Dairy News 30 October 2012

Fonterra board election candidate profiles. Pages 5-9

can’t keep looking for a a good man clean cut? down Silage block cutter Page 40

Farmer bounces back Page 11

october 30, 2012 Issue 279 // www.dairynews.co.nz

“Tensions over the new structure will eventually lead to Fonterra’s listing on the stock exchange” – Douglas Bull, Whakatane. PAGE 12

Co-op champ hangs up his boots SOMETIMES, A LITTLE BIT EXTRA MAKES ALL THE DIFFERENCE.

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Dairy News october 30, 2012

news // 3

Board revamp uproar andrew swallow andrews@ruralnews.co.nz

Dairy Women’s Network membership boom. PG.17

Iwi marches on with dairy development.

PG.26-27

Robotic milking needs keen minds.

PG.34-35

News ������������������������������������������������������3-19 Opinion ��������������������������������������������� 20-21 Agribusiness �����������������������������22-23 Management �������������������������������24-27 Animal Health �������������������������� 28-33 farm dairies & equipment ������������������������������������34-36 Machinery & Products ���������������������������������������37-42

FONTERRA SHAREHOLDERS are questioning the timing and implications of a governance and representation review underway in their cooperative.

The review was instigated late last year but until the round of shareholder meetings earlier this month, most grass roots suppliers were unaware of it.

Questions asked at those meetings elicited confirmation the review is underway, as did a subsequent email to shareholders.

“The timing of a governance review is completely inappropriate in my view,” South Canterbury supplier Ryan O’Sullivan says.

Regardless of all the promised controls of TAF (trading among farmers), its implementation has created “a sense of loss of ownership and control” among suppliers and for Fonterra’s chairman to then suggest fewer farmer directors on the board before TAF is in place “really just adds to that feeling,” he says.

“TAF needs to happen and be there for a while and farmers need to be comfortable with it before they go ahead with this review. It’s not a time to be talking about reducing farmer control on the board.”

O’Sullivan’s views are echoed by Mid Canterbury shareholder Ted Rollinson, who asked Fonterra chairman Henry van der Heyden about the review at the Ashburton shareholder meeting.

“Under good corporate governance there may be a case for decreasing farmer directors to eight and having five independents but Fonterra isn’t a corporate, it’s a cooperative. My view is that because it is still owned by farmers there should be good farmer representation at the top table. We should stick with nine.”

Both O’Sullivan and Rollinson are concerned at outgoing chairman Henry van der Heyden’s ex officio role in the review working group when chairman elect John Wilson isn’t involved. “He [Wilson] needs to stamp his own culture on the board,” says Rollinson.

He hopes the review and mooted 8:5 farmer:independent board split isn’t a ploy by van der Heyden to remain on the board. “Once we’ve elected a new chair the ex-chair needs to have the

good grace to step down and allow the new chairman to develop things.”

O’Sullivan urges fellow shareholders to look into what’s going on, and if they’re concerned, take those concerns to their Shareholders Council representative. “We really need the Shareholders Council to come into its own on this one.”

Feds Dairy chair Willy Leferink believes the only governance change Fonterra needs is a deputy chair.

“It is needed to ensure there is a succession pathway at the very top.”

Rather than kicking off yet more changes, the cooperative should be concentrating on bedding down TAF and putting controls on it with a constitutional resolution at December’s annual meeting, he says.

Board light on farmers FEDERATED FARMERS has also raised concerns about the lack of farmer representation on the Fonterra Shareholders Fund (FSF) board.

Though Feds applauds the calibre of the five-strong body set up to establish the fund, it says at least two farmer directors – though not necessarily both dairy farmers – would have been better.

“With the exception of Jim van der Poel, it is pretty much devoid of people who understand what we shareholders go through to produce the goods that make the co-op tick,” says Feds Dairy vice chair, Kevin Robinson.

The shareholder fund board is chaired by former PriceWaterhouseCoopers chair John Shewan, with Pip Dunphy and Kim Ellis appointed by Fonterra as fellow independent directors. Fonterra’s representatives are its independent director Ralph Norris, and farmer director Jim van der Poel. Three directors will in future be elected by unit holders and two directors by Fonterra.

Council chair plays down concerns SHAREHOLDERS

COUNCIL

chairman Ian Brown is clearly frustrated with the sudden furore about the governance and representation review.

The review has been on the agenda “for about a year”, he says, and should not be news to shareholders as he wrote about it a few months ago in the Fonterra shareholder magazine, and it was discussed at the Fonterra networkers conference.

sidered and the ShareThe review is curholders Council hasn’t rently at a sub-comyet formulated a view mittee stage and that on what’s an appropriate committee is working way to proceed. through various options.

“I think people are “The eight and five split being presumptious to is just one of the options suggest there’s another – no more, no less. The restructure coming status quo is obviously Ian Brown up. This is going to an option too.”

Brown says it would be premature take at least another year to work to go into all the options being con- through.”

The review concerns much more than just the right number of farmer directors on the board of Fonterra, he adds.

As for there being a “hidden agenda, or whether it’s being driven by any individual, the answer is definitely no.”

“This is just another work stream that should be on the agenda. It’s not designed to happen tomorrow by any means,” Brown says.

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Dairy News October 30, 2012

4 // news

School’s ‘wealth’ linked to free milk uptake pam tipa pamelat@ruralnews.co.nz

FONTERRA IS evaluating the nationwide launch of Milk for Schools based on the pilot scheme in Northland where enthusiasm for the scheme has a strong link to the school’s decile rating.

A few higher decile schools in Northland have opted out, whereas lower decile schools, where nutrition needs are higher, remain highly enthusiastic.

Fonterra group marketing manager beverages, Craig Irwin, says they haven’t yet decided on the national launch and are still evaluating it.

“We are looking at what’s working and what’s not…. it’s massive. We’ve served a millions serves in Northland alone, so to roll it out nationally (2000 schools) is a big undertaking… lots of logisitics for us and a bit of coordination with the schools.”

Irwin also refers to behind-thescenes discussions with potential partners in sponsoring the scheme, but there is nothing concrete yet. “Ideally

we didn’t want to go it alone. It would have been good to get the Government on board because there is a real need out there and partners are welcome.”

The Northland pilot scheme which began in February operates north of Warkworth and has grown from 103 to 119 schools, reaching 7500-8000 children a day.

Irwin says they survey the schools regularly, and 90% have said they are ‘satisfied’ or ‘very satisfied’ with Milk for Schools. Fridges are installed in schools and the UHT milk is supplied in cartons, with a recycling system in place.

A few schools have dropped off, which Irwin sees as a normal sorting out. “It naturally has a lot of enthusiasm at the start and then it settles down into normal operating business. In some higher decile schools they don’t see the strong compelling need as much as some of the lower decile schools, so that makes it a bit easier for them to opt out.”

Irwin says the system should be voluntary for schools and children; this was an important guiding principle from the start. “ If the school is enthusiastic and

finds ways to implement it smoothly, then it goes well.”

Some children do not like the taste of UHT milk but this isn’t a huge factor in opting out. “It’s not chocolate milk, it’s not Coca Cola, so when the novelty wears off some would rather have something more interesting such as chocolate milk. We really don’t want to go down that path.”

He questions how much these children need the nutrition. “In the lower decile schools you get principals who are really satisfied and excited that they are

Fonterra’s Kelvin Wickham and Manaia View School students Ginnye Shelford and Anaya Wakelin at the Milk for Schools launch in March.

helping kids in need of good nutrition.

They just about hug you when you walk in the door, because the kids need it.”

The pupils are now more focused in class. “Milk is low GI, it’s good sus-

tained energy and you don’t get a sugar rush, so they notice a real improvement in the kids.” @rural_news facebook.com/ruralnews

sri lankan schools join in FONTERRA HAS launched a milkin-schools scheme in Sri Lanka.

Fonterra Brands Lanka (Pvt) Ltd is giving a free glass of milk to students in certain schools in the Biyagama area, the Sri Lanka newspaper Daily News reported.

The launch was attended by Economic Development Minister

Basil Rajapaksa who also inspected Fonterra’s milk production procedures.

He said at the launch of the school milk scheme that his government planned to develop dairy farming with the aim of making Sri Lanka self-sufficient in milk.

Increasing milk production, importing hybrid cows and providing a good price for liquid milk, were some of the measures taken, he said.

Fonterra Brands Lanka (Pvt) Ltd collects 27,000 L of milk from 3500 farmers daily, the newspaper said.

Hoping the grass keeps growing IF GOOD growing conditions continue, the resulting higher production will help soften the blow of the lower milk solids payout and the effects of the high New Zealand dollar, says the head of agri and commercial at ANZ Bank, Graham Turley.

The short term is going to be tough, Turley says, “but we’ve seen a big change with many dairy farmers over the past few years being much more attuned to what their costs are and what their production capability is, so they are able to fine tune a little bit.

“Our cows can be inside sometimes for 24hours a day when the weather is bad. They are quite and happy. There is no waste of feed, and they need less food, because they are not using energy to keep warm and the pasture is protected.” Dairy Farmer Quote “We’ve got virtually no pugging damage and we’ve got more grass now than I think we’ve ever had” Beef Farmer Quote

“Farmers may just hold back on something to get through. They have to be much more aware of what their cash position is and what their cost structures are.”

In recent years farmers who have used cash surpluses to pay down debt are in a much stronger position, Turley says. ANZ has worked hard to get farmers to understand their cost structures better and reduce debt.

Some mortgagee sales now result from conversions

begun about three years ago by farmers who appear not to have the operating capital to get their farms up to full potential.

“The ones who’ve been able to hang on are now able to get up into the high production levels and they are producing more milk.”

Turley says the high New Zealand dollar is a risk for the dairy industry and it threatens payouts. Elsewhere, increasing dairy production in South America and Belarus needs watching.

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fonterra board candidate profiles // 5 Grant Cochrane

jacqueline rowarth

‘Shelve the gumboots, grab the calculator’ FORGET THE traditional career to dairy farm ownership: Dunedin-based multiple farm owner, company director and Fonterra board candidate Grant Cochrane went currency trading.

“From an early age my ambition had been to own a farm, however not coming from a farming family the challenge I faced was finding a way to generate the equity to realise this dream,” he says.

Inspired by a 1987 television programme on currency trading, he did a Bachelor of Commerce (Finance) at the University of Otago, then jumped in at the deep end of world markets, London, in 1989.

By age 26 he was head of global derivatives trading with Credit Suisse and jointly responsible for trading and sales

operations in London, Singapore, New York, Zurich, Geneva and Lausanne.

In 2000, with his first farm bought, he returned to New Zealand “to focus on farming and family.”

Cochrane says the change of career “was rewarding and provided a chance to learn a whole range of practical skills.”

One farm lead to another, and another, and a large-scale dairy equity investment.

The farms are now leased and they’ve moved into Dunedin “for our children’s education.”

He’s managing director of the South Island’s largest plumbing business, AG Foley, and a former director of velvet marketer ProVelco. He says his reasoning for seeking a Fonterra directorship

is two-fold.

“Firstly, with 95% of our payout determined by currency and commodity prices I believe the skills and experience that I would bring… are both highly relevant and unique in a farmer director.”

Increasing reliance on GDT and the introduction of TAF only add to that argument, he says.

“Secondly, our family has been privileged to enjoy prosperous times in our farming career, in large part because of Fonterra’s formation and success. For our children to enjoy the same opportunities it is vital that Fonterra continues to be well governed by farmers with sound commercial experience.”

On TAF, Cochrane says: “We need to remain vigiliant so we do not lose control over our co-op. Central to that will be the size of the fund as well as ensuring we have the right commercial skills on our board to ensure that it is acting as it is intended to.”

lachie cameron

‘Lead courageously in tough times’ FORMER ALL Black and career dairy farmer Lachie Cameron promises to bring “leadership through courage to the table of the Fonterra board of directors” should he be successful in his candidacy.

While his submission to the parliamentary select committee on the DIRA reform bill called for a 75% threshold for TAF (trading among farmers) to proceed, and was critical of the board’s handling of the process, the challenge now is to “get on and make the most of it,” he says.

“We need to make sure the changes put in place deliver value to shareholders. That’s really important to me.”

A risk with TAF is that it will make it easier for Fonterra to acquire capital, so discipline in the deployment of that

capital may not be as strong, he believes.

“That [must not] happen, otherwise we dilute the whole business.”

Nonetheless, opportunities to capitalise on internal growth and execute judicious acquisitions, adding substantially to farm payouts, must be captured, he adds.

He’d also like to see Fonterra taking more of a lead globally on environmental issues.

He sees continued good governance as a key issue for Fonterra, and would like to see more done to develop and bring on future directors for the cooperative.

“At the end of the day, the buck stops with the board.”

Having stood for the board last year, Cameron told Dairy News he didn’t par-

ticipate in the candidate assessment process this year “because it’s not 100% independent. To me that’s critical to get the right people.”

‘Better communication crucial’ THE BIGGEST challenge for Fonterra, or

any dairy company today, is the increase in resource management rules which are putting strictures on farm operations and raising costs, at the same time as the consumer or customer is saying milk is too expensive, says board candidate Jacqueline Rowarth.

“The fundamental problem is farmers are in an increasingly expensive production environment when people are prepared to pay less and less for their food,” she told Dairy News.

In general, the public fails to understand, or realise the long-term consequence of, that pincer movement. Similarly some policy makers appear to be ignoring it.

“It all comes down to communication, which is where I come in…. Science and communication are my skill, and I have always tried to take the perspective of the farmer, understanding the practicalities of the issues, to the highest level.”

She has a string of awards recognising her abilities in both areas, and has governance experience with a number of research and academic institutions.

Currently she’s Professor of Agribusiness at University of Waikato and a director of Agmardt.

“I think the cooperative structure is hugely important in New Zealand agribusiness and we need to do a better job of getting the value back to the shareholders in cooperatives. That’s going to take some R&D…. We lose the cooperative ethos at our peril.”

The public are quick to support fair trade for goods such as chocolate or coffee, she notes. “But what about fair trade for our domestic farms? Fair trade’s not just about luxury goods!”

On TAF (trading among farmers), some of the details emerging are surprising some shareholders, she says, and while she doesn’t go so far as to say so, that hints at another communication issue.

john wilson

‘Driven by passion for Fonterra’ FONTERRA CHAIRMAN-ELECT John Wilson says

its “pure luck” that his elevation to the top post will be endorsed by farmers. Wilson, one of the two retiring directors seeking re-election, says it’s great that farmers have a chance to do that.

