Dairy News 13 November 2012

Fonterra chairman-elect John Wilson calls for unity. Page 3

bring on twisting back-roads Sharper and lighter Sorento Page 42

A win-win situation

Farming sustainably Pages 30-31

november 13, 2012 Issue 280 // www.dairynews.co.nz

bumps come with the job

LIC’s new chairman Murray King talks about an eventful few months dealing with core database transfer and Matrix . PAGE 5

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Dairy News november 13, 2012

news // 3

No skullduggery in chairman’s tenure SUDESH KISSUN sudeshk@ruralnews.co.nz

Debt levels pose risk for some farmers.

PG.04

Grassland Association Conference coverage. PGS.6-8

Stock home helps save pasture, farmer’s energy. PG.37

News ������������������������������������������������������ 3-21 Opinion ���������������������������������������������22-23 Agribusiness ���������������������������� 24-26 Management ��������������������������������27-31 Animal Health ���������������������������32-35 Machinery & Products ���������������������������������������37-42

FONTERRA’S CHAIRMAN-ELECT John Wilson is rubbishing suggestions that a hidden agenda lies behind outgoing chairman Henry van der Heyden’s decision to remain on the board beyond 2012.

Wilson is urging shareholders to respect the contributions of van der Heyden and independent director Ralph Waters. He says it’s “a huge embarrassment” that van der Heyden’s contribution to the co-op has been called into question by a small group of farmers.

“I’m deeply troubled by some media reports,” he told Dairy News. “Henry has provided loyal service to the dairy industry and Fonterra for many years. We should be celebrating his contribution.”

Van der Heyden steps down as chairman at Fonterra’s annual meeting next month. However, he has agreed to stay on until early next year. Waters, due to retire next month, will stay on for another six months. Both men were asked by the board to stay on.

Some farmers have questioned van der Heyden’s decision to stay on despite giving up the chairmanship. But Wilson says as chairman-elect, he led discussions for both men to stay on as the co-op embarked on a unique journey under TAF (trading among farmers).

“As chairman-elect I recommended to the board to keep the two on. Every single director supported that. These guys are the two most experienced board members and we need their expertise.”

Van der Heyden is also chairman of Tainui Group Holdings, and a director of Auckland Airport and Rabobank Australia and New Zealand. Waters is chairman of Fletcher Building and a director of Westpac New Zealand. He is also chairman-elect of Australian retail giant Woolworths.

Wilson points out Fonterra could have technically faced five changes to its 13-member board if van der Heyden and Waters had departed next

month. With the resignation of Colin Armer, there’s at least one vacancy on the board. Wilson and Nicola Shadbolt are up for re-election at the annual meeting.

Wilson says in the context of the Fonterra board, five changes do not make sense.

“It’s all about continuity. Really, it’s a no brainer,” he adds. With the TAF prospectus out two weeks ago as part of the bookbuild, he says it would have been unhelpful to have directors moving in and out.

Wilson rubbished claims that van der Heyden will still hold the reins after stepping down as chairman. “I can assure farmers Henry will not get in my way. I’m sure he will make a very good contribution as a director.”

Wilson points out that van der Heyden’s term as a director doesn’t end until the annual meeting in 2013.

He urged farmers to get behind the co-op as its launches TAF. “For us, farmers, the council and the board the priority should be to remain united and focus on the business. The payout’s down due to the high dollar and volatile global dairy prices. We’re aware cashflow on farms is tight.

“The challenge is how we can expand the business and increase dollars in farmers’ pockets.

It’s very important for farmer shareholders to be united.”

Wilson believes the co-op is well placed to move into a new era. New chief executive Theo Spierings is implementing his strategy refresh.

“These are exciting times for farmers. I feel privileged to lead the co-op.

It’s very important our shareholder base is united as we move ahead.” @dairy_news

facebook.com/dairynews

lawf report out this week THE FINAL report of the Land and Water Forum (LAWF) will be released later this week by Government.

LAWF was set up in 2009 and comprises a group of 58 stakeholders ranging from agricultural, environmental groups,

iwi, power companies, recreationalists and industry.

A key task of LAWF, led by former public servant Alastair Bisley, has been to get consensus on a range of issues from a somewhat disparate group of individuals and

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organisations. So far it’s produced two reports and this week’s one will be its last.

Dairy News understands the final report will contain recommendations which could be incorporated into reforms of the Resource Management Act.

“ With a stack of maize silage on hand I control the season, instead of the season controlling me.

I wouldn’t farm without it.”

Mark Henderson Dairy Farmer, Taranaki

Dairy News november 13, 2012

4 // news

Debt levels pose risk for some peter burke peterb@ruralnews.co.nz

A LEADING agribusiness advisor says he doesn’t expect a run of mortgagee sales of dairy farms in the coming season despite warnings from the Reserve Bank about high debt levels in the sector.

But Ian Proudfoot of KPMG told Dairy News that some farmers will be forced to restructure their businesses and others with multiple farms may be forced by the banks to sell some to remain solvent.

“There is still a core of farm businesses really struggling [because of] assumptions made about payouts. In reality these

Graeme Wheeler

business models were never sustainable at an average level of payout.

That hangover still presents a real threat in some parts of the country where there have been intensive conversions such as Southland, Canterbury and Otago.”

The new governor of the Reserve Bank, Graeme Wheeler, last week

warned that some dairy farmers were carrying too much debt and could find themselves in trouble if export prices fall again.

Wheeler noted that at least one third of dairy farms will have negative cashflow in the 2012/13 season if Fonterra’s milk payout remains at $5.655.75/kgMS, and this would rise to about two thirds if the payout fell to $5/kgMS. Wheeler says it’s wor-

farmers most in debt. The industry’s debt is now at least $24 billion, with little sign of this improving, Wheeler says.

This view is echoed

by Proudfoot who says though some debt has been repaid, other loans classified as ‘non-performing’ by banks are now being re-classified as ‘performing’ – thus adding to the debt statistics.

The other problem, says Proudfoot, is a rise

“There is still a core of farm businesses really struggling [because of] assumptions made about payouts. – Ian Proudfoot rying that about half the debt in the dairy industry is held by the 10% of dairy

in feed costs as a result of the US drought. “US farmers are looking for

The Reserve Bank is warning of high debt levels in the sector.

other solutions for use in the feedlots which will put pressure on our more traditional feed sources such as PKE and that’s a negative to some farmers. Having said that, we are hearing that some farmers are trying to build business models that make sure there is a really valid return on the [spending] on

supplementary feeds.”

Proudfoot says it’s not all bad news and he believes some things have changed for the better in the last five months which will benefit New Zealand producers.

“The US drought has reduced the amount of supply going into export markets and there has not been great produc-

tion out of Europe which has also been beneficial.

So when you look at those two factors, I think they are reflected in the global dairy trade which is on a gentle upward curve.

I think this means that there’s an upside potential rather than a downside risk,” he says. @dairy_news facebook.com/dairynews

Newcomers line up for industry awards PAM TIPA pamelat@ruralnews.co.nz

FIRST-TIME entrants are lining

up for the 2013 New Zealand Dairy Industry Awards: 80 entries last week, 55 of them first-timers, the organisers told Dairy News.

Entries included 29 in the New Zealand Farm Manager of the Year contest, 28 in the Dairy Trainee of the Year contest and 23 received in the Sharemilker/Equity Farmer of the Year contest.

The Waikato and Canterbury North Otago regions were leading the

entries at that stage, with 11 each. Auckland Hauraki and Taranaki were just behind on 10 entries each.

There are 12 regions in the competition and entry numbers were expected to get a boost as launch events began around the country.

There is an earlybird prize draw for those who enter online at www. dairyindustryawards.co.nz before December 1. Three Honda Duster XR125 farm bikes valued at $4000 will be given away, one to early entrants in each contest.

Some conditions apply, including entrants needing to go through the judging process.

“At the moment there’s

pretty good odds on winning a great prize,” say organisers.

At least 500 people are expected to enter the 2013 awards before entries close on December 20.

National convenor Chris Keeping says the first entrant was a dairy trainee from the Hawke’s Bay/Wairarapa region who must have entered before milking as the entry was up very early in the morning.

Keeping says the awards deliver considerable benefits to those who participate.

“People already know the awards will give them a head start in the employment market and provide

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feedback on their business performance, as well as identify strengths and areas to develop while also providing some financial and business acumen with rural institutions.

“The awards also offer generous rewards and prizes,” she says.

“What might not be so obvious is the opportunity the awards offers entrants to develop a wider network with other motivated dairy farmers, and potential future business partners and rural professionals.”

The 2012 awards attracted a record number of entries, with 525 received. Keeping hopes a similar number will enter

2012 Sharemilker/Equity Farmer of the Year winners Sarah and Enda Hawe.

the 2013 awards.

Entrants first enter one of 12 regional competitions being held around the country, with the winners all progressing to a national final. In 2013 the

national final will be held in Wellington, culminating in the awards night on May 24.

The Dairy Industry Awards are supported by national sponsors West-

pac, DairyNZ, Ecolab, Federated Farmers, Fonterra, Honda Motorcycles NZ, LIC, Meridian Energy, Ravensdown and RD1, along with industry partner AgITO.

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Congratulations to the last winner John Oliver, Good luck this week!

Dairy News november 13, 2012

news // 5

Bumps expected even on broad, straight road THE FIRST few months

on the job have been eventful for LIC chairman Murray King, with issues hitting the headlines (hairy calves and the transfer of the core database) but he says this comes with the territory.

“This was always going to be a big year, with the transfer of the core database, he says.

“It’s a topic which has seen a lot of thought and debate over the years and it’s now at the point where the Shareholder Council support and board recommend it; we wouldn’t do that unless we believed it was in the best interests of LIC. “At the end of the day this is one way of resolving a situation which reemerges every few years, where LIC has to defend the impartiality of its management of the database, and this diverts a significant amount of staff time away from other critical issues.”

