kelly says Landcorp wouldn’t build dairy parlors or infrastructure as has Fonterra. “Shang-

farming operations or a combination of both. We would be supplying expertise, maybe some genetics, those sorts of things, while Shanghai Pengxin would fund this development.”

A lot of opportunity exists in China, a big farm-

ing country, but it lacks expertise in large-scale farming. “There are lots of small peasant farmers….

We’d bring expertise in large-scale farming,” Kelly says. If it took off it could generate extra income.

Landcorp is no different from any other farmer.

“We’ve got lots of assets but we don’t generate a lot of cash off the land.

“If we don’t have to spend scarce capital but can increase our revenue base by using other people’s money – from overseas or within New Zealand – that’s good for us,” says Kelly.

Landcorp hopes to supply its expertise to dairying in China.

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Mastalone The Big Gun LANDCORP IS paying about $21 million for the cows on the Crafar farms as part of its joint venture with Shanghai Pengxin. Landcorp’s management contract takes the form of a roughly 50/50 sharemilking arrangement.

Landcorp chief executive Chris Kelly says the deal requires they buy the

cows from the receivers KordaMentha at the “going rate”.

“As a 50/50 sharemilker we will own the cows, that’s the way it works, then Shanghai Pengxin and Landcorp will split the milk revenue roughly 50/50 and share the costs of running the farms.

“There are 13,000 cows… worth $1400-1800 each. We

already own about 50,000 cows so it’s a bit more of the same for us.”

Kelly says identifying the cows was at first a challenge.

The receivers have spent a lot upgrading them but their final value will depend on factors such as age, condition and breeding worth. “We’ll get independent valuers to assess the cows.”

NZTE report finds potential for offshore dairying A RECENT report by Price Waterhouse Coopers (PWC),

commissioned by New Zealand Trade and Enterprise (NZTE), singled out China as a country where New Zealand could further develop in dairying.

The report talks about the Landcorp/Shanghai Pengxin joint venture in sheep but says this could easily be extended to dairying.

It highlights Landcorp’s expertise in large-scale farming and its “political appeal”: as a government agency it appeals to Chinese, and Asian countries.

The NZTE report notes the government of Shaanxi province has expressed “strong interest” in setting up New Zealand-style farming systems and technologies, including genetics, breeding techniques and farm equipment.

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The benefits of such a venture could extend beyond the likes of Landcorp to universities, research institutes and private companies. A number of internationally recognised New Zealand agricultural scientists are collaborating with colleagues in China.

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14 // news

Global markets firm ahead of schedule ANDREW SWALLOW

THANKS TO drought in the US and high feed prices, dairy markets are starting to firm a little earlier than many pundits predicted.

Last week’s GlobalDairyTrade (GDT) average winning price was up 6%, consolidating 7.8% and 3.5% gains on August 15 and August 1. At US$3174/t, the average winning price is the highest since April 3 and 21% ahead of the May 15 recent low of US$2619/t.

“We think [the rise] is at least in part due to weather in other parts of the world, in particular the US drought,” Westpac senior economist Anne Boniface told Dairy News.

Slowing soya exports out

of Brazil and Russia expecting its worst wheat output in nine years are other factors.

“There’s all this stuff driving grain prices higher and they’re a vital input for northern hemisphere production so we expect [dairy] production to slow.”

But Boniface is hesitant when asked if this is the start of a sustained upswing. “We still see there being volatility, though in the longer-term trend we see prices starting to improve in 2013 relative to 2012.”

While tightening supply is the immediate driver, a likely recovery in China’s economic growth rate next year points to firming demand further out.

Westpac is holding its forecast for this season’s total

payout at $5.70/kgMS, which has been in place for “a couple of months” and is more or less in line with Fonterra’s August 29 cut in its forecast to $5.25/ kgMS (was $5.50/kgMS) plus 40-50c profit (was 45-55c), she points out.

“We’d like to see a bit more water under the bridge before we change our forecast for this season. We’re forecasting further [GDT] improvements but we wouldn’t expect the pace of the last three auctions to be sustained.”

The New Zealand dollar’s strength is a factor likely to limit upside in domestic prices. “Broadly we’re expecting exchange rates to firm with the New Zealand dollar peaking at US84c in March.

Commodity prices tend to drive our exchange rate.”

Global dairy prices are firming.

ANZ rural economist Con Williams says international dairy prices still need to firm 8-9% to achieve their prediction of $5.50/kgMS this season. “We think that’s achievable but obviously it means currency remaining around the US80c mark.”

Further quantitative easing in the US could see our dollar edge higher but in US dollar terms he’s confident dairy markets are on the up now.

“The question is, how much upside is there from here? It’s really about where it might top out. My guess is somewhere around where we were at the start of the year (~US$3700/t) but not near the peaks we saw in the 2010-11 season.

“Growth in the big economies isn’t that good and the New Zealand and Australian [dairy] seasons have started pretty well.”

Forecasting policies FOLLOWING

REPORTS

Westland had decided to move to monthly communication of its forecasts, Fonterra says there’s no change to its forecasting policy.

“Fonterra is sticking with its current policy and makes payout forecast announcements in accordance with the DIRA each quarter, or sooner if there is over 30c/kgMS change,” a spokesman told Dairy News.

In the last week of August, as Fonterra cut its forecasts, Westland increased its current season prediction 20c/kgMS to $5.205.60 on the back of market prices firming around 10%.

Westland says its policy of communicating payout reviews to shareholders monthly has been in place a number of years, and aims to keep them up to date.

“This is still a changeable market and we don’t typically inform the wider public and media of every adjustment we make,” chief executive Rod Quin told Dairy News.

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Dairy News september 11, 2012

news // 17

Astronaut’s 20th birthday party ANDREW SWALLOW

DAIRY FARMS with robotic milkers opened their doors earlier this month to fellow dairy farmers across the world to celebrate 20 years since the introduction of the technology.

The Lely-organised event saw two New Zealand farms take part: Carr Group’s Stradbroke Farm,

Mid Canterbury, and the Overgauw’s farm, Winton, Southland. Respectively they are starting their fifth and fourth seasons with the Astronaut automated units.

“They’re great in that we don’t have to milk the cows,” Stradbroke farm manager Jeff Hocking told Dairy News. “We work almost office hours, starting 7am and home by about 6pm at night,

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though a wee bit longer at this time of year. Post calving we’ll go to a 7.30 start.”

Such hours are one of a long list of reasons people give for going to the Astronaut system, Lely New Zealand managing director Peter Vis said (see panel).

Vis says there are now eight farms using them in New Zealand “and growing”, with 15,000 users worldwide. “They’re very easy to put in place compared to a rotary.” They’re also more power and water efficient, with a smaller yard footprint.

Brushes clean and stimulate the udder before the robot uses lasers to guide the cups onto teats. Lely’s research shows 97% of cows can be connected by the robots: udder defects such as crossed or very low teats cause problems.

Milk can be separated on various quality parameters, such as colour, or

conductivity – an indicator for high somatic cell count and/or mastitis. “You treat cows as individuals and manage by exception,” says Vis. Teat sprays are done by the robot. “There’s no waste and it’s done very effectively.”

Cows chose when they want to be milked, typically getting the reward of a feed while in the Peter Vis Astronaut.

In grazed systems Vis says they’ve found a 1-2km walk is the maximum the cows will do voluntarily, limiting farms to 600-700 cows through one shed. However, several sheds can be set up on one farm if need be. “That’s the nice point

Stradbroke Farm, Mid Canterbury, was one of dozens worldwide that marked the 20th anniversary of the launch of Lely’s automated milking system.

about robots: they’re easily split up.”

Ideally, cows should cross from one side or quarter of a farm to the other on their way through the shed for milking, and the fresh break of grass on the other side.

“Cows adapt in about three weeks but for the

farm manager it takes at least three months, usually a year, to adapt to the system. It takes some time to make it tick.”

During that time Lely, through its four farm centres in New Zealand, offers extensive, no-charge training and support. “We like you to be successful with the robots…. Together we

will find solutions that work for you.”

Vis says they’re not prepared to install robotic systems more than two hours or so from where they have technical support, at the Lely Centres of Ashburton, Feilding, Hamilton and Invercargill.

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Dairy News september 11, 2012

news // 19

Lower milk payout drops SOE’s profit PETER BURKE

A LOWER milk price last season was the main reason for a drop in Landcorp’s profit, says chief executive Chris Kelly.

Landcorp has posted a $27 million profit in 201112 compared with a record $42 million in 2010-11. The dividend paid to the Government by the SOE was $20 million – down $7 million on the previous year, but quite good regardless, Kelly told Dairy News.

“In our view the difference was due almost entirely to the reduced milk price. The exposure to dairy means now for us that every 10 cent drop or increase in payout

represents a $1.3 million decrease or increase in profit….

“We are quite sensitive to that but we had a really good production year. We had record milk production of 13 million kgMS, we killed more lambs than we ever killed before, at higher weights, and we got good prices for them.

“Our beef business went quite well as did our deer. The decrease in profit was almost entirely due to the price of milk.”

But he is a bit more pessimistic over the new season, with the news that Fonterra has decreased its forecast payout. “That’ll again drag us down, so heaven knows where we’ll end up. It’ll be a bit of a

challenge.”

Assuming the Shanghai Pengxin deal goes through, Landcorp’s bottom line will benefit from management fees from the joint venture. But most of its revenues come from the products it produces.

“These are largely commodities…. The combined high exchange rate and softening commodity prices mean we’re going to take a bit more of a hit. Remember that until about five years ago our exchange rate was about 57 cents.

“I don’t think we’re ever going to see that again; we’re going to have to live with a high New Zealand dollar and accommodate it willingly.”

‘Monitor cash flows’ PETER BURKE

Every 10c change in the payout represents a $1.3 million lift or dip in profit for Landcorp.

Kelly says the days are over that saw the exchange rate falling in sympathy with falling commodity prices, and New Zealand must live with a high exchange rate. The New Zealand dollar is high simply because the US dollar is weak, Kelly says, and New Zealand appears to be regarded as a ‘safe haven’ for money.

Economic uncertainty will not slow Landcorp’s plans to develop more dairy farms in the central North Island, Kelly says.

“We were going to do that anyway. There’s no doubt those central North Island properties should never have been in forestry in the first place. Dairying is by far best use of that land,” he says.

FARMERS MUST be on top of their finances this season, given the lower dairy payout and commodity prices, says ANZ commercial and agri managing director Graham Turley.

He told Dairy News farmers need to closely monitor cash flows and look at their costs to see what expenditure they can defer, reduce or do differently. They must also have forward-looking conversations with their bankers and accountants.

Turley says farmers have in the past tended to focus on issues outside the farm and left the financial stuff to the wife.

“But as farming has evolved and farm sizes have got bigger, the farms are big businesses. Nowadays rather than being farmers they are in the ‘business of farming’. That brings with it the requirement to have more financial discipline and we are seeing a big transition to that right across the sector.”

One positive thing that’s happened in the last couple of years, says Turley, is that farmers have been prudent.

They have used high payouts and commodity prices to pay down debt, to put financial leverage to work and to put more equity into their businesses, thereby gaining flexibility to withstand years that are not quite as positive as they might like.

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Dairy News september 11, 2012

20 // news

No muscle to milk warning – co-op FONTERRA IS shrugging off a warning the New Zealand milk wave may be about to crash. Co-op chairman Henry van der Heyden says milk production is forecast to grow 2.5 to 3% and he can’t see any reason why it will slow down over the medium term.

In a report last month Rabobank warned milk production will go “from a torrent to a relative trickle.” The author, Rabobank senior analyst Hayley Moynihan, says New Zealand milk production is likely to grow at a far slower pace over the next decade than has been evident over the past two.

While forecast growth of 30% over the next 10 years is considered rapid by most industry measures, it will be pedestrian

by recent New Zealand standards,” Moynihan says. “The heady days of more than 300 new farm conversions nationally in a single season are over.”

Hayley Moynihan

The increased cost of dairying will also stifle growth, the report says.

With our dairy operations becoming increasingly intensive, feed and interest costs have become embedded in production systems. Farmers have increased output through growing more feed on existing or purchased

land or by buying in supplementary feed and this has structurally increased their cost base, she says.

“As a result, fertiliser, feed, wages and interest costs now comprise almost 70% of net dairy cash income, up from 40% in 1999-00.”

Moynihan says these increased costs have reduced dairy producers’ ability to weather a downturn in the market.

Van der Heyden says he can understand what Rabobank is saying about on-farm costs. But he points out a lot also depend on the returns from other land uses like sheep and beef farming and cropping. “We strongly believe milk production will grow 2.5 to 3% per annum in the medium term.”

According to Rabobank, the relative economic returns for dairy

compared to other agricultural industries has driven the change in land use.

“The structural increase in the global milk price was behind much of the change in land use from sheep, beef and cropping operations towards dairy farms,” she says.

“And this trend has seen a significant lift in production in the South Island, with the south now accounting for 36% of national production, up from around 15% ten years ago,” she says.

Moynihan says growth was also underpinned by the readily available access to credit.

“Dairy farmers were generally able to service a greater level of debt than their drystock or cropping counterparts, with capital asset growth historically providing the equity to build, or to leverage from, for further expansion.”

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Milk production is forecast to ease in New Zealand says Rabobank but Fonterra begs to differ.

regulation to hit production THE TIGHTENING of environmental regulations is also seen as a constraint to future growth in dairy, says Rabobank.

While regulations vary by region, consent is increasingly required for nutrient use, effluent treatment and disposal, management of existing waterways, stock wintering policies and water usage.

Growth is likely to come from increased production per cow rather than more farms.

Hayley Moynihan says the

changes in the dairy industry will require a shift in focus. “Farmers will need to look at how to squeeze productivity gains from their existing herd, as well as ways to control their costs,” she says.

“The decline in production growth will also present challenges for those further up the supply chain. Processors and exporters will be facing a milk pool that is nearing its limits as well as the loss of cheap raw material, which will see them further define their strategies.” she says.

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news // 21

Pink, black tees to help fight cancer RD1 LTD has joined with Swazi to

raise funds for the Breast Cancer CURE Research Trust by making and retailing a limited stock of $34.99 pink or black microfleece tee-shirts.

Part of the proceeds from the sale of the tee-shirt will go to the New Zealand organisation that funds research into finding a cure for breast cancer by 2018. At least 660 New Zealand

women die each year from breast cancer.

Swazi founder Davey Hughes says 90% of his company’s work force are women, several affected by breast cancer or having loved ones affected.

“This is also the case for many RD1 workers, so it is a cause RD1 and Swazi are passionate about. Breast cancer is a vicious disease… and I believe now is

William Kelton

Study grants for science students FERTILISER CO-OP Ballance Agri-Nutrients is offer-

ing four scholarships to immediate family members of shareholders and employees. Each is worth $4000 a year for up to three years for tertiary-level studies in primary industries or process engineering.

Ballance R&D manager Warwick Catto says New Zealand scientists are developing world-leading capabilities in agricultural technology, animal health and also food technology.

“Our economy is inextricably linked to maximising the use of our land and we’re very good at it,” says Catto. “Our primary industries need high quality people who study hard to solve real-world problems today in our fields and paddocks and also in the future. Our scholarships make a real contribution.”

Catto says Ballance is heavily committed to the development of science in New Zealand and also science extension – the practical application of new and existing ideas and technology on farm.

Nearly 60 students have benefited from the Ballance scholarship programme since 2002. One early recipient was William Kelton whose parents have a small drystock farm west of Hamilton.

Kelton gained his bachelor and then masters degree in chemical engineering from Canterbury University. In 2008 he was awarded a Fullbright scholarship to the University of Texas, Austin, where he completed a PhD in chemical engineering.

“The Ballance scholarship was useful in allowing me to get here,” says Kelton. “A lot of students face big student loans which puts a lot of pressure on them to go straight into the workforce.”

Kelton says removing some of that financial pressure facilitated his study in Austin. “I’m working in the biotechnology side of the department on antibody engineering.

We’re looking at optimising the function of the antibody so it works with the immune system more efficiently.”

Kelton has another year before concluding the research towards his PhD before returning to New Zealand. “I’m hoping the skills I’ve developed will apply to other agricultural problems, such as vaccine development, when I get back.”

Applications for the Ballance scholarship close on October 28. For more details or to apply, visit www.ballance.co.nz

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Dairy News september 11, 2012

22 // world

Volatility clouds profit forecast SUDESH KISSUN

DUTCH DAIRY co-op

FrieslandCampina is uncertain about its 2012 full-year result despite improving half-year returns. In its half-year results last month the co-op declines to make concrete statements; the economic outlook remains too uncertain, it says.

“The forecast is that consumers in Europe will continue reticent in their spending due to the economic situation [so] dairy product consumption will remain under pressure.”

But global consumption may rise slightly this year with demand in emerging markets.

The co-op points out that drought in the US is causing rising animal feed prices, and lagging milk production in the EU is likely to pressure worldwide milk supplies. “Small fluctuations in supply and demand on the world market can have major consequences for the price of dairy products.”

The 2015 prospect of no EU milk quota, and economic difficulties in Europe, are creating a new dynamic in the global dairy market, the co-op says. It is seeing a speeding-up of takeovers of international dairy companies – partly a reaction to the Friesland Foods-Campina merger and partly due to “parties positioning” for the end of

the EU milk quota. “The markets will become even more volatile.”

FrieslandCampina’s route2020 strategy is said to be robust, a good basis for further growth and result improvement.

In the first half of 2012 the net revenue of Royal FrieslandCampina N.V. rose by 7.6% to $8 billion. Profit rose by 8.7% to $218m. Volume growth and higher sales prices, to offset the increased costs, helped revenue growth and improved the result.

In the first half of 2012 the overall volume rose by 2.4% but “strategic value drivers” grew in volume by 4.5%. Most volume growth was in the consumer and business-to-business mar-

kets for infant and toddler foods. FrieslandCampina chief executive Cees ’t Hart cites a good first half of 2012, with revenue and results up despite the difficult EU market condi-

tions and a steep drop in prices for butter and milk powder. “Partly due to this the guaranteed price of milk from the member dairy farmers was less than in the first half of 2011.”

FrieslandCampina’s half year results are up but the co-op is uncertain about its full-year profit.

Arla wants to lift payout DANISH CO-OP Arla said last week it expects 2012 revenue to top $13 billion.

Its half-year results contain a prediction of major improvements in global commodity markets in the second half of the year and a consequent rise in earnings.