“I’m very fortunate to also have strong support from the board as chairman-elect,” he told Dairy News.

The Te Awamutu farmer has been on the Fonterra board since 2003 and was previously chairman of the Shareholders Council. He says his passion for the co-op drives him every day.

A third generation dairy farmer, Wilson’s family has deep roots in dairy co-ops. “For me, the principle thing that drives you every day is the passion for Fonterra.”

Now, with TAF almost finalised and the strategy refresh

spearheaded by chief executive Theo Spierings, Fonterra is ready for the next stage, “[doing] the basics well, providing outstanding service to farmers and customers.”

With TAF scheduled to launch later this year, Wilson says the onus is on the co-op to launch the scheme with “real accuracy”.

“We must make sure every farmer has every confidence in TAF. In one year we must look back and say we have done things right.”

Earning the respect and support of every New Zealander is also one of Wilson’s priorities.

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Dairy News October 30, 2012

6 // fonterra board candidate profiles donna smit

grant rowan

‘Life blood in co-op’s success’

‘Benefits must align for co-op and owners’ BAY OF Plenty farmer Donna

Smit believes Fonterra has an opportunity to reconnect with farmers. If elected to the Fonterra board, she will push for a strategic direction “where the benefits to Fonterra and to its farmer owners are aligned”.

“We must recognise the contribution a loyal supply makes to Fonterra’s bottom line,” she told Dairy News.

Smit will also work towards lifting the farmgate milk price and improving sustainability.

Balancing what the industry can afford with what needs to

be done will take strong leadership, she says.

“Fonterra, Dairy NZ and Federated Farmers all have a role to play; we must work together in a coordinated approach so as not to duplicate costs and to get the best outcomes for our farmers and our environment. In the future we will be proud of the gains we have made.”

Smit, an outspoken critic of TAF, is making a commitment to “working in a positive manner to implement a successful TAF”.

“There is still a lot to

do, Resolution two can be improved. I will be looking to honour the 100% ownershipand-control promise made to our farmer owners.”

Smit and her husband Corrie and their four children own five dairy farms, trading as Corona Farms Ltd, a business they started from scratch 26 years ago.

The company runs 2300 cows and Smit is the solecharge relief milker for its Tawa street farm. “I find milking provides a good time to reflect,” she says.

GRANT ROWAN says “as dairy farmers, the on-going success of Fonterra is our life blood”.

“I am committed to the success of Fonterra as an intergenerational high performing cooperative serving and growing value for dairy farmer supplying shareholders,” he says.

Rowan’s family owns and operates two dairy farms in Southland milking 1350 cows.

Raised on a family dairy farm near Wanganui, he sharemilked in Manawatu to achieve farm ownership. He was Manawatu sharemilker of the year and runner-up New Zealand sharemilker of the year in 1998.

As an office holder in Federated Farmers, his positions have included Manawatu sharemilkers section chairman, Manawatu dairy section chairman, provincial vice-president and national dairy executive member. He was also a Southern Manawatu Fonterra shareholders councillor from 2004 to 2008.

He has facilitated investment in at least 40 dairy farms for eligible investors in New Zealand dairy farming syndicates via Myfarm where he is a shareholder and director.

He says he has good analytical skills, and is able to make tough decisions, he says.

ABAgSc (Hons) graduate from Massey University in 1987, he also attained an MBA (distinction) from Massey University in 2002 and holds a Certificate in Company Direction from the Institute of Directors. Married to Angela, they have three children, one at university and two at high school.

She is motivated to contest the election to use her strategic skills and leadership experience “to repay the dairy industry for the opportunities it has given me and my family”.

“I believe in the collective strength of the cooperative model and its superior ability to look after farmer shareholder interests,” she says.

nicola shadbolt

‘TAF prospectus is a bloody good read’ AS AN incumbent director

seeking re-election, Nicola Shadbolt says she’s severely constrained on what she can say about the issues facing Fonterra and its future direction.

However, one key point is “reinforcing the structure of the cooperative and delivering

to that co-operative ethos as we evolve,” she told Dairy News.

“The cooperative is a good model and part of our focus is protecting that model.”

Elected in 2009, Shadbolt serves on Fonterra’s capital structure and supplier relations committees, and the milk pay-

ments and international farm ventures groups.

As a farm manager, farm director and academic, she says she brings to the board both a practical perspective and international outlook. “I attend a lot of international agribusiness to page 7

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Dairy News october 30, 2012

fonterra board candidate profiles // 7 nicola shadbolt from page 6

workshops and network around the world on what’s happening in agribusiness.”

Besides her Fonterra role, she’s Professor of Farm and Agribusiness Management at Massey University, a fellow of the New Zealand Institute of Primary Industry Management and a trustee of the Agri Womens Development Trust. “That’s about nurturing the next generation which is something I feel very strongly about.”

She sees her first three years on Fonterra’s board as something of an investment in her by the cooperative and one which, if re-elected, it’s her duty to deliver on for the benefit of the shareholder base and benefit of the cooperative. “When I was asked to stand three years back, I was asked would I be in it for the long haul, and I said ‘yes’ at the time and it’s still ‘yes’ now.”

Speaking to Dairy News on the eve of the TAF prospectus launch, Shadbolt couldn’t comment on its content, other than to recommend it. “It’s actually a bloody good read.”

eric ray

‘Still milking twice daily’ THE SON of dairy farmers, Eric

Ray after leaving college joined the local milk powder plant at Waitoa.

This became his career choice so he worked in both the powder plant and butter factory, obtaining a Diploma in Dairying (Butter Making) at Massey College.

He was promoted through various plants of New Zealand Cooperative Dairy Company (NZCDC), taking his first management posi-

tion at the Waharoa milk powder processing plant.

“I have been fortunate to talk one-on-one with farmers on many occasions given my vast experience working at management level,” he says. “This meant their concerns were able to be voiced and I in turn reported the information to the directors and supplier reps.”

In 1974 NZCDC gave Ray

responsibility for all activities in the Waharoa and Reporoa area and later the Te Awamutu region.

He came onto the family 40ha farm in Springdale near Te Aroha about 22 years ago.

“I am standing because I am unhappy with Fonterra; my background means I am able to access this. I am active and advised Fonterra of yield problems that were a carryover of my advising the

NZCDC. My work on my farm was acted on in 2006 to give a substantial increase in payout.”

Ray says he has worked in the dairy industry in Asia so has seen how our product is handled.

He voted against TAF and is concerned for the suppliers – the ‘mums and dads’ – who are good farmers but are struggling.

At age 72 he says he still milks his own herd twice a day.

michael spaans

‘It’s time to refine the course’ DAIRYNZ DIRECTOR and Waikato

dairy farmer Michael Spaans thinks Fonterra needs to focus on performance, maximising its milk price, and further investing in valueadded products and value-added returns.

Fonterra has a good strategy and a good chief executive, he says, but has been distracted by TAF. It’s time to implement strategy to get the co-op back on course.

“Performance wise it has been a bit flat; we are starting to make it too easy for competitors to match the Fonterra milk price. We need to get TAF implemented successfully and to focus on the performance of Fonterra itself.

“I think Fonterra can run better; it has been distracted and we need to ensure we maximise the milk price, remain competitive and invest in our valueadded products.”

Spaans served on Fonterra Shareholders Council for eight years from 1999 and went through the governance development programme. He says he realised it was difficult for farmers to become directors of Fonterra and add value immediately.

“We need to have that training and governance experience and that’s what I have been doing for the last four or five years. I am a director of a number of companies and have gained that experience and stand for the Fonterra board where I can add value straight away.”

A dairy farmer since 1984, Spaans now owns a 146ha farm, a 27ha support block and has farming interests in Chile. He is a DairyNZ director, including director of NZ Animal Evaluation Ltd, chair of the board’s strategy and investment committee and has been appointed director to the NAIT and AHB merger establishment board.

He also holds chairmanships of Waikato Innovation Park, Dairy SolutioNZ Ltd, Beef SolutioNZ Ltd, New Zealand Food Innovation Waikato and Animal Breeding Service Ltd and is a director of Shoof International Ltd.

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Dairy News october 30, 2012

fonterra board candidate profiles // 9 blue read

‘TAF must come with safeguards’ FORMER FONTERRA

Shareholders Council chairman Blue Read, approached by Fonterra farmers to contest the election, says the question is how he could add value to the co-op.

Read chaired the council when farmers in July 2010 approved TAF in principle. He supports TAF but wants safeguards including tighter limits on the size of the Fonterra shareholders fund.

A motion to curb the fund size failed just short of the 75% majority required at the co-op’s special meeting in June.

Read wants the motion voted on again at Fonterra’s annual meeting in

December. “I think TAF is essential for Fonterra but it must come with safeguards to ensure 100% ownership and control by farmers.”

“Cooperatives are like any other business: they are an evolutionary beast.

The key ethos is that people who own the cooperative must use it and patronise it to get the benefits. Owners must also be prepared to fund it.”

Read believes strongly in cooperatives and is chairman of New Zealand Cooperatives Association. The coastal North Taranaki dairy farmer has completed the company’s candidate assessment panel process, which he

in brief Southern focus to DairyNZ AGM

instigated when he sat on the Fonterra Shareholders Council.

Read joined the council when Fonterra was established in 2001 and stepped down in 2010 after three years as chairman. He and his wife Shirley milk 200 cows on their 90ha Waiiti farm, but he doesn’t expect to continue milking cows if he wins a seat.

DAIRYNZ ‘S ANNUAL meeting last week had a decidedly southern flavour, with chief executive Tim Mackle saying dairy now contributes 8% of Southland’s GDP. At least half the average annual milk revenue of $1.2 million/farm circulates through the local economy and at 506,000 cows, Southland’s dairy herd surpassed Taranaki’s for the first time last year, accounting for 11.5% of national production.

The South Island now produces about 39% of production, from about 37% of the national herd.

“Southland-Otago is one of the areas showing the most growth and we have recognised this by putting extra resources into this area.”

That means more staff, farm support, and research to tackle issues specific to the area, such as wintering and sensitive catchments like the Waituna Lagoon.

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SOUTHLAND DAIRY farmer Jan Kingma supports much of Fonterra’s strategy but believes some sharp choices are yet to be made.

Fonterra aims at spreading its wings widely across the globe, operating in a large variety of commodity and consumer markets, he says. But the resulting complexity carries considerable risk of overstretch.

Kingma is a Dutch-born New Zealand dairy farmer, who has held senior managerial positions and chaired boards within a diverse range of industries, including agri-business, mainly in Europe. He became a New Zealand resident in 2006 when he also bought his dairy farm in Southland.

Kingma says his 17 years’ working experience with Wessanen, Koopmans and BP Nutrition gave him exposure to many aspects of the international agri-business. He managed strategy, finance and control, an international IT department, led sales and marketing organisations in nine European countries and was heavily involved in merger and acquisition projects.

He has served on a number of boards in the 15 years since. With a masters degree in economics, he says his experiences include all aspects of strategy, finally teaching the subject at university level.

Kingma has written three open letters to Fonterra since 2009 giving his in-depth analysis on its strategy and has published them on his website. The letters list areas in which he believes Fonterra has not considered risk assessment sufficiently.

They include its Beyond Borders policy, the combination of commodity, ingredients and consumers businesses in one company, whether investment in farms overseas is prudent and Fonterra’s reluctance to sell parts of the business to fund new ventures.

In his 2012 comments he says there is much positive about the new strategy presented by Fonterra chief executive Theo Spierings. However some of his concerns from 2009 remain.

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Dairy News October 30, 2012

10 // news

‘Budget discipline crucial’ A PREDICTION by MPI

Tim Mackle

of a 57% drop in pre-tax profits caused by the lower milk solids payout has prompted a warning for dairy farmers to be disciplined about budgeting.

DairyNZ chief executive Dr Tim Mackle told Dairy News that probably fewer than 15% of farmers are budgeting one year

ahead then monitoring those budgets. It’s crucial such discipline is imposed on farm working expenses, he says.

“One cost that has risen significantly since the 2007-08 drought is total feed costs. That particular year was a high milk-price year but it was also a drought, then we

had the recession. Feed shot up from about 80c/ kgMS to about $1.40/kgMS and it’s sort-of hovered around that figure. This figure takes into account all feed costs including the cost of planting and harvesting supplements, and buying feed off-farm; it’s not just supplementary feeds.”

Mackle says while this is a significant cost it’s also important that farmers don’t underfeed cows but go back to pasture and make sure they utilise to best advantage.

“Feed related costs are now the single largest cost on a dairy farm.

Interestingly labour costs per kgMS haven’t changed much, even though wages have gone up. That’s because farmers are getting more milk solids out of a unit of labour and so the big upwards mover has been feed and it dwarfs everything else now. Interest costs are probably $1.50/kgMS on average, so that’s also a big cost and you can’t do much about that.”

Dairy farmers now most in difficulty are those with high farm working expenses and high interests costs, Mackle says.

Some farmers’ interest bills could be as much as $2/kgMS. Short-term prospects are not bright, neither are the medium- and long-term prospects. And though the present blip

in payout is no surprise to farmers, they must still monitor their budgets.

“Go back and look at those costs and budgets; make sure you don’t cut costs unnecessarily, but if there are opportunities to genuinely make savings and be more efficient and more productive then that’s a good thing for the farm and the industry.

“An old adage says people take two or three years to recover from a good year and one year to recover from a bad year.

In other words, in difficult times farmers find ways to make themselves more efficient and more productive and the reverse is also often true when milk prices are good people and tend to relax.”

Mackle says farmers should not be afraid to seek good advice from other farmers or rural professionals about their budgets. DairyNZ is monitoring the situation and may run special financial seminars if needed, as was done several years ago at the depth of the recession.

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A2 CORPORATION (A2C) has appointed Chinese distribution partners for the launch next year of its a2 brand milk powders and infant formula in China.

Sales of the a2 infant formula to China could reach $50 million in four years, the company believes. Production of infant formula by Synlait Milk, Dunsandel, is likely to begin in December and first sales into China by June next year.

A2C, based in Australia, had a supply agreement with Synlait Milk to source a2 milk from accredited New Zealand dairy farms and make a2 brand milk powders and infant formula.

A2C has now appointed China State Farm Holding Shanghai Company (CSF) as the exclusive distributor of a2 brand infant formula in China. CSF is a subsidiary of China National Agriculture Development Group Corporation, the only Chinese state-owned enterprise in agriculture, animal husbandry and fisheries. Its business is large in the major agricultural regions of China, including trading and distributing agricultural inputs and consumer products. It has strong local relationships and financial capacity to set up infrastructure, distribution and marketing to support the A2C infant formula business, says A2C. The distribution agreement is for three consecutive three-year terms with renewal conditional on performance.