King says back in 2001, when DIRA was before Parliament, he was a strong advocate for LIC retaining the core database because they were the right custodians at the time. Now, with DairyNZ a strong industry-good organisation, the time’s right to transfer it across.

“I’m confident share-

holders will agree and vote in favour. Transferring this won’t affect LIC’s business. The core database contains raw information, but LIC has a commercial database which contains all our IP and that remains the property of LIC shareholders.”

of controversy. When it’s radical change, you expect it because you’re challenging the status quo. The introduction of AB, for example, caused shockwaves in some Kiwi farming homes. It’s been a bit the same with the introduction of genomically

“We often get accused of being too focused on profit but I make no apology for running a profitable business.”

LIC’s always been at the cutting edge of dairy science and King doesn’t think the role it has played, in supporting and extending New Zealand’s dairy industry, is widely appreciated.

“As an example, in any year we invest a significant proportion of our revenue (currently around $20 million per year) into research which, overseas, would be Government funded. LIC does this as a dairy farmer owned cooperative out of our commercial earnings – but the output of that research benefits every dairy farm in New Zealand, and the dairy industry in general.

“LIC has led some of the major evolutions in dairy farming – AB, sire proving, herd recording – and when you look back, every step has been accompanied by some sort

selected bulls.”

Matrix’s coming to prominence this year as the carrier of a genetic defect is very frustrating, King says, because it’s highlighted the fact that in biology nothing is guaranteed. The ability to identify elite bulls through their DNA is cutting-edge but farmers tend to be traditionalists; they understand ‘proving’ sires and some have questioned why we’re not able to predict these things, he says. “The simple fact is that a prediction is just that.”

“On reflection, I think we handled this reasonably well; there was a huge amount of activity going on behind the scenes that we didn’t talk about publicly – we do our best talking on-farm, not in the media.

“The only thing we might have done

sooner was the gesture of goodwill, but we had to know what we were dealing with. In the end we didn’t please everyone but I am confident we pleased the majority. For every farmer who asked for compensation there were many more who told us not to.“ King says he’s not happy when even one shareholder has cause to complain.

“This has been a huge frustration to me, the board and in fact the entire LIC team. Do we regret it? Absolutely.

Could we have anticipated or prevented it happening?

No way.

“We’re dealing with a biological product here; there are no guaran-

LIC chairman Murray King says it handled the Matrix affair reasonably well.

tees, just as I can’t guarantee that the offspring of a champion racehorse and mare will produce a winner. We do the best we can to develop and deliver the most rigorous, internationally peer-reviewed science and translate this into useful products and services.

“Sir Paul Callaghan RIP is quoted as saying New Zealand needs to invest for the long term, not the short term; that comes at a cost and the benefits aren’t immediately realised. That’s what LIC has always done, for

the betterment of all dairy farmers.

“We often get accused of being too focused on profit but I make no apology for running a profitable business because, if you’re not, you don’t have the ability to invest or take opportunities.”

King says LIC is a cooperative and one of the best examples is that it takes everyone’s data and turns it into something meaningful.

Individual farmer’s herd records are highly relevant to their own farms but we create addi-

tional value by combining them with the information from fellow shareholders’ farms to create products which benefit everyone, he says.

“I always find it interesting when farmers demonstrate displeasure by withdrawing their custom from us and spend their hard-earned money with companies whose profits go to overseas shareholders. They’re working against their own cooperative which, each year, returns all its profits to Kiwi shareholders in one form or another.”

honoured to lead co-op MURRAY KING, who took over chairmanship in May, says it’s an honour leading the co-op.

“I’m in this role, not because I need the job – because I don’t – but because there’s nothing I’d rather do. I’ve worked in many industries but there’s nothing I love more than farming, talking with farmers and working with a company which delivers so much good to the industry.

“I’ve just come back from a trip to the US where I was looking at LIC’s business. We attended a dairymen’s dinner in Texas and

they were talking about water quality, labour, animal welfare, milk price, input costs and compliance; no matter where you go in the world, we’re all talking about the same thing.

“My maxim, at home and within LIC, is to get the best out of your resources without degrading them. We all have limited resources, no matter what we’re doing, and you have to look at how you maximise them and utilise them to best effect. I hate seeing waste – of anything – land, water, feed,

energy, talent, money …

“It’s a huge honour to lead LIC; it’s a great company, it has good people, it does great things. You show me another company in New Zealand which does as much for one sector of the economy? It’s value-add stuff. I’m also conscious we carry the weight of expectations of previous generations of dairy farmers and that’s the biggest concern. We have to build on that heritage.”

King says the dairy industry is in good heart.

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Dairy News november 13, 2012

6 // grassland association conference

High-input dairy systems poured through fine sieve system? No. The biggest influence will be the management that’s in place.”

Similarly, when asked, Dalley admitted “it’s difficult” to separate management influences from those due to the system used. McCall’s analysis found the high-input farms had, on average, $1.80/kgMS higher farm working expenses (FWEs – see table), of which 60% was attributable to feed, 20% to other FWEs, 8% to wages, and 6% to both wages and fixed costs.

“It’s not just the cost of the feed.” Operating surpluses were lower for the high-input systems, markedly so when measured against kgMS produced.

Extra capital employed in housing and machinery, etc, also saw the high-input systems come second on return on capital employed.

McCall’s sensitivity analysis of the accounts shows the higher-input farms would start to lead on operating surplus at a payout of about $7/

andrew swallow andrews@ruralnews.co.nz

HIGH-INPUT DAIRY

farmers at last week’s Grassland Association conference, Gore, probably left questioning their approach financially, but feeling more confident environmentally.

During a scene-setting session on the first morning, local business advisor Lloyd McCall demonstrated – using 2010 and 2011 accounts from four farms – that operating surplus per kgMS decreases as input level increases.

“These are actuals, none of that gross-margin stuff where you can put in or take out what you like [from the figures],” he pointed out.

Meanwhile Jane Chrystall, Agresearch, and DairyNZ’s Dawn Dalley, presented modelled data suggesting lower leaching losses occur where cows are wintered off-paddock.

However, Chrystall concluded: “Is there a best

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kgMS, or, if there’s a 50% increase in feed prices at the same time as the payout increases, a payout of $9.30/kgMS. Running a similar sensitivity calculation on return on capital employed shows the highinput farms need a payout of $23/kgMS or more to put them ahead.

But McCall stressed all systems can generate high returns and farmers’ personal objectives will inevitably dictate which farming system(s) they invest in.

Dalley said a survey of 300 southern farms three winters ago found 60% of cows wintered on crop, 9% on pasture, 9% on pasture and crop, 6% housed and crop, 6% feed-pad and crop, and 3% on a pad.

DairyNZ’s Southern Wintering Systems project subsequently looked in detail at wintering on six farms with different systems, then used the Overseer model to assess losses, as presented by Chrystall at last week’s conference.

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Dalley’s paper on wintering systems wasn’t accepted for publication in the conference proceedings, which Dairy News understands was on the grounds it failed to acknowledge the lim-

Lloyd McCall presents his figures to the Grassland Association’s conference, Gore.

itations of what were one-farm, one-season assessments of wintering systems, and subsequent modelling of that subjective data. @dairy_news facebook.com/dairynews

Four Farms’ physical and financial comparison

Low Input

High Input

Southland farm

A

B

C

D

Milking platform

228ha

220ha

102.5ha

215ha

Run-off(s)

0

93ha

111ha

222ha

Stocking rate (platform only)

2.76

3.02

3.84

2.47

MS/cow

433kg

449kg

437kg

594kg 1466kg

MS/ha

1197kg

1359kg

1673kg

FWE/ha

$3370

$3964

$6797

$6303

Capital/ha

$44,339

$47,936

$52,781

$55,722

Return on capital employed

11.34%

11.01%

9.49%

7.54%

Actual farm figures from 2010 and 2011 as presented by Lloyd McCall, AgriFocus, in NZ Grassland Association programme

GRASSLAND ASSOCIATION president Jacqueline Rowarth presents farmer and long-time science investment adviser Pat Garden with a certificate to mark his delivery of the inaugural Levy Oration, a new keynote address feature of the association’s conference to recognise the work of Sir Bruce Levy, “the founding father of Grasslands’ research in New Zealand,” noted Rowarth.

Garden said he felt “honoured and humbled” to be giving the first such address, and went on to say Levy’s research is as relevant as ever, and to stress the value of discussion groups.

“The power to generate continuous improvement is tremendous.”

He also touched on biosecurity, currency and climate change, speculating that if his grandchildren go on to farm the family farm at Miller’s Flat, Central Otago, they might have to deal with facial eczema, kikuyu grass and black beetle.

“The uncertainty in my mind is not about whether [climate change] is happening; it’s about what the impacts will be.”

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Dairy News november 13, 2012

grassland association conference // 7

Limited grazing plugs N loss ANDREW SWALLOW andrews@ruralnews.co.nz

ON-OFF grazing

could help dairy farms in limbo under looming nitrate loss limits, judging by research presented at last week’s Grassland Association conference in Gore.

The work, by Massey University PhD student Christine Christensen and colleagues as part of the cross-industry funded Pastoral 21 project, found that limiting cows to fourhour grazing blocks morn-

The on-off grazing system, probably because of slurry application, grew less grass which would cut milk production, Christensen conceded when questioned about milk production in the trial.

However, she suggested “tweaking” the timing of the effluent application could actually increase pasture production in the on-off system, in which case there might be an opportunity to increase stocking rate.

Less treading damage on the on-off paddocks would be another benefit.

trials into version 6 of the model.