First-half efficiency improvements should help cut group costs from the end of 2012 and into 2013 so the co-op expects to achieve its fore-

cast US$380 m profit – 3% of annual revenue.

But milk prices paid to farmer shareholders needs to rise, says chief financial officer Frederik Lotz. The current price is not as high as the co-op would like.

“The world commodity market has proved more unfavourable than foreseen, primarily due to an unexpected increase in world milk production. This is putting pressure on

prices and therefore on our earnings from commodity trading and global E-auction sales and affects 25% of our milk.”

For the first six months of 2012, Arla posted a revenue of $6.3 billion compared to $5.7b last year.

The 12% increase results from organic growth in core and growth markets, and merger and acquisition benefits, including those in Sweden and Germany.

signs of life Dramatic images of the first days of trout

sep-Oct issue out now WAYS TO SUBSCRIBE: Freephone: 0800 782 436 Online: www.nzgeographic.co.nz

Dairy News september 11, 2012

world // 23

Oz processor’s year of ‘two halves’ AUSTRALIAN DAIRY processor Warrnambool Cheese

and Butter (WCB) ended the 2012 financial year 17.8% down on the previous year with a net operating profit after tax of $A15.2 million. But the result – $A3.3million less than 2011 – was stronger than the 20-30% reduction forecast in June.

Both the Great Ocean Ingredients and Warrnambool Cheese and Butter Japan joint ventures performed strongly in 2012 with a $A3.2 million contribution to net profits.

“Once again WCB has produced robust earnings for shareholders and milk suppliers in a year marked by a declining global economy and international commodity prices,” says chairman Frank Davis.

“The company was able to mitigate the impact of declining international revenues through its customer specific applications and plant capability upgrades to maintain comparably strong export prices.”

Total milk intake for 2012 was 919 million L, a net 4.5% increase. Milk intake grew due to a 4.6% increase in supplier numbers and a 3.7% increase in milk sourced from other dairy companies. WCB paid average farm gate price of A41.4 cents/L. A large investment was made in the recently announced five year Great Ocean Road national cheese supply agreement with Coles.

Total revenue for 2012 was $A497.8 million, down by 1.3% on 2011. Total sales were down 5.1% largely due to a decision to hold higher closing inventories on the prospect of improving prices in the new financial year.

“2012 was a year of two halves where strong prices were achieved in the first six months before declining sharply in the second,” says managing director David Lord. “A deterioration in the global economy combined with a high Australian dollar and a surge in global production put downward pressure on pricing in the second half.”

In 2011-12, WCB continued to deliver on its strategy to pursue growth in milk and cheese supply. The full year impact of 2011/12 capital project investment is set to be realised in 2013. These include: ■■ Sungold Fresh Milk expansion - a 50% increase in plant capacity was completed in the first half ■■ Skim Milk Powder plant upgrade - upgrade of the powder plant was a key contributor to maintaining sales volumes and margins during the second half of 2012.

■■ Mil Lel Specialty Cheese plant upgrade - capacity upgrade supported a 63.3% increase in sales ■■ Coles national cheese supply - the recently announced Coles five year cheese supply agreement provides underlying support for the Mil Lel plant upgrade and WCB’s strategy to expand its domestic retail business.

Early 2013 indications are for continued restraint in

commodity prices for the first half of the financial year.

The impact of dry conditions in the USA is yet to be fully recognised. Analysts are now revising downwards their forecasts for growth in US milk production for 2013 and this may lead to improved commodity prices in the first half of the 2013 financial year.

Warrnambool Cheese and Butter’s annual result was affected by lower global dairy prices.

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in brief Reverse price cuts MEMBERS OF the Dairy Coalition in the UK have again called on milk buyers to urgently reverse price cuts implemented in May and June.

After a meeting on August 24, NFU dairy board chairman Mansel Raymond said in a joint statement there were positive signs in the strengthening of global and domestic dairy markets, as a result of global supply tightening.

“There are some signs of improvement in the global market that would justify price increases.

What’s more, it’s clear from recent media reporting of drought in the US that farmers’ costs are rising significantly. The prices cuts made in May and June are still hurting; farmers need to see that money back in their businesses now.”

BREAKING NEWS MANAGEMENT STORIES MACHINERY REVIEWS COMPETITIONS MARKETS & TRENDS AND MUCH MORE...

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Dairy News september 11, 2012

24 // OPINION opinion Ruminating

EDITORIAL

Not another delay

milking it...

Pulling away from GE kerb

OVER A decade ago New Zealand ‘parked’ the GE issue because risk assessment couldn’t tip the scales for or against. Opponents still argue we should pursue premium niches – GE free – not volume.

But GE is as much about productivity as about volume. Risk assessors will need to consider whether an organic premium will offset disadvantages.

And they must realise the New Zealand dairy industry is a volume player; our farmers need to be able to match or exceed global productivity standards.

Can of worms

PRIME MINISTER John Key had no idea he was opening a can of worms, rather than just a factory making cans of infant formula in Auckland recently.

Pictures of the PM at the opening have been popping up in advertisements in China. Suddenly Key seems to be endorsing a range of infant formula products in China.

A cow of a rescue

A COW had to be rescued by fire services in northern England after it tumbled down a 30m river embankment and got stuck in a tree.

Fire crews in Cumbria were surprised to get a call to rescue the cow, which had toppled 10m beside the river Leith before a tree broke its fall.

The bruised bovine was discovered after its farmer noticed one of his cows was missing. The animal was sedated by a vet before being winched out of the tree by firemen.

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ISSN 1175-463X

One Plan ruling an own-goal

FISH AND Game hails the Environment Court ruling on Horizon’s One Plan as “a win for all New Zealand”. But it’s not. Some Manawatu dairy farmers could be forced off their land by some of the rules iin the plan. If this happens, the losers will be New Zealand’s export productivity and our long-term economic outlook.

What will the trout fishermen have to say about that?

NGATI REREAHU has in the eyes of some thrown a last-minute spanner in the works of the never-ending Crafar farm sales saga. They are seeking leave to appeal the Appeal Court’s decision that allows the farms to be sold to Shanghai Pengxin.

Behind the scenes anger and frustration is building over what’s been happening for months.

It also prompts a question: why have out-pourings of indignation over Shanghai Pengxin’s bid not been heard every time a piece of godzone has been sold to so-called foreigners. Answer: it seems there are foreigners… and ‘foreigners’.

Germans, Israelis, Americans and Swiss, to name a few, are ‘one of us’ – but not the Chinese. The inconsistency of the argument is mind-boggling; we could be excused for labeling this racism and certainly prejudice.

To be fair to Ngati Rereahu, they claim this is all about land that was originally theirs and which they have been trying to get their hands on for years and the Crafar deal has given them a unique opportunity to press their case.

But why didn’t they mount a legal challenge years ago when Allan Crafar took it over? They say they have no problem with the Chinese, just the law, and who really knows what the law is anyway. Some say we have legal system, not a justice system.

The Crafar saga is an ugly look for New Zealand. It is straining relations with China, a country we need as a market for primary commodities given the economic crisis in Europe.

China also offers opportunities for New Zealand to sell its farming expertise. Yet a deal in which Landcorp would work with Shanghai Pengxin to develop sheep and dairy farms in China is on hold as result of these delays. Will this affect Fonterra’s operation in China?

Dollars are being foregone daily as this deal hangs in limbo but few people seem to care. Perhaps more national grief and hysteria would arise if a possum got stuck up a lamppost for a day.

It’s easy to sheet the blame home to Ngati Rereahu and others, but if the law had been drafted better in the first place these shenanigans may not be taking place. Is NZ Inc is losing out? Who cares? as long as the lawyers are getting their slice of the action. – Peter Burke

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Dairy News september 11, 2012

opinion // 25

Grain prices hold key to profits John droppert

DROUGHT CONDITIONS experienced in

the Northern Hemisphere over recent months have caused a spike in global grain prices, in an environment of lower farmgate pricing.

These movements have been rapidly transferred to Australian dairy farmers’ delivered feed grain prices, increasing pressure on production margins. While these developments have the potential to accelerate the rebalancing of the global dairy supply chain and boost commodity prices, the timing and extent to which this occurs remains unclear.

While El Niño conditions threaten to develop in the Southern Hemisphere, the US Midwest is experiencing its worst drought in half a century.

Although some areas have seen relief from late August, the damage has largely been done and late rainfall may in fact be counterproductive – increasing the costs associated with drying the grain to an acceptable moisture level. With harvesting now underway the USDA expects the corn crop to be the lowest since 2006-07 – with the large area planted only partly offsetting the lowest perhectare yields since 199596. The soybean harvest is yet to commence but the USDA’s latest monthly forecast tips a harvest of around 73 million tonnes – down 12% on last year.

Drought is also affecting the Black Sea region in Eastern Europe, where late rains are equally unlikely to improve yields as harvesting gets underway. The potential disruption to global markets of a repeat Russian export ban remains top of mind for many buyers, despite the Russian government repeatedly ruling out such action.

Well developed, interconnected and highly liquid grains markets with a diverse range of heavily traded derivatives such as futures – and not to mention extensive par-

ticipation by third-party speculators – have rapidly translated these events to the other side of the world as higher feed grain prices for Australian dairy farmers.

International grain markets also benefit from a great deal of liquidity, allowing them to rapidly price-in production changes and market information as it comes to hand.

The dairy production system is more complex and its markets are slower to respond. With the exception of a few derivative products, participation remains limited to those physically trading product – and as such, market movements are generally more closely related to the fundamentals (supply and demand) rather than sentiment and news. When combined with the long lead times associated with herd expansion, they tend to play out over a longer time frame.

While signs of a dairy commodity price recovery are emerging as US milk output slows, the timing is largely dependent on New Zealand milk production, which is expected to increase 4-5% this season.

Until a sustained recovery takes hold, the combination of fast-moving grains markets and slowerresponding dairy markets will continue to squeeze the margins of grain-feeding dairy farmers across the world. This is evidenced by the recent slowing of milk output growth in the US, EU and South America as producers feel the pinch.

Australia is no exception. Increased feed costs have come as processors in exporting regions are paying opening prices 8-10% lower than last year, and many farmers in drinking milk regions face lower contract prices. In order to provide a secure base price from which to ‘step up’, export processors are forced to pay only what they can reasonably expect to sustain for the whole season, with a risk margin deducted.

The speed of the grain market and the sluggish-

ness of dairy markets have combined to maximum negative effect at present.

But in all of this lies something of a silver lining: the rapid rise of grain prices is likely to hasten the re-balancing of

global dairy demand and supply, with producers who are most exposed to grain under greatest pressure.

• John Droppert is industry analyst with Dairy Australia.

The US drought has caused grain prices to spike.

Dairy News september 11, 2012

26 // opinion

Buying a farm and GST rating THE SALE of a business

such as a dairy or a garage is zero-rated for GST as it’s treated as being sold as a ‘going concern’. Effectively the old owner walks out and the new owner continues trading in their

Until 2011 a dairy farm could be sold as a going concern.

place, everything necessary to continue trading being included in the sale – building or lease, stock and customers.

As the purchase is of an existing business, or trading activity, GST is

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charged on the sale at 0%, the only requirement being that both vendor and purchaser are registered for GST. Farms, however, are generally treated differently from a GST perspective.

Until 2011 a farm could be sold as a going concern. This was unusual, however, due to the various trading structures that might have been used by the vendor and purchaser, and also the necessity for land, stock and plant to be sold in order to qualify as a going concern.

Where the sale was of just the farmland, GST had to be paid. This frequently involved careful juggling of GST registration, timing of GST periods, the correct selection of payments or invoice registration, and organising short-term funding to cover the GST component of the purchase.

This delicate balancing act ended in 2011 due to a change in the GST Act 1985. The sale of land used for a taxable actively, such as farming, is now deemed to be a zero-rated transaction for GST purposes.

This greatly simplified the GST implications on the sale and purchase of farmland allowing the parties to focus on the business aspects of the transaction rather than taxation concerns.

Set of warranties to meet zero-rating criteria The requirements to meet the zero-rating criteria are a simple set of warranties which are now incorporated into Schedule 2 of the standard agreement for sale & purchase. These warranties assure that, for the purposes of the transaction, the vendor is GST-registered and the purchaser, or the purchaser’s nominee, is (or will be) GST-registered on settlement.

It’s very important this registration is not overlooked; failing to register for GST would leave the purchaser paying GST on the purchase price and not being able to claim back that GST from Inland Revenue.

The purchaser must also warrant that the pur-

chase of the land is for the purposes of carrying out a taxable activity; that is, it is a business making supplies which are taxable.

Finally the purchaser must warrant they will not use the property as a principal place of residence.

Failure to confirm this prevents the sale being zero-rated, requiring that GST be paid and is not claimable. This question causes the greatest confusion as there is usually a dwelling on the land and the purchaser does intend to live in it. However, the warranty relates to the farmland not the dwelling.

Living on the farm The taxable activity or property being purchased is the farmland, not the dwelling and, accordingly, the farm land is zero-rated for GST as the farmland is not the principal place of residence.

The purchase of the dwelling is deemed to be a ‘second sale’ or ‘supply’ occurring with the farmland. This second sale, being residential property, is GST-exempt and doesn’t impact on the sale of the farm.

To deal with the residential component of the sale a valuation of the dwelling is obtained and that value is deducted from the sale price of the farmland before GST is calculated; this provides a taxable value for the farmland alone. GST is then calculated on the land at the correct rate, zero percent, if all other warranties are provided.

• John Sheddan is a partner in Gore law firm Bannermans. This article was first published in Rural eSpeaking, farm-focussed newsletter of NZ LAW Limited member firms. Bannermans is a member of NZ LAW. Information in this article is not a substitute for legal advice.

Dairy News september 11, 2012

agribusiness // 27

Winners tracking well on sustainability HAWKE’S BAY dairy farmers Nick and Nicky Dawson are proud to stand up for their industry. The Patoka couple, who farm in an equity partnership on two farms northwest of Napier, were winners of the LIC Dairy Farm Award in this year’s East Coast Ballance Farm Environment Awards.

Nicky Dawson says the award confirmed their 366ha farming operation was on the right track for sustainability. “Farming has to be profitable, but you have to look after the resources you’ve got. As food producers we have to be accountable to consumers and to the environment.”

Nick Dawson says entering the competition was a good opportunity to represent the dairy industry and show the wider farming community that in sustainability “there are some half-decent dairy farmers out there”.

Like other regions, the dairy industry in Hawke’s Bay has struggled with the ‘dirty dairying’ label. “I think most dairy farmers have really pulled their socks up in recent years.”

He says the Ballance Farm Environment Awards help show many dairy farmers care deeply about the environment and are trying their best to improve sustainability.

The Dawsons have now won the LIC Dairy Farm Award – an award that recognises dairy farmers who demonstrate “in a practical way the choices that have been made to farm for the long term”— two years in a row. They also won the Ballance Agri-Nutrients Nutrient Management Award in the 2012 competition.

Judges praised the couple’s longterm view of their sharefarming business and the high performance of their farm. They said Dawsons run a well-planned dairy unit with excellent soil and water management and sound staffing policies.

“The Dawsons have a passion to be successful, great community involvement and an excellent work-to-family ratio.”

Since winning the award, the Dawsons have expanded their operation again, this year buying a neighbouring bull beef farm. Much of this will be converted to dairying.

Nicky Dawson says their involvement with the Ballance Farm Environment Awards has been thoroughly enjoyable. “The awards are a great way to show the rest of the country the good things dairy farmers are doing.”

With other dairy farmers the Dawsons were invited to attend last year’s Building Dairy Environment Leaders forum, in Waikato. They visited Waikato farms and heard speakers from a range of industries.

Mixing with other dairy farmers and industry leaders was rewarding and motivating, Dawson says. He urges other dairy farmers to enter.

Entrants learn and get inspired by other like-minded farmers. “People are scared of losing face, but it’s not that type of competition. It’s all about being yourself and learning as much as you can.”

Nick says the benefits make entering worthwhile. “There is definitely no point in sitting on your hands. Get out there and enter.”

Entries for the East Coast 2013 Ballance Farm Environment Awards are now open and entry forms can be downloaded from the New Zealand Farm Environment Trust website at www.nzfeatrust.org.nz For more information on the Ballance Farm Environment Awards, contact David Natzke, general manager, New Zealand Farm Environment Trust, phone 07 834 0400, email david. natzke@nzfeatrust.org.nz

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Dairy News september 11, 2012

28 // agribusiness

Fonterra spurs Oz conversion GORDON COLLIE

CONVERTING A beef property to a robotic dairy while operating a diversified farming business down the road has made life hectic for young Tasmanians Marcus and Zed Crowden.

Marcus Crowden is a fifth generation farmer at Caveside in the Meander Valley west of Launceston where a 550ha aggregation supports dairy and beef cattle, sheep and poppy growing.

They have built their milking herd up to 320 cows on an effective area of about 110ha and are continuing in expansion mode with the new dairy about to start up. They aim to milk 450-500 cows between the two properties.

They are intent on growing a stable cashflow business with the encouragement of processor Fonterra which is also investing in Tasmania and will take all the milk they can produce.

“We’ve built our dairy on high performance ryegrass pasture, supplemented with our own hay and silage production,” Crowden says.

But a grain feeding component introduced

over the last decade has helped stabilise production through a series of dryer seasons. They are now buying about 600 tonnes of feed mix a year shipped in containers from Melbourne. “Our profit comes from the pasture, but we are getting higher production with a grain component and it’s an easier system to manage.”

ing New Zealand.

The property has been subdivided with electric fencing into three areas, each containing a block of ten 1.8ha paddocks.

Plans have been made to install a centre pivot which will travel over the fencing to irrigate about 55ha.

An allocation of 150 megalitres has been bought from the Meander

Marcus and Zed Crowden are expanding their herd on high performance ryegrass pasture, supplemented with their own hay and silage production.

With the opportunity to build an optimal new dairy, Crowden did a lot of research, including visiting New Zealand.

They have owned the 90ha conversion property since 2007 and have carefully planned a phased development which will start this spring.

They are breeding up their own stock for the new dairy with the first batch of 60 heifers to be introduced after calving with another 125 in following seasons. “We want to select the best heifers for the new farm with the aim of having a 900010,000L herd compared to the home farm where our average production is about 8000L,” Marcus said.

With the opportunity to build an optimal new dairy, Crowden did a lot of research, including visit-

dam scheme at a cost of $A1100/megalitre and an expected annual usage fee of about $A60/meg. The system water will complement dam storage totaling about 400 megalitres between the two farms.