A2C managing director Geoffrey Babidge will head a joint marketing committee comprising representatives from A2C and CSF. Initial distribution will be in five cities totalling 50 million population, then it will expand across China, Hong Kong and Macau.

A2C will sell the a2 brand infant formula to CSF. It will be packaged in shelf-ready form to ensure and maintain quality. Babidge says the China distributor appointment is a significant development. “Having now secured supply and distribution… with highly credible and experienced market participants, A2C is now well positioned to enter the Chinese market.”

Dairy News october 30, 2012

news // 11

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E S O O H C Storm-ravaged farmer U O 2 Y R & ION 1 O makes a comeback OPT E C N A FIN South Taranaki dairy farmer David Werder in front of a new shed for calves.

PETER BURKE

SEVEN MONTHS ago

South Taranaki dairy farmer David Werder was standing in a paddock amongst twisted corrugated roofing that had been a hay barn. Today two new barns are up and his farming operation is back to normal.

Werder was one of many farmers in the tiny settlement of Kakaramea, just north of Patea, who were hit in March by ferocious winds. It was utter devastation: falling trees cut power, damaged fences, blocked races and damaged sheds, houses, schools and halls.

But Werder simply got on with the job and did his best until power was restored and his farm returned to normal. “We lost two hay barns during the storm and they have

both been replaced with more suitable sheds, but at a cost. There was insurance but it didn’t cover what we actually rebuilt.

It took about four months to get all of those sheds back up because there was a lot of pressure on the builders. The big issue was sheds for the calves and in the end we’ve got better facilities than we had before the storm.”

Werder says the previous sheds were essentially hay barns converted for calving; now they are purpose built. He says while he had insurance it was a nominal amount and did not cover the cost of full replacement. He estimates it cost him about an extra $15,000 but he says the new sheds are stronger and able to withstand strong winds.

The big issue in March was lack of power and the lack of local generators to

run milking sheds. Werder had a generator before the storm but has since bought a new one.

“There are probably five or six generators within 2km and all are capable of running milking sheds. We’ve also set them up for water and quite a few farms have got a little generator as well so they can be self-sufficient in water. At the time of the storm water was a big issue. I think we bought two or three tanker loads to get us through tight periods but now we have the facilities and the knowhow to get things running quickly,” he says.

While many dairy farms had fences and races knocked out by falling trees, Werder says he was lucky; this type of damage on his farm was minor compared with others.

But like a lot of farmers in Taranaki, he has

a forestry block which was damaged by the high winds. He says some farmers had to mill their damaged forestry plantations and get what they could for their logs – in most cases very little. Some just cleared out the logs and planted again, their retirement plans in tatters. In his case much of the damage was to trees in the middle of his block and only when he logs it in about 10 years will the full extent of the damage be known Maize crops were also badly damaged in the storm and Werder estimates yields were as low as 12-13 tonnes/ha, which meant the growers would lose money on the crop or at best just cover their costs. While maize yields in the area were low, farmers including Werder used PKE as the supplement of choice to keep going.

some lessons not learned WHILE DAVID Werder and many farmers have learned from the devastation a big storm can cause, he’s surprised some haven’t.

“Unfortunately some people still haven’t equipped themselves properly for another one. Maybe it will be a long time away but some people said at the time, ‘oh I must

buy a generator’ but they have just turned off and haven’t equipped their sheds with plugs or haven’t organised themselves to handle this.”

Werder says in an event like the March storm, farmers have to be able to look after themselves because there are insufficient people or resources to help them fix the problems.

“You can get and help your neighbours a little bit, but you still have to get your own farm and the cows up and milking.

As well you may have extended family – especially elderly folk who need your help. It’s frustrating that some people just think that somebody else will fix it. In reality you have to be self sufficient.”

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Dairy News October 30, 2012

12 // news

Co-op champion to hang up his boots Co-ops can overcome challenges without ceding control to outside investors, says retiring dairy industry leader Douglas Bull.

cooperatives.

On the verge of retirement, the former industry leader remains convinced TAF (trading among farmers) is a smokescreen for eventual listing of Fon-

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WHAKATANE farmer Douglas Bull

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its merger with two other regional processors to form Bay Milk Products in the 1970s. He was a director of Bay Milk until its merger with the New Zealand Dairy Group in 1992.

Following the merger he became deputy chairman of the New Zealand Dairy Board and stepped down in 1997 to concentrate on his farm.

A Fonterra supplier, Bull’s 373ha dairy prop-

from other sources. “TAF is a smokescreen. But as a majority of suppliers have voted for it, as a shareholder I accept the result.”

As a co-op leader Bull has seen the benefits of the co-op model trickle down to farmer shareholders. Co-ops face challenges but these are overcome without ceding control to outsiders, he points out.

As chairman of RPDC, Bull led it through some

“The hills have got steeper and posts heavier so the time is right to step down.” erty, Lake Farm, near Kawerau is on the market. Bull milks 850 cows and hopes to produce 320,000kgMS this year. The farm comes with 320,000 Fonterra shares, worth nearly $1.5 million.

He believes the time is right to retire but stresses it has nothing to do with Fonterra’s recent decision to embrace TAF, a controversial share trading scheme among farmers. ”I’ve been thinking about retiring for a while,” he told Dairy News.

“The hills have got steeper and posts heavier so the time is right to step down. It’s a great opportunity for someone else to pick it up and take the next step.”

Bull voted against TAF in June.

He’s concerned it disassociates shareholders from the value of milk supplied, moving it away from the co-op model. On a Nuffield scholarship visit in 1975 to the UK, Bull saw Irish dairy processor Kerry ceding farmer control. He believes Fonterra is following a similar route with TAF. “Tensions over the new structure will eventually lead to Fonterra ending up on the stock exchange,” says Bull.

Fonterra’s board argues TAF is needed to stop capital washing in and out of the co-op, giving it a sound capital structure to expand. But Bull points out Fonterra could have expanded with funding

tough times. The co-op was forced to divest noncore businesses, including a cheese cake and ice cream business.

In return for loans to prop up the co-op, RPDC appointed two non-farmers – ANZ representative and an accountant to its board. It was a first for a dairy co-op in New Zealand and the move paid off, Bull says.

“These two guys made a sterling contribution to the co-op and it took us three years to retire debts through sale of non-core assets and our payout to farmers was again right up there with the best.”

In 1987, when an earthquake flattened the coop’s Edgecumbe plant, it bounced back again. Bull supported the merger of dairy co-ops. It allows farmers and the co-ops to leverage economies of scale.

When Bull became chairman of RPDC, there were 50 dairy co-ops dotted over the country.

When he stepped down from the NZDG, there were just eight.

On his retirement plans, Bull says he will travel and devote more time to the Rotary Club.

As a Rotarian, he has undertaken rural village projects in Samoa and Fiji.

Bull, who moved from north Auckland to Bay of Plenty to join the dairy industry also plans to stay in Whakatane which has been his home for 50 years.

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Dairy News October 30, 2012

14 // news Sarah Speight wants to see dairy women step up to leadership roles.

Grooming women leaders PAM TIPA

DAIRY WOMEN’S Net-

work (DWN) chief executive Sarah Speight is well qualified to encourage other women to ignore ingrained attitudes as they step forward for leadership roles.

Speight led a major

dairy project in Pakistan – in fact she was the highest woman in agriculture there at the time – but the men still spoke to her through any male she happened to be with — assuming she was the secretary.

But Speight was more interested in getting the job done than worry-

ing about how the locals reacted to a woman in charge.

“And there was a real respect for New Zealand and the way we approach farming – working on a shoestring and using know how,” she says.

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input, high cost and not suited to their tropical environment or low milk price.”

Now Speight is helping dairy women around the country step up for leadership and governance positions from school boards to business directorships.

An ag science graduate, Speight became a consulting officer with LIC in a role which is now part of DairyNZ and married a farmer and had children.

The Pakistan experience came in 2006-08 when she worked with other kiwis to lead a Pakistani national dairy extension project to grow the dairy industry there, travelling throughout the country including the volatile tribal areas.

She says you cannot imagine the satisfaction of seeing a family living in a tiny space with their one buffalo improve production enough to be able to educate their children.

She moved on to Chile as a production manager for 35 farms operated by a New Zealand company then returned to New Zealand to be operations manager for eight of the Crafar farms in receivership. She moved on in 2011 thinking the sale was done and dusted.

Becoming DWN’s first full-time chief executive in June 2011, she has overseen a period of tremendous growth, with membership up 700 to 3100 in the last year.

The network is not a “sexist” organisation – in fact men can and do attend events. But it was recognised in the late 1990s that while most dairy farms were run by couples, with women closely involved, most dairy industry events focused on mens’ main areas of interest – cows, grass and industry issues.

And some were held at night when someone had to stay home to look after children, and that was usually the women.

“DWN researched the learning styles of women in order to offer the environment best suited to dairy women. The events are interactive and allow for plenty of discussion and where possible we try to hold DWN events from 10am to 2pm and

not during the school holidays.

“It’s an opportunity to meet other women in a supportive environment to talk about the issues they are interested in or most involved in.

Often that is calf rearing, young stock, finance, business and they are often more involved in compliance issues with HR being a popular topic in recent times.

“The women’s role on dairy farms is being acknowledged far more than it was. And with businesses getting larger, the requirement for women to understand things like environmental compliance is becoming more complex.

“Some issues are exactly the same as the men talk about and men are welcome to come to any of our events. In fact more are coming along, for instance to hear particular speakers.”

Women are now heavily involved in the business side of dairy farming and often decide where the money is spent. Speight says there’s more recognition of the valuable resource of these business skills to the wider industry. But women need training and encouragement to move into leadership and governance roles.

“There’s a lot of discussion in the media about the role women are playing in leadership and governance across all New Zealand. We are providing opportunities to dairy women to grow their knowledge and skills and support them as they move towards more leadership roles. These roles may be within the farm business, their community or the industry.”

Creating Dairy Women of the Year was part of that encouragement and “celebrating successes”.

The inaugural winner, Barbara Kuriger, is “a great role model”, says Speight.

Kuriger is participating in the Global Women Forum Breakthough Leaders programme, aimed at preparing women for governance roles.

But Speight says women need to know they are in leadership roles through their own merits not through quota systems.

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Milk QualiTy prograMMe inspires DunsanDel farM Manager Tony Dodunski is a young farm manager milking 900 cows on a dairy farm half an hour’s drive outside Christchurch in the small rural township of Dunsandel.

After moving to a dairy farm in Southland with his family in 1992, Tony decided to carry on the family tradition of farming and enrolled in a Bachelor of Commerce (Agriculture) at Lincoln University.

Once he completed his degree, Tony was keen to get back on to a dairy farm and decided to enrol in AgITO’s Milk Quality Stage One and Stage Two courses to ensure he had the knowledge and the skills he needed to do the best job possible.

Tony is currently managing three staff, all working to ensure top-notch milk quality, productivity and profitability. “I thought Stage One was great because it really taught me the fundamentals, so you become competent in the day to day basics, whereas Stage Two is really good because you learn about everything from the cow to the tanker,” Tony says.

Tony believes that other farmers would benefit from taking part in the Milk Quality courses too.

“I would definitely recommend the Milk Quality courses to other farmers. It can save you lots of money in the long term so it really is worthwhile.

It ensures that you set up procedures for everything to keep the farm running smoothly.”

Tony Dodunski, farm manager, Dunsandel

“One of the most useful things I learnt from Stage Two was about the grading system, and ways to put procedures in place to prevent rather than react to grades. We are grade-free and our SCC is currently sitting at around 125,000 so we’re pleased with that.”

Tony was impressed with the AgITO tutors. “They were practical, and had ‘been there and done that’ so they could really relate to you. They had a solid, real-life knowledge of farming.”

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Dairy News october 30, 2012

news // 17

Dairy Women’s Network membership boom THE DAIRY Women’s

Network has now hit 3100 members, growing by 700 in the year to June 2012.

Chief executive Sarah Speight told the annual general meeting in Hamilton this month the network is an “influential voice in the dairy industry”. It represented thousands of women who were key decision makers and industry and community leaders.

DairyNZ remained the

network’s prime funder, with BNZ the prime sponsor. Dairy Women’s Network Trust board chair Michelle Wilson says it has been a year of transition and growth with many achievements.

“The management team has grown from three to five part-time staff and we appointed Sarah Speight to the fulltime chief executive role, the number of participants in our Dairy Days training increased by 100 more

Nominations called for annual award NOMINATIONS OPEN on Thursday (November 1) for the Fonterra-sponsored 2013 Dairy Women of the Year Award.

The winner will attend the year-long Women in Leadership course run by Global Women, worth $25,000. Nominations close on December 16, 2012 and the winner will be announced in March 2013.

The Women in Leadership programme connects participants with high-calibre networks and provides mentoring and professional development.

Global woman members include high profile lawyer Mai Chen, business woman Annah Stretton and ex-Prime Minister Jenny Shipley.

Inaugural winner, Barbara Kuriger says she joined the leadership programme in September and it has already helped her find Barbara Kuriger her future aspirations. She sees her future in another governance role.

“I’m passionate about helping people find solutions, and I can see there is more potential for New Zealand’s rural and urban business communities to connect – we’re not that different.”

Dairy Women’s Network chairwoman Michelle Wilson says the judges saw in Kuriger a real demonstration of leadership by example, exemplifying the network’s values of innovation, commitment, inclusiveness, credibility and integrity.

With 25 years’ experience, Kuriger was the first woman regional director of LIC and has held other leadership roles including a DairyNZ and AgITO directorship. She owns and operates a dairy farm in New Plymouth with her husband Luis.

Dairy Women’s Network chief executive, Sarah Speight, says the Dairy Woman of the Year award advances women who are making a real difference in the dairy industry.

“Women are valued at the leadership table because they bring a range of different perspectives, but they still make up less than 12% of agribusiness boards (source Ministry of Women’s Affairs website). Through the award we want to assist dairying women to develop their leadership skills for the benefit of our industry,” says Speight.

The winner will be announced at a gala dinner at the Dairy Women’s Network annual conference on March 20, 2013 in Nelson. Nomination forms can be downloaded at the Dairy Women’s Network website: www.dwn.co.nz

than last year, we held 112 regional group meetings – 47 more than the previous year, and we created the inaugural Dairy Woman of the Year Award which was won by Barbara Kuriger and sponsored by Fonterra,” she says.