They found the model’s predicted leachate losses correlated well with their collections from drains under the plots. However, Overseer’s prediction of run-off losses was poor, coming out at zero for both grazing systems.

In reality, 3.2kg N/ha

was lost to run-off under conventional grazing, and 2.9kg N/ha under on-off grazing. “The difference was very slight, not significant.”

In contrast, total N loss over the three-year trial was significantly reduced, from an average 22kg N/ ha in leachate and run-off combined under conven-

tional grazing, to 14kg N+/ ha under on-off. Within those annual figures, rain amount and distribution caused leaching loss timing and amount to range from 13 to 26kgN/ha/ year under conventional grazing, and 7 to 14kgN/ha/ year under on-off. @dairy_news facebook.com/dairynews

Christine Christensen

“It’s a significant reduction and one farmers can use to help mitigate nitrate in water issues.” ing and evening reduced total nitrogen loss 36% compared to continuous grazing. That result was despite off-period effluent being collected and spread back onto the grazing plots.

“It’s a significant reduction and one farmers can use to help mitigate nitrate in water issues,” Christensen told delegates.

Milk production from the mobs wasn’t measured, but pasture growth and cow intake was. “We assumed if they eat the same amount of pasture they would produce the same amount of milk.”

“It’s an option for people who’ve got an issue with nitrate leaching. Our [loss] numbers are relatively small compared to some farms’ but the main story is the reduction, not the actual numbers.”

If a farm is losing 60kgN/ha through leaching and run-off under conventional grazing, Christensen said under an on-off system that might be halved.

Recognising that regulators and farmers will likely use the Overseer nutrient management model to calculate losses, Christensen et al plugged the numbers from their

in brief More N for less P APPLYING MORE nitrogen and taking resultant pasture as silage could reduce risk of phosphate loss where the latter nutrient is in excess, research presented by Agresearch and Lincoln University’s Rosalind Dodd shows.

“Target your silage cuts to these paddocks and increase the nitrogen application and you can get a significant reduction in whole farm P losses,” she told last week’s Grassland Association conference.

While the technique didn’t work on an allophonic soil site, it did on brown soil and pumice sites.

As phosphate is otherwise slow to decline, harvesting the nutrient in this way could speed a reduction to levels which present less of a pollution risk.

There was no increase in nitrate leachate even when 300kg N/ha was applied.

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Dairy News november 13, 2012

8 // grassland association conference

No silver bullet andrew swallow andrews@ruralnews.co.nz

NITRIFICATION INHIBITOR dicyandi-

The three-day conference had many relevant dairy papers.

amide (DCD) isn’t the silver-bullet solution to nitrate losses from winter forage crops, a recognised environmental hot spot in many dairy systems, delegates heard at last week’s

Grassland Association conference in Gore.

Trials on pumice soil in the central North Island, presented by Aaron Stafford, Ballance Agrinutrients, found granular DCD applied post grazing cut nitrate loss by 27kgN/ ha in 2008 and 47kgN/ha in 2009 — 20% and 27% reductions respectively.

However, as those

percentages suggest, total losses were high, at 132kgN/ha and 173kgN/ha, and that was only from the start of grazing in May to when soil drainage ceased in November/December.

A paper presented by Chris Smith, Agresearch, immediately prior to Stafford’s paper, showed losses from crops on a similarly free draining soil – albeit at Five Rivers, Southland – started long before grazing. “Nearly 50% of that nitrogen was lost before cows even went near that crop.”

While the Central North Island work found DCD cut losses, the Southland trial didn’t. “There was more nitrogen leached under the DCD treated than the control: it wasn’t significant but it still happened,” noted Smith.

“Also 30-40% of the DCD was lost… DCD in the aquifer: we don’t know what that does,” he added.

Smith said he didn’t think liquid application of DCD would have made any difference. “Our issue was timing. On some areas the cows had already been there five to seven days before we applied it. Also, in two out of three years there was a dry period following application which probably meant the nitrate was out of touch with the DCD.” In the other year, heavy

rain probably flushed the nitrate out before the DCD went on, he suggested.

Stafford acknowledged “DCD is not a silver bullet.” “Firstly we’ve got to get that nitrogen supply and demand aligned going into winter,” he suggested; “…then stop the urine from landing on the paddock.”

As an earlier paper at the conference had shown, an 18t/ha forage brassica crop will typically contain up to 350kgN/ha, which the cow then concentrates into urine patches, he noted.

Smith said the Southland work showed soil nitrogen content accumulated over the three years of cropping the same site with winter forage crops – two years of brassica, with the third being fodder beet – and with it nitrate losses, prompting the suggestion such crops should be rotated.

The high losses pregrazing also indicate that better management of nitrogen applications is needed. Cropping farmers routinely take into account soil mineral nitrogen levels when calculating their fertiliser nitrogen requirements, perhaps forage crop growers “need to go down that track as well,” Smith suggested. @dairy_news facebook.com/dairynews

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CROPPING A slice of the milking platform can boost returns, a five-year trial in Taranaki shows.

However, management must be spot-on and poor pasture managers should not apply, delegates at the Grassland Association conference heard.

“If you’re not doing a good job as an all-grass farmer, then doing this is not going to make you any extra money,” warned Joe Clough of PGG Wrightson Consulting.

The trial looked at returns from two farmlets set up on the Waimate West demonstration farm from 2007 to 2012, one all grass, the other with 10-17% of the farmlet cropped on rotation. Forage crops included maize (for silage), turnips, chicory, Italian ryegrass with oats.

In the first two years operating profit of the farmlet including cropping was slightly lower than the all-pasture farm but in years 3-5 returns pulled ahead.

“By the final year there was quite a substantial advantage [with cropping] – almost $1000/ha,” noted Clough.

“From our perspective the system adopted did have the potential to produce a lot more and put more money into farmers’ pockets,” Clough says.

No allowance was made for depreciation of extra plant and equipment that may be required for cropping, but Clough suggested the advantage of the cropped farmlet might increase as pasture benefitted from more frequent renewal and the expertise of farmers grew.

Dairy News november 13, 2012

news // 9

in brief 354 comment on plan ENVIRONMENT CANTERBURY has received 354 submissions on the proposed Canterbury Land & Water Regional Plan.

Further submissions are now welcome, from people who represent a relevant aspect of the public inter-

The controversial One Plan could slash farm profits by 43%.

Govt report reveals One Plan slashing farm profits PETER BURKE peterb@ruralnews.co.nz

FARMERS’ PROFITS

could be slashed by up to 43% in the area covered by Horizons Regional Council’s One Plan, according to a government report.

Prepared by MPI and Environment Ministry officials, the report looks at the likely impacts controversial One Plan, which dictates how farmers use their land.

The report was part of a series of briefing papers to Environment Minister Amy Adams and Primary Industries Minister David Carter. This contradicts evidence given to the Environment Court

by Horizons which stated that the plan would, on average, result in only a 4% increase in farm costs. It’s also at odds with a recent statement by the chair-

man of the council, Bruce Gordon, (Dairy News, September 25) that “...the economy of the region would stay neutral, if not improve, under the plan”.

Likely to be worst affected are dairy farmers and commercial growers.

This latest information is based on research for MPI

by Landcare Research.

Federated Farmers has labeled the news ‘Farmergeddon’. Chief executive Conor English says plan changes mean real changes to people’s lives, therefore good data is needed on which to make decisions. “If someone walked into the council and said everyone there has to take a 43% pay cut, they would quite interested in knowing why that is the case. What is important with these plan changes is that they need to make sense and be practical, fair and reasonable

and actually make a difference.”

English is highly critical of councils all around the country for the way they conduct economic analysis of such plans. He says under section 32 of the RMA, councils have to do this work before a plan change is notified and many are not doing this. “The intention of that section of the act is that informed decisions be made [then] the best outcomes can be achieved for the constituents of that council. With some of these ‘section 32s’ the only number you find in them is the page number; and some are frankly a disgrace,” he says.

English says if businesses in a city were told that a council plan change would wipe away 40% of their profit there’d be an outcry. But he says this is what MPI and MfE are

saying about the business of farming in the Horizons region. They face a 40%plus pay cut.

“This isn’t just about farmers, or the provinces, it’s about New Zealand. We absolutely agree about the need to protect our environment but if we make ill-informed decisions that see the economy shrink then there’re going to be consequences.

There will be job losses not only in the provinces but all the way through the supply chain. Of the $25 billion of primary sector exports, the farmer only gets about 10%. The rest goes to a whole range of people in the supply chain between the farm and the beach,” he says.

He says a whole range of businesses will close and there will rural depopulation.

est or who have an interest in the proposed plan greater than that of the general public. They may submit for or against submissions already received.

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Woeful analysis – Carter PRIMARY INDUSTRIES Minister David

Carter has described as “woeful”, the section 32 cost/benefit analysis done

by Horizons on its controversial One Plan.

Carter says he’s concerned the One Plan appears so restrictive on productivity increases of farming in the region.

His comments follow the just-revealed economic analysis of

One Plan by Landcare Research, whose analysis is completely at odds with that of the Horizons Regional Council.

“I think it’s a very serious issue if we’ve got regional plans being developed attempting to protect water but going so far as to cause a dramatic drop in profitability which is, after all, what New Zealand relies on,” he says.

Carter says he’s wait-

ing to see the outcome of appeals to the High Court on One Plan, but says in the meantime he and the Minister for the Environment, Amy Adams, are working on plans to reform the Resource Management Act which is at the heart of this issue.

Carter recently met with Horizons’ leaders, but has also had many complaints from farmers about the One Plan.

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10 // news

Co-op powers free bone scans A RECORD seven million people will receive free bone health checks over the next 12 months from Fonterra, whose Anlene bone health programme will be run across Asia and the Middle East.