To provide feed for the first season on the new property, an initial 16ha block of irrigated perennial rye has been established.

Crowden says he believes the future of dairying was in automation and the couple has bought two robot milking units and provided for a third. This will the first voluntary milking system DeLaval has introduced in Tasmania. Each unit has a capacity of about 2500L

in 160 milkings a day with the herd expected to settle into a pattern where each cow averages about three milkings a day.

The new dairy has been designed for ease of natural cow flow and is capable of fully remote operation with electronic systems and video cameras installed to allow system monitoring from the home farm 4.5km away.

Grain mix will be fed

during milking and the dairy also has three feeding stalls in an outer parlour, with provision for another three units as numbers increase. Cows will receive a measured ration of 10-12kg a day, depending on milk production and likely to be evenly split between the two feeding points.

Crowden says the new dairy will incorporate a pad for silage feed-

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the ageing herringbone on the home property with robot milkers.

“We’ve got a lot of learning ahead of us to bed down the system and get the new dairy working smoothly,” he said.

Their cows will also need educating.

Crowdens plan to introduce the herd to their new surroundings and feeding routine before calving.

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ing, but he is also planning to paddock-feed silage to encourage the cattle to move around the property.

A flood washing and effluent irrigation system has been installed which will automatically clean the milking complex.

Cashflow from their existing dairy is funding the expansion on the new property and Crowden hopes the business will one day support replacing

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Dairy News september 11, 2012

30 // agribusiness

Smaller loss for NZFSU NEW ZEALAND Farm-

Lower milk revenue continues to affect NZFSU.

ing Systems Uruguay Ltd has reported a US$7.6m loss for the year ending June 20, 2012 compared to a US$8.7m loss last year.

Earnings before interest and tax (EBIT) before the fair value adjustment and herd improvement for the year was a loss of US$5.9 million compared

to a loss of US$19.3 million for the 2011 year.

Lower milk revenue and higher foreign exchange losses meant the EBIT result fell short of the break-even position indicated in the half-year report to shareholders, the company says. It is also outside the range of a US$3-5 million loss as

indicated in the company’s market update in mid June.

Milk production continued to increase yearon-year during the second six months, however difficult climatic conditions including two dry periods resulted in milk production being much lower than assumed at the time

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funding lines used to meet operating cash requirements.

A committee of independent directors will address the capital requirements and is expected to report to the board by early October 2012.

The company is considering a rights issue to raise up to US$135 million (about NZ69 cents/share) by a pro rata rights issue to be supported by Olam. A further market announcement will be made as soon as an independent directors’ report has been considered by the board which is expected to be no later than mid October.

“The major focus for management is to improve the quantum and consistency of milk production,” the company says. “This will require a continuing focus on staff development and retention.

“The past year has been one of significant development involving bringing on stream an additional 15 dairy units. With all of these now producing milk, we look forward to continuing improvement in operating performance in 2013.”

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of projecting a breakeven EBIT position for the full year. The late completion of eight dairies in the autumn also impeded total milk production.

Revenue (excluding change in fair value of livestock) was US$63.1 million, an increase of 46.6% compared to US$43.0 million in the prior comparable period. This was primarily due to an increase in milk production from 105 million L to 152 million L, and an increase in average milk price from US$38.1 cents/L to US$39.1 cents/L. Dairy livestock numbers increased during the year from 58,502 to 71,995 at 30 June 2012. This came from a combination of purchases to populate 15 new dairies developed during the 12 months, plus a natural increase in the herd.

Repayment of a US$110.0 million short term shareholder loan from Olam International Ltd is due by December 31, 2012. Funding is also required to meet the remainder of the capital works programme and to replenish the current

A GROUP of New Zealand’s leading primarysector chief executives say it’s possible to meet the Government’s business growth agenda of increasing exports’ contribution to the economy from 30% to 40% of GDP by 2025.

Twenty chief executives from leading agribusiness companies and the heads of NZ Trade & Enterprise, MPI and the Maori trustee spent six days in a ‘boot camp’ at Stanford University, California. So did Primary Industries Minister David Carter, and Fonterra was represented but not by chief executive Theo Spierings.

Daily from 6.30am until 9.30pm the group heard from a team of the university’s business professors and broke into groups to discuss how they and others could increase primary exports.

The event has been hailed as a meeting of exceptional minds whose ability, individually and collectively, can effect real change for ‘New Zealand Inc’.

Spokesman Bill Falconer, chairman of the Meat Industry Association, told Dairy News the people and their companies were selected as being ‘down the track’ in lifting their game to increase export marketing performance. The Kiwis visited local companies known to have made breakthroughs in their marketing.

Discussions about collaboration in markets showed the term meant different things to different companies, Falconer says. “[We recognized that] various companies could work together to improve their performance. It’s one thing to say ‘collaboration’, but you have to work out how this might play out in practice with different sorts of companies.”

The boot camp was very worthwhile and may be repeated, Falconer says.

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This year’s KiwiCross teams are incredibly good. And at the front of these teams is one very special bull — Checkpoint.

With a BW of $329 he is truly a once in a lifetime bull.

Dairy News september 11, 2012

32 // agribusiness

iPads and calf feeder up for grabs ENTRIES ARE flooding in for LIC’s annual art compe-

tition for rural children, lured by iPad prizes for schools and a mobile calf feeder prize for a farm.

Children are invited to enter pictures of calves in training for Calf Club events, to compete for prizes for them, their schools and parents.

Spokeswoman Clare Bayly says LIC supports rural communities and a time-honoured rural event.

Children are entering pictures of calves for LIC’s Calf Club competition.

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“These days calf club is often the one day in the year when rural communities get together – children, parents, grandparents, teachers and the local community. LIC is a long-time supporter and promoter of calf club, providing a website and resources to help children select, train and show their calves.

“And we’ve gone one step further with an art competition, co-sponsored by Stallion Plastics, which encourages children to create a work of art which captures their commitment and love for their calf. “ Last year it received almost 2000 entries, some schools submitting art from each student.

Prizes include a Stallion Plastics MG50S mobile calf feeder worth $3900, which goes to the dairy farming parents of the child with the winning entry; three iPads donated by LIC which go to the rural school with the most innovative entry.

Chief executive of Stallion Plastics Grant Allen says Calf Club is about children taking responsibility but as a parent himself, he knows that they can’t do it alone.

“These events are an important date on the calendar of most rural communities in New Zealand; they encourage our kids to take care of an animal, bond with it and have fun.

“It may not always seem like the coolest job but it pays off on the day when they can show their animal, be proud of their efforts and get recognition of their hard work, and that goes for the parents too, who will have helped them with their training and keeping the kids motivated.”

Judging will recognise three age categories (5-7, 8-10 and 11-13 years), with all artwork put on display at LIC’s Newstead headquarters for staff to vote.

The three winners of these categories will then be posted online at www.calfclub.co.nz for the public to determine the overall best picture and winner of the Stallion mobile feeder.

Entry forms are available at www.calfclub.co.nz, with entries closing Monday October 1.

Allied Farmers reduces losses ALLIED FARMERS Ltd took an unaudited loss of $14.1m in 2012, less than the $40.9 m loss it suffered in the previous year.

It was a year of restructuring and reducing costs – milestones that included selling or closing loss-making rural merchandise stores, restructuring the livestock business into subsidiary NZ Farmers Livestock Ltd, and realisation of property assets. About 30% of the livestock business was sold to livestock agents and staff.

A big part of the loss – $10.3m (last year $34.1m) – largely relates to the further impairment of assets acquired from Hanover and United Finance, the company says.

The rural services division, which includes the livestock and real estate operations, had a profitable post-restructuring second-half result; its earnings before interest and amortisation were $1 m.

“This result is well ahead of budget and is particularly encouraging, as significant recruitment of livestock agents has been necessary to replace those who left early in the period, and it has taken time to rebuild this business,” the company says. “It is expected this business will continue to grow as the new team fully develops and we continue to improve and expand services to clients.”

The asset management services division, charged with recovering ex-Hanover and United Finance assets, reported a loss of $7.8m for the year.

“The value of the New Zealand based assets, now largely comprised of residential sections at Jacks Point in Queenstown, has stabilised. However, offshore assets in Fiji and Australia in the process of being realised have incurred significant additional writedowns.”

Dairy News september 11, 2012

agribusiness // 33

Jason and Lisa Suisted

Contest broadens winners’ vision WINNING THE New Zealand Share-

milker/Equity Farmer of the Year in 2011 brought a new perspective to their farm business, say Jason and Lisa Suisted.

“We are in an industry that I would describe as dynamic, constantly changing, full of energy and new ideas, and not surprisingly the home of some unique success stories,” Jason Suisted says.

“At times we can feel scrutinised from many different angles but it’s our ability to look outside the box and learn, challenge and support each other that makes our industry successful.”

Suisted says the industry offers considerable promise and is attracting passionate, hard working, intelligent, down-to-earth go-getters.

“The possibilities and opportunities we see in dairy farming are endless. There really is no such thing as a lack of opportunity in farming you just need determination to find it at times.”

The 2011 New Zealand Farm Manager of the Year, Jason Halford, says the benefits of entering the awards are as significant as the work it takes to enter. “And it’s not just about winning.

“I have widened my industry networks, strengthened my farming model and solidified my business plan.

“Winning the competition has increased my motivation like you wouldn’t believe. It has shown me that there is still so much to learn and achieve, as agriculture is so diverse.”

Plans for the 2013 New Zealand Dairy Industry Awards are underway.

Details are to be confirmed at a conference in October. The awards run the Sharemilker/Equity Farmer of the Year, Farm Manager of the Year and Dairy Trainee of the Year competitions.

The New Zealand Dairy Industry Awards are supported by national sponsors Westpac, DairyNZ, Ecolab, Federated Farmers, Fonterra, Honda Motorcycles NZ, LIC, Meridian Energy, Ravensdown and RD1, along with industry partner AgITO. Entries for the 2013 awards open in November.

Visit www.dairyindustryawards. co.nz for more information or follow the awards on twitter @nzdairyawards.

Hunt resumes for West Coast’s high-profit farm THE HUNT is on again for the West

Coast’s most profitable dairy farmer.

Part of the DairyBase Profit Challenge, it will see the winning farmer presented with a $5000 travel voucher. Six others will get cash or travel vouchers.

This is the third year DairyNZ and Westland Milk Products have run the competition, intended to promote DairyBase, the national dairy farm business database that lets farmers record and report their business performance.

DairyNZ West Coast consulting officer, Ross Bishop, says the competition is also an excellent way to get farmers focused on what makes their farming systems tick.

“Understanding the factors that affect profitability is key to optimising both on-farm profitability and productivity, particularly when we are heading into a period of a lower

payout,” says Bishop.

“Entrants are judged on the physical and financial performance of their farm business over a three year period.”

Last year Andrew Mirfin, Gunsight Farms, took the major prize. He had the highest average farm operating profit for 2008-09, 2009-10 and 201011 financial years.

Other West Coast winners were: Nathan Keoghan, Westport; Peter and Debbie Langford, Karamea and Danny King and Katherine Hands, Mawheraiti.

Since using DairyBase, Mirfin says reviewing actual income and expenditure has resulted in more control over finances. “You quickly see where the money has been spent.”

DairyBase is a web-based package that records and reports standardised dairy farm physical and financial information.

The database allows farmers to compare their operations to other farms by looking at national benchmarks, regional benchmarks or individual farm benchmarks, which farmers have given their consent to use.

Farmers can find out more and register by contacting either Ross Bishop at DairyNZ (021 277 2894, ross.bishop@dairynz.co.nz) or Wayne Climo at Westland Milk Products (021 376 491, waynec@westland.co.nz).

Registrations close 5pm, October 31 2012.

In addition to Westland Milk Products and DairyNZ, the competition is also supported by: Grey Vet Centre, Hokitika Veterinary Centre, Buller Vets, Marshall Heaphy Chartered Accountants, PGG Wrightson, Rabobank and Ravensdown.

For more information on DairyBase, visit www.dairybase.co.nz.

New high concentrate Rumensin Max is here.

It replaces Rumensin Trough Treatment and Rumensin Drenchable Liquid in a single formulation that delivers the same Rumensin benefits in a new 2ml per head per day dose rate.

You’ll have a couple of pack sizes to choose from and the same benefit package that Rumensin has been delivering to dairy producers for over 20 years.

BLOAT • MILK PRODUCTION • KETOSIS COW CONDITION 1 • FEED EFFICIENCY 2 For benefits that last through your entire lactation, talk with your veterinarian or animal health stockist now about a Rumensin nsin programme to suit your system.

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A Real Kiwi Story It was the 1950’s and Kiwi’s Bert and Dawn Hansen were building their house. Bert couldn’t find a reliable toilet valve, being an entrepreneur he invented one. This then lead Bert into developing a range of high performance Brass Foot and Check Valves. The design was patented and fast became the bench mark for industry standards and today the original design Bert created is used in a multitude of valves in hundreds of markets all around the world.

With the initial success of the Brass Foot and Check Valves, Bert and Dawn worked many long hours to keep up with supply. Their garage was the hub of their business with all the machining, assembling and packaging carried out there.

In those early days Dawn remembers having to pack up the car and take all the fittings down to the railway station for distribution.

In the 1960’s the range was expanded further with Bert designing and manufacturing a range of Brass Quick Couplings. However by the early 70’s Bert and Dawn realised that plastic was the way of the future and re-developed the existing range of Brass Quick Couplings and Brass Foot and Check Valves in plastic. By the end of the 70’s Bert and Dawn saw an opportunity to add to their range and designed An Original Hansen and manufactured a Advertisment range of Nylon easy 1979 to use “Cold Fit Pipe Fittings”. Back then this completely changed the way Bert’s Kiwi Farmers joined Alkathene Original pipe, “We had a few teething Toilet Valve 1952 problems with the original cold fit range, mainly around the single barb being difficult to get past the hard pipe when it was cold and a 130kg farmer trying to tighten up a 25mm fitting with a 24” stillson on a -5 degree Southland winters day. Those were some fun learning times but we got those problems sorted, we should have labelled the fittings “Kiwi Proof”.

Hansen Instore Display Unit 2009

In the mid 1980’s some more enthusiasm and ideas were injected into the business when Carl Hansen (Bert and Dawn’s Son)arrived from completing his engineering trades.

Within a short period of time, Carl’s experience

Hansen Easy Fit Pipe Fitting 2009

in engineering and his desire to use the “right” technologies in manufacturing and materials added even more strength to the Hansen company. Bert and the team didn’t sit still for long and in the late 1980’s it was decided Hansen would design and manufacture a range of True Fit Threaded Fittings.

With the Hansen range of products growing rapidly, it was time to move out of the garage and into its own manufacturing plant to start injection moulding their products. This move was a huge investment and there were many sleepless nights in the Hansen households. The move proved to be the right decision and it wasn’t long before Hansen products were being demanded from all over the world. The 1990’s saw the products develop a stronger following in New Zealand and Australia, with many of the original products having upgrades to high performance materials and the core ranges growing every year.

“At one point it felt like we were adding fitting configurations every month” recalls Carl Hansen. In 1999 it was time for Hansen Products to move into even bigger premises. A building in Union East Street, Whangarei was found and the building underwent huge changes to house the manufacturing plant.

The turn of the millennium saw Hansen Products continue on the path of constant improvement; a sister company in Canada was established, Irripod was purchased, the Easy Fit range was updated and after much encouragement from the market our Full Flow Ball Valve was released.

2012 and Hansen Products is far from slowing down.

Our in-house Research and Design team has developed several new products for release, Level Alert Heavy Duty Tank Level Indicator, the Leveller Tank/Reservoir Valve, Superflo Piston Valve and the Maxflo Diaphragm Valve.

All of these products have been designed for high performance whilst still staying true to Bert’s original philosophy of “Keep it Simple”. At Hansen we believe the Superflo and Maxflo valves will quickly become the next industry standard of High Performance Float Valves.

After 60 years in business, Hansen Products is extremely proud to be a New Zealand owned and operated business. We are continuing to design, manufacture and distribute Pipe Fittings and Valves of the highest quality around the world. Hansen has built a reputation for providing high performance, easy to use, simple products that deliver our customers “Best Installed Value”. The winning formula that has been applied to the product range since the 1950’s has ensured a loyal customer following through the generations. With a range of over 1000 different products, loyal customers and a dedicated team, Hansen is poised for the new challenges ahead.

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35 Years Time Tested “When kiwi Bert Hansen decided to invent a pipe fitting for farmers to join alkathene poly pipe together, his main focus was to keep it simple and make it last!

35 years on, and with over 100 million fittings in the ground, Bert’s pipe fittings are still simple to use, unquestionably time tested, but most importantly trusted by kiwi farmers!”

Don’t just ask for a pipe fitting, ask for a Hansen fitting! find your local stockist at www.hansenproducts.co.nz/stockists.htm

Dairy News september 11, 2012

36 // management

Hone financial skills – DairyNZ PETER BURKE

DAIRYNZ IS encour-

aging farmers to improve their financial management skills especially given the current volatility of the global economic environment.

Kevin Argyle, leader of DairyNZ’s consulting team in the lower North Island, says in the light of the expected lower payout in the coming season, farmers need to closely monitor their financial position.

Argyle was until recently chief financial officer at Massey University. He also runs a 440cow herd near Palmerston North.

He says improving farmers’ financial literacy is something DairyNZ pushes with programmes such as Biz Start and Biz Grow.

“There is recognition across the dairy sector that

financial management is critical to the success of a farmer’s business,” he told Dairy News. “Fonterra had warned dairy farmers to expect a lot more volatility in payout. Therefore there is significant risk… in this current year.

“If we look at farm working expenses over the last few years we see these have crept up with increasing costs such as greater use of supplements.”

Argyle says it’s critical farmers have a budget for the year and every month look at expenditure against that budget and forecast out to the end of the year how their expenditure is tracking. “[Also] develop a cashflow for the year so they can identify one-off significant things such as tax payments, share purchases or even money coming in such as dividend payments. They need to have a clear grasp so they can

track their cashflow to avoid nasty surprises including a particular commitments in any given month.”

“Monitor and listen to what’s happening in the marketplace including messages and signals.”

– Kevin Argyle Argyle recommends adopting a ‘no-surprises’ relationship with the bank and talking through cashflow projections, highlighting any unique ‘requirements’ they might have.

“They certainly should be doing monthly reporting, but not all farmers have the skill to do this,

hence the special training programmes we run for them. It’s all about developing financial skills and being able to measure and monitor the whole financial aspect of the business.”