Other highlights were new partnerships with AgITO and TBFree, more than 95,000 visits over the year to the network’s website and the addition of Robyn Judd, Sue Lindsay, Leonie Ward and Neal Shaw to its trust board.

Dairy Women’s Network chairwoman Michelle Wilson (centre), with retiring trustees Robyn Clements (right) and Marie Marshall.

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Dairy News october 30, 2012

world // 19

Oz farmers hail Gillard’s foreign investment register AUSTRALIAN FARMERS are

prehensive picture of the specific size and locations of foreign agricultural landholdings.

welcoming the Federal Government’s decision to introduce a foreign investment register, announced last week by Prime Minister Julia Gillard at the National Farmers Federation national congress.

It is hailed as a ‘win’ for Australian farmers.

NFF president Jock Laurie says in April the federation called for a national land register, making compulsory the reporting of any deal in farm land or water (acquisition or trans- Julia Gillard fer of interest) by a foreign “This is welcome news for the person or organisation. The intention is to clarify purchases of land Australian agricultural sector, as and water and allow monitoring of it means greater transparency around this much-debated issue.” trends.

Foreign investment in agricul“In June the Government responded, stating they would ture has dominated headlines in establish a working group to con- Australia following the recent sale sult on the development of a for- of its largest cotton farm to Chinese eign ownership register – a good and Japanese interests. Several first step. Today the Government Chinese companies are also fronthas responded to the NFF’s calls…, runners to buy a substantial stake announcing a foreign investment in Tasmania’s corporate dairy farm, register that provides a more com- The Van Diemens Land Company.

VDL, 98% owned by New Plymouth District Council, announced last year it was looking for a cash

Jock Laurie

injection of at least A$180m to fund dairying expansion, allowing it to build 20 new dairies at Woolnorth each milking 1000 cows, acquire other local dairy farms and double milk production from 70 million litres a year.

Chinese-owned CIC is understood to remain a firm contender to buy the enterprise, along with the A$700m dairy fund set up Macquarie Bank’s agricultural fund, Lawson Dairies. The third bidder is

also believed to be foreign-owned, and could include China’s largest dairy operator, the Wahaha group.

Laurie agrees foreign investment has traditionally been positive for Australian agriculture. It is important we do not deter foreign investment, but we want to see greater transparency around investment to clarify the motivations behind such investment.

“We remain concerned about foreign-owned entities purchasing Australian agricultural land for the purposes of securing their own food availability. But before any policy decisions are made… we need to have the national land register in place to understand the current levels of foreign investment in agriculture.

“Having a full understanding of foreign investment is crucial to getting the policy decision right. It’s essential we’re clear on the facts of foreign investment, and we will continue to focus our efforts on building transparency,” says Laurie.

Call for milk price transparency A COALITION of UK farmers and consumer groups

fighting for fairer milk prices wants greater transparency on the part of milk buyers. The Dairy Coalition says further action is needed to ease the current crisis in the industry.

Following meetings with processors, retailers, milkmen and dairy farmers, the clear emerging theme is a lack of transparency about where money is going and who is getting what from the market, it says.

Farmers for Action chairman David Handley says he recently met representatives of the doorstep milk delivery industry, who have experienced significant price inflation.

“I’ve met retailers who claim to be paying more for milk and processors who claim their margins are nonexistent, but at the end of the day, farmers are barely 0.5p/L better off than six months ago, yet their costs of production have risen by at least 2p/L.” NFU dairy board chairman Mansel Raymond says all it wants is a fair deal for the consumer, the farmers and those in between.

“As a coalition we will be closely monitoring dairy markets in the coming weeks. We need to know we are getting our fair share out of the market.

“Dairy farmers are telling us they are on borrowed time – costs are spiralling, banks are becoming less understanding and all the while we have the health and welfare of cows to maintain through what is set to be a financially difficult winter.”

The challenges issued by the coalition include a commitment to British dairy farmers, through the delivery of transparent milk pricing mechanisms such as cost of production, by liquid milk buyers.

Keeping politics out of farm ownership AUSTRALIAN PRIME Minister Julia Gillard wants to take the politics out of foreign ownership.

She told the NFF congress last week that foreign investment is not a new thing. It has helped build Australian agriculture for 200 years and is important as we seek to boost food production and food security, she says.

“Foreign direct investment in agriculture,

forestry and fishing accounts for just 0.1% of total foreign investment in Australia.” And 89% of agricultural land is entirely Australian owned, with a further 6% majorityowned by Australians, levels roughly similar to 30 years ago.

But Gillard says her Government understands the need for more information to foster an informed public debate.

“The register will provide the community with a more comprehensive picture of the specific size and locations of foreign agri-

cultural landholdings over and above what is currently available.

“We will shortly release a paper to begin discussions with

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Dairy News October 30, 2012

20 // opinion OPINION Ruminating

EDITORIAL

Crucial board election looms

milking it...

No longer the bogeyman

“GREENPEACE HAS stopped campaigning against them, the EU says there’s no risk, even Bill Gates has got behind them. So why are so many people still worried about genetically modified crops?”

These words were not penned by the GM lobby or the mythical ‘militaryindustrial complex’; they appeared in the latest issue of Geographical, the journal of the revered Royal Geographical Society.

The fear of GM is going the way of Y2K. The change in sentiment is no surprise: despite decades of scaremongering about the risks, the bogeyman has not appeared.

Out of control

A SIGN of things to come? The new Fonterra Shareholders Fund Management Company announced this month has one farmer member – Jim van der Poel and four members of the corporate world. TAF sceptics have always feared losing control of the co-op. Is this what they were talking about?

New protection Better luck this against HIV? time?

LOVE IT or hate it, cow’s milk is a source of calcium and vitamin D. Now scientists think they can harness it to protect people from HIV. Researchers found that cows could be used to produce antibodies that defend against the human immunodeficiency virus (HIV). The animals can’t contract the disease themselves.

The next step will be to develop it into a cream women can apply to protect themselves from contracting HIV from sexual partners.

A team from Melbourne University worked with Australian biotechnology company Immuron Ltd to develop the milk.

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YOU’D HAVE to be a cynic to look sideways at A2 Corporation’s announcement of a US$6 billion deal with Chinese state interests. Ah well, if the cap fits….

Milking It hopes A2 did its homework before signing with China State Farms (Shanghai), appointing it as its distributor in China.

The photos of the grand signing ceremony remind us of a similar ceremony about 1999 involving Affco and its Chinese partners who were also statebacked. Within months the promised livestock supply had dried up and the investment soon tanked.

BY ALL accounts the upcoming Fonterra board election will be crucial for the co-op. It’s the first opportunity for Fonterra shareholders to have a say on board-level governance since the TAF (trading among farmers) vote in June.

A few candidates are riding the anti-TAF wave, hoping to secure the votes of at least the 34% of shareholders who voted against the controversial share trading scheme. Then, there is a small group who support TAF but are disgusted at the way former director Colin Armer lost out on the chairmanship.

Armer, a major supplier, is unlikely to vote for the two directors including chairman-elect John Wilson.

Then there is Wilson, who faces the unique situation of being elected chairman-elect and seeking re-election in the same year.

A solid endorsement from shareholders will be the perfect start to his new role.

Many questions are swirling around Fonterra governance.

Shareholders have recently questioned why the co-op hasn’t had a deputy chairman. Some have also questioned why outgoing chairman Henry van der Heyden is staying on the board.

In fairness to van der Heyden, his term doesn’t expire until the 2013 annual general meeting. Also, Wilson wants him around to ensure continuity when TAF is launched.

Against a backdrop of uncertainty about governance issues, this election has attracted 11 candidates, a few of whom have unsuccessfully contested the election the year before. And there are some fresh candidates.

At the annual meeting on December 17 in Hamilton at least one new director will join the Fonterra board. On November 26 Fonterra shareholders will receive candidate profiles; voting starts that day and runs until December 15. Shareholders will also have the opportunity to meet candidates and ask questions at meetings starting December 3.

How the corporate suppliers – Landcorp, Maori trust-owned farms and large South Island farms – vote will be crucial.

Most small farmers, the TAF vote fresh on their minds, are likely to cast a protest vote against the board. But whether their votes will be enough to rattle the board remains to be seen.

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Dairy News october 30, 2012

opinion // 21

Co-op business model key to success ramsey margolis

IN 1988, farmer George Siemon and six dairy farmer neighbours formed a small cooperative in Wisconsin. Under Siemon’s leadership, CROPP Cooperative (the Cooperative Regions of Organic Producer Pools) has become North America’s largest and most successful organic farmers’ cooperative.

Winners of the 2012 BusinessWeek award for America’s Most Promising Social Entrepreneurs, CROPP Cooperative (www.farmers.coop) is owned by 1766 organic farmers in the USA and Canada and has 680 employees.

At a dinner for investors (who own non-voting preference shares), Siemon stated that sales for 2012 are projected at US$875m with the dairy side of the business being responsible for 89.7% of CROPP’s revenue, while the remaining 10.3% comes from eggs, meat, farm services and feed, logistics, soy, juice and produce.

The co-op’s Organic Valley (www.organicvalley. coop) and Organic Prairie (www.organicprairie.coop) brands represent 43% of the co-op’s revenue while the relatively new Stonyfield yogurt brand brings in 9%. Private label brands, supplying to supermarkets and the like, represent 17% of their revenue, and bulk milk and ingredient sales a further 28%.

In 2011, at US$26.55 per cwt, the co-op paid a US$13.33 premium over the price of regular milk.

That was a good year; while the price paid for organic milk has risen in a stable way, what is paid for standard milk floats

up and down.

Cooperative Network (www.cooperativenetwork. coop) is Wisconsin’s association of cooperative businesses. President and chief executive Bill Oemichen said, “Organic Valley is providing financial stability to a large number of dairy producers inside and outside of Wisconsin during a time of tremendous price volatility.”

CROPP makes it clear that the cooperative business model is one of the keys to its success, stressing farmer ownership in all its marketing – its website is found on virtually all its products.

Governance of the co-op is by seven elected board members with two board advisors. Members’ opinions are carried through to the board from elected regional executive committees.

Interestingly, the co-op credits their success largely to the partnership culture they’ve created between farmers, employees and consumers, with each having a role in the cooperative. Building a base of loyal customers, they argue, allows the cooperative to bring more farm families into the cooperative along with their land, water and animals.

While their priority will always be providing a fair and stable price to farmers for their milk and other products, CROPP has a profit sharing model that recognises the contributions of all three groups, distributing 45% of the coop’s profit to farmers, 45% to employees and 10% to the community.

‘As a co-op, we start with the final pay price and we go up from there,’ Siemon told Cooperative Business Journal. “We have a profit goal at end

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of the year of 2%. Here’s what our farmers need to be paid to be sustainable, and we need a 2% profit to stabilise the co-op. We try to run a thrifty outfit here, and yet be a national business. We’re owned by

farmers and we know what their work ethic is.”

• Ramsey Margolis is executive director of the New Zealand Cooperatives Association. http:// nz.coop/blog

US dairy co-op Organic Valley stresses farmer ownership in marketing its products.

Dairy News October 30, 2012

22 // agribusiness

‘Daring business model’ celebrates 50th birthday FARMLANDS TRADING Society was consid-

ered a daring business model when it set up as a cooperative 50 years ago.

Today, as it celebrates its half century, it has an annual turnover of $773 million, almost 28,000 shareholders and 47 stores throughout the North Island.

The rural retail giant started in typical kiwi fashion with a cup of tea in the Eskdale Hall in rural Hawke’s Bay on December 17, 1962.

Chairman Lachie Johnstone says the original 22 members, whose first year turnover was £2,148.11.4d, held high hopes but were

unaware they would set the foundations for one of New Zealand’s most successful rural trading enterprises.

“Much has changed since its origin in a generation of protectionism and very strong margins in the supply of rural goods and services,” says Johnstone. “We now operate in an industry where transparency of information is a given and competition is fierce.”

Farmlands was established when a group of entrepreneurial farmers and growers joined forces to secure the best possible prices on rural supplies for their farms and orchards.

top performeR ■■

Annual turnover up 13% to $773 million.

■■

Pre-tax profits before loyalty rebates were similar to the previous year at about $5.5 million.

■■

Rebates to members increased by 23% ($3.7 million) to $50.4 million

■■

Shareholder numbers increased by 925 to 27,925.

■■

On track to have 50 stores by the end of 2013.

Their two objectives were to supply shareholders with products and services at a lower price and to deliver long-term shareholder returns.

Chief executive officer Peter Ellis says 50 years on that hasn’t changed.

The half century celebrations include 50 days of savings, giveaways and a chance to win a Ford XR6 at Farmlands’ retail stores up until November 13, and all Farmlands branches are inviting shareholders to watch the Melbourne

Cup at their local branch.

Celebratory memorabilia includes the production of a book documenting the company’s history called Our Story – Celebrating 50 Years of Farmlands.

“It details the progress of the cooperative over the years, including the difficulties facing the early founding members, and the changes in recent history that have seen rapid expansion and success,” says Ellis.

The founding members were renowned innova-

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tors. In 1962 the business model they proposed was considered daring, although soundly based on the good old-fashioned values of a cooperative society.

Farmlands shareholders literally become an owner and partner in the business, so success was a win-win situation.

Johnstone and Ellis, as today’s leaders, attribute much of Farmlands’ success to the people at the grassroots level – the 500 plus staff who deliver the

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Ellis says the Farmlands team are pivotal in supporting the recovery of the country’s rural sector.

Today close to 28,000 shareholders enjoy special prices when they shop at Farmlands and receive exclusive offers at Farmlands Card Partners throughout New Zealand.

Any profit made – beyond what is needed to grow the business – is shared out as an annual bonus.

NEW ZEALAND Young Farmers is celebrating a milestone – 2000 members.

Founded in 1932, New Zealand Young Farmers is in its 80th year with 90 clubs nationwide.

Seven years ago membership sat at 450 people.

Steady increase year by year has seen it reach 2000 members – significant and rewarding for a non-profit organisation.

New Zealand Young Farmers chief executive Richard Fitzgerald says to reach 2000 members is a big milestone.

“It has been many years since we have had this number of members so it’s a good sign the organisation is in a healthy position.

“Over the past few years Young Farmers has continued as a fun place for people to connect, meet their mates and it is also building the leadership and personal skills of these people too.”

Kiwi butter adds taste to French pastry BEST TRADITIONAL

French baking is combining with quality New Zealand butter to make life easier for croissants lovers.

Paneton Bakery’s ‘Ready-to-Rise Croissants’ can be just taken out of the freezer to rise overnight, then bake them in the morning for delicious, freshly baked croissants.