Fonterra managing director ASEAN/MENA Mark Wilson says the intention is to help raise awareness about the importance of bone health of people in the region.

“Fonterra has been working to raise awareness and generate interest in bone health for more than a decade; we initiated our regional Anlene bone health check in 1999 and have provided free bone scans to more than 13 million people in the last five years alone.”

According to data analysed from the Anlene check, by the age of 35 one in three people in Asia

are at medium-high risk of developing osteoporosis, for which there is no cure; but Anlene, “the only high calcium milk clinically proven to improve Mark Wilson bone health, can play a role in helping prevent its onset,” Fonterra says.

“Raising awareness about bone health and highlighting the simple lifestyle and nutrition choices that people can make to prevent osteoporosis is essential in helping to reduce the prevalence of this crippling disease in Asia and the Middle East.

Our Anlene bone health check is one of the key ways that we can do this,” says Wilson.

The announcement fol-

lows events across Asia and the Middle East at the end of October to mark World Osteoporosis Day. Fonterra’s Anlene brand sponsored events there, with about 20,000 people coming together to ‘move for bones’ in Indonesia alone.

“Since Anlene began sponsoring World Osteoporosis Day, we have encouraged more than 1 million people across the region to participate in mass physical activity events to help highlight the dual role a balanced diet, rich in calcium and protein, and regular weight bearing exercise play in helping people maintain their bone health,” says Wilson.

Fonterra says Anlene is the leading high calcium milk brand in nine out of 10 markets in Asia and the Middle East. “It is also a

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leader in China, becoming the number one high calcium milk brand in Shanghai and Guangzhou just over a year after launch.

Earlier this year, the brand

hit another major milestone, selling 1 billion serves in 12 months for the first time.

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At the same time, people are becoming increasingly affluent, driving interest

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People are looking to stay fit and active for longer and good bone health is essential in them achieving this goal.”

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12 // news

in brief Hard facts on feed THREE NEW Zealand experts in cow nutrition will this month provide hard facts on feed at two DairyNZ events in Canterbury.

Dr John Roche from DairyNZ, Dr Jim Gibbs from Lincoln University and Dr Terry Hughes from Synlait will present unbiased and researchbased information to farmers in Darfield and Ashburton.

DairyNZ consulting officer for Western Canterbury, Juliette Lee, says the events will separate fact from fiction in a “new and different format: no fixed subjects to be presented and a very short introduction.”

Those attending may ask any

question they like, and speakers will answer with the available science.

“This provides a great opportunity for farmers to get information specific to their farm. Considering the calibre of the speakers and their varied backgrounds, I don’t think there will be any questions they couldn’t answer.”

An insight into the potential pitfalls and opportunities to better utilise supplementary feed will also be given.

“Farmers are inundated with information on what to feed their cows and the experts will be able to cut through this by relaying information from on-farm research.”

Kiwi scientist to head IDF A FONTERRA scientist Dr Jeremy Hill has been elected president of the International Dairy Federation (IDF), the first New Zealander to hold that role in its 109-year history. Hill is director, research science technology and development, at Fonterra.

Managing director Fonterra Nutrition Sarah Kennedy congratulated Hill on his election.

“This reflects New Zealand’s leadership on the international dairy stage and Jeremy’s contribution to the industry,” says Kennedy. “Fonterra is a world-leader in dairy research and innovation and, since 1991, Jeremy has been at the forefront of that research at Fonterra and its legacy organisations.”

Hill was elected last week to the position at the IDF’s general assembly at the IDF World Dairy Summit in Cape Town and took the seat last Friday. He replaces Richard Doyle, who has completed a four-year term.

With a PhD in biochemistry, at least 100 publications and four patents, Hill has held senior research and development leadership roles.

These include stints as general manager R&D at LIC, general manager Fonterra Research Centre and general manager manufacturing innovation. He has also served at Fonterra’s director regulatory affairs and food assurance.

Hill is based at the Fonterra R&D

centre at Palmerston North.

Its products include cheese starter technology, spreadable butter, Anlene, DR10 and DR20 probiotics and ‘instant mozzarella’.

Founded in 1903, the IDF is a non-profit private sector organisation for dairying at the international level.

It is the leading source of scientific and technical expertise for all stakeholders of the dairy chain. Areas of work include sustainable development, nutrition, methods of analysis, farm management, hygiene and safety, and more Hill has been involved in the work of the federation for over two decades.

Speaking at the IDF conference Willy Leferink, Federated Farmers Dairy chairperson said: “This is truly a major moment for New Zealand on the world stage”.

“Dr Hill will serve a four year term effective from this Friday and is, I believe, the first time a New Zealander has ever headed the world body for the dairy industry. As one of the Kiwis at the IDF we are very, very proud.”

Jeremy Hill

Hill outlined in his address to the conference upcoming challenges including membership and global representation. Challenges within the dairy sector such as globalisation and cross border trade, consolidation, major changes in global demand and volatility will also have to be tackled, he said. General challenges included nutrition, food safety, food security, and analytical methods.

He says the IDF had to adapt to meet these challenges.

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SECRETS TO milking even smarter will be revealed at ten new-format DairyNZ Milksmart events nationwide over the next few months, in which New Zealand experts will tell how to improve milking efficiency.

DairyNZ project manager for Milksmart, Chris Leach, says even small changes to a milking routine can add up.

“Some pretty big savings, in both time and money, have been achieved by our previous participants, so we’re including the topics that have worked well in the past along with plenty of new material.

“These days have been designed for the whole farm team, with both practical hands-on sessions for junior staff and higherlevel strategic sessions for managers, owners and rural professionals.

“Feedback from farmers who have attended previous events has been incredibly positive and has helped shape the programme and format for this series.”

The events, free-ofcharge for levy-paying farmers and their staff, are part of a four-year programme aimed at improving the efficiency of the whole milk harvesting process – from collecting the cows from the paddock and milking, through to clean-up and return of the cows.

This year the format has been extended to run from mid-morning through to the evening and attendees will have the option to attend as many sessions as they like, at a time that best suits them.

Presenters include Mel Eden, Neil Chesterton, Jenny Jago and Josh Wheeler and there is a

choice of 14 Milksmart events are scheduled for milk harvestthe following locati ons: ing-related ■■ Palmers ton North – 22 Nove mber topics, each ■■ Hawera – 29 November ■■ Kamo – of which will 4 December ■■ Morrinsv be repeated ille – 19 February ■■ Kihikihi – 26 February two or ■■ Reporoa – 28 February three times ■■ Telford – 5 March during the ■■ Winton – 7 March ■■ Geraldin day. e – 12 March ■■ Lincoln – Topics 14 March include: • Stockworld from a cow’s point manship – understanding of view. and working with cows.

• PeopleSmart – tips • Managing milking for training milkers.

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Dairy News november 13, 2012

news // 15

Council faces heat over compliance case tactics andrew swallow andrews@ruralnews.co.nz

ENVIRONMENT SOUTHLAND last week called in

an out-of-town environmental lawyer to audit its compliance division in the wake of allegations it made misleading statements in two farm-related prosecutions.

Federated Farmers Southland provincial president Russel MacPherson welcomes the move but questions whether it goes far enough. “What has been alleged in the media is so serious… it concerned me both as a farmer and a ratepayer.”

The Southland Times headline ‘ES admits ‘untruths’ in court,’ came on top of a Campbell Live report that council employees had seemingly altered police documents to fine truckies, he notes. “The actions of Environment Southland in both seem a little suspect.”

MacPherson believes the review should go “deeper and wider” to include Environment Southland’s systems and culture in all departments.

“Compliance, which is to be audited, is the flipside of policy formation, but policy formation is excluded [from the audit]. That being the case, would it not be appropriate to ask the Office of the Auditor-General or a retired judge to look into all aspects of Environment Southland?

These two revelations dent trust and confidence and these must be restored.”

ES last week said it would make no further comment until the audit is complete, which is expected to take about a fortnight. “Everyone needs to be confident that compliance action is based on sound processes that have been carried out with integrity,” said ES chief executive Rob Phillips.

The Southland Times report covered an ES case against trucking firm Euan Shearing Contracting for effluent discharge onto a road. The action was withdrawn by ES following a court submission by a police officer who inspected the truck with an ES compliance officer at a checkpoint on May 31.

The police officer’s submission said his report stating nil discharge had been altered to “discharge, no tanks on trucks.”

The Southland Times says Shearing believes the ES compliance officer altered the document, which was then used to justify a fine of $750 for the driver and $750 for the company.

The trucking company hasn’t paid the fines and is now seeking legal fees from ES. Shearing told Dairy News the truck was returning home empty after delivering dairy cattle.

The truck court case report prompted a separate report to the Southland Times alleging that an ES case against a farm owner and manager contained statements that were not true.

ES chief executive Rob Phillips says in light of the allegations he has instructed environmental lawyer Karenza

de Silva to undertake a comprehensive audit of Environment Southland’s compliance division.

Auckland-based de Silva has practised environmental law since 1988, specialising in enforcement. She’s an author of the Resource Management Enforcement Manual and acts for several local authorities in the North Island.

Phillips says the legal audit “will be thorough and the results will be released.” @dairy_news

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Irrigation pipeline A DECISION to pipe the Ashburton Lyndhurst irrigation scheme, costing $90-95 million, will bring energy savings and improved water use efficiency.

The 234 shareholders in the Ashburton Lyndhurst Irrigation Ltd (ALIL) have voted 82% in favour of piping along 200km of the scheme’s open water races.

ALIL chairman John van Polanen says the energy to be saved by piping the scheme will be equivalent to the energy used by 2000 homes.