Farmers are eternal optimists – a positive attribute, says Argyle, because they have to deal with so many unknowns such as adverse climatic conditions.

“But farmers have got to be realistic about the forecast payout… monitor and listen to what’s happening in the marketplace including messages and signals from the likes of Fonterra and other milk supply companies, and make sure they provide for a ‘rainy day’ with money in the kitty.”

With a tough year expected, the focus is on the various dairy farm systems and whether high

Kevin Argyle

cost systems can survive the financial storm.

The issue is not so much about whether a farmer is operating on ‘system one’ or ‘system four’, but rather that whatever they’re doing is being done “damn well”.

“The key to success is making sure they plan, structure and manage

TM

highly effectively.”

Since New Zealand’s competitive advantage is in low-cost grass production, it’s important farmers manage it, harvest it and make sure pasture is monitored and measured weekly.

“We still think there is opportunity for more farmers to do pasture

monitoring and pasture walks. This is because of the dynamic nature of pasture grown, because it can change rapidly from one day to the next. In feed budgeting you know what feed you have and then look at the strategic management so you know what other supplements are required.”

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Dairy News september 11, 2012

40 // management

Farmers connect to solve problems pam tipa

A DAIRYNZ scheme

which helps farmers connect to share knowledge on a one-to-one basis is now being extended to other regions after a suc-

Janine Broekhuizen explains the Dairy Connect process to Newstead farmer, Lief Tumai.

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cessful launch in the Waikato over the last 10 months.

Janine Broekhuizen, coordinator of the scheme Dairy Connect, says people are more likely to try a new initiative or successfully troubleshoot a problem if they have talked it over with someone who has been there before.

“It helps farmers make good, well-informed farming or business decisions,” says Broekhuizen.

The new DairyNZ initiative aims to support a broader range of farmers than may, for instance attend the usual workshops, by linking them up with others that could help.

“It’s very much a oneto-one short-term connection over a particular topic,” Broekhuizen says.

“We have a lot of farmers that are more than willing to have a chat about what they have been through, something special they have on their farm or something new they have instigated.

“Or they may just help out in a business decision or the structure of their career path planning.”

The Dairy Connect support or “buddy” farmers have areas of particular strength or recent experience, through development on their farm. These vary greatly and include topics like animal welfare, on farm facilities, work/ life stress balance man-

agement, business management tools, on farm accidents, or pasture and crop management.

Illustrating the reach of the scheme, some farmers who have rung up to go on the support data base have turned around and said “well actually while we’re here I’d like a boost in another area”.

“One support farmer has enquired about feed pad design, another has gained help with staff recruitment systems.” The Patersons of Patetonga gave immediate feedback saying “what a great service and great help so thanks Dairy Connect, and we can’t wait to help others out who could benefit our knowledge”.

So while DairyNZ initially thought the scheme would mainly be used by newer farmers, this has not entirely been the case.

“Some people are getting into dairy farming as mid life career changes. So Dairy Connect is benefiting a wide range of people from those newer to the industry to others from generations of farmers looking to improve their business in some way.”

Of the three top topics of interest in the North Waikato so far, supplementary feeding and putting in feedpad infrastructure is also likely to be a hot topic in Taranaki.

Career progression is also a key topic on which farmers are seeking advice, with other routes to

advancement now available rather than the traditional sharemilking, equity to farm ownership.

“Some are going into management positions or equity partnerships without buying cows, it’s about career progression, lifestyle and the best way of building equity for the individual.”

The third one, is recruitment and staff mentoring with support people happy to pass on the resources they use to help others get some good robust systems in place.

Budgeting and getting cashflow systems working is another topic relevant to all.

“We also have people who are happy to help others get that work life balance and deal with stress,” Broekhuizen says.

“Some people would rather talk to another anonymous farmer who has been there, done that, than go to a GP or their mate down the road at the pub, and we can cover that side of it. Other people prefer to talk to someone they know” People can also be referred to trained support organisations if the situation warrants it.

Dairy Connect is a resource for people at all business and career levels.

To get involved or make an enquiry, visit www. dairynz.co.nz, email dairyconnect@dairynz.co.nz or phone 0800 4 DairyNZ (0800 4 324 7969).

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SEVERAL CONNECTIONS through Dairy Connect have seen farmers visit different feedpad designs around their wider area.

Cambridge farmer Ele Duncan was taken on a road trip by Hauraki Plains farmer Steve Ball and says the whole process was “absolutely brilliant” and being able to see the practical side of design concepts clarified their thinking.

“We were debating between your basic concrete, rubbercovered hard stand versus your soft litter, so we were looking at people who had those facilities themselves and could share some ideas,” says Duncan.

Others have taken up the opportunity to sit down and chew the fat with another farmer over their

budgeting and cashflow systems, or in setting career plans and goals when the business options within the dairy industry are many.

Matamata farmer Ralph Gore was relatively new to farming and said it was great to talk to someone “at the coal face”. He “struck gold” with his Dairy Connect partnership, which gave him practical action points to address mastitis in his herd, he says.

And a Patetonga couple, say they found the job of employing staff much easier after receiving hints and resources from support farmers they were linked with through Dairy Connect.

People looking for information or help for anything can contact Dairy Connect.

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Milk is money, more to the point — it’s your money. That’s why Herd Testing is so important, without the data from regular scheduled herd tests you can’t get the most out of MINDA Milk. It means you can’t get the most out of your herd, you can’t get the most out of your farm, and ultimately, you don’t get the maximum benefit from all your hard work.

Arrange your herd test by calling your local Customer Relationship Manager, and access MINDA Milk at MINDA Home.

It’s the most important first step to maximising your productivity.

MINDA PUTS YOU IN CONTROL

Dairy News september 11, 2012

42 // management

Join a discussion group PETER BURKE

DairyNZ discussion groups, like this one in Manawatu, allow farmers to get familiar with other farmers in their area.

NOW IS the time for dairy farm owners to get their staff into DairyNZ’s farm discussion group programme, says Kevin Argyle, leader of the group’s consulting officers in the lower North Island.

He pointed out to Dairy

News that the start of the new farming calendar brings something of a ‘sea change’ in personnel.

“A number of farm owners and managers are employing new staff including farm assistants, 2IC’s and the like….

It’s a great opportunity to get their staff to discussion groups so they

feel a sense of community and get more familiar with other farmers in their immediate region. [It also helps] transfer knowledge because you get such a cross-section of people at discussion groups – from senior farmers to farm assistants.”

Farm managers can show they value what their

staff do by engaging them and taking them along to discussion groups, Argyle says.

“It’s a good learning environment where often there are specialist speakers on topics such as nutrition or reproduction; real knowledge transfer can take place. [Being] there and listening to other people with similar challenges is really important.”

specialist topics and practical tools and systems offered.

“Each year we track and analyse our customer database for farmers who attend the discussion groups…. We get a wide cross-section of people and see new people coming all the time.”

DairyNZ tries to tailor information to the needs of regions, “such

It’s a great opportunity to get their staff to discussion groups so they feel a sense of community.

It’s business time.

Farm life can be quite lonely particularly during spring when it’s wet and with mud up to farmers ankles. “It’s nice to occasionally take the staff offfarm to hear from other farmers with similar issues and challenges. Suddenly things don’t seem so bad.”

Group discussions often reinforce key messages, people taking and applying information to their farm systems, increasing productivity and ultimately their profit.

Argyle says DairyNZ works hard seeking feedback and evaluating the discussion groups and events. The feedback is positive on the range of

as Hawke’s Bay where we have an economic farm surplus group interested in the more business aspects of farming.”

“The body condition score has become a critical component people want to understand and get better at. Some are interested in the nutritional imperatives for best maintaining BCS by feeding quality and quantity supplements.”

And towards the end of a season staff recruitment and human resources issues are on the radar of managers and owners.

Much of this data is on the DairyNZ website, “highly rated by farmers.”

in brief Young farmers to battle

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THE NATIONAL Bank Young Farmer Contest begins September 29, the 45th year of the competition. Regarded as New Zealand’s ultimate rural challenge, it inspires excellence, showcases innovation and raises the capabilities of young farmers, the organisers say.

Entries opened last week and about 400 contestants are expected in the first round – the district finals. These will finish by Christmas, then regional finals begin in February.

Eight regional winners will battle for a $330,000 prize pack at the grand final, May 1518 in Auckland. Contestants of all skill levels are encouraged to enter.

“Competing in the contest is good for you and your career” says New Zealand Young Farmer chief executive Richard Fitzgerald. “You can win great prizes too.

“It gets you out of your comfort zone and can stretch you. People learn useful farm business skills, life skills and leadership skills. It is a great stepping stone for an agricultural career and a great experience”.

2012 contest champion Michael Lilley urges, “Just go on and enter, you have nothing to lose.

If it’s your first attempt, ask someone local or someone who has competed at district final level for pointers on what to expect.”

Entry is open to anyone aged 15–30. Entrants must be under 31 years of age on January 1, 2013, and must be a current NZYF member. www.youngfarmercontest.co.nz

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Dairy News september 11, 2012

management // 45

Calf rearing website gaining hits andrew swallow

A

NEW independent source of calf rearing information is attracting growing traffic, says the site’s instigator.

“We’ve had quite a lot of downloads,” Paul Muir, of On-Farm Research, told Dairy News a month or so after www.nzcalfrearing. com went live.

The DairyNZ funded website pulls together years of research by Muir and others on calf rearing at On-Farm Research’s Poukawa Research Station, much of it funded by Beef + Lamb New Zealand predecessor Meat and Wool New Zealand, plus other material Muir sees as worthwhile.

“If you Google calf scours you get 250,000 references and people really don’t know the good information from those selling snake oil.”

Muir has “distilled” his and others research into about 30 factsheets, presented in groups under the topics: getting started; health; feeding; targets.

Fact sheets can be downloaded individually or by group.

There’s also a library of mostly media articles, plus an occasional text book reference or link to other websites. “The references to the text books are if you

really want to get into the detail. The key with all of it is that I am happy with the information.”

To download material users must register, but Muir says there’s no commercial intention behind that. “There are no ads on the website. It’s an information website and there’s a discussion forum function on Facebook.”

Registration on Facebook is necessary to access that. As of last week

calves.

“It’s mostly been a case of drawing together existing work and putting it all together in one place. Also it’s electronically available rather than people having hard copy information

that they’ve got to store and might not be able to find so easily when they need it.”

The site’s launch also fits in with the big-picture objective of growing better heifers,” she says.

A new website providing calf rearing information is gaining popularity.

Cutting-edge efficiency

Paul Muir

the site had attracted 54 “likes” – a Facebook tool for users to automatically get updates from that page – though the discussion on Facebook is limited to date.

DairyNZ development team leader animal husbandry and welfare, Nita Harding, says the aim of funding nzcalfrearing. com is to provide an independent, sciencebased reference that’s readily available to dairy farmers and other rearing

Factsheet sample THE FEEDING group of one-page factsheets includes

summaries of high and low milk systems, rumen development, and weaning, among others. The latter lists eight key points to heed when cutting out the milk, supported by a bullet-pointed discussion of timing depending on milk feeding system and other points, such as ensuring pasture calves go onto is clean and high quality.

“Often paddocks close to the rearing facility are weed infested and used for effluent,” it notes.

Shelter, gradual reduction of milk, and meal regimes are also tackled.

Weaning should be by weight – what weight will depend on breed and feed system. On high milk systems slower rumen development means Friesians will need to be 100kg, crossbreds 90kg and Jerseys 80kg. On low volume restricted milk ad-lib meal systems, those weights can be cut to 65kg, 60kg and 55kg respectively owing to more rapid rumen development.

“These are minimum weights, not the average of the group. And all calves need to be eating 1kg of meal/day before they are weaned,” it stresses.

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Dairy News september 11, 2012

46 // management

Astronaut system’s out of Lely’s Astronaut robotic milking system was launched 20 years ago – in New Zealand five years ago. Two farms here took part in a global celebration of the anniversary.

Andrew Swallow reports from Mid Canterbury THE BIGGEST chal-

lenge in running a grazed robotic system such as Carr Group’s Stradbroke Farm is feed management, says the farm’s manager, Jeff Hocking.

“You’ve got freerange cows and you need to encourage cow-flow through the farm and so that not all the cows are in the yard at the same time,” he told Dairy News.

In early spring he runs a three-break-per-day system, but will step that up to four breaks from the end of this month. The farm is split into 42 paddocks, divided into quarters by straight laneways leading to the central shed and the four Astronaut robotic milkers.

“Every six hours the

Robot work times Cow & heifer management Feeding Admin, PC & data management Robot care & cleaning Miscellaneous, inc other maintenance & cleaning

gates will change so the cows go off in a different direction.”

Typically only a handful of stragglers need to be chased up to move through the shed and onto the next break.

A platemeter is used daily to allocate pasture by weight, and a C-Dax meter comes in once a fortnight to give an overview of covers.

Besides not having the chore of milking (see news story, p17), the great thing

45% 15% 20% 5% 15%

about the Astronaut is being able to manage cows individually, says Hocking. “There’s all the information on the computer telling you exactly what the cow is, or isn’t doing.

We feed according to yield with high protein pellets so we know cows are not getting over-fed and we can target our high producers.”

The top cow as of the end of August was already doing 48L/day three weeks after calving. “She’ll do

over 60 litres at peak.”

On a rough 8% conversion to milksolids, that’s 5kgMS/day, he notes. Top producers in the herd last season did 850-900kgMS. “A third are still Jersey-cross but we’re whittling them out. They just don’t produce quite so much milk. We know for a fact the Holstein Freisians produce a lot more and we’re feeding our cows so they reach their full potential here.”

Activity meters on cows monitor, among other things, cudding frequency. If it’s too rapid, it’s an early warning of acidosis; too slow and there could be too much fibre in the diet. The meters also signal heats, and cows can be drafted

ready for AI accordingly, however Hocking says they’ll also be using Heat Seekers (similar to Kamars) this season. “It’s a matter of good observation. If the computer thinks they’re on heat, they can be auto-drafted Stradbroke Farm manager, Jeff Hocking.

out, then it’s down to us to see if she is on heat or not.”

Milk from every quarter of every cow every milking is monitored for conductivity, giving an early warning of mastitis, or subclinical infections.

Late last month somatic cell count was running at about 170,000. “I’d like that down to 140,000150,000 but we’ve got a lot of older cows in the herd.”

The first thing Hocking looks at when he goes into the shed in the morn-

Dairy News september 11, 2012

management // 47

this world ing – about 7am at this time of year and 7.30am later in the season – is the herd overview display. He checks if any cows have missed milkings, which can occasionally happen if a cow “tailgates” one that has already been milked through a drafting gate out of the shed.

Udder health is next on his list, then a check to see if there are any “failed” milkings – cows the Astronaut hasn’t been able to milk for whatever reason.

“They’re separated out anyway.”

Such information is presented on a dashboard display which also includes milk separated from the vat, for example due to penicillin or colostrum; milkings/cow/day; concentrate used/L milk produced; milk/cow; time milking/cow; feed allocated but not used. “For example, if a cow’s meant to have 8kg over three milkings but has only come in for two.”

Clicks on each display allow the user to drill down into the information behind the herd data.

More income after tax COMPARE RETURNS per hectare from an indoor 420-cow herd on a 114ha robotic farm with those from a typical top 10% Canterbury dairy operation and the robots win, judging by an analysis presented to the Lely open day by consultant Helwi Tacoma, Intelact.

The top 10% farm had 188ha milking 673 cows at peak producing 292,000kgMS compared to the housed, robotic unit’s 350,000kg.

To produce that, total feed input on the housed farm was 3764t or 7.53t/cow compared to 3587t or 5.34t/cow on the top 10% property.

Much higher concentrate and maize silage use in the indoor system gives a total feed cost of $1.13m indoors compared to $371,000.

Tacoma says his 700gMS/cow production assumption is achievable, noting that the Overgauws in Southland are doing about 750kgMS/ cow. “I’m convinced it’s quite reasonable to get 700kgMS out of these bigger, Holstein-type animals.”

The indoor diet produces higher protein milk, making it worth $5.62/kgMS on average compared to the $5.50kgMS he used for the top 10% calculation.

Combined, the higher milk volume and value give the housed unit milk revenue of nearly $2.2m to the top 10% figure of $1.61m. Tacoma adds $167,000 to the housed unit income for the nutrients it is able to use or sell as effluent. “I’ve sold it to someone at market value. That might be yourself, if you have another block you can use them on, or to a neighbour.”

The net result is while cost of production is “quite a lot higher” in the housed unit, output and value of that output more than compensate to give an operating profit of $845,000, compared to $839,000 on the top 10%.

Interest and depreciation come in much higher on the housed unit, slashing taxable income, which, even after allowing slightly more for capital replacements, leaves an income after tax and capital replacements of $2481/ha on the 114ha housed farm, and $1688/ha on the top 10% unit. “That’s what you can use to go to Fiji or do whatever else you want to with it.”

There is a higher financial risk in the housed robot system, given the greater investment, and, because the farm’s asset value stacks up at $94,000/ha to the top ten’s $62,000/ha, return on asset value is marginally lower.

Tacoma acknowledged a winter milk contract is crucial to achieving the figures he presented for the indoor system, and such contracts can be hard to get, but as Lely’s Paul Tocker pointed out, that may change as dairy companies start to look at the long-run value of having processing plants full for longer.

Lely New Zealand’s managing director, Peter Vis stresses the equipment, and all the information it provides, doesn’t necessarily make for a successful operation. “It depends on you as the farmer to make it tick.”

And impressive as the technology is, he believes

“it is the least interesting part. We’ve proven here it works. We’ve proven for 20 years it works.”

Once a manager is up to speed on running a farm with robot milkers, without the twice daily chore of milking, work-time is quite different, he points out (see panel on p46).

Cowside: One of the girls at Stradbroke gets milked, while another waits her turn.

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HE ASKED FOR IT James Barron: Matamata. Herd size 250.

James is no stranger to split-second decisions being the difference between life and death. Once he was pinned underwater at the bottom of a waterfall for 30 seconds.

That’s why he prefers to take the urgency out of decisions in the dairy – letting his Protrack system help him to ensure that decisions are planned, accurate, optimised and automated.

With a Protrack system keeping your dairy running smoothly, we doubt that you will go searching for whitewater. We just know that you, like James and every other Protrack owner, will find better things to do with the time you used to spend in the shed.