Co-owner and pastry chef at Paneton Dominique Colombie says the

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use of quality New Zealand ingredients – especially butter, which is of course a core aspect of good pastries – is crucial to the great taste of the Paneton range.

“Paneton’s primary objective is to make authentic French recipes, using quality New Zealand ingredients, and particularly butter,” he told Dairy News.

“New Zealand’s dairy industry is a global force

– we produce some of the best quality dairy products in the world, in my opinion. Paneton is fortunate to be based in a country that’s able to provide these superior ingredients. Butter is an absolutely essential ingredient in our croissants and we need to use the best to make the best.”

Paneton’s butter is supplied by Canary Enterprises.

Dairy News october 30, 2012

agribusiness // 23

Lower debts key to success This tension between equity growth and cash returns can be complicated by bankers’ requirements.

OVER RECENT years

the search for pathways that enable new entrants to participate in the primary sector, and existing operations to expand their investments, has prompted development of equity partnerships and syndicated farming businesses.

An ageing farm owner population and the appeal to non-farming participants of investing in food production for a hungry world, combined with the ability to delegate management and share financing, means interest in such ventures is likely to remain. It is timely to reflect on the performance of these entities and think again about the issues and opportunities about this ownership structure.

The most pressing weakness has been the limited cash return generated by some joint venture operations. This partly reflects the traditional disconnect between farming asset values and the returns they generate.

This can be accentuated by insufficient shareholder equity combined with volatile product prices. My perception is that equity partnerships work best if their debt levels are kept lower than what would otherwise be acceptable for a privately owned operation.

This trend for modest cash surpluses can be compounded by lack of alignment of shareholder expectations and goals.

This highlights the importance of careful evaluation of the motivations of investors before these operations are established.

Equity partnership shareholders commonly comprise a mix of owners of existing farming operations and non-farming participants. The latter group will most likely have strong cashflows from other business or careers so they will be satisfied with profits accumulating for debt reduction or reinvestment in the business.

Contrasting with this, those who already have farming enterprises are more likely to be looking for distribution of profits.

This tension between equity growth and cash returns can be complicated by bankers’ require-

ments for debt reduction.

This combination can make it difficult to achieve consensus on strategic direction and profit distribution. This demonstrates the benefit of lower debt levels and stronger cash flows so there are options to release cash surpluses and respond to differing shareholder aspirations.

I have noted some situations where individual investors’ bankers have excluded the contribution of the assets and security value of shares in equity partnerships when calculating their clients’ security positions. It is understandable that the more complicated saleability of shareholdings in such an enterprise will be seen as a less “liquid” security asset from their point of view.

Those who have leveraged against sound equity in their home operation can potentially be penalised for the additional debt they incurred to fund that investment.

Of greatest concern is that the execution of a decision to exit from these investments can be less than straightforward. The usual requirement to offer shares to existing shareholders before putting them on the open market can mean that the sales process is time consuming and complex. If there are a number of shareholders involved, getting consensus and cooperation on entry and exit can be challenging. This can result in a sense of being held captive by the investment. It appears much easier to get into than out of syndicated farming operations.

In the early days of developing equity partnerships there was extensive discussion about including “sunset clauses” in shareholder agreements.

These require a business to be sold unless all parties agree to continue with the venture. This means there is a defined timeframe for business sale in

the absence of a unanimous decision to continue trading. It offers those wishing to exit greater certainty regarding their ability to sell at market values

although this will always be driven by economic conditions prevailing at the time of sale.

Finally, the spirit and culture of corporate farm-

ing ventures is slightly different from the traditional family farming operation. Family corporates are typically influenced by broader personal, business and career objectives of the owners. Equity partnerships impress as having a narrower focus driven predominantly by a com-

mercial expectation of profits and capital growth.

There is no doubt aggregation of farming businesses and the need to rationalise businesses owned by an ageing farm owner population will continue to drive the development of ventures with shared ownership.

Judging by the sentiment I have picked up in corporate farming to date, this option still has some way to go before it fully delivers the expectations of all stakeholders.

• Kerry Ryan is a Tauranga agribusiness consultant.

Contact him at www.kerryryan.co.nz

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Dairy News October 30, 2012

24 // management

Reseed returns hinge on right paddocks DO YOU know how much grass your best paddock produced compared to your worst? More importantly, do you know why some paddocks perform poorly?

Visitors to Lincoln University Dairy Farm’s first focus day of the new season heard how typically there’s a 100% difference in productivity between the best and worst paddocks on most dairy farms.

“It’s just ridiculous what the range is,” Agriseeds’ Graham Kerr told the focus day. Rather than regrassing by rotation, he says monitor production and select the poor performers. “The first principle is to monitor where the cows go. They might go to your best performing paddock 17 times a year, but only 12 times to the worst.”

Having established which are the poor performing paddocks, working out why is the next step. “If you’ve got an underlying problem and you don’t correct it you’ll just get the same reversion [to low output] again.”

Sometimes it is simply the wrong pasture species, but soil fertility, including pH, drainage, pests and compaction should be considered as possible causes too.

By picking the right paddocks the return on a reseed will typically be doubled. What’s more, the economic gain, which on average is about $1250/ha/ year at a $6/kg payout, goes on year after year.

“That’s quite a compelling number, and it’s not just in the year you do it: it’s something that keeps

on going. And you can be fairly confident that if [the poor paddocks] weren’t regrassed then they would have continued to decline [in productivity] so $1250/ ha might be a bit of an underestimate of what the benefit is.”

When analysing grazing days a paddock provides allow area, number

Use objective measurements to determine paddocks for renewal, says Agriseeds’ Graham Kerr.

of cows, and supplements used at the time of grazing, says Kerr. Also any silage/ baleage taken from the paddock.

“Our experience is that most dairy farms tend to analyse poor paddocks visually or by gut feel.

There are better ways to do it,” he stresses.

– Andrew Swallow

get familiar with fvi IF YOU’RE reseeding a paddock, it might be worth taking a look at the recently released DairyNZ forage value index before making your cultivar choice (see www.dairynzfvi.co.nz).

While to date the new cross-industry supported tool only has about half the 30 or more commercially available ryegrass and endophyte combinations on it, that will build over time, says

Agriseeds’ Graham Kerr.

“It’s not got all the varieties you might want to use but the principles embedded in it – valuing production at different amounts at different times of year – are relevant.”

Cultivars are given a star rating according to the value they will deliver compared to industry average pasture performance on farms by region: upper

North Island; lower North Island; upper South Island; lower South Island.

Kerr says he expects it will be three to five years before the content is comprehensive.

“It’s a great way to sort out some of the noise in the market. We’ve probably all seen enough leaflets saying ‘this is the best ryegrass’,” Kerr told the LUDF field day.

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Dairy News october 30, 2012

management // 25

Making quality silage IF YOU are making pas-

ture silage this spring, research shows it is worth doing the job properly. A trial in the 1997/98 season at DairyNZ’s No 1 farm compared the milksolids production of cows fed a low pasture allowance plus 5kgDM/cow/ day of high- (10.4 MJME/ kgDM), medium- (9.4 MJME/kgDM) and low(8.3 MJME/kgDM) quality pasture silage in spring, summer and autumn.

On average the cows fed high-quality silage produced 0.22kgMS/cow/day more than cows fed lowquality pasture silage.

At a $5.50 milksolids payout this equates to an increased return of $1.21/ cow/day for the high-quality silage. The additional return from feeding highquality silage to a 300-cow herd for 30 days would be $10,890.

The principles of making high quality pasture silage can be summarised in the following steps:

that inoculants can effectively improve silage quality, it is important to recognise that some products had no positive impact on pasture silage fermentation quality.

The authors concluded that farmers should look for two things when selecting inoculants: published trials conducted 5-7cm. Chopping allows for good consolidation, reducing storage and feedout losses. It also releases plant sugars which are converted to acid by fermentation bacteria.

Add a quality silage inoculant at harvest time. Pasture silage has a high buffering capacity which means a lot of acid must be produced to drop the pH, however it has a limited amount of sugar for acid-producing bacteria to ferment.

Quality silage inoculants contain the right strains of lactic acid-producing bacteria to ensure the sugar in pasture is efficiently converted

according to scientific protocols, and guaranteed bacterial counts on their labels.

1 Kleinmans et al, 2011.

‘Using silage inoculants to improve the quality of pasture and maize silage in New Zealand’. Proceedings of the New Zealand Grassland Association 73:75-80.

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to acid. They can help to reduce fermentation losses while at the same time improving silage quality.

A recent inoculant performance study1 compared the performance of five commercially available silage inoculants (and an untreated control) applied to six different New Zealand pasture samples.

Pioneer brand 1174 gave a faster pH drop when compared to the untreated control. Other inoculant brands did not differ from the untreated control.

1174 inoculated silage had the best fermentation acid profile (more lactic and less acetic acid) and lower ammonia nitrogen levels indicating that less protein had broken down into forms animals cannot use.

While this study shows

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Harvest at the correct time. The feed value of the ryegrass plant drops rapidly as it enters its reproductive phase. Harvest pasture silage no later than 35-40 days after the last grazing or when a maximum of 10% of the ryegrass seed heads have emerged.

Wilt to at least 28% drymatter. Wilting concentrates the plant sugars and reduces the risk of nutrients being lost from the silage stack as leachate.

Make sure there is no soil in the silage. Soil reduces the feed value of silage. To keep it out of your silage, harvest during dry weather, ensure the cutter bar does not skim the ground, and watch that the stack tractor does not carry soil on its tyres.

For pit silage, chop to

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Dairy News October 30, 2012

26 // management

Fast conversion adds to iwi’s With 14 dairy farms and two dairy support blocks, Parininihi ki Waitotara (PKW) is Fonterra’s largest milk supplier in Taranaki. But it’s not about to stop there. Reporter Peter Burke recently visited PKW’s latest dairy conversion.

THE NEWLY converted

farm is a few kilometres from Normanby. It’s great dairy country and on a fine day you can clearly see the centrepiece of the region – Mt Taranaki.

This latest conversion was done in record time,

says PKW general manager of land assets, Ranald Gordon, overseer of this project. He’s an experienced agricultural consultant who’s been involved with PKW since the late 1980s. He’s ex Rural Bank and while consulting for

Farm manager Gary Fredrickson.

Ernst and Young he did contract and valuation rent review work for PKW before joining them in 2009.

“The process started about November 2011 when we became aware that a 143ha property on

Tempsky Road, owned by the Murphy family, was coming on the market. We were also aware that Ivan Willis, a third generation dairy farmer who owned three leases on the north side of Tempsky Road, was potentially interested in doing something with PKW so we negotiated the purchase of both the Murphy and Willis land.

That was all stitched up in December 2011. “ Despite the custom of June 1 dairy farm transactions, Gordon and his team wanted a prompt start to work on dairy shed and infrastructure – water, races, sheds and fences – so they negotiated early access. “Ivan gave us early access to do the cow shed so this was started on March 1 and we had infrastructure access from May 1. PKW acknowledges Ivan and Felicity Willis’s allowing early access. The cowshed was completed and blessed by the local Iwi Nga Ruahine in mid July.”

The new conversion is 190ha, to run 570 cows, aiming for 225,000kgMS this season. The 60-bail rotary shed is impressive,

replete with new technology. It’s identical to the other five sheds on PKW farms.

For example, during the Canterbury earthquakes, it took days to get some rotary platforms back

PKW emphasises the value of people: staff are rostered and get to take leave more or less when they want – calving and mating time excepted.

“It’s the sixth we’ve done. We’ve identified the need for standard facilities so we can shift staff between the facilities and they can go from one to the other and there’s no transition. They can just turn the same buttons on and that’s been a big help,” he says.

This latest rotary platform is made of Kevlar which is 22% of the weight of a conventional 46 tonne concrete platform.

“We’ve got walk-on weighing, automatic somatic cell count detection, automatic cup removal, in-shed feeding and automatic teat spraying,” he says.

The $1.1 million shed is designed to mitigate against natural disaster.

on their rollers, but the new PKW platform can be repaired and restarted within a day. “The shed is set up so it can be run by a generator and we now have one generator for every two farms. Last year we had two snow [storms] and two weather bombs and because we were prepared we didn’t lose any milk.”

Making this dairy shed different is its easy access to the inside of the rotary

– easier maintenance and user-friendliness for farm staff and contractors. “We use Waikato Milking Systems [which makes] all its own componentry in New Zealand so there’s no downtime in getting parts.

Maintenance is easy, e.g. automatic oilers on the platform itself.”

A dairy shed worker told Dairy News the technology makes her job much easier. “It was designed so that only one person need milk in it during summer so you are not tied down to milking all the time and you can get out and do other farm work. I’ve worked in other sheds but this is a luxury.”

Gordon says the shed is designed to take account of new research on the work of milking cows, which shows that after about 90 min-

Technology plays a big role on the farm.

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Dairy News october 30, 2012

management // 27

panache utes in a milking shed workers lose concentration. “So this shed operates on a 12-minute cycle.

Once calving and mating are over the 500 cows can be in and out of the shed within 90 minutes which

is pretty efficient.”

PKW emphasises the value of people: staff are rostered and get to take leave more or less when they want – calving and mating time excepted. “At PKW we tell staff… you’re

Desire to reinvest THE NAME Parininihi ki Waitotara effectively defines the boundaries of the incorporation.

Parininihi is the White Cliffs in North Taranaki and Waitotara is the river which is the southern boundary. PKW has 9000 shareholders.

PKW Incorporation was set up in 1976, taking over a reserve from the Maori trustee.

The change to an active portfolio from a passive landlord followed the passing of the Maori Reserve Land Amendment legislation (MRLA Amendment Act 1997). This gave the first right of refusal to buy any perpetual leasehold interests that came up for sale.

They now have 50 leases in addition to extra land they have bought.

Today PKW milks on 2636ha (2353ha effective), running 7500 cows – some Jersey, mostly Friesian cross. Production in 2011/2012 was 2.573 million kgMS or an average of 1190kgMS/ha achieved off 2163ha eff. Gordon says some PKW farms do as much as 1450kgMS/ha, but others in the coastal area produce slightly less. The total increase for 2011/2012 across all the farms is 200,000kgMS. Of the 14 farms, nine have 50/50 sharemilkers, two have variable order sharemilkers and the remaining three, including the latest conversion, are managed. Herd have 150-900 cows and all the farms are within a 45km radius of Fonterra’s factory at Hawera.