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Dairy News november 13, 2012

16 // news

Why visitors buy our farms peter burke peterb@ruralnews.co.nz

A LEADING dairy farmer and recognised expert in succession planning, Trevor Hamilton, says there’d be fewer farms sold to overseas buyers if the governance structures

of those farms had been better.

He told Dairy News that the reason many farms end up getting sold to overseas buyers is that people suddenly require large amounts of capital to sustain their businesses and there aren’t many people in New Zealand

with such large financial resources.

“They can’t raise the capital and then all of a sudden their only means of raising it is to [sell to] a foreign buyer. If you stretch the balance sheet to acquire capital you are up for whoever can put capital in. So I am saying

to New Zealanders, ‘if you don’t want foreign ownership, get your business planning, succession planning and governance immaculate and you won’t have foreign ownership’.”

Hamilton, who owns eight dairy farms, has an unusual governance structure. He has switched

from a trust to a company with a board of which he and his wife Harriet are members. But he has two independent directors: his accountant, Glen Eden, and academic James Lockhart of Massey University, chairman.

None of the Hamilton’s five children is on

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the board, though four work for the company, TH Enterprises. The siblings’ discussions about farming matters must be directed to the board, not to their parents. Business matters and personal family issues are treated completely separately and this works, Hamilton says.

The governance structure he has adopted is designed to ensure the family business is ‘intergenerational’ and that it will continue to grow and prosper well beyond the next generation.

“It’s very much based on the Maori trust model which is also designed to preserve the business for future generations. The only difference is that we have a lot fewer investors or shareholders than the Maori trust model.

Our business is the same size as PKW, a large Maori trust in Taranaki. Like theirs, our model is intergenerational, so we have learned from their culture.”

Hamilton says the time to develop a governance

model for a business will vary from farm to farm. He says hitting two million kgMS/year was the time when he changed.

“Should we have done it before? The answer is ‘yes’. I think we probably should have done it five years ago.”

For Hamilton, proper governance can make the difference between saving and losing a business.

He values having different opinions around the board table – getting good professional advice from experts but also some good advice from his wife Harriet who runs the administrative side of the business.

“She’s a details person and the last thing an entrepreneur like me needs to deal in is detail.

“That’s exactly what’s needed by the entrepreneur and I think that’s brought balance to the way we do business all the time.”

• Trevor Hamilton on sustainable farming, p30-31 @dairy_news facebook.com/dairynews

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tory near Taupo that exports much of its skim milk powder to Vietnam, is unlikely to invest in dairy farming there.

This comment is prompted by the news that an Israeli company, Afmilk, is developing in Vietnam 12 dairy farms for 23,000 cattle.

Miraka has Vietnam’s largest dairy Richard Wyeth company Vinamilk as a strategic shareholder and partner, but chief executive Richard Wyeth told Dairy News Miraka has not been approached to help Vinamilk with farm operations. He says Vinamilk is presently comfortable with its capability.

Vinamilk owns farms and cows and is looking to grow that side of its business, Wyeth says.

Though dairying in Vietnam is on a reasonable scale, it’s not the same as in New Zealand, he says. “Certainly when you drive through the countryside you don’t see black-and-white cows as you do in New Zealand. But last year when we were there we went to a milk collection centre. They have hubs around the country where milk is collected and then transferred to the larger factories.

While they don’t have the larger-scale dairy farms as we do in new Zealand they do have a focus on dairy and dairy products.”

A recent New Zealand Trade and Enterprise report shows that Vietnam (pop. 88 million, 33% aged 15 or younger) is very receptive to western-style foods. The dairy market there is forecast to grow by 7% over the next three years, with even higher growth forecast for dairy spreads and liquid milk.

“Vietnam is a great place to visit and you can see it growing in front of you with more cars and fewer motorbikes on the roads,” Wyeth says.

Dairy News november 13, 2012

news // 17

Key vote on core database more efficient and profitable by genetically improving their animals and providsudesh kissun sudeshk@ruralnews.co.nz ing information, systems and technology that makes it easier to farm.

“It’s important to remind farmers that THE TRANSFER of the dairy industry’s core database to DairyNZ hinges on a key we’re talking about transferring the core database which contains 46 fields of raw vote by farmers this week.

A vote on the resolution transferring data. This in no way affects the LIC datathe raw data relating to New Zealand dairy base which contains around 18,500 fields herds will be announced at LIC’s annual of commercial IP. This belongs to, and remains with, LIC.” meeting in Hamilton.

Morrison last week DairyNZ and LIC reached urged shareholders to have an agreement on the transfer a say on the transfer of the after a public spat. The agreecore database. ment needs to be ratified by DairyNZ says it has the 75% of voting LIC shareholdexpertise lined-up and ers. waiting for the developThe core database was ment and management of developed by LIC in the the database.

1980s, on behalf of the dairy DairyNZ chief executive industry. A comprehensive Tim Mackle says the organreview of the herd improveisation is stepping up for ment movement, chaired by Jenny Morrison this new stewardship role Professor Robert Anderson, in 2009 recommended that the management but is awaiting the result of the LIC vote.

“This is about realising our vision for a of the core database should be transferred national database covering calving, mating to DairyNZ. LIC Shareholders Council chair Jenny and production data, that we can extend Morrison says it agrees with the LIC board and add to with industry good information. New database fields will be defined that the transfer is a good thing.

“LIC has always been the most logical and added as new animal traits of relevance place for the core database to lie but now for genetic evaluation emerge. It’s an excitthat we have an industry-good body it is ing project and farmers should see it as a more appropriate to transfer it to a man- huge industry opportunity,” says Mackle.

“Our industry is dynamic and we need agement structure independent of any commercial herd improvement organisa- a national database that is dynamic too – evolving and developing all the time, in tion,” says Morrison.

Over the years there has been a per- response to dairy farmers’ needs. That’s ception that LIC obtained a commercial the industry’s vision and that’s what we advantage through its management of the are committed to delivering,” he says.

LIC chief executive Mark Dewdney says core database.

Morrison says this perception has been he has confidence in DairyNZ’s capacity to tested a number of times by the Commerce manage the transfer and develop the new Commission and the courts and consis- dairy industry-good animal database.

“We wouldn’t be putting this recomtently found to have no basis – but the permendation forward if we didn’t believe it ception remains.

“Transferring the core database to was good for shareholders. LIC is a partDairyNZ will free LIC from the distraction ner and supporter in this proposed transand cost of defending its objective man- fer and we are an integral part of DairyNZ’s agement of the core database and let our steering and stakeholders groups and its cooperative concentrate on its core pur- planning on how to take this forward,” pose – which is to help farmers become says Dewdney.

robust transfer plan in place DAIRYNZ’S STRATEGIC investment leader for productivity, Bruce Thorrold, says DairyNZ has already developed relationships with database development experts, who will work on the transfer process if LIC shareholders vote their approval. ”DairyNZ has invested in developing a robust transfer plan for the database and is just waiting to push ‘go’.

We have developed the plan in conjunction with a dedicated project and stakeholders’ group,

including representatives from LIC, CRV Ambreed, Federated Farmers and the Ministry for Primary Industries,” says Thorrold.

“We’ll engage more experts as we move towards the transfer and management of this database. Farmers can rest assured that we will build the capacity and capability to do this job well. We know they will be closely watching how we perform as this information is key to their business.”

Thorrold says build-

ing the database is expected to cost over $1 million. “But this will only be confirmed once a specific partner is chosen for the build, with several high calibre companies already vying for the work should the vote be positive.

“The cost to run the database will be about $1.3 million each year.

But these costs will be met by DairyNZ from its existing operational budget, meaning there is no expected increase in levy to farmers through this transfer.”

MaStitiS ManageMent courSe ProveS valuable for dairy farM converSion In a remote location on the edge of Fiordland in Western Southland, Paul and Juanita Marshall are quickly learning the ropes of dairy farming after 25 years as sheep and beef farmers.

Converting to dairy and milking 920 cows represented a steep learning curve for Paul and Juanita, and they recognised the need to gain all the knowledge they could about the critical aspects of dairy farming.

After completing AgITO’s Milk Quality Stage Two course in 2011 and receiving the National Certificate in On Farm Milk Quality (Level 3), Paul and Juanita decided to enrol in AgITO’s Mastitis Management course to ensure the milk they produced was of the best possible quality.

Mastitis Management was developed by AgITO to help farmers create mastitis management plans for their farms that are practical and successful at decreasing clinical mastitis and somatic cell counts (SCC).

Paul believes the course was extremely valuable.

With a background in finance, focusing on the cost of mastitis to dairy farms appealed to the economist in Paul.

“One of the key things we learnt during the course was how to apply the SmartSAMM tool for calculating the financial costs to the business of mastitis within a herd. This season, after completing AgITO’s Mastitis Management course, our SCC is averaging around 137,000 and Western Southland is averaging 224,000. We are very pleased with how things are tracking.”

Paul and Juanita Marshall, Western Southland

Keep your business moving forward with specialised milk quality training. agito’s Milk Quality programme will give you and your team the right skills and knowledge to ensure high quality milk production and manage animal health. there are limited spaces available in Milk Quality Stage one and two and Mastitis Management courses, running from now until the end of the year. don’t miss out. to enrol or for more information, contact your local agito team on 0800 691 111 or visit www.agito.ac.nz

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Dairy News november 13, 2012

18 // news

Oz dairymen pleased to extend Fonterra milk supply contract sudesh kissun sudeshk@ruralnews.co.nz

FONTERRA HAS

extended a deal with milk suppliers in Australia.

The seven-year deal with

Bonlac Supply Company (BSC) ensures security of supply in the fiercelycontested Australian milk supply.