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Dairy News september 11, 2012

animal health // 49

$3m to make life easier PETER BURKE

DAIRYNZ IS to get $3

million of taxpayer money over four years to find ways of making life easier for cows during their most stressful time – the ‘transition period’ immediately before, during and just after calving.

The expected outcome is greater productivity per cow.

The money will come via the Ministry of Business, Innovation and Employment (formerly Ministry of Science and

Innovation and FRST) plus some extra from DairyNZ and partners.

DairyNZ says the failure of cows to ‘transition’ properly is costing the industry $375 million a year.

The research is intended to reduce this problem and raise milk output per cow by 2-5% .

DairyNZ chief scientist Dr Eric Hillerton told Dairy News that during the ‘transition period’ a cow goes through its biggest physiological changes of the season.

“She has to give birth

to her calf, turn her colostrum production into milk production and she has a huge negative energy balance if she doesn’t or can’t eat enough.

ductive tract. Anything that can go wrong with a cow tends to go wrong at the time.”

Hillerton says the research will be done at

“She has to give birth, turn her colostrum production into milk production and she has a huge negative energy balance if she doesn’t eat enough.”

“Her immune system is compromised at that time and she is likely to suffer the highest risk of mastitis or infection of the repro-

DairyNZ’s facility at Newstead, near Hamilton, to help understanding of how nutritional and management can minimise the

Eric Hillerton

effect of transition and get the cow back into successful milk production rapidly.

“It’s a case of building on some stuff we’ve done before, such as making sure we‘ve got the animal at the right body condition score.

“Also understanding the signals we’ve got from the immune system and what is exactly happening there. It’s possible there are signals we can find –

Oz genetics lift reliability THE AUGUST release of Australian Breeding Values (ABVs) includes the first release of Jersey ABV(g)s – breeding values based on genomics – which will give Jersey breeders new options for selecting sires to use in their herds.

ABV(g)s enable dairy farmers to achieve faster genetic gain by selecting superior young sires with confidence.

Genomics is the large scale use of DNA data to predict the future performance of bulls and cows.

Genomic testing – or genotyping – can be done on an animal at any age, allowing breeding values to be estimated for young bulls, long before they have daughters in production.

ADHIS general manager Daniel Abernethy said an easy way to get started

Specific details of the trials have to be finalised, but Hillerton says they have a clear idea of the outcomes.

“We want cows in a better state of fitness from lactation, and to be milking the healthiest cows we can milk.

“We want our dairy farmers to be able to exploit whatever the results are of this research, regardless of the farming systems they’re using.”

SAFE AND

with selecting young Jersey bulls is to refer to the latest issue of the Good Bulls Guide which includes the first list of the top young Jersey bulls based on their ABV(g)s.

Abernethy said the reliabilities of ABV(g)s for young bulls with no daughter information was about 59% for production traits and about 45% for type traits.

The Holstein genomic reference population now includes at least 3000 bulls and about 10,000 cows.

The first ABV(g)s for the Holstein breed were released in April.

Michelle Axford, from ADHIS, said in the four months since April, the genotypes of an additional 408 Holstein bulls had been added to the genomic reference pool.

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even before we get to the dry period – about how the animal is going to undertake the transition.

“Getting an early understanding of the risk factors will enable us to devise strategies to cope with these; that might simply be what sort of nutrition has to be applied to the animal.”

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Dairy News september 11, 2012

50 // animal health/feed

Biotech invention ‘lifts pasture production and palatability’

Biozest lifts pasture production by 20%, says Indigo Technologies.

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human food plants, resultA NEW Zealand biotechnology invention has been ing in more growth and improved nutritional qualshown to raise farm proity, with no withholding duction and profits, and period.” reduce ‘greenhouse’ gas Indigo Ltd maremissions, says its develkets three formulations: oper, who last week outBiozest, for livestock farmlined the technology at a ers, is to increase proRotorua conference. duction and palatability Speaking at the Interof pasture; Agrizest, for national Conference for orchardists, treats woody Agricultural Biotechnology, Nathan Balasingham, plants; and Nature’s Curaof Indigo Ltd, “There are now said his company’s novel good commercial plant-extract forevidence and track mulations, when records backing the sprayed on paseffectiveness of the ture, vines and crops, can boost technology.” food production tor serves home gardenand profits. The products ers’ efforts. are commercially proven, Farmers are reporthe says. edly seeing measurable The essential comimprovements in plant pound, made from colour and vigour, and in extracts of coconut, soy animal production. Within bean and marine plants, a few days of animals graz“tricks plants into thinking treated pasture, dairy ing they are under attack. factory returns show This stimulates their increases in milk volume immune systems and and milk solids, Balasingresults in more vigorous ham says. growth and higher quality Independently run production. dairy farm trials are said to “This outcome is the have measured increases result of genome work in the 1990s when it was dis- of at least 20% in pasture production, plus covered that membranehigher milk solids, and net bound receptors in plants profit increases exceeding recognise when foreign $1000/ha. molecules are present Balasingham says treatand activate the plant’s ing pasture with Biozest immune system. improves animals’ rumen “We used this knowlprotein retention which edge to create new prodleads to increased milk ucts that can be safely and meat production. sprayed onto animal and

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Because animals excrete less urea, soil nitrogen loading and leaching are reduced, as are emissions of the greenhouse gas nitrous oxide. Methane generation in animal rumens is also said to be lower.

Farmers’ profits and New Zealand’s ‘clean green’ brand are obvious beneficiaries, Balasingham says. “There are now good commercial evidence and track records backing the effectiveness of the technology, and strong support from farmer and orchardist users.”

He hopes to see CRIs measuring reduced green-

house gas levels as a result of pasture treatment with his product, and he sees China, India and South America as likely markets offering “profits and environmental kudos to New Zealand.”

The ICAB 2012 conference was attended by scientists, international technology scouts and venture capital companies.

Indigo’s goal is to license multinational agricultural chemical companies to market the product overseas. Balasingham says he used the conference to pitch the products to relevant organisations. www.biozest.com

Dairy News september 11, 2012

animal health // 51

Treating mastitis the smart way jane lacy-hulbert

Treating the right

cases requires patience and prudence. A cow’s immune system helps her cure, or contain, mastitis.

The challenge is to spot cases that would benefit from antibiotic treatment, while not wasting resources on those that may cure themselves.

As a general rule, only clinical cases receive antibiotics in lactation.

For tips on finding and treating the right cases of mastitis, visit the DairyNZ SmartSAMM website – www. smartsamm.co.nz Seek and you shall find. Squirting the first few strips of milk onto a dark surface to check for clots or discoloured milk – called foremilk stripping – is still the most effective way to find new clinicals.

But stripping every cow in a large herd is hard work and time-consuming.

Treat clots, watch snot The golden rule is to treat only those cows with clinical, or visible signs of mastitis.

Cows with a positive rapid mastitis test (RMT), i.e. a thick gel or ‘snotty’ reaction, should be watched and re-checked at later milkings for clinical signs, i.e. clots, unless otherwise recommended by a veterinarian.

SmartSAMM recommends treating only cases with clinical signs (wateriness, clots and/or discoloured milk) that persist for three squirts during stripping. This reduces the risk of wasting antibiotics on cases that may cure on their own.

When should the RMT be used? Ideally, every cow should be checked with the RMT before entering the milking herd. This applies equally to cows leaving the colostrum mob, leaving the mastitis treatment herd or coming in from an outside herd.

Checking all cows with the RMT is also advised when the bulk milk SCC is too high and no clinical cases have been found by stripping.

What happens to a cow with a positive result? Prudence is the best approach. Holding back RMT-positive cows in the colostrums herd for an extra one to two days is wise. Marking RMT-positive cows and re-checking them for clinical signs over the next few days is another option.

To find out more, visit DairyNZ’s smartsamm. co.nz This article first appeared in DairyNZ publication, Inside Dairy September issue.

Adding stripping to the daily or weekly routines makes the task easier and less prone to mistakes.

Benefits include earlier treatment of new cases, increasing the chance of cure, and quicker removal of infected cows from the herd, reducing the spread of infection.

Cows also become

more accustomed to having their teats handled, which makes milking easier for everyone.

SmartSAMM recommends all cows in the colostrum mob are stripped at least once daily, and that all cows in the milking herd are stripped when clots are found on the filter sock or

when the bulk milk SCC is too high.

Some farmers find it easier to check all milking cows daily or weekly in the first two to three months of lactation, until the rate of new cases drops to low levels, e.g. one to two new cases per week.

• Jane Lacy-Hulbert is a DairyNZ senior scientist.

Jane Lacy-Hulbert

Dairy News september 11, 2012

52 // animal health

Synchronisation lifts fertility WHEN AN average cow gets in calf Bayer fertility regulators when the Cueduring the first round of mating, she Mates are removed. “That brought the goes from being average to better-than- non-cyclers into synch with the others. average, says Kiwi ex-pat Mike Waite, Once they’re synched the workload is reduced.” now farming in Australia.

By identifying the non-cycling cows “Better fertility gives her more days in milk and increased production,” early in the Ovsynch programme they are given the same chance as the rest of Waite says.

He and his wife Dawn seven years the herd to get in calf to AI, rather than ago moved to Ecklin South, near Terang being left out until after the main AI in south-west Victoria, with their son programme is completed.

“It’s important to be proactive, not and daughter, both now in their early reactive,” Waite says. “If we don’t do the 20s.

They milk 260 cows on 120ha and are non-cyclers first, there’s little point in increasing herd numbers to about 340, doing the rest of the programme.”

The probringing more gramme was young stock into “When we started timed so that the the Holstein here we bought cows fixed-time insemcross-bred herd. ination (FTAI) of In New Zea- from many different the non-cyclers land they share- herds and their was the day milked 700 cows calving dates were all before the desin North Waikato over the place.” ignated mating and were familstart date. In iar with synchronisation programmes and condensed effect, thorough early planning enabled them to run two FTAI programs over calving.

“When we started here we bought two consecutive days. Also, FTAI on day cows from many different herds and 0 of the mating programme gave them their calving dates were all over the the option of three inseminations for place,” Waite says. “We started with a any cow in the six-week joining period, basic PG programme but we saw there compared with just two if left to natuwas plenty of room for improvement so ral mating.

All cows are ultrasounded at 15 we moved to an Ovsynch programme.”

Over the past three years they have weeks from mating start date to detergreatly improved their in-calf rate (ICR) mine the age of the foetus and estimate with a full Ovsynch program using the six-week ICR; most recently they Bayer fertility regulators under the achieved a 78% six-week ICR. The strong ICR brings other benesupervision of local vet Craig Wood, with whom they have developed a fits. Culling becomes a much broader planned reproduction programme, management decision than simply which takes advantage of the latest taking out animals because they are reproductive technology available to empty.

“It means we can make culling decidairy farmers.

Initially the plan called for the non- sions on other attributes, not just on cyclers to be sorted out well ahead of fertility,” Waite says. “Culling then the mating program, using a Cue-Mate becomes about taking out the real device to backdate their ovulation and bottom 5%, as well as making sure infer-

Mike and Dawn Waite are reaping the benefits of a thoroughly planned reproductive program using Ovsynch.

tility is not being bred into the herd.

“A good in-calf rate means we can cull deep and focus on the longevity of high producing, fertile cows. Their best production is at 6-8 years of age; they are reaching their strengths then, so we want to be sure we have the best cows in the herd when they reach their peak. And we want to have an even age spread through the herd, with younger quality cows coming through.”

The higher fertility and better synchronisation brings many benefits at calving as well, e.g. the entire calving programme is managed by Waite and son Jason, back on the farm to help out during calving.

“We get big runs of calves, 10-20 calves a day. This year we had 115 in the shed in the first week. We get the first mob onto the calf feeder within a week and we can move them through the shed more quickly.”

With most calves developing together it is easier to sell off the bottom, because those calves not aligned with the development of the majority will always be behind. In their second year, the early heifers get into calf earlier, highlighting the opportunity for longer and more productive lactations to follow.

The tight calving pattern means the management focus is concentrated

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for short bursts of time. This prevents errors, says Waite, who considers mistakes generally occur when calving drags on and staff get tired. “It’s not rocket science, but it’s definitely an easier way to manage a reproduction programme.”

Their reproduction success has allowed Waites to sell 30-40 weaned calves a year on the Chinese export market, handy extra income averaging $1200 per animal.

The improvement in fertility, with 3-10% empties in a 10-week calving period, runs against the national trend towards higher levels of infertility in dairy herds.

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Dairy News september 11, 2012

54 // animal health/feed

Help for maize growers

Mark Bon

SILAGE AND grain maize developer Pacific Seeds says it is strengthening its support for New Zealand maize growers.

“We recognize the importance of starch in maize and this season’s range has been selected to ensure it provides our clients with the energy levels they need for top animal

production”, says Pacific Seeds territory manager Barry Smallridge.

Maize starch is a valuable resource which represents 50% of the available energy in maize silage and 75% of the available energy of maize grain.

In addition to helping balance animal diet high starch content will also

In addition to helping balance animal diet high starch content will also improve rumen function. improve rumen function.

Growers therefore need to recognise that the economic benefits of producing high yielding crops need to be supported with

high starch and ME levels, says Smallridge.

“To help growers and farmers better understand this we have recently produced a publication titled The Importance of Starch in the Production of Maize Silage and copies are available via www.pacificseeds. co.nz. As indicated in this publication two important grower considerations in maximising ME and starch levels are cob-to-stover ratio and cob size.”

Mark Bon, Maungatawhiri , who has been growing PAC 624, is happy with the way this particular hybrid ticks both those boxes. “I chose three hybrids from three different suppliers, tested for energy and starch levels and found that PAC 624 was the best.”

PAC 624 is a high yielding, full season purpose-bred silage hybrid. Large girthy cobs, a high cob-to-stover ratio combined with soft starchy grain results in high quality silage.

Daniel Geuze, Greytown, who grew the com-

pany’s DKC43-72 hybrid, is also similarly impressed.

“The large 18-20 round cobs gave us a great return and it also gave our buyers energy levels of 11MJ/ kmDM,” says Geuze.

DKC43-72 is a robust high quality hybrid with an extremely useful maturity. With large cobs, consistently 18-20 kernels round, it also shows good disease resistance and is a medium-tall plant with good vegetative bulk and a strong stalk.

Pacific Seeds claims international leadership in the development of silage and grain maize. Its selection process and product

development programme provides growers with hybrids proven to perform in New Zealand.

Tel. 027 494 7706 www.pacificseeds.co.nz

in brief 1080 drop in Rimutaka hills A LARGE aerial possum poisoning operation was completed last month in Rimutaka Ranges, near Wellington. Animal Health Board and Greater Wellington Regional Council ran it jointly to crack down further on possums as bovine tuberculosis (TB) vectors and forest vegetation wreckers.

In high-risk areas possums are said to be linked to at least 70% of new TB outbreaks in cattle herds.

About 28,000ha of the ranges has been treated with 1080 poison baits, including parts of the Rimutaka Forest Park, the Pakuratahi Forest, the Kaitoke Regional Park and Greater Wellington’s Wainuiomata-Orongorongo water collection area.

A healthy, intact forest catchment protects water sources for treatment and supply, AHB says. “The roots of the trees bind the soil and help keep sediment out of the water, making it much easier and less expensive to treat. Possum browse damages forests and makes them less effective at filtering water.”

AHB says sodium fluoroacetate (1080) is highly soluble in water and biodegradable, so does not persist in water or soil. Of 100 water tests in the Wellington Region during previous aerial 1080 operations, none has shown 1080 contamination.

Dairy News september 11, 2012

animal health // 55

Australian jersey producers have a successful breed genotyping programme.

Jerseys make their own genomic luck richard meredith

IT’S OFTEN said “you make your own

luck” and the story of how Australia’s Jersey producers created a viable reference population for a breed genotyping programme is the quintessential do-ityourself achievement.

To run a successful genotyping programme, large numbers of herd recorded animals are essential – the more the better.

DNA analysis of thousands of individual cows and bulls is needed to have any chance of creating a valid genetic map of the key traits for any breed developed under Australian dairy farming conditions.

Jersey numbers in Australia are somewhere south of 15% of the national herd.

Compare that with Holsteins at about 80%. In April the Dairy Futures CRC and ADHIS released newly updated genomic reliabilities for Holsteins based on the analysis of at least 10,000 diligently recorded cows from at least 90 herds.

Not so the smaller Jersey population.

With as few as 400 tested bulls, they were told they didn’t have a big enough progeny test base from which to produce a viable genomic reference population. And anyway the cost of building up the reference population and sampling through the CRC’s computer technology was beyond the available budget.

It was felt their best chance was to get maybe two key traits up to any level of genomic reliability; still being somewhat lower than the reliabilities for the same traits in Holsteins. Compared with the 40 key traits validated to the equivalent of a 30 daughter proof for Holsteins earlier in the year, this seemed like a less than useful outcome.

It was questionable whether the results would give producers confidence to use genomics for bull selection for a couple of traits. Would it be worth the effort? Among association members, the thinking was resolute.

“We knew we had to do whatever was necessary,” said Jersey Australia chairman, Trevor Saunders. “We knew it was cru-

cial to have domestic genomic technology because we could potentially lose our breed’s Australian identity. Without this genomics programme we would have no other option than to work with the North American system. It was really do or die for Australian Jerseys – one chance to create our own genomic base.”

So Jersey Australia set to work on a grassroots campaign to hunt down every possible source of DNA data that could be used to build a sizable breed reference population.

Members checked semen stocks, pulling out old AI tanks with straws that Trevor Saunders dated back to the 1960s and 1970s.

AI companies contributed semen from Australian bulls they had in stock. In all up to 1000 Jersey bulls were eventually genotyped – about 900 bulls with daughters in milk, and an extra 100 young sires that will become the first bulls to receive an Australian genomic breeding value (ABVg).

“Up to 75% of members came on board,” said Trevor. “It was very exciting.”

Through the process 4000 Jersey cows with quality records, breadth of pedigree and key traits not much recorded (such as fertility) were identified and accepted into the genotyping programme. Members collected tail hair samples and Dairy Futures staff, led by Associate Professor Ben Hayes, responded to their enthusiasm by “going the extra mile” in assisting with collections in order to give the project its best chance.

And, as the samples were delivered to the CRC laboratory over a period of two years, luck played its hand; the price of the testing technology started coming down, until it became feasible to undertake a much larger project.

“We had the samples and as the test price came down, we could see that it might be possible to develop a fully fledged genome technology for the Jersey breed within our budget,” said Dairy Futures chief executive David Nation.