Gordon points out that Maori are intergenerational farmers who will not sell their land but will continue to invest in them. The emphasis is on producing a dividend for shareholders as opposed to farming for capital gain. “Our challenge is to match the cost of capital or better it. Based on the modeling we’ve done we expect to better the cost of capital.”

entitled to four weeks holiday and you can take them in the summer and winter just the same as anyone else,” says Gordon.

Environmental issues get due attention. A 1 million L sealed concrete effluent pond is nearing completion to hold up to 30 days effluent.

This anticipates Taranaki Regional Council requiring upgrades of effluent systems to avoid discharge to waterways – part of the environmental responsibility (kaitiakitanga) of Maori culture embedded in PKW. All waterways on all PKW farms will have riparian plantings.

PKW general manager land assets Ronald Gordon.

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Dairy News October 30, 2012

28 // animal health

Scanning affordable and vital data source ROBYN EDWARDS

CALVING IS over for most farmers, and disbudding, tagging and vaccinating the calves are ticked off. And for most, AB is well underway.

DairyNZ is promoting a shift in thinking from the ‘empty rate’ to the ‘six week in calf rate’ – a case of the glass being half full rather than half empty. This is because the in-calf rate determines next year’s calving rate and calving pattern, milk supply, seasonal feed demands and how much time cows have to get back in-calf.

A six-week in-calf rate is the agreed industry standard for measuring reproductive performance on dairy farms. Empty

rate obviously varies with the length of the mating period and cannot be compared easily between farms and years. Nonreturn rates commonly overestimate in-calf rates by 10% and the extent to which they overestimate varies between farms.

Also, the six-week in-calf rate has been shown to be a strong driver of effective farm surplus.

The current average national six-week in-calf rate is 60%, however the top 10% of farms achieve 78% or better. DairyNZ’s computer modelling suggests that for every 1% increase in the six-week in-calf rate, profit is increased by $3.34 per cow.

So how do you determine your six-week in-calf rate if this information is so critical? Early scanning

is the key. The earliest the six-week in-calf rate can be determined is 10 weeks after the start of AB. The following calendar is a good indicator of when this is likely to be based on the start of AB.

■■

■■

■■

Early scanning helps lift productive performance.

Confirm date of pregnancy: early dating confirms which animals have held to AB. Accurate dating between 30 and 90 days.

Calving spread of herd separately.

early confirmation scan Planned start of mating

1 Oct

8 Oct

15 Oct

early scan 10 Dec 17 Dec 27 Dec date

By scanning we can identify a pregnancy as early as 30 days after conception. Accurate dating of the foetus, and therefore accurate calving dates, are best determined 30-90 days after conception. Advantages of the six-week in-calf scan: ■■ Confirmation of AB sires (replacement calves) and natural sires (terminal calves).

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Recording results

22 Oct

29 Oct

5 Nov

12 Nov

19 Nov

26 Nov

1 Jan

7 Jan

14 Jan

21 Jan

28 Jan

4 Feb

for feed budget purposes.

■■ Identify non-cycling cows (anoestrus) while bulls are still in the herd.

When measuring reproductive performance, it is the proportion of cows in calf early that is the critical figure. Cows have a natural tendency to get later in calf every year, so the more cows you can keep earlier the more sustainable your farming business will be. Having a scanning plan in place makes a lot of economic sense.

Armed with early scanning results, farmers also have the opportunity to leave the bull in longer, increase bull numbers, sort the herd so all bull power is in the cows not confirmed pregnant, change bulls or continue AB for longer if necessary.

The in-calf rate impacts

greatly on the success of not only the coming season but often many seasons after that.

Just as important as the scanning, is the recording of results. The LIC Minda program is widely used and can be accessed

by Ultra-Scan technicians and vets to upload your scanning results direct

on a rotary platform or between milkings in a herringbone cow shed. 100 to 200 cows can be scanned per hour depending on information required, minimising the time that the cows are away from pasture and reducing loss of milk produc-

accurate calving dates Scanning Date

Pregnancies can be accurately dated on cows mated between

Calving on 29th July-28th Sept

From 20th Jan

20th Oct-20th Dec

From 20th Feb

20th Nov-20th Jan

29th Aug-29th Oct

From 20th Mar

20th Dec-20th Feb

28th Sep-29th Nov

From 20th April

20th Jan-20th March

29th Oct-27th Dec

In addition to early scanning, subsequent scans – generally 30 days or more after the bulls have been removed – will confirm cows that are incalf, also those not previously confirmed and any that were recorded as in-calf from the early scan but that may subsequently have lost the calf.

This then allows accurate decisions on selecting cull cows to avoid feed deficits during periods of limited feed and grass growth, and later-calving mobs for grazing or wintering off

into your Minda records.

Ultra-Scan has also developed an application for Android devices which, when synchronised back into their system, can provide the scan data to farmers by email in PDF format by either ‘days pregnant’ or tag number order. This is generally available the same day of the scan and as with all scanning the aim of the results is to provide farmers with the data they need.

Scanning in general

Scanning is an affordable but critical information source. Cows can be scanned during milking

tion. Ultra-Scan will offer multiple scanners on the larger herds to keep the scanning time to a minimum for both stock and farm staff. Scanning takes place in the rectal environment and causes little discomfort to the cow. Using ultra-sound technology the results are instant and accurate.

Scanning services are offered by a range of providers including UltraScan certified technicians.

Tel 0508 858 727 www.ultra-scan.co.nz

• Robyn Edwards is the national franchise manager, Ultra-Scan Ltd.

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Dairy News october 30, 2012

animal health // 29

Mating policy tweaks at LDUF MORE DAUGHTER Proven semen, rather than DNA Proven, will be used at Lincoln University Dairy Farm this spring.

But the change has nothing to do with the Matrix mutant calf issue which arose from a bull in the DNA Proven team.

Rather, it is because the managers gave LIC a tight budget to work with, and switching the 220 cows – which are F0 through to F7 (i.e. pure Jersey through to 7/16 Friesian) – to Daughter Proven Friesian sires will save about $5/straw.

Heifer AI is also to the Daughter Proven team, but with Kiwi-X sires — the reasoning in that case being to avoid the near ¾ Friesian influence in the DNA Proven Kiwi-X team, says farm manager Peter Hancox.

Yearling mating started October 15, 10 days before the main herd. “They’ve made a good start: 30 in three days,” Hancox told the recent focus day.

With yearlings grazing only 10 minutes from the home farm, visual assessment of heats has been possible, saving the cost of synchronising. “We’ll do one round of AI then run them with bulls for nine weeks.”

Later in the Focus Day LIC’s Jack Hooper explained how semen use suggests an increasing proportion of South Island cows will be Kiwi-X in future, from 55% today to 73% in five years. Conversely, pure Friesian and Jersey will fall from 36% and 9% to 23% and 4% respectively. Where your own herd is heading within that is important for setting replacements’ growth targets, Hooper stresses.

Breeding values for a typical two-thirds Friesian cow indicate a mature weight range of 530-580kg, while a pure Jersey would be 442kg.

Setting and, where graziers are employed, communicating growth rate targets for a calf set by looking at its sire and dam liveweight breeding values will be increasingly important to avoid production losses when those calves come into the herd.

Hooper’s LIC colleague Greg McNeil points out recent MINDA data showed 73% of young stock were at least 5% below their liveweight targets at 22 months.

Another study of calves born in 2007 and intended as herd replacements found 15% didn’t have a second lactation and 35% were gone by what should have been their third lac-

in brief Feed quality descriptor METABOLISABLE ENERGY (ME) is still the best feed-quality descriptor for New Zealand dairy farmers, says DairyNZ’s principal scientist Dr John Roche.

“When I hear people telling farmers that ‘all energy is not equal’ and they should ‘focus on non-fibre carbohydrate instead of ME’ when feeding their cows, I get quite frustrated. It shows me that a little knowledge out of context can be a dangerous thing.”

Roche says the main reason the recommendation to focus on non-fibre carbohydrate is wrong for New Zealand farmers is that pasture-based cows are rarely short of protein.

“Management to produce more microbial protein, without providing additional energy when cows are not deficient in protein, will not increase milksolids production,” he says.

“Fibre can produce the same amount of microbial protein as non-fibre carbohydrate, provided it is digestible in the rumen. For example, a cow eating the same amount of energy from pasture or pasture plus a high (60% DM) or low (30% DM) non-fibre carbohydrate supplement, produces the same amount of microbial protein.

That cow also has the same amount of metabolisable protein reaching the small intestine and as a result of the similar metabolisable energy intake and metabolisable protein, produces the same amount of milksolids,” says Roche.

tation. Analysis of what data is available on heifer growth rates shows most are close to targets in their first nine months, but the trouble comes in their first winter when average growth rate tumbles to 0.32kg/day.

While compensatory growth in spring can recover some of the lost

ground, it won’t put them back on track, and there’s evidence to show excessively rapid growth just pre-puberty cuts lifetime milk production owing to excess fat deposition in the udder.

Birth date of replacements also needs to be factored into target growth rate calculations, Hooper

points out. Depending on target mature liveweight, early July born heifers need to average 0.6kg/ day growth over the two years to their first calving, whereas September born replacements will need to put on 0.68kg/day to achieve the same target.

McNeil estimates a group of heifers coming

into the herd at 10% below target liveweights costs about $100 in reduced production for every animal reared.

Greg McNeil

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Dairy News October 30, 2012

30 // animal health

Facial eczema takes a hit from cow genetics gareth gillatt

DAIRY farmers now can use genetics to reduce the risk of facial eczema (FE) on their operations says CRV Ambreed breeding programme manager Aaron Parker.

Parker recently announced the availability of 12 FE-tolerant high BW progeny tested bulls at a DairyNZ Northland monitor farm field day on Alistair and Lynn Candy’s 479ha property 10km west of Okaihau.

The five Jersey and seven Holstein Friesian bulls are the result of a programme the cattle genetics company has had in place since 2000 but which, says Parker, has only now started to produce results.

Parker says farmers have pushed animal health conditions aside in

recent years, with potentially disastrous results, especially as AgResearch findings suggest the average dairy cow was 20% more susceptible to FE than in 1985 and is 20% more likely to react negatively to a challenge.

“When you see 3% clinical cases in herds, 70% of the herd will be sub-clinical,” says Parker.

“What we’re seeing is just the tip of the iceberg.”

And with almost half of the national herd living in high risk areas – Northland, Auckland, Waikato, Tarnaki and the Bay of Plenty – Parker says the company is so concerned about this that it has been involved with FE tolerance for the last 10 years.

CRV Ambreed started FE tolerance research by challenging progeny tested bull calves with FE heavy pastures about 12 years ago. But Parker says the com-

pany has piggybacked a lot on work done by AgResearch with sheep.

In research AgResearch had learned that the high presence of the enzyme gamma glutamyl transferase (GGT) corresponded heavily with the susceptibility of stock to FE. The company worked with AgResearch and DairyNZ to track the GGT level of cows, and has built up a database of GGT levels in 17,000 dairy cows since the 1980s.

The work was first done with progeny tested bulls, says Parker, but animals were not able to be developed fast enough to keep up with the remainder of their genetic catalog largely because they had to use bulls that were four years old to have the necessary records from daughters.

“Those bulls were very good for tolerance but not good enough for the

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one round of mating.

“You’re winding back the clock 25 years,” says Parker. “That’s a huge result.”

Straws from the FE resistant bulls have been been available in a soft launch since May and Parker expects them to become more widely available from next season.

other traits required.”

The company changed tactics in 2009 says Parker, pulling three yearling bulls out of their progeny tested programme a year and putting them into the FE resistance programme.

This fast-tracking of animals has allowed Ambreed CRV to produce bulls with a 141-222 BW that will make the herd 20% more resistant to FE within

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AHB says the eradication goal is endorsed by farmers, industry and local and central government as a means of protecting our reputation as a supplier of safe, high quality meat and dairy products.

TB is an infectious disease, one of the world’s most serious animal health problems and in many parts of the developing world still a major killer. Humans can catch it mainly by drinking milk or

by handling infected animals or carcasses.

TB annually kills thousands of people in the developing world. In the developed world good food handling and milk pasteurisation keeps the disease at bay.

Yet bovine TB is still seen as an unwanted disease because of the negative consumer perceptions and adverse market reactions it could generate. High levels of bovine TB would also cause big production losses for New Zealand farmers.

Bovine TB can infect most warmblooded mammals, but possums, and in some areas ferrets, are the main source of infection (or vector) of TB in domestic cattle and deer herds.

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Dairy News October 30, 2012

32 // animal health / pasture Scientist Mike O’Connor shows the root depth of AberDart.

Sweet results from grass DAIRY COWS grazing high-sugar ryegrass produce

more milk, says AberHSG marketer Germinal Seeds NZ Ltd, commenting on a Tokoroa customer’s milk collection receipts and grazing calendar.

The company quotes dairy farmer Graeme Barr telling farmers at an Aber High Sugar Grass field day this month on his farm that a definite link exists between milk yield and cows grazing the AberHSG pasture.

“Our figures show we got an extra litre per cow when they grazed the Aber paddocks for 24 hours prior to the next collection,” Germinal Seeds reports Barr as saying.

He first sowed perennial AberDart on his farm in 2005 and has planted more each year.

Currently 26ha of the 80ha milking platform is in AberDart and the newer variety AberMagic and this autumn half the farm will be growing AberHSG pasture.

He says his initial reason for sowing less than 5ha as a trial was because he wanted to find an alternative to grasses he found were not able to fully feed the cows.

“When the cows eat out a paddock and then start bawling for more then you know something is wrong.”

He has planted more AberHSG pasture each autumn because it has proven to be a persistent grass that offers more consistent drymatter yield than others “and there’s definitely cow preference for the high sugar grass”. He says the AberHSG paddocks don’t go rank and don’t require topping to keep them fresh during a 25 day round.

“The cows nail the Aber paddocks. They don’t leave urine clumps or other clumps,” says Barr.

Germinal Seeds says AberDart and AberMagic paddocks up to five years old have been found to be evenly grazed and containing a good ratio of clover growth in a dense sward with very few weeds. Barr said grass grub one season had decimated some paddocks but the AberDart recovered and this could be linked to the plant’s strong root growth.

The farm spreads a slow-release mix of nitrogen fertilizer as an alternative to urea nitrogen and the AberHSG and clover pasture has responded well.

A guest speaker at the field day, Mike O’Connor, a former senior scientist with AgResearch and recipient of the Ray Brougham Trophy for his contribution to grassland farming, dug up a spade spit of AberDart to show the plant’s strong root growth down towards the end of the spade.