BSC’s 1300 members supply 75% of Fonterra’s milk in Australia, the balance coming from farmers directly contracted to Fonterra. Under the new deal, BSC members will merge with the other suppliers to form a new supplier organisation. Fonterra’s 10 Australian manufacturing

“Over many years, BSC and Fonterra have built a strong relationship that has delivered genuine results for Australian dairy farmers.” sites process 1.7 billion L of milk annually.

BSC chairman Tony Marwood says 400 farmers voted overwhelmingly in support of the new deal.

The new supply model will be implemented January 1, 2013, replacing the agreement BSC reached with Fonterra when it took over Bonlac Foods in 2005.

Marwood says a more robust BSC board will be set up to represent suppliers’ interests.

“We are incredibly pleased shareholders can see the significant benefits and opportunities which the new model provides,” says Marwood.

“BSC suppliers will now have greater security [in continuing] to receive a competitive farmgate milk price, and the assurance that Fonterra will support our growth, collecting our milk regardless of volumes.

“Over many years, BSC and Fonterra have built a strong relationship that has delivered genuine results for Australian dairy farmers.”

Fonterra’s offer of $25m of units in the Fonterra Shareholders Fund has further strengthened the partnership.

The offer provides a unique opportunity for

shareholders to participate in the cooperative’s performance and share in the economic returns from BSC’s Australian ingredients and consumer branded business, and its entire global business, Marwood says.

“No other supplier organisation can provide this exposure to the dynamics of the global dairy industry as our partnership with Fonterra can.”

He says farmers are excited about having economic exposure to “global Fonterra they have not

Tony Marwood

had before”.

Marwood plans to buy units. But it’s up to other farmers to make their own decisions, he adds. BSC recently held 20 supply meetings which were addressed by Fonterra staff. “We have talked this through with farmers. I’m confident some will buy units but we have made it clear they should obtain their own financial advice.”

On a recent visit to Australia, Fonterra directors met BSC board mem-

bers to discuss TAF. Fonterra chairman Henry van der Heyden says one of the questions always raised by Australian suppliers is how they could become part of the co-op.

“It’s not possible for them to own shares but TAF offers them opportunity to buy units and brings suppliers closer to Fonterra.

“They want to feel part of the co-op. They can invest in units but ownership and control is out of question.”

Two more China farms FONTERRA HAS

signed a deal to develop two more large-scale dairy farms in Yutian County, Hebei Province, China.

They will complete Fonterra’s ‘hub’ of five farms in Hebei Province and are the next step in its strategy to build a fresh local milk supply in China.

The two farms, 120km east of Beijing on a 80ha

double site, will house 3350 milking cows each and collectively produce up to 65 million L of milk a year once fully operational.

Kelvin Wickham, president of Fonterra Greater China and India, says the demand for dairy in China is expected to double by 2020 and much of this growth will be met from

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“We need to build a safe, sustainable local milk supply to feed this growth. The announcement completes our first farming hub in Hebei Province. Once fully operational, it is expected to produce around 150 million L a year. We intend to follow this farming hub with several more through China, with the ultimate goal of producing up to 1 billion L of milk by 2020.”

The double site will operate as two farms, with separate 50-bail parallel milking parlours and cow barns; however they will share common facilities such as workshops, feed mixing areas, effluent treatment and staff accommodation to maximise efficiency.

Nicola Morris, general manager of Fonterra China Farms, says the herd will be made up of Chinaborn cows bred on Fonterra’s other farms and supplemented by about 4300 cows shipped from

A Fonterra farm in Hebei province.

New Zealand.

“The right people are critical to the success of our farming operations in China. We will be utilising the great farming and animal husbandry talent that we have developed on our existing farms, to make up the 175-strong workforce we need to employ locally,” she says.

“We have a well established training and development programme across our farming businesses in China which is helping to feed the talent pool needed to manage

these farms to Fonterra’s high standards.”

Construction will start in December 2012 and the farm is expected to open in October 2013.

Zhang Yaowu, deputy magistrate of Yutian County who’s in charge of agriculture sector, welcomed the investment.

“Fonterra’s first farming hub is helping to solidify Yutian County’s position as a national agricultural demonstration zone. We welcome the impact this will have on our local economy.”

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Dairy News november 13, 2012

20 // world

WA farmers boost fresh milk export rick bayne

A WEST Australian dairy farm is pre-

dicting an upsurge in fresh milk exports as producers look for ways to overcome domestic price pressures.

The Bannister Downs Farm at Northcliffe is exporting 300L of fresh milk per week to Singapore and expects to sell more from 2013. Overseas demand is growing with weekly enquiries from potential markets.

Bannister Downs Farm managing director Sue Daubney said the fresh milk export market could provide a positive future for the dairy industry.

“We are doing very small volumes at the moment but are trying to get flavoured products approved for export which would give us seven different lines which is much more appealing for the supermarket shelves,” Daubney says. “We are still in the experimental phase. We have started on a small scale but see opportunities to grow.”

The family farm is a supplier, pro-

cessor and retailer of its own milk and dairy products and while it is still looking to grow its domestic market, is also conscious of the export opportunities.

“As our business grows we will be putting more emphasis on the export avenues,” Daubney says.

“We have been growing at 30% per year each year since start-up and just staying ahead of demand with limiting factors shifting between raw milk supply, juggling distribution challenges such as a driving team/truck space and ahead is the restriction of facility capacity. Having recently gained the supply of the neighbour’s entire milk production means there is room for expansion.”

Earlier plans by the farm to export to Hong Kong were hung up by trade restrictions.

“Hong Kong is very challenging because of the import requirements,” Daubney says. “They require bacteriological tests on every shipment before releasing it, which make it just about physically impossible to send fresh milk there.”

However, the market in Singapore is much easier to access. “It’s a very simple process. There are not a lot of trade restrictions. The milk can be in the cow here in the morning, sent by air and in a shop at Singapore the next afternoon. It is just an extension of the distribution of our milk to local retail outlets.”

Daubney, who manages the farm with her husband Mat, says she saw a bright future in exports. “At the moment we are under a lot of price pressure. The supermarket price war has devalued milk in the eyes of consumers. It has led them to believe milk is only worth $1 a litre. It’s a false economy but it is hard to reverse and has done long-term damage.”

The farm started exporting after being contacted by an expat Australian living in Singapore. “We probably get emails from international customers once a week. We have followed up a few and are looking at options in Malaysia and Indonesia. There are plenty of open doors.”

Sue and Mat Daubney export 300L of fresh milk per week to Singapore.

Bannister Downs Farm has 1500 Holstein Friesian cows milked twice daily in a 90-bail rotary dairy. “We farm using old fashioned methods with minimal interruption to our precious environment,” Daubney says.

The farm does not make silage due to the volume of waste plastic from wrapping and fertilises mainly with crushed lime and chicken manure.

The fresh milk is piped only 10m directly from the dairy to the farm’s milk processing facility where traditional processing takes place.

“The milk is processed for pack-

aging only minutes after each cow is milked,” Daubney says. “The benefits of this system can be tasted in our milk and boasts a longer, fresher life.”

The processing system, set up in 2005, starts with a separation procedure to ensure the correct percentage of fat in all milk. Only the cream is then homogenised to make sure all solids are dispersed evenly. In the final stage of processing the fresh milk is heat treated using a batch pasteurisation method.

The milk is heated to 65oC where it is held for 12 minutes prior to a fast cooling process down to 4oC.

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Dairy News november 13, 2012

world // 21

High dollar, soft trading triggers profit warning FONTERRA IS not the only dairy company struggling in the Australian market. Listed processor Warrnambool Cheese and Butter last week announced a surprise profit downgrade.

The company says its net profit for the first-half of the financial year would likely be about $20 million lower than the previous corresponding period’s profit of A$30.7m. It is blaming the high Aussie dollar and soft trading conditions for the downgrade.

At the company’s annual meeting last month, WCB chief executive David Lord said while trading conditions were soft, the short-term outlook was sound and tipped a recovery from ‘‘early2013’’.

But in a statement to the Australian Stock Exchange on November 5, the company says lower sale prices and a rising Australian dollar would hurt operating margins.

Competition among milk processors was sending the cost of raw milk supplies higher, further eroding profits, it says.

“The milk cost-to-revenue ratio for the first

half is expected to be 67% compared to 63% for the same period last year.

This will have an impact on operating margins for the half of approximately A$10m.”

The company says its business fundamentals remain strong with revenue and earnings diversifying. Its joint ventures are also performing well and a strong balance sheet and low debt positions it well for growth.

WCB says it will provide a further trading update at the company’s half-year results in February.

Fonterra’s ANZ business, including its Australian operations, faced a difficult 201112 with a 20% decline in normalised earnings to $204 million. After adjusting for the sales of the Western Australian dairy business last year, volumes were down 4% or 44,000MT. Fonterra says the lower earnings were impacted by lower prices to support market shares across all categories. “Normalised earnings were up slightly in New Zealand; however, the trading environment in Australia remains chal-

lenging with a continued downturn in consumer spending and aggressive competition.”

The co-op says its ANZ

business is implementing a plan to increase profitability and maximise cash flow in these tough market conditions.

Warrnambool Cheese and Butter has issued a profit downgrade.

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AN INCREASE in tier 2 milk prices has been announced by Australian processor Lion for its New South Wales and South East Queensland direct and former Dairy Farmers suppliers.

Lion will pay the equivalent of tier 1 base prices for all milk supplied from February to the end of June 2013. Tier 2 milk refers to production above quota.

Lion agriculture procurement director Murray Jeffrey says the price of tier 2 milk is reviewed every quarter, and circumstances are changing.

“Farmers have scaled back production, reducing the amount of milk available, and our forecasts suggest that once the spring peak has passed our volumes will be closely aligned with demand.

“This will allow us to pay for all the milk we receive at the tier 1 base price in each region. We’re letting farmers know now so they are in a better position to plan ahead.”