Dairy News september 11, 2012

56 // animal health

Take ownership with Tight calving pattern starts visual soil tests “By doing the assessments yourA New Zealand soil scientist says Australian dairy farmers can self, you save money on consultants improve their bottom line by con- and take ownership of the results ducting their own visual soil assess- which means you can tweak your management practices to improve ments.

Visiting New Zealand soil scientist Graham Shepherd encouraged dairy farmers at a workshop in Timboon, Victoria last month to start doing their own visual soil assessments.

Shepherd told the workshop farmers doing their own soil assessments are more likely to take greater ownership of the results and implement changes to improve their production levels and profitability.

Shepherd, a director, soil scientist and agricultural consultant with BioAgriNomics, says the assessments could lead to adjustments of farm management practices Soil scientist Graham Shepherd at a recent workshop at resulting in increased profTimboon, Victoria. itability.

“It is a very simple test that helps farmers to assess not your bottom line profitability.”

Shepherd says more farmers only their soil quality but also the performance of their pastures,” he were turning to visual assessments.

“The more that do it the better,” says.

“It helps farmers to maximise he says.

Shepherd has worked as a soil their pasture conversion effiscientist for many years in New ciency.”

Shepherd says the Timboon Zealand including working for demonstration proved that visual Landcare Research and the Departsoil assessments uncover very sim- ment of Scientific and Indusilar results to tests undertaken by trial Research and is recognised across the Tasman as one of the experts.

foremost authorities on the physical quality of soils under pastoral and cropping systems.

His research has significantly improved understanding of the impact of farming and sustainable land management practices on soil quality.

HDLN Landcare coordinator Geoff Rollinson says the workshop had helped landholders and service providers to improve their skills at visual soil assessment and to better understand the benefits of using the system.

“It’s an easy task that all landholders can do and it’s easy to interpret,” Rollinson says.

The workshop was part of Heytesbury District Landcare Network’s Caring for our Country project and was presented in conjunction with Dairying for Tomorrow and DemoDAIRY. The project aims to improve the soil conditions and biodiversity of 50 participating landholders.

The workshop was one of six being held for landholders participating in the HDLN Caring for Country soil acidification and biodiversity project.

The Federal Department of Agriculture, Fisheries and Forestry and Bega Cheese also funded the workshop.

with heifers

Dairy farmers who want to achieve and maintain a tight calving pattern need to include heifers in the plan.

Dr Barry Zimmermann, who manages Dairy Aus­tralia’s InCalf program, says that heifer manage­ment had a big impact on a herd’s calving pat­tern.

“Decisions you make about heifer management will strongly affect the herd’s calving pattern,” Zimmermann says.

“For example the calving pattern of your heifers is strongly influenced by their growth rates and their weight at joining.

“Secondly, the herds calv­ing pattern will be influenced by the number of heifers available to replace older and less fertile cows – as they will calve later if they remain in the herd.”

A tight calving pattern is achieved by maximis­ing the number of cows and heifers that calve in the first three weeks of the calving period. Aim to have at least 85% of

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your heifers calved by week three.

“A good strategy is to join heifers to start calving two weeks before the main herd.

This gives them some extra time to recover from their first calving and start cycling before the joining period.

“It also compensates for lower conception rates that can be experienced by using sexed semen.”

But joining heifers early relies on excellent calf and heifer rearing practices so that heifers reach their target joining weight by 14 months, or as early as 13 months for later born calves.

“To achieve target growth rates, heifers will need a high-quality supplement at some times, for ex­ample post weaning and when high quality pas­ture is not available.”

Supplements should contain at least 11-5 11.5 mega joules metabolisable energy per kilogram of dry matter, and 16% crude protein.

Dr Barry Zimmermann says heifers should be joined to start calving two weeks before the main herd.

QA &

With COOPERS Vet Hannah Field BVSc For drenching to be effective, it is important to do it right.

Careful drenching technique and making the right choices when choosing a drench are crucial.

Q: Does it really matter which drench actives I use?

A:

YES! For young cattle we recommend a combination drench that contains both abamectin and levamisole - two of the most effective drench actives for cattle.

Abamectin is a potent ML giving broadspectrum worm kill, and importantly is one of the best drenches for controlling Ostertagia (type 1 and 2) – the most harmful worm of cattle.

Q: What puts calves at risk of toxicity?

A:

Drenching while calves suckle from milk-feeders, or mixing drench in with the milk risks toxicity in your calves. These practices put calves at high risk of death through absorbing drench far faster than intended. These drenches are designed to sit in the mature rumen and be absorbed slowly.

Q: How do I check that my drench gun is accurate?

A:

Fill the barrel fully with drench, seal the nozzle with a finger or thumb and attempt to depress the plunger. It should not move. If the plunger depresses, drench is escaping back past the seals.

Calibrate the volume by setting the gun volume to 10mL and deliver 10 squirts of drench, not water, into an accurate measuring container.

Have the gun serviced if there is a problem with pressure or calibration.

Mixing drench with milk risks killing your calves

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They are not. You should always drench to the label instructions and get the dose right. The only way to do this is to have an accurate estimation of weights – using scales. If you don’t have scales, at least get an estimate with a weigh band/tape.

Remember, dose to the heaviest animal in the mob. However, IMPORTANTLY, if there is a wide variation in weights within the mob, separate them into two groups of similar weights and dose to the heaviest animal in each group.

Also remember to check that your drench gun is accurate by calibrating it.

Q: What’s wrong with pour-on drenches?

A:

The absorption of pour-on drenches can be variable, and can be affected by numerous factors including temperature, licking, dirt in the coat, rain and application technique. These factors can alter the effectiveness of the drench.

That’s why we recommend drenching orally, for as long as you can do so safely.

Q: How flexible are dose rates?

A:

Levamisole has retained good efficacy against Cooperia worms – a worm that shows widespread resistance to other actives in New Zealand. Cooperia can decrease appetite and growth rates without you knowing they are there.

I recently investigated a case where it appeared the drench wasn’t working.

When examining the remaining drench, it was noticed that over 3 litres of drench was left in the 5L drum, despite 200 calves having been drenched with a 14mL dose each.

Further examination found the gun to be delivering a 7mL dose, despite being set to 14mL on the dial.

This case shows how important it is to check equipment, because as well as giving a poor result, underdosing is a high risk practice for the development of resistance.

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As a rule of thumb, start drenching once calves have been weaned off milk and on pasture for at least three weeks.

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Dairy News september 11, 2012

58 // effluent& water management

Inspectors landing at a site near yours EFFLUENT COMPLIANCE

taken over about 1000 of the region’s 4000 dairy farms, and potential problems were then followed up by ground inspection.

The plan for 2012-13 is to target up to 500 farms in areas with soils at risk of allowing effluent to get into waterways.

The council will select farms in areas where there are high risk soils. Those farms will initially be flown over by a helicopter to identify any properties with potential for serious non-compliance, and these farms will be inspected first. Once any serious non-compliance is dealt with, the rest of the properties in the group will also be inspected.

The exact boundar-

monitoring in Waikato is shifting from the air to the ground as Waikato Regional Council trials a new way to protect water quality in the region.

The trial will involve more on-land work with farmers to identify and fix problems, and less random helicopter monitoring of farms by council inspectors.

The council previously relied largely on complaints from the public and helicopter monitoring of farms chosen at random, to detect breaches of effluent management rules. Each season, about seven helicopter flights had been

ies of the high risk areas aren’t being disclosed in advance. But farmers who will be visited at some stage during the season are being informed of this in writing and will receive a phone call shortly before a council officer arrives for a ground inspection. The warning by letter will give farmers a chance to do any needed work on their effluent systems before the officer visits.

When the officer does eventually visit they will identify any problems with the farmer’s effluent system and, if necessary, make a formal direction for improvements to be made.

After recent work with the dairy industry, the

council will now be in a position to tell the farmer to work with effluent system companies accredited under DairyNZ’s farm dairy effluent code of practice and design standards.

Helicopters may still be used outside the higher risk soil zones for random monitoring as required.

The new way of doing things is not expected to cost any more, says council compliance and education manager Rob Dragten.

“The change to a more ground-based strategy sees us moving from a random system of compliance monitoring, to a targeted monitoring regime… to direct farmers to farm

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specific advice about compliance from a code of practice-accredited designer.

“In the past, farmers haven’t always had access to guidance on what constitutes a good effluent management system.

Now the dairy industry has developed the new code and formally accredits those designers qualified to apply its standards properly.

“The new arrangements mean we can trial our different approach to compliance monitoring, involving us working with farmers more to sort things out. Naturally we’ll still take formal enforcement action where necessary against farmers, as in the past.”

Another advantage of our new system will be targeting of farms in areas where soils are seen as having a higher risk of allowing effluent to get into waterways. These include soils with impeded drainage or infiltration rates, soils with a very coarse structure and land with a slope of over seven degrees.

“Targeting higher risk soil areas is a bit like paying more attention to roads with higher crash rates when you’re trying to reduce the road toll,” says Dragten.

He says the council has a strong focus on preventing untreated dairy farm

Waikato Regional Council is cutting back on aerial surveillance of effluent systems but increasing farm visits.

effluent from entering waterways.

“Many farmers have shared our environmental protection goal and have done much to protect water quality, including upgrading effluent systems. Fonterra and DairyNZ have also worked with us closely to improve the industry’s environmental performance in the Waikato.

“Our combined strategies have been helpful in

making progress over the years. We’ve been holding reasonably steady with dairying’s environmental performance lately.

Now the council is hoping its new, more targeted approach will make further gains.”

Dragten notes the new system of monitoring compliance meant this season’s compliance results would not be directly comparable with previous years.

seek early support WAIKATO FARMERS on high risk soils are being urged to seek early support in light of the Waikato Regional Council’s new effluent compliance monitoring process.

DairyNZ development project manager for effluent, Dr Theresa Wilson, says farmers will now consider how the changes may impact them so they can prepare for the season.

“Nationally, farmers lowered the level of significant non-compliance below 10% for the first time, which is a good achievement and we’re keen to see this trend continue.

“The way Waikato Regional Council’s process is supporting the Farm Dairy Effluent Standards and Code of Practice for system design, should also give farmers some of the clarity they have been asking for,” she says.

Dairy News september 11, 2012

effluent & water management // 59

Common effluent systems The following describes the individual components or building blocks of common effluent systems in New Zealand:

A stormwater

pile up beneath.

2. Passive separation: usually weeping walls – lined storage areas which have a narrow slotted wall along the length of the store. There should be two storage areas which can be alternated. The liquid drains through the wall into a drainage chan-

nel and is transferred to a liquid storage facility. The solids remain in the storage area.

Once the solids build up to a certain level they can be left to dry out and then applied to land. The sizing and design of the weeping wall is critical to its success.

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purpose is to transfer effluent from one location to another. Where possible diversion is an effecit is better and more cost tive way of reducing the effective to use gravity to amount of water entering move effluent. the effluent system. This Pump stations may be in turn reduces the efflurequired to get effluent to ent storage requirements storage and are definitely and the amount of efflurequired to transfer effluent having to be applied ent from storage to the to land. applicator.

The stormThere are a water diverFarmers sion takes the may choose wide range of options availrainfall that to only use able for transfer falls on the farm dairy and stormwater pumps includany surround- diversion at ing different ing yards and times of the types, sizes and capabilities. directs it away year when It is imporfrom the efflunot milking tant your pump ent system. has the correct There are a huge number of stormwa- specifications to ensure ter diversion designs avail- your effluent system works effectively. able, including manual Solids separator and mechanical. RegardSolid separation less of design, care needs involves the removal of to be taken to manage the stormwater diversion cor- coarse solids from the effluent resulting in a rectly, installing an autoliquid effluent which will matic facility or warning then go to storage and a devices is advised. store of solid material.

Farms located in high Using solid separation rainfall areas would benin the system will mean efit from a stormwater there is less liquid to be diversion. Farmers may stored and storage facilichoose to only use stormwater diversion at times of ties may require de-sludgthe year when not milking. ing less frequently. The removal of solids also If using regularly during allows the liquid effluent the milking season it is to be applied through any essential robust systems are in place to ensure mis- type of applicator. Low rate and mainline centre takes are not made. pivots systems must have Stone trap a solids separator.

Stone traps are Solid separation should designed to slow down be considered when and redirect the flow of operating a feed pad or effluent so sand, stones high feed input system and debris can drop out. as the amount of solids This will prevent blockin the effluent is greatly ages in the effluent pipe increased in these syswork, pumps, storage tems. facilities and applicators.

There are two main Stone traps are genermethods of solid sepaally made of concrete and ration: have a wide base which 1. Mechanical separaslopes down toward the tors: achieve a high rate of pumping or draining end. separation and produce The inlet is normally well a dry solids component above and on the oppowhich is held on a pad or site side/end of the stone bunker for use at a later trap to the outlet. The date. Once the solids are solids that accumulate in removed the liquid comthe stone trap need to be ponent is transferred to a regularly removed onto storage facility. Mechana sealed surface located ical separators are nordirectly beside the stone mally either slope screen, trap which drains any rotary screen or screw liquid back to the stone presses. trap. The solids should be ■■ Screw press systems applied evenly to land.

All systems need a force the effluent under stone trap unless you have pressure through a gravity fed flow to a weepseries of fine mesh ing wall. layers. These are often Pump station elevated above the The pump station’s ground so solids can Stormwater Diversion

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Dairy News september 11, 2012

60 // effluent & water management Check out our free classifieds listings at www.ruralnewsgroup.co.nz/classifieds

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Zealand is urging dairy effluent system designers to ‘become accredited’. “It’s not as scary as it sounds,” says Irrigation New Zealand chief executive Andrew Curtis. Five companies have now been accredited, three applications are pending and 15-20 companies are considering, he adds.

“Six new applications were received this month but we’d still like to see more effluent system design companies apply.

We do respect that it’s quite a hurdle and that

each application requires a lot of work. But it’s one of those things where critical mass is going to build.

Being accredited in dairy effluent system design will become the norm in the near future.”

On October 1 the code of practice and design standards for farm dairy effluent management will be reviewed. While only a voluntary code, having guidelines has already helped standardise design and improve effluent outcomes, Curtis says.

“It’s a positive to have a code of practice and it’s

the way forward for the industry. The code of practice works hand-in-hand with the accreditation programme as both enable farmers to better manage their effluent.”

The dairy industry target of reducing significant non-compliance in effluent below 5% by 2016 is a big target says Curtis, but these processes make it achievable.

“When combined with the industry code of practice, standards and training, an accreditation programme is the best way of improving skill levels

and ensuring consistency within the effluent service industry.

“Significant investment is going to be required in on-farm effluent infrastructure in the next five to ten years, and without a quality assurance system we may not meet the target. The accreditation programme ensures effluent system designers can deliver appropriate systems. With growing pressure on the dairy industry, it makes even more sense for designers to be accredited.”

Irrigation New Zealand

runs the Farm Dairy Effluent System Design Accreditation Programme under contract to partners DairyNZ and the New Zealand Milking and Pumping Trade Association. The accreditation process complements other assessment programmes Irrigation New Zealand provides for irrigation system design, installation and evaluation, and water measurement. An accreditation programme for irrigation design will soon be released along the same lines.

Safeguard irrigators against loss A NEW campaign is underway to minimise irrigation-related losses on farm. Rural insurer FMG and Irrigation New Zealand are jointly campaigning to try to save farmers and growers time, energy and money in summer. The campaign began on August 22. It includes a checklist from Irrigation New Zealand and ‘check the track to make it back’ stickers to remind operators to check the paddock before starting up the irrigator. Packs are available from FMG representatives.

FMG general manager of advice and insurance Conrad Wilkshire

says every year about 100 FMG clients suffer loss or damage to their irrigator, most preventable.

Irrigation New Zealand chief executive Andrew Curtis says the campaign is timely as farmers are just starting to think about irrigation for the coming season.

“Ensuring irrigation systems are in good condition is all about preparation. September is the key month for maintenance and if farmers undertake the right checks and balances now, the rest of the season will run smoothly. If not the fallout can be very costly.

“Our checklist reminds farmers and their staff of the simple actions they can take to prevent problems…. Making sure the irrigation season gets underway safely and efficiently will mean less system downtime improving productivity and returns this summer.”

Dirt piles, overgrown hedges, motorbikes, tractors and fences can cause devastation if they get in the irrigator’s track. Repairs can cost thousands and the interruption to business production can have a huge impact.

Practical tips: do a quick walk

following the path the irrigator will travel before flicking the on switch. All it can take to damage an irrigator is a dip in the track caused by a washout or a tyre punctured by a fencing iron left lying in the paddock. Strong winds can also cause massive damage, particularly nor’westers in Canterbury, which can tip irrigators over, twisting machinery and rendering it unusable. To avoid this, move your machinery out of the wind, or if this option is not available, irrigators should be parked downwind pointing into the prevailing wind.

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Dairy News september 11, 2012

effluent & water management // 61

50mm of rain worth $80,000 STUART REID

ABOUT HALF the rainfall on your farm produces your income. (The other half runs off to a river in winter.) If rainfall on your farm is 1200mm, then your wealth relies on the 600mm that stays on the farm.

With 500 cows, and 350kgMS/cow at $5.50/ kgMS, then your annual income will be about $960 000. Therefore each millimetre of rain earns you $1600 and 100mm of rain earns $160,000.

There are ways of retaining rain on your farm; a big effluent storage pond helps to do this and pays for itself by collected rainfall alone. It will provide 20mm extra water to about 20% of your farm – the effluent irrigation block – or put another way, it would be like adding 4mm to the whole farm.

That’s about $6400 extra income a year from the water alone that goes to pay back the pond. So big ponds are ‘production tools’. Not only do they keep stress down, they improve pasture growth by using the extra water effect and they improve pasture quality by using the ‘dilute nutrient’ effect.

The ‘fresh-is-best’ man, who irrigates raw effluent from the yard, probably also watches the seagulls follow the effluent spreader and eat the worms that come gasping to the surface after it has passed. Dilute effluent, uniformly spread, is

best for pasture. Fresh strong effluent can be almost too ‘toxic’ to the soil organisms and bigger ponds play a role in dilution by collecting extra rain which allows you to spread a dilute product over a greater area with no damage and a better overall effect.

On a similar theme, consider your response if the fertiliser truck applied urea at 80kg/ha at one end of the paddock and 30kg/ ha at the other end: you’d tell him to not come back.

But it doesn’t seem to bother many of you with respect to effluent water and nutrient.