O’Connor says he had looked at four farms growing AberHSG pasture and the comments common to all four farmers was in regard to the grass’ persistence, palatability and increased pasture utilisation by the cows.

He says the silage cut from AberHSG paddocks on the Tokoroa farm was better quality than silage from other pasture varieties and was probably linked to the 15% higher sugar content in AberDart than other ryegrasses.

“The Aber is grazed right down because we can see the base of the plant is green and fresh rather than dry and stalky, and the base contains [at least] 20% of the plant’s sugar content.”

O’Connor says there is a possible link between the higher sugar content in AberHSG and its apparently better protection from black beetle on farms he has visited. There could also be a link to “a very deeper root than is typical for NZ bred grasses”.

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DAVID KERR, general manager of AberHSG seed grower and wholesaler Germinal Seeds NZ Ltd, say farmers were having to choose between at least 30 perennial ryegrass varieties in New Zealand. The questions to be answered are “what is the animal actually eating and what does it do with that feed?”.

Kerr says AberHSG leaf is more digestible and more efficiently converted into animal protein because the extra sugar assists the digestion process in the rumen. The benefits of increased digestibility are more meat and milk and a proven reduction of wastage in the form of nitrogen and greenhouse gas emissions.

He says AberHSG varieties are bred to last for 10 years or more as viable pasture and were among the few ryegrass varieties in New Zealand that offer consistent drymatter yield from year two onwards without a significant drop.

Kerr says AberDart paddocks still look good after nine years in the ground in Northland and other regions yet have either nil endophyte or AR1 and no AR37 endophyte. AR37 endophyte is not added to AberHSG varieties because there is uncertainty about its effect on livestock and their impact on plant persistence on the farm.

The Tokoroa field day was one of nine Aber high sugar grass field days being held on farms throughout the country until November 12.

Dairy News october 30, 2012

animal health / nutrition // 33

To raise production, rethink feed inputs IF A dairy farmer thinks his cows aren’t capable of raising production, he is probably right, says an Inghams Feeds & Nutrition commentator.

Nutritionist Pip Gale, of Tasmania, says, “Equally, if they think their herd can put more milk in the vat, that’s probably right too.

I believe dairy farmers… want to make rational business decisions, therefore they require sound information and exposure to industry achievement.”

Gale says many New Zealand dairy farmers are beginning to think differently about dairy nutrition and feed inputs as they become more educated on the topic. “Familiarity is a type of cultural architecture…. If farmers feel no need to change their production system, fair enough.

“But, if farmers face a challenge… to improve their cows’ nutrition and welfare, they need to realise they can do so. It will require them to carry out different activities and make strategic financial investments however.”

Gale says that a farmer’s adjusting of his mindset – before he

“I believe dairy farmers want to make rational business decisions, therefore they require sound information and exposure to industry achievement.” begins exploring supplementary feed options for a herd – is a key to increasing milk production.

“Often a dairy farmer has an issue they want to address. [Inghams] will say ‘yes, we can help, but there has to be a willingness to do something different.’ Farm-

ers have to resolve this in their own minds first.”

Having overcome what can often be a type of fearfulness (about change), dairy farmers can then get on with a supplementary feeding due diligence, figuring what activities they’ll have to do differently and how to incorporate it into the pasture management systems’ employed on the farm.

“In other words, to change outcomes on a farm, you have to change the activities carried out on the property,” Gale says.

“Such a change of philosophy is no small matter, but that’s the job of people like myself; to help support that change of mind, to suggest there are actions farmers can or shouldn’t take.”

Gale says that lifting the production of cows that are genetically quite capable of doing so can be achieved relatively easily – as long as farmers give themselves permission to begin thinking differently.

New Zealand dairy farmers are starting to think differently about dairy nutrition, says Pip Gale (inset).

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Dairy News October 30, 2012

34 // farm dairies & equipment

Robotic milking needs keen minds, ADAPTING TO robotic milking can be a longer process for farmers than for cows, says a Cambridge dairyman cited by DeLaval.

John Fisher and his wife Margaret farm 80ha (eff), this season looking to milk 330–340 cows on the farm they’ve run for 30 years.

Fisher in March 2011 set up his DeLaval voluntary milking system (VMS), with four robotic milkers, “and was surprised how quickly [his] cows adjusted,” DeLaval says.

Said John Fisher, “It probably took us longer than the cows to recognise and solve problems. You spend half your time thinking like a cow.

And you realise, actually, they’re not that dumb after all.”

Fisher had been a keen observer of DairyNZ’s

Ruakura robotic milking research that kicked off in early 2001, De Laval says.

For him, DairyNZ made a breakthrough by starting a three-way grazing system in the mid-2000s, “which means you are offering the cows fresh grass every eight hours.”

Fisher, while he was evaluating whether to make the move to robots, in 2006 visited an Australian VMS system. He says by 2010 the VMS “was at a price we were comfortable with, and [we] could see how the whole system would work on this farm.”

Along with the robotics, DeLaval selection gates were set up for before and after each cow is milked. Concentrate is available in the VMS, and feeding troughs feed the cows when they leave the robots.

Cows suffering lameness or mastitis can be

Waikato farmer John Fisher has no regrets switching to robotic milking.

pre-programmed on the computer system to be drafted off if required; these cows are then guided to a holding paddock.

Fisher says the cost of the system is about twice the per-cow cost of a good rotary setup. “But, you’re

not having to put cups on cows yourself.”

Converting to the robotic system three quarters of the way through the milking season, instead of at calving, was a deliberate decision.

“We figured, starting at

calving, that we’d rather be concerned with [all the issues of getting cows up and running], than with getting the cows used to the system. By beginning and teaching towards the end of the milking season, we were able to concen-

trate on the robotic milking setup itself.”

With one and a half season’s use behind them, Fisher says cows that were used to the system got straight back into it once they calved. For heifers calving for the first time,

Fisher and his farm manager Gareth Purdie have been slightly more handson, guiding the new ones through and giving them time to get used to the operation.

A couple of weeks prior to their calving, the heif-

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Dairy News october 30, 2012

farm dairies & equipment // 35

adaptive thinking ers were put through the VMS, given a teat spray and fed a small amount of meal, though the cups weren’t put on. A third of the heifers took up to three weeks to settle down and be comfortable with

the system.

Fisher says that as well as the obvious difference of not having to get up at 4.30am to start milking, automatic milking gives him time to focus on individual cow attention and

‘Simple if you manage well’

pasture management, thereby increasing productivity. “If you offer too much pasture, the cows won’t come back to the VMS,” he says.

His VMS has been set up to milk a cow on average 1.5 times a day, with their current throughput 1.7 times a day. If the figure slips below 1.5, “then you

JOHN FISHER says robotic milking itself is relatively straightforward; it is the pasture and feed intake side of things that requires good management.

“You can’t just walk away. You need to be a very good pasture manager and keep a close eye on animal husbandry.”

The DelPro herd management software and the Smart selection gates of the VMS hold the ‘”key” in this process. Cows producing colostrum can have their milk put in a separate vat, while those displaying mastitis or lameness, for example, can be drafted off and held for closer examination. A cell phone text message alert indicates if a robot milker needs attention, and/or if a cow has been held back for closer inspection.

As far as he’s aware, Fisher’s farm is the only one in the world where all cows will spring calve and go onto the automatic milking system. First calving heifers were given a two-week training before they calved, though they only received a teat spray and some feed, without the cups being put on. He estimates that 95% of these heifers learned how the system operated within three weeks.

Fisher is yet to determine whether the VMS has resulted in increased cow production. Labour costs have reduced, and he suspects that cow replacements will reduce because the animals are happier and more relaxed.

Like him, farmers won’t rush into robotic milking, “even though it is the way of the future,” he says.

Managing under the new scenario takes some planning, though much of the knowledge gained by DeLaval for New Zealand specific conditions can quite easily be passed onto dairy farmers, Fisher says.

realise they’re probably getting too much pasture, and haven’t got that incentive to walk to the robot.”

He says that now the system has bedded in, the results in the vat and budgets should be more telling. Labour costs have reduced, though running costs and maintenance are slightly up.

Cows waiting to be milked at the Fishers farm.

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Dairy News October 30, 2012

36 // farm dairies & Equipment

Taking the road to robotic milking HOW IS a dairy farmer

to know whether automatic (or robotic) milking (AMS) is an option for their farm?

In reply to this question, DairyNZ suggests the following as a starting point for deciding: is reliable mobile phone coverage and broadband internet available?

The AMS requires broadband for remote servicing, and phone coverage is essential so you are alerted to technical problems at the dairy. You will need to attend to alarms that can occur any time in 24 hours. The geography of your farm also comes into play.

According to DairyNZ, experience to date suggests that walking dis-

tances of up to 1km present few issues for cows. “It is not necessary for cows to be able to sight the dairy from all paddocks however farms in New Zealand are generally flat to rolling. As the land becomes steeper it is likely that more intervention will be required.”

So what farm system is best suited to automatic milking?

DairyNZ says dairy farms in New Zealand are classified as system 1 to 5 based on the level of bought feed (including grazing off) used and fertiliser applied.

There are farms from every system operating AMS in New Zealand. In general the higher the level of imported feed the easier

it should be to implement and get the full benefit of automatic milking and individual cow feeding, particularly if supplementary feed is offered at the dairy. All systems require good grazing management to encourage good cow flow and optimise pasture production and utilisation.

A small level of concentrate is generally required to maintain cow flow through the milking stations although there is one farm in New Zealand operating successfully with only grass and no feed in the AMS. The DairyNZ research farm (Greenfield project) successfully operated within the criteria of a system 2 farm.

Within conventional

systems emphasis is on milk production per ha.

This is equally applicable to automatic milking, however milk production per milking station is another important performance indicator for system profit, it says.

“The focus should be on optimising the utilisation of the automatic milk-

The most common robotic milking systems milk one cow at a time but operate 24h/day.

ing system, whichever farm system is operated.”

The most common automated milking systems milk one cow at a time but operate 24h/day.

The number needed to milk a herd will depend

on how often you want the cows to be milked, the peak yield of the herd and what level of utilisation of the milking stations can be achieved. Typical numbers of cows per AMS are 60 to 90.

Each milking has a fixed set-up time, so the aim is to increase the yield per milking by increasing the milking interval but not to the extent that per cow production is compromised.

seasonal or split calving DAIRYNZ SAYS both seasonal and split calving can work well on an AMS farm.

While split calving better utilises the AMS through the year the decision should be based on economics and the profitability of winter milking needs to be carefully evaluated.

Seasonal calving places ad-

ditional pressure on the AMS about four weeks into calving.

This is because of the washing time required between colostrum and mastitis cows.

DairyNZ says a farmer should plan the dairy layout so that colostrum cows can be drafted to a particular robot which avoids

taking up time on the other machines.

“There will be many factors to consider when looking at the installation of automatic milking on a farm. However a major factor is the economics of such a system and how it stacks up against a conventional dairy farm,” DairyNZ says.

Dairy News october 30, 2012

machinery & products // 37

Milk liner sends SCC down AVERAGE SOMATIC

cell count (SCC) has “gone backwards” on the McFetridge family farm at Tauranga since they began two years ago changing the way they milk, reports milking rubberware maker Skellerup.

In two seasons their average somatic cell count (SCC) on two farms has plummeted from 250,000 to 110,000 on one farm, and to 60,000 on the other. That puts the higher of the two properties in the top 10% for the country, and the lower in the top 1%, the company says.

Gordon McFetridge says this has been

achieved with help from Josh Wheeler of Quality Consultants of New Zealand and staff keen to adopt new systems and

two- and three-year cows on 60ha. They have three full time staff plus part time help when necessary.

Production last season

“I would struggle to find a reason to go back to the old style liners now.” – Gordon McFetridge procedures.

Using different milking liners and changing them more often has also helped improve the milk quality performance in both herds, Skellerup says.

McFetridges run two farms at Lower Kaimai: one milks 260 cows aged four years and over on 70ha, the other milks 190

was 126,000kgMS and 62,000kgMS respectively; the budget this season is 130,000 and 65,000kgMS. Both farms milk herringbones.

In 2010-11 the family started the season with Skellerup Smith 16 liners on their young herd. But bad cup slip on the young cows’ small teats led to a

change. VacPlus Square Liners were fitted on both farms and cup slip quickly disappeared. “I would struggle to find a reason to go back to the old style liners now,” McFetridge says.

Last season they followed this up with changing all liners at 2500 milkings, their natural lifespan. Again McFetridge says the end results were well worth it, including the lowest SCC on record for their business.

Other measures implemented as part of their DairyNZ Best Practice overhaul include: ■■ Keeping and maintaining accurate records

■■

■■

■■

■■

■■

■■

in Minda.

Stripping all cows twice a day when they’re in the colostrum herd.

Rapid mastitis testing (RMT) all cows before they go into the milking herd.

Treating two-year-old cows for sub-clinical mastitis.

Stripping the milking herds on a regular basis when SCC climb or when mastitis is suspected.

Thoroughly teat spraying all cows after milking, all season.

Segregating herds by age.

Gordon McFetridge

www.dairybestpractice. co.nz

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Batmobile flies to rescue hungry kids in Africa A SPECIAL customised Optima sedan has been created by Kia Motors US to help boost awareness of comic book publisher DC Entertainment’s “We Can Be Heroes” campaign, a relief effort to fight hunger in the Horn of Africa.

The Optima Batmobile is the first of eight individually customised Kia vehicles, based on different characters from the DC Comics ‘Justice League’, that will appear as part of the campaign at various motor shows and comic book conventions across the United States over the coming year.

Legendary comic book artist and DC Entertainment Co-Publisher Jim Lee has collaborated with Kia designers on the styling of each car with his vision for each iconic member of the Justice League.

The exterior bodywork features a black matte/gloss finish and is enhanced by a dramatically low-

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“It’s a very imaginative campaign and a fun way to draw attention to a serious and a very worthwhile cause,” says Todd McDonald, General Manager of Kia Motors New Zealand, “as well as highlighting the innovation in design that has become a hallmark of Kia product in recent years.”

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Dairy News October 30, 2012

38 // machinery & products

Large numbers handled with ease STAFF AT Lochiel

Farms, Franklin had had enough of old manually operated crushes. So, the business bought two semi-automatic, air levercontrolled iDraft crushes.

Farm general manager Kim Robinson says it puts big numbers of cattle through the yards but this unit handles them with ease.

“The control panel has made the job a one man operation: we can draft the cattle, squeeze them up, head bail them, mark the calves, and tag and weigh them all at the press of a button or flick of a switch.”

And the 3600 ha farm has the option of upgrading to fully automated iDraft crushes.