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Dairy News november 13, 2012

22 // OPINION Ruminating

EDITORIAL

Unforgettable – unforgivable

milking it...

Rolleston on a roll

WESTLAND MILK Products recently advertised for a production manager at Hokitika. The advert referred to “a new position”, implying the encumbent production manager would be engaged with Westland business. Milking It suggests this is another sign the West Coast cooperative is gearing up to build ‘over the hill’ at Rolleston, Canterbury.

Consents were notified early last month. What’s the betting that, when those consents are in the bag, we’ll hear the board has signed to start building and it’ll be all systems go, possibly even for a late-2013 opening?

Old is white gold

EVER WONDERED what keeps us fitter in old age? A new study suggests benefits of milk consumption early in life last through to later years.

Researchers from Bristol University, UK, found that elderly people who consumed the highest amounts of milk and dairy foods in childhood were able to walk faster and were much less likely to suffer problems with balance.

“This is the first study to show positive associations of childhood milk intake with physical performance in old age,” researchers say.

Armed with votes

FONTERRA’S LATEST annual report lists shares held by each director at July 31, 2012. Former director Colin Armer, who stepped down after failing to secure the chairmanship, is the biggest by far, holding almost 18 million shares in the co-op. The rest of the directors hold about 21m shares in total. With voting underway for director elections, the question is how will Armer vote?

Chairman-elect John Wilson is not likely to get Armer’s. Wilson, by the way, holds 4.1m shares.

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Milk exchange anyone?

TALKING OF growing supply competition in Canterbury, anyone driving SH1 south of Christchurch will see dozens of milk tankers from various companies passing each other, and their respective factories.

The same is happening to a lesser extent in Southland, Wanganui and Waikato. Wouldn’t it be more efficient for companies to pool collection resources and exchange milk to minimise transport costs? Collectively it could just add a cent or two to payout, and in this economic climate every little bit helps.

IT’S HARD to comprehend how Horizons Regional Council apparently got the economic analysis of the One Plan so wrong if one is to believe the information recently produced by the Ministry for Primary Industries.

Being out by up to 43% takes some doing. Even worse is that similar data given to the council by Federated Farmers in the early stages of the plan seems to have been ignored.

To cut a person’s income by 40% or more is a big call – actually it’s stupid. Would Horizons have even contemplated a plan change that would have cut the incomes of retailers and businesses in Palmerston North city by 40%? Not likely; imagine the yelps of pain from townies.

Have the councilors and staff at Horizons offered to take a 40% pay cut? Not to our knowledge. Yet they are happy to kick the rural community in the guts with the stroke of a pen and the support of some greenies.

Let’s face it, One Plan is a dog and a mangy one at that because its lousy impacts have the potential to spread further afield. Clearly the Government is dismayed with Horizons, Primary Industries Minister David Carter going so far as to say the economic analysis by Horizons was “woeful”.

The people at Horizons must understand they are not just cutting farmers’ incomes; they are squeezing the life-blood out of the region, which, incidentally, according to Federated Farmers, is the worst performing one economically in the country.

If the plan goes ahead everyone in region will take a huge pay cut: businesses will close and there’ll be more people on the dole. Ironically with less money around, the likelihood of being able to fix the environmental problems will be questionable.

Surely this latest incident gives the Government the ammunition it needs to step in now, sack the council and appoint commissioners to put One Plan back on track. Waiting for appeals to the High Court will waste valuable time and resources of all the parties.

Horizons has clearly lost the confidence of the Government and a significant number of its constituents; it needs life saving surgery in the form of competent and qualified commissioners to run it – now.

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Dairy News november 13, 2012

opinion // 23

Good succession plan a long time maturing OWEN COONEY

The television

ads for Mainland Cheese convey a message that is contrary to the rapidly changing times we live in and the fast paced environment many businesses and business owners need to confront every day. The idea that moving quickly and finding solutions without delay is becoming the presumed criteria for success in the modern environment. However, the message that succession is a process (sometimes the longer the better), not an event, has been reiterated

in a number of examples I have been involved with in recent times.

Example 1: Two siblings, one on-farm and one working off farm until two years ago. Now both siblings on-farm, one with partner on home farm in contract milking role, one sibling and partner with minority equity stake in a new family farming company. The parents still own both enterprises, but day-to-day operations are now led by siblings and/or partners of siblings with minority ownership being transferred, but final ownership and control some way off.

Example 2: Three sib-

lings, one on-farm with partner and two previously off-farm. Now the on-farm sibling is in a 50/50 ownership of a new family farming enterprise, one sibling with partner now in co-ownership of a separate farming business and the third sibling now on home farm working to get experience. The parents retain ownership and control of three separate yet associated farming units. Time is the key factor to allow off-farm siblings to experience other options, before returning and committing to farming business.

Example 3: Two siblings, none on-farm, but

until recently both indicating they wished to join mum and dad’s farming operation. Due to dialogue over a lengthy period, it has now been identified that one is no longer interested in joining the farm business and one says maybe, ‘but only after building my own business’. Mum and dad now need to make decisions as to how to achieve their goal of more time away from the business (considering an equity manager arrangement). If the needs of mum and dad are better served by a sale of the farm, then this decision will be easier to make following the opportunity

that both siblings have had to participate in ownership.

In all of the above the keys have been: ■■ The parents’ willingness to have dialogue with family members.

■■ The importance of continuing dialogue even if a plan is not yet clear.

■■ Dialogue with peers and advisors helps to give confidence and provide ideas.

■■ The process needs to start early, because the solution may be years in the making.

Perhaps the words of Kerry Ryan from the Ryan Report published in Dairy News on 28 August 2012

Owen Cooney

best puts it when he says “Succession should be integrated into the overall strategy of any business so that it can be groomed along with the people affected to achieve positive ownership transition

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TAF investment a no-brainer AS PART of the new

TAF (trading among farmers) scheme Fonterra has recently set dates for the rollout of the new Fonterra Shareholders Fund – an investment fund set up and backed by Fonterra.

Fund chairman John Shewan said it prudently in the report that the Fonterra Shareholders Fund was a “unit trust that would acquire the economic rights of Fonterra shares and issue units to investors. Farmers and other investors can purchase units in the fund which will give them exposure to the economic rights of a cooperative share – dividends and capital gains or losses on those shares. It is important to note that this is an opportunity to invest in units issued by the Fonterra Shareholders Fund, not an opportunity to acquire Fonterra shares.

However, the return on a unit is essentially dependent on the performance of Fonterra.”

These are wise words, and they explain the investment well.

The offer comprises $500 million of units, the price range is expected to be $4.60 -$5.50 per unit and the date this price gets fixed is November 27. Units can only be sold

to New Zealand and Australian residents. Dividend for the 2013 financial year is forecast at 32 cents per share. The price range implies a 2013 financial year gross distribution yield (return) of 5.8-7%, outstanding in this low interest-rate environment.

Application has been made to list the fund on the New Zealand and Australian stock exchanges.

If this is successful, unit prices will be displayed daily on these markets the same as general shares are, in which case the unit price will be listed online or in the newspaper in the share tables section.

Of most importance to farmers is the Farmer Shareholder Supply Offer, which opened November 2 and will close on November 21. Fonterra farmer shareholders will have the opportunity to sell to the fund the economic rights

Date

of up to 25% of wet shares (i.e. shares a farmer shareholder is required to hold to meet the ‘share standard’ for a season) and any dry shares (i.e. shares held in excess of those required by a farmer shareholder to meet the ‘share standard’ for a season).

Fonterra has appointed registered volume providers (RVPs) – or to put this more plainly, a broker – to act as market makers for the investment units.

The market maker between the investor and

the Fonterra Shareholders Fund provides a service whereby investors can buy and sell units in the Fonterra Shareholders Fund. The RVPs appointed

by Fonterra are already well known names in the investment management industry in New Zealand and internationally: Craig’s Investment Partners, Deutsche Bank, UBS and Goldman Sachs. As with any unit investment it must be backed by a certain asset, In this case Fonterra, and the quality of these assets makes up the basis of the unit price.

It’s a no-brainer that Fonterra is a quality asset and with the expected return to be 5.8-7% at a time when people are getting very low interest rates on their bank deposits I expect the demand for the units to be strong. Exciting times for Fonterra

Action

21 November

Stakeholder (Farmer) Offer closes

21 November

Broker Firm (Investor) Offer closes

26 Nov to 27 Nov Institutional Offer closes 27 November

Pricing and allocations announced

30 November

Expected allotment and commencement of trading of Units expected to start on the NZX Main Board and ASX (on a deferred settlement basis for ASX)

Key dates

outcomes.”

• Owen Cooney is a partner in Tauranga law firm Cooney Lees Morgan (ocooney@clmlaw.co.nz) and specialises in succession strategies for rural and nonrural businesses.

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and farmers alike as Fonterra covers new ground with the TAF program and the Fonterra Shareholders Fund.

• Francis Wolfgram has 15 years experience in financial markets, primarily in London and Sydney.

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Dairy News november 13, 2012

24 // agribusiness

Century of effluent pond expertise

Phillipa Green marketing manager - Breast Cancer CURE Research Trust (left) receives the cheque from Swazi Ltd chief executive Davey Hughes and RD1 Ltd managing director Jason Minkhorst.

Rural folk dig deep for charity THE BREAST Cancer CURE Research Trust (BCRT) is the big winner following a joint fund raising initiative between RD1 Ltd and Swazi New Zealand.

RD1 sold 560 Swazi manufactured bush shirts and tee shirts through their stores in less than a month, the two organisations jointly raising at least $13,000 for BCRT funded research into finding a cure for breast cancer.

RD1 managing director Jason MInkhorst says the fundraising idea originated in heartland New Zealand.