So many of you have hydrants which deliver different pressures that the irrigator performance is different in each paddock and often the pond mixing is so poor that you get a weak coffee colour at the nozzle in one paddock and treacle in the next.

Don’t focus only on the irrigator’s ability to spread evenly, the pump and mixer both have to help with this job too, but since you can’t see what’s happening under the water you probably don’t know how bad it is.

Actually, that centrifugal pump and floating mixer combination is probably letting you down.

Localised propeller mixers just send the sludge to the quiet zone in the pond, and centrifugal pumps on their own are unable to supply uniform flows to the hydrants. It’s a fact that there are other pumps and pond mixers more

suited to giving you a nice uniform spread.

Every now and then we see a breakthrough in one aspect of farming and I think what I’m going to tell you about now might be one of these breakthroughs.

It’s a cunning new product which has me rather excited: a completely new, simple and revolutionary pond mixer.

Many of you will recall that we have an underwater propeller shaft mixer with many blades that churns up all the effluent sludge and solids in the pond. It all hangs from a bridge. Many of you have probably perceived it as ‘over the top’ and therefore expensive.

But what if we kept all those blades and got rid of the bridge cost?

The breakthrough product is being developed now and it could be described a bit like this.

Imagine a chain tied to a short post at the centre of a round pond and pulled tight by a man on the bank holding the other end.

He lets this chain sag until it is just clear of the bottom. Now he can walk round and round the pond and the chain will go with him, completely passing over the pond bottom.

Imagine also that the

Ingenious new product: The entire mixer superstructure (below) vanishes and you’re left with the propellers attached and suspended from a set of specially linked driveshafts which both rotate and travel over the whole bottom surface of the pond. Complete mixing is assured.

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from 30 years of reliable service 3,000 farmers cannot be wrong

chain has many propeller blades clamped to it and that the whole chain is rotated by a motor at the same time. This device should enable the removal of all the bridge structure, leaving us only with a clever mixer that will stir the entire pond at a fraction of the cost of the previous design.

Call me if you want to know more 04 5863411 or I’ll keep you posted now and again via our website www.spitfire.net.nz • Stuart Reid is managing director of Spitfire Irrigators

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Dairy News september 11, 2012

62 // effluent & water management

Synthetic liners edging out ‘clay’ CONCERNS ABOUT farm dairy effluent (FDE) leakage from ‘clay’ lined ponds are increasing dairy farmers’ interest in synthetic pond liners, says DairyNZ. These ‘geomembranes’ – also called ‘synthetic liners’ or simply ‘liners’ – are marketed in a number of chemistry types and a variety of thicknesses. Some FDE ponds have been built using very thin, or inappropriate, geomembrane types and their dura-

bility and performance has not been as claimed, says DairyNZ. In many cases a thicker geomembrane better suited to the pond (or tank) design may have provided a more dependable and longer life solution. Also, the liner performance depends on such factors as the smoothness of the surface on which it sits and how well it is fastened to the embankment.

Geosynthetics come in a wide

range of forms and materials, each to suit a slightly different end use. They have a wide range of applications and are used worldwide.

Geomembranes represent the largest group of geosynthetics – thin sheets made with specific properties to provide key attributes. Membranes can last 20 years or more in most applications. They are dependable, do not leak, are fast to install and easy to maintain.

Interest in synthetic pond liners is increasing.

Left and right: Geomembrane installation.

Use an experienced installer GEOMEMBRANES MUST be installed by

experienced installers approved and trained by the supplier of the product.

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manufacturers publish installation guidelines for their products and these are available from suppliers for reference purposes.

For the protection of farmer and installer (or alternatively the main contractor and their installation subcontractor) a contract agreement is essential to all parties, setting out expectations, responsibilities and payment terms.

Subgrade preparation must be accepted by the installer and conform to the geomembrane manufacturers requirements

before installation.

Subgrade materials should not contain sharp, angular stones or any objects that could damage the liner or adversely affect its function unless a cushion layer is used.

A cushioning layer should generally be placed beneath all geomembrane liners, and certainly if the subgrade particles contain sharp angular stones, or the particle size is greater than 9.5mm. The decision whether a protective geotextile under the liner is not required should be made by the engineer/ designer.

Dairy News september 11, 2012

effluent & water management // 63

Closer study, treatment of effluent challenge GEA TECHNOLOGIES says its solid separa-

tion technology caters for today’s farms with a more modern approach to effluent management that has resulted from intensification.

As farmers collecting more solids emanating from feeding areas, they face greater challenges, GEA says.

“Firstly, by removing solids a lot of the ‘blinding’ effect is removed.”

Solids in a pond or tank can not only be difficult and costly to manage, but over time accumulate to a point that reduces the available storage capacity.

This sludge layer should be considered when calculating the size of a new storage structure – one of the benefits achievable by separating solids out before the liquid enters storage.

Discharging effluent to land has also changed,

with a greater focus on deficit irrigation and matching the irrigation system to a farm’s soil types.

GEA says in particular this includes low application-rate systems which give farmers a greater opportunity to irrigate and promote best farm practice by keeping nutrients in the root zone.

“Firstly, by removing solids a lot of the ‘blinding’ effect is removed when solid particles block soil pores, impeding soil infiltration ability and causing surface ponding.

“Another key benefit is the ability to irrigate effluent through many low application-rate irrigators without the risk of blockages.

“This includes small irrigator nozzles such as those on centre pivots which are becoming more practical with separation equipment such as the slope screen separator.”

The company says particle size analysis done by an independent company show the particles in the separated liquid stream are no larger than 1.2mm with 99% less than 1mm

GEA’s slope screen separator in action.

in brief Submissions close WATER MANAGEMENT in and around Kaikoura will again be canvassed at a public meeting this month of the region’s ‘zone committee’.

This was launched in July 2011 jointly by Environment Canterbury and the Kaikoura District Council. It includes representatives of the council, Ruanga and the community.

The committee has held ten public meetings, workshops and field trips www.ecan.govt.nz/canterburywater

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“The slope screen is passive and the equipment involved does not require the same level of maintenance as screw press type separation systems. In combination with GEA’s sand sedimentation pit this system is effective at removing virtually all solid material from the effluent stream.”

The slope screen comes in two sizes depending on effluent volumes and processing requirements. The common size being 4 foot which can process up to 36m3 per hour and new to New Zealand is a 2.4m model recently installed

on a 2000 cow farm, processing all effluent from a dairy shed, feed pad and barn.

This larger screen can process up to 110m3 per hour and is a two stage separator with an Xpress Roller Press to squeeze excess water from the solids.

The high processing capacity gives the operator greater ability to handle high inflow from rainfall events and minimises processing times. The Roller Press is efficient, low maintenance technology that can be set up under both Slope Screen models to produce solids up to

28% dry matter.

GEA FT supplies transfer pumps to feed the separators and this includes the Agi-Pompe that is designed to get effluent into a suitable state for efficient separation by agitating, chopping and transferring effluent all in one unit. The Agi-Pompe has shear knives on the propeller to cut fibrous material.

This transfer technology also comes in different PTO configurations capable of agitating and transferring thick effluent in larger ponds and above ground tanks.

Tel. 0800 657 555

Travelling Irrigator Map View

Sleep easy with the TracMap system for monitoring your travelling irrigator. The TracMap system shuts down the pump in the event of problems, and records your application history, ensuring the best use of the nutrient value.

Benefits (all systems) • Minimises the risk of ponding due to irrigator malfunction or reaching end of run • Reduce the risk of accidently failing to comply with effluent application consents • Solar panel - no changing batteries • Flexible warning setups - Lights, Buzzers, text alerts • Choice of radio or cellular to suit any geography • A TracMap branded product means reliable backup and support

Tailored approach to farm needs GEA FARM Technologies supplies the range of Houle equipment in New Zealand. This covers the spectrum of effluent handling including solids separators, pond pumps and agitation systems.

Houle is an established GEA FT Canadian effluent treatment company with a 50-year record of R&D.

Designs reflect the need for largescale effluent systems in confinement operations.

Such operations impose big treatment loads and problems arise in trying to make equipment deal with heavy liquid/slurry that varies in consistency, flow rates and sediment. This inevitably

can lead to undue wear on components and mechanical failure.

Houle has developed a range of products to effectively process effluent; the mix of product can cater for all types of applications allowing a tailored approach to meet a farmer’s requirement.

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Dairy News september 11, 2012

64 // effluent & water management

Finding the right person to build your effluent system

Get an accredited installer to build your affluent system.

GETTING THE right

person to design and install a farm dairy effluent system is critical to a system’s success.

When deciding who to use, first look for an accredited farm dairy efflu-

At last:

ent (FDE) company; these are specialists trained to understand and follow the Farm Dairy Effluent Code of Practice and Design Standards when designing and installing systems.

Using an accredited FDE

A Traveling Effluent Irrigator …

That:

What this means for you:

r Meets even the toughest New Zealand Effluent Enviro Standards r Has the Most Even Rain Cover over wetted width in New Zealand by far r Has a Rain Rate of 5mm or less across total wetted width, not just the centre area. (please see in the independently proved graph)

r No more strips left in your paddock r No more doughnuts either r No more ponding left after each run r No more Enviroment police calling in

Applied Depth – Depth 54 0 –5 32 No 1 Overlap mm 0

just 5 mm applied depth!

Test 1

Test 2

Test 3

•••

••

•

•

•

••

• •

•

• • •

•

• •

• •

••

•

• •

• •

•

–20

–16

–12

–8

–4

0

Distance (m)

4

8

12

16

•

20

The new irrigator is still backed up by our very tough and well proven drive system, no blockage mast, booms and nozzles.

The new model irrigator boom modifications can be made to all existing Plucks LP series irrigators (so give your supplier a quick call) and most other makes of effluent irrigator of similar size.

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80 PATENT No. 57

For more information call us at Plucks

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8

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0

0

7

5

8

2

5

panies visit effluentaccreditation.co.nz When selecting a designer/engineer, consider the following: ■■ Do they have experience working with your type of farm system and farm size?

■■ Do they have experience in the type of FDE system you would prefer to operate?

■■ Do they have experience working with your specific regional council rules and dairy company requirements?

■■ Can they demonstrate competence through testimonials and references?

Once the FDE system is installed ensure you receive the following within one month of the

installation being completed a ‘commissioning report’. This will describe the system as it was installed, including the evaluation of its performance. The report should include date of commissioning, procedures followed during commissioning, and results of performance testing An accurate to-scale plan with all key items located and with dimensions of all key components provided and appropriate manuals and training should be provided with your new FDE system. This should include and operations manual, a maintenance manual, and training for the system operator that covers operation and maintenance.

Frequently asked questions

Our New Irrigator and Booms have to be seen in action to be believed and are covered by NZ Patent No. 578084 Our new irrigator has been tested, proven and approved by the independent company—Irricon Resource Solutions Ltd from Ashburton.

company will provide assurance that: ■■ The investment in effluent infrastructure will be specific and relevant to you, your farming environment and your farm system.

■■ The effluent system is capable of complying with regional council requirements when managed correctly.

■■ The system is designed with an understanding of the current research and best technology options available at the time.

■■ DairyNZ funded the establishment of the FDE accreditation programme. Look for this logo when selecting a company. For a full list of accredited FDE com-

7

Main South Road, Rakaia 7710 • Mid Canterbury

Q. What is the benefit of designing a system using the code and standards?

A. These provide certainty your effluent system will be appropriate for your farm, and when managed correctly will comply with regional council requirements.

Systems designed using the code and standards will also optimise the value of the nutrients in your effluent resource and will minimise any environmental impact from effluent.

Q. When building a new effluent system how do I know if the system designers and installers are working to the code and standards?

A. When contracting the services of an effluent system engineer, designer or installer, or when buying effluent equipment, make sure you ask for advice and design recommendations based on the FDE code and standards, and ask if they are an accredited FDE designer. Ask for a certificate of work stating they have followed the code and standards.

Q. What information is available to help me understand the code and standards?

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A. Only those designing and installing FDE systems need to specifically understand the technical detail of the code and standards. However, to help you work through the code and standards with your engineer, designer or installer you can refer to the booklet ‘Farm Dairy Effluent (FDE) systems – planning the right system for your farm’, which can be ordered from dairynz.co.nz.

Q. What if I want to design my own system? Do I have to use the code standards?

A. You do not have to use the code and standards as they have no legal status, but to achieve the most appropriate effluent system it is strongly advised the code and standards are followed.

Q. When will trained and accredited FDE designers be available to advise on farm?

A. The code and standards were released in February 2011. Training courses for FDE designers began mid 2011, this being followed by an accreditation process.

Dairy News september 11, 2012

effluent & water management // 65

Spring deal on Germans will stir your pond EFFLUENT SPREADING to land is becoming

the industry norm and is best practice. To achieve maximum benefit the effluent must be applied evenly to target areas, says Midwest Machinery, distributors of Nevada range of effluent pond stirrers.

Whilst irrigators and applicators have been the centre of much attention, many farmers little understand the importance of stirring the effluent mixture to ensure even consistency, the company says.

“Effective efficient stirring is the key to even spreading.”

Nevada says it searched for a stirrer with the following attributes: ■■ Efficient in creating a vortex action to thoroughly mix ingredients

in ponds.

Strong enough for the loading of crusted sludge.

■■ Corrosion resistant.

■■ Reliable with a bearing system not dependent on oil seals.

■■ Affordably priced for dairy farmers.

The Nevada Farmerstir and Turbostir range of PTO pond stirrers are “truly a tribute to German engineering excellence,” the company says.

“With strong gusseted A-frame headstock, heavy wall pipe construction, efficient 3-bladed propeller and greasable hardwood bearings, the Nevada machines are everything required for efficient mixing.

“The New Zealand trial in 2011 confirms ■■

the manufacturers reputation, built on 50 years experience in building effluent pond stirrers.”

The Nevada team is celebrating the launch of the Turbostir and Farmerstir with a “super spring deal to cheer farmers up.”

Tel. 06 278 8644

Stir the effluent mixture to ensure even consistency.

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Measure rainfall contribution RAIN FALLING on your farm dairy roof and yard can be a large contributor to the amount of water entering your effluent disposal system. Collect rainwater off the farm dairy roof by installing guttering and reusing it in the shed.

A rainwater diversion system can be used to prevent rainwater off the yard from entering the effluent disposal system when the yard is not in use and is clean. Care needs to be taken to ensure that the rainwater diversion is: ■■ Closed during the day and night to prevent rainwater entering the effluent system.

■■ Open during milking and wash-down so effluent does not enter the diversion.

■■ Open when stock are on the yard or the yard has not been cleaned.

■■ Ensure all staff are aware of rainwater diversion.

If you do not have either of these systems in place, or you do not use them, you need to be aware of how much rain water you are contributing to your effluent volume: 1. Use your annual rainfall figure.

2. Determine the surface area of your farm dairy yard and roof (if roof water drains onto the yard).

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Dairy News september 11, 2012

66 // effluent & water management

Code of practice guides designers THE CODE of practice is a guide to take designers through the process of developing a new farm dairy effluent (FDE) system. It covers the initial site investigation through to commissioning the final system. It provides a general design approach, including lists of factors to consider during the design process.

The design standards provide a benchmark for measuring the adequacy of farm dairy effluent systems. The standards define a minimum level of performance every new FDE system must achieve.

Rapid development has taken place recently in the dairy industry. Those involved in effluent system design and installation

have to date had no industry standards to operate by. In many cases this lack of standards has led to inadequate performance of effluent systems.

There is a lot of information available on managing FDE systems, but very little about the standards for designing and installing FDE systems.

Who is the code for?

The code of practice and design standards are intended for designers of farm dairy effluent collection, storage, and land application systems. This may include engineers, equipment suppliers.

Water in effluent dilutes microorganisms that work in your ponds.

Water in effluent pose challenges THE MORE effluent produced, the

bigger the challenges in disposal – especially washwater and rainwater off yard and feed pad, DairyNZ points out.

Not only does water increase the volume of effluent needing disposal, there are also other issues, such as: Effluent pond systems ■■ Dilutes the amount of micro-organisms that live and work in your ponds treating effluent.

■■ Decreases the temperature of ponds.

■■ Reduces the retention time by flushing the effluent through the system.

■■ Land application of effluent ■■ Increases the amount of hours you use your pumps and irrigators – increasing your power bill.

■■ Increases wear and tear on machinery.

■■ Increases the risk of having to irrigate effluent during high rainfall periods when soils are wet, increasing the risk

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of runoff and leaching.

Increases the land area to be irrigated each day to achieve a correct application depth.

It is assumed the quantity of effluent and washwater (not rainwater) generated at the farm dairy is about 50L/cow/day.

This value is used regularly for the design of effluent disposal systems. However, water use can vary at the farm dairy, producing effluent volumes from 30-100L/ cow/day.

These figures are for dairy shed effluent only; figures will increase lots when feed pad effluent is added.

It is important you know how much water you are contributing to your effluent volume so that you can: 1. Ensure your effluent system is designed appropriately; 2. See where you can make savings on water-use, and ultimately the disposal of your farm dairy and feed pad effluent.

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Dairy News september 11, 2012

68 // machinery & products

Plastic feed silos easy to install

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grain storage silos made by Advantage Plastics, Rangiora, have proven affordable and easy to install for a Northland dairy farmer and a stock food company.

Kaitaia dairy farmer David Polglaze milks 850 cows off a 250ha platform, feeding a mix of silage, maize silage, bulk palm kernel and grains.

Polglaze had a 16-tonne steel silo for grain feed but needed more capac-

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ity. He bought a 23-tonne rotationally moulded polyethylene SmartSilo from Advantage Plastics to increase capacity to 39 tonnes.

A professional installer was needed for the steel silo, but not the SmartSilo, Polglaze says. “Installation was something I could do myself.” And the SmartSilo had many of the features found on a steel silo including a sight glass and a front loading tap.

The SmartSilo’s delivered price was much less than the steel alternatives,

says Polglaze. “It’s really affordable when you compare what it holds for the price; that’s really what it comes back to.”

He has used the 23 tonne silo for three years and despite its outdoors location it still looks like new.

And it suffers none of the condensation problems of a steel silo.

Elsewhere in Kaitaia, Selwyn Garton, manager of North Country Grains, says he initially got two 23-tonne SmartSilos because of their dimensions.

At 3m wide x 6.2m high they were the only storage available that could take a truckload of product without taking up too much room.

Installation was also a factor for Garton; he found setting up the silos was straightforward.