Using the full auto system, cattle can be automatically weighed, released from the crush and directed through the

appropriate draft or exit gate.

This unit is easily managed by one person with the auto-draft functions set up on a touch screen control unit. It can also be operated remotely via a 10 function hand held radio remote control, says

new iDraft control panel – standard on all models – has precluded some problems often found with cattle crushes. “One of the biggest features is the internal routing of loadbar cables, which keeps them tidily out of the way and completely

“It is simple to use and well suited to an older farmer given the less physical effort required to operate it.” – Jeremy Blampied Te Pari principal Jeremy Blampied.

“It is simple to use and well suited to an older farmer given the less physical effort required to operate it. With an eRail EID reader system incorporated into this crush, it really is possible to weigh, record and draft hundreds of animals per hour.”

Blampied says Te Pari’s

shields them from activity around the crush. Up to 70% of all problems with weigh scales can be attributed to damaged cables.”

The weigh scale mounting is at eye height, easy to use and read, and no add-ons are required.

Other features of the control panel include a storage tray for tools and tags,

Lochiel Farm general manager Kim Robinson says large numbers of cattle are handled with ease by the iDraft crush (inset).

and a cupboard where air regulators, EID reader control units and batteries can be stored.

A lockable cover goes over the control panel for extra security and protection against the elements.

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Dairy News october 30, 2012

machinery & products // 39

Steel first choice for large dairy A TOTALSPAN dairy

shed is ideal for the farm, says franchise owner Warwick Dunn.

Dunn, whose company provided the shed for a large North Island dairy project, says everyone is happy with the end result.

as a sleeve outside a concrete floor and wall construction, he adds. A new framework design ensures the shed is bird-proof.

The construction schedule – one month to completion – meant Totalspan had to work closely

Dunn says.

The dairy shed is said to have won praise from the main contractor and the dairy farmer. “It’s been a great result – and everybody is very happy – that’s

Dairy shed under construction.

always the main thing.”

Dunn, a civil engineer with 20 years industry experience, has worked on a number of dairy sheds.

Tel. 0800 868 257 www.totalspan.co.nz

On this project, Totalspan’s building approach also allowed the team to save time on putting down the concrete, particularly during the wet weather.

He says his company was able to provide the right construction and materials at the right price. “We were also the leading choice because of our ability to deliver this kind of shed in a tight time frame.”

He first worked with Totalspan designers on a design for the purposebuilt 22m long by 22m wide building.

The wet environment, which needs careful cleaning and maintenance, demanded the choice of steel for its durability, strength and convenience, he says.

The design called for the walls and framing to fit

with the main contractor.

The company also organised council consents. “As Totalspan does across the country, we work seamlessly with our local council. “ On this project, Totalspan’s building approach also allowed the team to save time on putting down the concrete, particularly during the wet weather.

The crew built from the outside in – constructing the framework and cladding around the foundation before lifting on the roof structure. “Sealing it off quickly probably saved a couple of additional weeks on the concrete,”

The framework design ensures the shed is bird-proof.

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Dairy News October 30, 2012

40 // machinery & products

Silage block cutter slashes costs A NEW silage cutter, the German-made BvL Topstar block cutter, is fast and runs minimal risk of spoiling the stack face, says distributor Webbline.

The company says though traditional shear grabs cut relatively cleanly, their design often makes them too slow and unable to pick up enough silage in each load to suit largescale farmers who need to handle several tonnes daily.

“As a result, many farmers have gone back to using standard silage grabs

which are relatively fast to load out with and are easy to use,” says sales manager Glen Malcolm. “But the down side is these silage grabs loosen the stack face every time you get a load, letting air in and heating the silage, which burns up sugars and reduces quality and digestibility.

“The biggest concern is the potential for harmful toxins and bacteria to develop in the silage as a result.

“We all know the negative result of feeding milking cows silage that’s

starting to spoil, even if it is only a small percentage of the stack.”

The Topstar has a counter-rotating knife which cuts on three sides, Malcolm says.

“The operator simply drives the forks of the Topstar into the silage stack and presses the third service button on the loader.

“The top part of the machine then cuts vertically down to the forks, using a scissor action.

“Once cut, that whole block of silage is simply

Sharemilker James Hartshorne is impressed.

lifted out and can be tipped into the feed-out wagon. The cube shape means even the smallermodel Topstar is still capable of taking well over a tonne of silage in a single cut.

“Not only does this mean fewer backward-

There is no risk of spoiling the stack face with the new silage cutter.

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and-forward movements for the loader operator, but the way the Topstar works requires no levering with the loader to get the silage out. It’s simply cut

and lifted out like a block of Lego.”

The other major advantage of the Topstar versus the traditional shear grab is that the action of the

counter rotating knives effectively seals the stack as it cuts. No loose silage is left lying around to spoil.

Tel. 0800 932 254 www.webbline.co.nz

Silage losses averted A BIGGER version of the BvL Topstar – called Megastar – suits farmers using telehandlers or wheel loaders, Webbline says. This can cut at least two tonnes of silage in a single block.

Sharemilker James Hartshorne, of Tapanui, is said to have been “blown away” by the results seen during a demonstration at his farm.

His 130hp Massey Ferguson was cutting and lifting 1.4 tonnes of silage each time, allowing him to fill his 16m3 silage wagon “in no time”.

“The stack face was so tight,” Hartshorne said. “When I came back the next afternoon the part of the stack face that had been removed with the silage grab was warm and the area where we used the Topstar was stone cold.

“To go one step further, we did a quick calculation of potential losses

on our silage stack face using the current silage grab system. The results were quite frightening.”

The stack face was 24m2 (8m wide x 3m high). Calculate 100mm of aerobic penetration = 2.4m3 (potential losses). Assume a compaction rate of 200kg/m3 = 480kg @ 50 cents (value of silage after ensiling losses) = $240 potential losses.

Says Hartshorne, “Depending on temperature and days between feeding this loss will [occur] every time we disturb the face; [assuming] 100 feeding days from our silage stack this equates to potential losses totaling $24 000.

“This is before we calculate the negative effect of feeding a percentage of spoiled silage to our milking herd.”

Webbline’s website shows a demonstration of the Topstar.

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Dairy News october 30, 2012

machinery & products // 41

Hardening up on 4x4s GREATER CHOICE in

4x4 suspension and accessories is now offered by Ironman 4x4.

The company says its 4x4 products, developed in the harsh proving ground of Australia, have sold there for 50 years. And they now sell in 140 countries.

all involved in four wheel driving.

Ironman 4x4 supplies original equipment for car manufacturers, and military and mining fleets worldwide. It recently contracted to supply equipment for the US government’s fleet of 30,000 Ford Rangers in Afghani-

Northland to Southland.

The company shipped 100,000 suspension kits last year.

Tel. 0508 IRONMAN www.ironman4x4.co.nz

“Parts of this quality and affordability will make a big impact on the New Zealand market.”

Importer Terraquip NZ brings in outback tested suspension kits, shock absorbers, springs, winches, bull bars, diff locks, snorkels, recovery kits, lights, tents, etc.

Set up in 1958 as a Melbourne suspension parts maker (Jacob Spring Works) the company expanded into design and supply of leaf and coil springs for cars, trucks, buses and 4x4 vehicles. In 1988 JSW Parts launched the Ironman 4x4 brand of springs and suspension parts. The company’s product engineers are

stan.

Says Terraquip founder Vince Rietveld, “Parts of this quality and affordability will make a big impact on the New Zealand market…. The majority of 4x4 vehicles in the current market are largely designed for on-road use.

We can now offer quality suspension and accessories at affordable prices, that will allow the off road ability of these vehicles to be greatly enhanced.

The main warehouse and distribution centre is in Christchurch; 12 dealers and fitters operate from

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Seeding huge factor in crop success

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crop success depends on it, says machinery maker Kuhn.

Quality of seeds influences seed germination and growth and seedbed quality influences germination time. .The minimum germination rate for seeds available on the market is at least 85%. In practice, rates are often higher, Kuhn says.

Seedbed quality is the factor which influences the time needed for germination. A fine seedbed promotes soil-seed contact to ensure continuous absorption by the seed. Seedbed preparation must be based on semi-dry or wet conditions.

For soil with a risk of slaking, best to compromise between excessive refinement of the seedbed (no clumps larger than 5cm) creating ideal conditions for seed germination but which can create a crust of slaked soil, and a rougher seedbed (some clumps larger than 5cm) to limit the risk of forming a slaked crust but with the risk of reducing germination rate.

The instruction in nstr struct u ion uc uct on to o our ou ur salespeople sale sale lespe speopl spe ople opl e is is simple simp simp imple l – do le do what what With the dollar where it is, there’s never been a better time i tak it ttakes a es s to to do oad eal al o on n a new De Deutz utz-Fa utz -Fa F hr h tra acto ctor. t r. r To To hel he p deal Deutz-Fahr tractor. help tothe buy Deutz-Fahr.

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Dairy News October 30, 2012

42 // machinery & products

Lighter by far in a Kia KIA MOTORS is working on making its cars 10% lighter by 2015, to bring many motoring benefits and savings, the company says.

A 10% reduction in weight would help boost fuel economy by 3.2% and cut emissions by the same amount, says Kia. The vehicles will also become 1.6 times more durable, as key parts do not wear out so quickly, reducing wastage as well as saving money for owners.

Also, acceleration improves by 8.5% and there is a 19% increase in steering wheel manoeuvrability.

“Weight reduction in a car has benefits: savings in production costs, reduced fuel consumption and emissions, improved safety and durability, ” says Todd McDonald, general manager of Kia Motors New Zealand.

“The next generation of Kia cars will be even lighter and more sustainable.”

Kia is researching ways to cut weight in production vehicles, including the replacement of steel with aluminum, resins and other lightweight materials – such as using adhesives instead of welding.

Research is focused on decreasing the thickness and weight of the materials while maintaining performance and durability. Cutting the number of parts through adoption of modules will also help reduce weight.

In the Kia Optima sedan, which went on sale in New Zealand last year, the heating, ventilating and air conditioning unit was the first in Korea to be made of a high-strength plastic featuring ‘glass bubbles’.

Using this system, Kia saves 10% in weight compared to conventional HVAC units made with polypropylene.

The Optima’s centre pillar is made of ultra-high

strength steel produced by hot stamping, a method of reinforcing a given material by pressing it at a high temperature and then quickly cooling it.

Using this type of steel in the Optima has reduced the number of parts and overall weight of the car, while making the body shell stronger and more durable.

Kia has also found ways to reduce weight in the mass of electrical wiring in its cars. Wiring looms in the newest Kia vehicles are less complex and they employ intelligent, electronic modules to ensure no loss of effectiveness.

One major way to reduce weight is to replace larger and heavier engines with smaller, more efficient power plants. One example is the recently introduced Kia Rio, which now has a 1.4L petrol engine in place of the previous 1.6L unit, yet the performance of the car has not suffered.

The Kia Optima uses several weight-saving technologies to reduce fuel use and emissions.

Both the Kia Optima and the Kia Sorento were previously powered

by V6 engines, but the latest models have moved to four-cylinders – more efficient and fuel economic.

WADRO

Sports model can look even racier SUBARU’S BRZ

sports car, to go on sale mid December, will have Subaru Tecnica International (STI) performance parts and accessories so owners can personalise their car. And Possum Bourne Motorsport (PBMS) can turn the BRZ into a track day special or make it suitable for other forms of competition.

The PBMS modified BRZ has been unveiled at Sydney’s, Australian International Motor Show (AIMS). STI parts to

personalise road-going BRZs include a front bib spoiler, side skirts, boot lip spoiler, front suspension tower bar, alloy wheels, uprated springs and dampers, quick shift gear lever with an STI knob, sports muffler, push

WADRO With you all the way.

Dura-Max: Specially hardened cam tracks with

KRONE SWADRO RANGE Rotor

Model

Single

35-42

Double

700-1000

Four

1400

Six

2000

Widths range from 3.5m-19m

twice the normal hardness and impact strength.

The material is ‘isothermally’ tempered cast iron and provides high wear resistance and absolutely no maintenance.

Jet Effect: the forward coupling of the rotors provides for a smooth ‘touchdown’.

When lowering the rotors, it is the rear wheels of the tridem axle that land first, then the front wheels ensuring the tines are not in ground contact thus avoiding soil contamination of the forage when going into work.

Distributed by Tulloch Farm Machines Dealers Nationwide

Serious about Fencing!

More electric fence options, it just gets easier!

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Contact your local rural supplies merchant or phone 0800 266 258

start switch, rear under body diffuser, and instrument panel trim.

“We are already getting indications many BRZ buyers want to add performance touches to their cars,” says Wallis Dumper, managing director of Subaru of New Zealand.

“Choosing genuine Subaru equipment offers great design, quality and peace-of-mind that aren’t necessarily guaranteed by after-market suppliers.”

STI is Subaru’s performance arm and is respected worldwide by car enthusiasts for its high quality range, all tested to the same quality control standards as Subaru’s vehicle range.

PUTTING OUR BULLS ON THE LINE

14/07/2012 GENOMIC PREDICTION DATE

M O N I T O R T E A M S — S E L E C T E D F R O M T H E A G E C L A S S T H AT H AV E T H E I R F I R S T D A U G H T E R S I N M I L K T H I S S E A S O N .

GENOMIC PROOF

HOLSTEIN -FRIESIAN

JERSEY

KIWICROSS

™

BEFORE PROGENY TEST

DAUGHTER PROOF AFTER PROGENY TEST

B&LIC0147

The 2012 DNA Proven Teams will not receive progeny tests until 2015. This makes it hard to show how accurate their gBWs are. To solve this we’ve used our latest genomic selection technology to calculate the gBWs of three teams due for their first progeny tests later this season. As these teams’ progeny test data becomes available we will publish the results, proving within a matter of months just how accurate genomic evaluation is. For all the details see www.lic.co.nz.

rd1 39x7

EXPERT ADVICE AND SUPPORT

DAIRY NUTRITION

CONTRACTORS

FERTILISER

AGRI CHEMICALS SEEDS

SOIL TESTING

WE’LL MANAGE YOUR CROPPING FROM THE GROUND UP. Spring is busy enough already for dairy farmers without having to worry about your cropping. So let RD1 manage it for you.

We’ll provide everything your crops need, from expert advice and support, through to seed selection that’s customised to your farm’s soil conditions. So talk to your local RD1 staff today, and we’ll manage your cropping from the ground up.

CROPPING MANAGEMENT

0800 731 266 │ WWW.RD1.COM