“We just needed to bold together the rings and bases and then lift the silos into place.”

North Country Grains sells stockfood from Auckland to Cape Reinga.

Garton says the two silos have been used to store at least 150 tonnes of soyabean meal and 150 tonnes of dried brewers grain for 18 months without problems.

gareth gillatt

FREEPHONE 0508 733 728 email redpath@redpath.co.nz www.standoffshelter.co.nz

Dairy News september 11, 2012

machinery & products // 69

Good year made better by new machines busy mowing and baling operation.

The operation primarily focuses on silage baling but also does cultivation, undersowing and truck work. “This year we’ll probably make more than 30,000 big round and square bales,” Hawke says.

“It’s been a good year.”

This season has been good for another reason too: buying Massey Ferguson mowers and rakes and a new Fendt 818 has improved productivity and efficiency.

do the local rugby ground and says they give a beautiful finish. And they’re just as effective on heavy crops.

“Having the 4.0m back mower is a major plus. My biggest worry was its ability to follow the contour but it runs under pressure, which forces it into the ground. It’s easy and quick.”

The two new mowers have made a significant difference to his business. “They’ve improved our efficiency because we can mow in the mornings and come back and bale in

“It makes a big difference.

We’re doing five hectares an hour, and that saves us heaps of time.”

Last September Hawke and his partner Anne Corbett bought a new Massey Ferguson DM1330 front mower, an MF DM1364 rear mower and two new Massey Ferguson RK3877 rakes for their business, Phil Hawke Contracting Ltd, Hinuera, 7km south of Matamata.

Hawke has never had a Massey Ferguson mower before and has also never had a front mower.

“Nobody else does a 4.0m-wide back mower.

We can cover 7.0m at a time, whereas the normal combination is 6.0m with a 3.0m-wide front mower,” he says. “It makes a big difference. We’re doing five hectares an hour, and that saves us heaps of time.”

He was worried about how a front mower would work out but says he’s had no problems with it. “I’ve got the Fendt tractor with the front linkage. Now I can send one tractor out and it covers what two separate mowers would cover. I like the way the Fergie mowers are made – they look strong.

“I always got on well with my dealer, Matamata Tractors and Machinery.

I worked for them a few years ago. I know them well, and they do a good deal.”

Hawke uses his new front and rear mowers to

the afternoon. Before now we had two mowers going out and they sometimes weren’t finished in time to start baling.”

Hawke bought the first of his two Massey Ferguson RD3877 rakes after seeing someone else buy one at Matamata Tractors and Machinery. Luckily for him the sale fell through, and he took the rake home. He bought a second rake soon after.

“Comparing the Massey Ferguson rakes to other rakes I’ve had, I would say they’re stronger and easier to operate. We run them in front of the round and square balers and go out to 7.2m wide.

The round balers need a wider windrow and we have to shorten them up for the square baler. The old rake was so difficult but these are so easy.”

Hawke particularly likes the way the tines are set up and how easy it is to replace one if it breaks.

However, despite the busy season he’s had, he hasn’t yet broken any tines.

“If we did have to replace one, it would be a five-minute job, compared to a half-hour job with our old rake. And even if you bend an arm there’s only one pin to pull out to straighten it.”

The other new addition to Hawke’s fleet is a Fendt

818 tractor, which he’s now operating alongside the second-hand Fendt 718 he bought a year ago.

“I found the 718 easy to drive and economical and that’s why I bought the 818. They’re initially reasonably expensive to buy but you save so much in

fuel and ease of operation and they’re so well made.”

The 718 pulls a new baler, while the 818 is used for mowing, square baling and pulling a large undersower.

Both tractors have Vario transmission, making driving easy.

A new Massey Ferguson front-rear mower combination and rakes are helping Waikato contractor Phil Hawke boost the efficiency of his baling business.

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Dairy News september 11, 2012

70 // machinery & products

Phone app turns calf recording one-touch gareth gillatt

A NEW phone app interface for Ambreed’s Insight herd recording system has been a lifesaver for Taranaki

sharemilkers Cat and Caleb Burkitt during calving.

The Burkitts are 50/50 sharemilkers on 150ha in Taranaki where they milk 200 Jersey, Jersey/Friesian cross cows (spring-calving) near New Plymouth.

Cat and Caleb Burkitt with children Katelyn and Mikayla.

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They also juggle raising their two children Katelyn (2.5) and Mikayla (15 months).

“We didn’t have much time between a farm and two toddlers to sit down and be able to focus on entering records,” says Cat. But they got a hand this year when CRV Ambreed asked them to trial the new phone interface for its Insight program.

The Android and iPhone app allows operators to record cow numbers and details about calves directly into their CRV Ambreed Insight records from the paddock instead of writing them in a book and transferring data later to the computer. These include calving dates, drying off dates, mating data, pregnancy test data, treatments, tests and workability scores, and performance graphs, mating histories and animal health treatment histories.

The couple, using a Samsung Galaxy on the Telecom network, say the app is easy to use – a simplified version of the desktop programme. They synched

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CRV Ambreed’s Insight herd recording system.

information instantly to the cloud via a 3G connection, or could have one it later using a WiFi connection. “We don’t have to set aside time to enter data into the computer, so we have more time for our family and farm.”

Burkitts began using the Android app on August 1 and have not suffered any forced closures or ‘freezes’ in that time.

Angela Ryan, CRV Ambreed herd services product manager, says the Android version of the application

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requires 2.48mb of initial free memory and 612kb of memory for 13 new lactation’s and four new bulls.

Data transfer rates are low and Ryan says uploads of as many as 100 records should only use 150kb of bandwidth.

The CRV Ambreed Insight Android app will work on any Android device running on Android 2.2 or higher. The iOS CRV Insight app will work on anything iOS 4 or higher.

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Dairy News september 11, 2012

machinery & products // 71

Udder cream treats mastitis UDDER CREAM Teatease

provides a proven antiseptic against gram negative and gram positive bacteria, says distributor Animal Health Direct Ltd. “Mastitis is caused by a variety of different bacteria or germs and a common source of infection can be dirty teat cup liners, the company says.

“They accumulate skin fat and dried milk fat both of which can harbour germs in the invisible cracks and in the rubber…. Applying the recommended amount of a reliable udder cream… is effective against mastitis-

causing bacteria and germs.”

Teatease, in a non-lanoilin base, is said to be odourless, non-tainting, heals cracked teats and soothing.

It promotes healing of minor cuts and abrasions. It disinfects hands and arms.

Teatease has nil withholding times for milk and meat and has nil residues.

The cream goes “a long way” and at the recommended use rates the two key pack sizes will treat 100 cows twice daily for 1 month (3.5kg pack) and the 285 cows twice daily for 1 month (10kg pack).

Te Awamutu farmer, Chris Lewis is noticing a big difference in his RumenX fed calves.

Special calf meal lifts cow health, behaviour

Quality Counts…

TE AWAMUTU farmer Chris Lewis, is noticing a differ-

Every farm has its demands and each farmer has his own ideas on how to get the best result from their forage harvesting. Therefore Lely offers a wide range of machinery giving farmers the choice to suit their needs.

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ence in his calves - their behaviour, health and the way they look, says RumenX maker Agri-feeds.

RumenX is a specialist calf meal developed specifically to fast forward rumen development.

“The most noticeable differences in our calves since introducing them to the RumenX feeding programme, is their behaviour, health and the way they look,” Lewis says.

“The first week they were they became quiet and content. And as we don’t feed them as much milk anymore they are less scoury.”

Agri-feeds national Chris Lewis marketing manager Debbie Schrader says the extrusion technology used to manufacture RumenX means the ingredients are in a form easily digested by pre-ruminant calves.

“As calves can convert feed earlier they can be weaned off milk as early as 32 days of age and because of the reduction of milk farmers are seeing less nutritional scours,” she says.

Lewis milks 1100 Friesian-Cross cows at the foothills of Mangatautari Mountain and started rearing 500 calves on RumenX during the 2011 season.

“While it was a learning curve for us, Agri-feeds kept in close contact for the first four weeks, answering questions and giving advice. Plus we received a visit from Agri-feeds technical team to make sure we were using the product correctly,” says Lewis.

Agri-feeds says all new RumenX users receive an easy feeder kit with measuring jug, wall chart, weekly calf pen tags, user tips and a trouble-shooting guide.

“We visit our customer regularly to cover off any questions, offer calf rearing expertise and provide technical support,” says Schrader.

Lewis says his calves eat more and this will eventually lead to them producing more milk at their first lactation.

“The heifers appear 20 to 30kg heavier, look stronger and have a bigger gut,” he says.

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Dairy News september 11, 2012

72 // machinery & products

Dairy drenching in the past ANIMAL HEALTH

Direct Ltd says its product Oral-Mag only needs to be administered fortnightly.

Magnesium pidolate is an organic form of magnesium made by compounding magnesium with a naturally occurring amino acid, it says.

“Oral-Mag offers a sustainable solution for animals not getting enough magnesium through their normal dietary intake. The magnesium (magnesium pidolate) contained in Oral-Mag is metabolised

more quickly than other forms of magnesium, and retained by the animal for up to 10 days.”

The bonding between magnesium and the amino

TECHNOLOGIES

acid has three main advantages: magnesium pidolate is quickly transported through the body more readily than conventional magnesium such as mag-

nesium sulphate. It is absorbed easily through cell membranes.

Once inside the cells, magnesium pidolate exhibits an extended residual effect, so magnesium is available when needed, for longer than other magnesium supplements.

Oral-Mag can be used in conjunction with other forms of magnesium supplementation.

Much of the magnesium from other sources could be excreted within 24 hours. So, the best way to ensure cows get enough magnesium is by oral drenching.

AHD Ltd says this way, you can be certain the each cow is getting her

Less stressful ORAL-MAG IS retained in the body for a longer time than traditional magnesium supplementation.

It’s more palatable because it contains flavouring better accepted by cows. It also offers better protection for cows with a history of low magnesium levels. Often the best-producing cows are the most at risk, AHD Ltd says.

It causes less stress on induced cows and cows are more likely to cycle and milk better.

requirements and by using Oral-Mag the need to drench is stretched out to every 10 -14 days.

Every farm has a different level of magnesium in its pasture, depending on physical properties of the soil, climatic region, fertiliser regime and predominant pasture species.

Also pasture and water

intakes between animals vary each day. AHD Ltd says a simple blood test can determine and monitor the magnesium status of animals and help determine the frequency of supplementation.

There are several main causes of reduced magnesium levels in animals.

In some paddocks, grass

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AN AUSTRALIAN pump maker has developed a line of larger-flow, higher-pressure transfer pumps that use less power, and consequently fuel, to shift water.

Australian Pump Industries began work on the project five years ago, says pump product manager Brad Farrugia. “The result is 3-inch pumps that are cost effective but deliver unparalleled results in lowand high-pressure water transfer applications.”

Based on an original design conceived for high pressure fire fighting and crop protection applications, the Brigade Boss pumps achieve head as high as 70m and flows of up to 1500L/ min. They are powered by Honda GX 13hp petrol, or Yanmar or Kubota diesel engines.

The pumps are said to prime better than any other self-priming pump available. “The Brigade Boss series

Kirsty Clayton checks out the new Aussie QP3310SX high pressure transfer pump.

will draw water through a vertical lift of 8.4m.”

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cannot supply enough magnesium, mainly in spring.

Protein content of grass inversely affects magnesium absorption, so the timing of the pastures carrying a high protein level coincides with a high magnesium demand.

But high protein results in low magnesium absorption.

Stress and environmental factors such as a cold snap cause magnesium ‘redistribution’ within the animal, where magnesium moves from extra cellular fluid to the body tissue Increased losses of magnesium also occurs during lactation, the company says.

the user to select, and if necessary to convert, his pump during the life of the unit to different performance characteristics to suit jobs.

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2) INTERNET: direct credit ASB 12 3039 0893559 00 factories, (your surname as reference) PLUS telephone or email us, etc – $1800 saying which product(s) you want. incl. GST + post.

Dairy News september 11, 2012

machinery & products // 73

Accolade for Kia BRITISH CONSUMER maga-

Kia has been awarded the title of Best Car Manufacturer of 2012 for producing cars like the Optima.

New head for Whangarei A&P Society

zine Which? has named Kia Motors ‘best car manufacturer for 2012’ in its annual awards, referring to a “superb range of cars”, excellent value for money and an “industry leading” warranty.

The magazine’s chief executive, Peter Vicary-Smith, said, “This is the first time Kia has made the short-list and to walk off with the

title is a significant achievement.”

He cited Kia customer satisfaction and reliability, noting it had triumphed against strong competition from BMW, Toyota, Hyundai and Skoda.

Said the magazine, “Kia’s new Rio, Sorento, and Picanto have all impressed in our test lab, while the new cee’d 2012 and Optima get the thumbs-up from our initial road

tests. Compared to where it was five years ago, we feel Kia is the most improved car brand around.”

Which? is the UK’s biggest notfor-profit consumer organisation and with a 50-year record of recommending only thoroughly tested products to its one million plus subscribers. The recognition is not before time, says Todd McDonald, general manager of Kia

Motors New Zealand.

“Kia has been working relentlessly on continuous improvement – design and technology development, build quality and customer experience in the dealership…. But you can never stand still – Kia is always looking to make improvements and you’ll see this with the new products that are now in the pipeline,” says McDonald.

For when the going gets tougher

The A&P Show has long been a focal point for Whangarei, says Murray Jagger.

GETTING NORTHLAND’S brightest and best inter-

ested in agriculture is an aim of Whangarei Heads dairy farmer Murray Jagger in his new role as president of the Whangarei A&P Society.

Jagger replaces Grant Billington, encumbent for nine years. The society hosts the annual summer show, the largest event of its kind in Northland.

LIC liaison farmer since 1994 and now a national councillor for Whangarei, and a director, Jagger and his wife Helen farm 500ha at Taurikura Bay, Whangarei Heads.

They are past Northern Regional Sharemilker of the Year winners.

The farm milks 630 Jersey cows and employs four staff.

The Jaggers’ also breed Angus-cross beef cattle from their Jersey herd, rearing the steers through and selling heifers at 18 months.

“I am excited about taking over the role of president at this time in the society’s history,” says Jagger.

Established in the mid 1800s the A&P Show has long been a focal point for Whangarei and surrounding districts. Now the society faces an era of change, Jagger says. “As a nation we have a population that has moved away from its traditional roots on the land, yet food production and utilising our wonderful resources have never been more crucial.

“Agriculture has never had such an important role to play and is the fourth-largest employer in Northland. So the society has taken a look at making a more tangible contribution to agriculture in Northland. It is vital the agricultural industry provides resources and training to help the brightest and best of our young folk get excited about agriculture and provide opportunities for them to become involved.

“The society believes it can play a role in this and is working on a plan of action to make this happen. As president of a society that has stood the test of time, I am looking forward to assisting the organisation head in an exciting new direction.”

Jagger brings a wealth of experience to the role, both as a farmer and businessman. He has held the directorship with LIC since 2000.

He is a member of the Institute of Directors and has been on the Whangarei A&P Society committee since 1998, most recently in the role of vice-president.

He was also the foundation chairman for Northland’s Kikuyu Action Group which was established in 1999.

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Loaders, implements and attachments shown above are sold separately. † The engine horsepower information is provided by the engine manufacturer to be used for comparison purposes only. Actual operating horsepower may be less.

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Dairy News september 11, 2012

74 // machinery & products

Keeping our fish free of grass staggers tony hopkinson

A STORY arising from the sinking of MV Rena after its grounding on Astrolabe Reef off Tauranga is worthy of Ripley’s Believe It Or Not. It involves five containers holding 4800 x 25kg bags of Chinese magnesium oxide packed in 1.25t sling bags,

and an observant fishing-trawler deckhand who happened to be the fiancée of the commercial manager of the company importing the material into New Zealand.

MV Rena ran aground on October 4; so began the long job of removing fuel, lubricants and containers.

Imperil Trading Company was founded five years ago by Earl Hazel-

Sue’s fiancé Glen Hazelwood (right) and brother Jeff Hazelwood of Imperial Trading.

wood and his two sons Jeff as general manager and Glen as commercial manager. Earl was previously general manager of Agrifeeds Mount Maunganui, owned by PGG Wrightson. Glen also worked for a time at the bulk supply depot.

Imperil imports, manufactures and supplies mineral and chemical commodities for agricultural merchants, vets, feed mills and fertiliser companies (www.imperiltrading.co.nz).

“We lost all our consignment and though we were insured it did impact our planned supply chain to our clients,” says Glen, commenting that any fish in the vicinity would be well protected against grass staggers.

Sue Hill, Glen’s fiancée has worked five years as a deckhand on fishing boats. She is from Tokomaru Bay and started fishing out of Gisborne. After doing a relief run for Tauranga fisherman Neil Gwyllum she has worked fulltime for him for four years.

His boat Gay Maree is an 18m steel trawler with three crew.

Sue Hill was surprised to find the bag.

Trading – Glen’s company.”

After much excitement and comments about where people drop their rubbish they eventually returned to port with a unique story.

The coordinates of MV Rena are 37.32.48S and 176.25.72E so the bag, less contents, had travelled 30.5 nautical miles – 56km for land lubbers – and taken nine months to get there.

On July 2 this year Gay Maree was fishing for snapper and tarakihi between the Aldermans and Mayor Island (coordinates 37.08.07S and 176.02.43E) in 68m of water.

Says Sue, “I was on the port side and with the other deck hand we were guiding the net as the skipper winched in the catch when up in the net came a tattered plastic bag which I instantly recognised from the logo as belonging to Imperil

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Beat bloat this spring Spring is the most common time for bloat to occur. There are many factors that influence the onset of bloat but typically, bloat is associated with lush, rapidly growing clover. However bloat is also prevalent in pasture with high moisture and low fibre content.

There are a number of ways to reduce or prevent the occurrence of bloat. > Ensure cows are introduced to lush pasture slowly and not given the opportunity to gorge on pasture known to produce bloat. Feed supplements such as hay or silage alongside or prior to pasture grazing. > The use of rumensin can also reduce the incidence of bloat. > Bloat oils or detergents are useful when known high risk pastures are being grazed or in the case of a bloat outbreak. > Bloat detergents can be dispensed via water. This can be unreliable as cows consume less water in wet weather and may not receive adequate detergent to prevent bloat. > The most effective way of ensuring bloat is controlled is via drenching. Depending on the bloat risk, this may be once or twice daily following the dose rates.

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Freephone 0800 10 22 76

Helping grow the country