“A group of staff at RD1 Pahiatua came up with the idea and approached Swazi chief executive Davey Hughes at a local field day.

Hughes saw the potential in their idea and got on board immediately,

and the concept grew from there.”

Minkhorst says RD1 chose the BCCRT because of their brilliant work in funding research into breast cancer by world class researchers.

“The BCCRT was an obvious choice for a fundraising effort because breast cancer affects us all -- ur mothers, sisters, wives, daughters and friends. Not many people are unaffected as New Zealand has the fourth highest rate of breast cancer in the world making research into breast cancer prevention and cure vital.”

BCRT marketing manager Phillipa Green, who accepted the cheque on behalf of the trust, says news of the RD1 and Swazi effort was especially welcome with recent economic times affecting funding opportuni-

ties for the trust.

“Fund raising has become more difficult in the current environment and to receive a call saying RD1 and Swazi have raised over $13,000 on their own volition, was amazing.

“It’s tough times for not-forprofit organisations that depend on fundraising. There is a squeeze on and not the spare cash around to support organisations such as the trust. Without the Glasson’s tee shirt range this year , the additional funding will help replace that initiative.”

Staff at the RD1 Support Office in Hamilton also got the fund raising bug; Minkhorst was able to hand over an additional cheque for $1458.00 raised by an RD1 staff auction selling surplus sample and oneoff goods to staff.

ONE HUNDRED builders and designers of farm dairy effluent (FDE) ponds are now known to have completed a recognised training course aligned with new industry standards.

The Farm Dairy Effluent Pond Training Course was established by DairyNZ with InfraTrain New Zealand and Opus International Consultants (Opus). It is based on Practice Note 21: Design and Construction of FDE Ponds, released late 2011 by the Institution of Professional Engineers New Zealand (IPENZ). DairyNZ sustainability team leader Dr Theresa Wilson says the information in Practice Note 21 is the first industry-agreed set of good-practice standards for the design and construction of new effluent storage ponds.

“The course is part of work to ensure the standards outlined in the practice note are met. Those who have completed the course are listed on the InfraTrain website and we encourage dairy farmers to use this list when looking to build an effluent pond.”

The course, run by New Zealand Water and Environment Training Academy (NZWETA), was split into three days: the first day an overview, the second day construction, the third day on pond design.

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InfraTrain’s national operations manager, Ross Leslie, says the workshops, held in six locations across the country, covered the practical aspects of design and construction.

“The course aims to ensure that those building storage ponds have all the information they need to build an effluent pond that is compliant and will provide farmers with a great return on investment, The practice note provided a solid base to model the course on and also means there are consistent messages on pond construction.”

Hugh Ratsey, from Opus, says it was good to see such a range of companies in the North and South Islands participating in the course.

“This course required a high level of participation and those who attended responded well to the practical examples and the expert guest speakers used throughout the programme. Our course trainers have many years’ experience in this business and were heavily involved in drafting Practice Note 21. Attendees made the most of having these experts on-hand.”

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TWO AUSTRALIAN university graduates will be studying farm business management in New Zealand.

Dairy Australia and the New Zealand Centre of Excellence Farm Business Management have developed the new farm business management scholarship programme for university graduates.

It offers two students the opportunity to study at post-graduate level in Massey University and Lincoln University.

The scholarships each have a value of A$30,000 and cover course fees and living expenses during the period of study.

Dairy Australia’s farm business management program manager, Gavin McClay, says the scholarships are an exciting opportunity for graduates to develop skills and experience in farm business management.

The scholarships will be awarded on academic merit and research interests that align with the themes and current research programme of the Centre of Excellence, including strategy and structures, resilience and decision making, data, human capability and farm systems.

“Massey University and Lincoln University are highly regarded agricultural education centres in New Zealand with a philosophy based on whole farm systems and a strong connection to farmers and the industry,” says McClay.

Deadline for applications is December 7.

Dairy News november 13, 2012

agribusiness // 25

Milk pioneer eyes global launch pam tipa pamelat@ruralnews.co.nz

A2 CORPORATION

will use its Australian marketing model to ramp up fresh milk sales in New Zealand as it also eyes new markets and products globally.

The Australian based company has just released its strategic review which includes expanding into North America and the European markets of Germany, France, Italy and Spain. Another initiative could be selling UHT milk and yoghurt in Asia Pacific and Europe.

Managing director Geoffrey Babidge says while the wider international initiatives are the higher priority, the company also wants to expand the business in New Zealand.

“The company has also decided to enter the New Zealand fresh milk market directly through the establishment of a wholly owned operating subsidiary,” he says “We are now in discussions with our sole remaining non-exclusive licencee Fresha Valley (Northland) to work with them to establish a new

business model whereby we can participate in the sales and marketing activity and assist in building distribution.

“There’s been increasing interest in A2 in New Zealand, consumers are wanting to access it and it has had limited distribution. Obviously only the full fat product has been available and we would like to encourage wider distribution and more sales.

“Packaging and marketing initiatives we have applied successfully in Australia [could be brought] to New Zealand

over the next one to two years.”

Babidge says the company is in discussion as how to ramp up further production and introduce a low fat as well as a full fat dairy. “That might include further opportunities to partner with other people to manufacture the product but at this stage our discussions are with Fresha Valley.”

Babidge says the company in partnership with Synlait has started to recruit a2 milk supply in the South Island to manufacture infant formula for export to China.

A2 Corporation is eyeing new markets around the world.

“We will be keen to start building direct supply from A2 farmers obviously to supply A2 fresh milk for the fresh milk supply in New Zealand but also as we grow our infant formula business.”

Babidge says although A2 is keen to increase fresh milk sales in New Zealand, a higher prior-

ity is moving forward the infant formula initiative, with the recent appointment of China State Farm Holding Shanghai Company as its distributor.

“This is a significant step forward; we are expecting to be selling fully packaged New Zealand milk formula in China by mid next year, and we are proceeding with the

launch of A2 fresh milk in the UK. It is just starting to appear on shelves in the UK. “The strategic review also announced a number of other prioritised initiatives including UHT milk being sold into Asia and how we would prioritise some additional overseas markets for fresh milk over time.”

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■■

■■

now under way. A fourth supermarket chain will be included from January 2013.

Further developing its intellectual property.

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■■

and specific markets in Europe are the first priority.

■■

Further investment in the UK, seen as a launching pad for Europe, will be considered.

■■

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Dairy News november 13, 2012

26 // agribusiness

Global factors changing in Oz farmers’ favour

International grain prices have spiked as a result of the drought in the US.

john droppert

WITH THREE months of production figures in, the first cut of silage in plastic and the grain harvest well underway, November is a

good month to take stock of the Australian production season to date.

Operating margins have been tight over the last few months, as depressed milk returns coincided with sharply

higher grain and energy prices. While these and other challenges remain, seasonal conditions have been broadly favourable, milk prices are starting to improve and grain prices seem to have stabilised.

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Australia’s milk output was up 2.1% in the three months to September – at 2.4 billion L – notwithstanding a variety of challenges at the regional level (as evidenced by figure 1). Dairy Australia has recently reconfirmed its forecast for growth of about 2% to 9.65 billion L over the full 2012-13 season.

While the high Australian dollar continues to impact export returns, the outlook for closing farmgate prices has been boosted by the commodity price recovery on global markets in the last few months and processors have recently begun announcing step-ups.

Dairy Australia’s September ‘Situation and Outlook’ update indicated an improved closing price expectation of A$4.70$5.00/kg MS (A34-36c/L), with further upside potential.

The latest monthly data shows milk supply in the northern hemisphere has declined compared to 2011, easing the oversupply situation that weighed prices down in early 2012.

Market balance has also been helped by the New Zealand season continuing to track close to expectations.

On the inputs front, international grain prices experienced a dramatic spike during the northern hemisphere summer as markets responded to the drought-induced crop damage in the US Midwest. With the US corn and soybean harvests now around 90% complete, yields have become clearer and there is less uncertainty in the market.

Similarly, export bans in Russia and the Ukraine are already ‘priced in’ as these are neither unexpected nor materially significant, given most of the exportable surplus in these countries has already been sold.

For Australian dairy farmers, the local harvest

John Droppert

will be the major influence on pricing over our summer. Current forecasts suggest the domestic wheat crop will be 20-22 million tonnes – 30% lower than last year but only 9% below the five year average.

Whilst limited upside risk remains in grain pricing, the potential for attractive returns is expected to induce northern hemisphere growers to maximise plantings in the coming season. This should lead to an improvement in the global supply situation and consequently some price relief for buyers during 2013.

Fertiliser prices have edged higher recently due to demand driven by large cropping programs and the seasonal closing of a Chinese export tax concession.

Despite these price pressures, many analysts believe there is sufficient production capacity worldwide to cushion buyers.

Domestic culling data to the end of October shows cull cow sales are down 6% in year-to-date terms, suggesting that unlike their US counterparts Australian farmers are retaining livestock – which will further support growth when margins improve.

Water is a bright spot, with the risks of El Niño easing and full water allocations in irrigation regions helping reduce the cost of pasture and purchased fodder.

• John Droppert is an industry analyst with Dairy Australia.

Dairy News november 13, 2012

management // 27

Farm system trims the fat TWO DAIRY operations

owned by Synlait Farms are more efficient thanks to a new system which eliminates wasted time, money and space.

The Lean Manufacturing system, renamed InSynC by Synlait Farms, improves productivity within a business. Used mostly in manufacturing industries, it has elements traceable back to the early 20th century.

Synlait Farms, with

the help of Skills4Work, adapted the system for its farms and DairyNZ followed the progress to see whether it could be applied in the wider dairy industry.

The DairyNZ On-farm Innovation Fund helped pay for the system’s introduction.

Synlait Farms estimates InSynC is saving 912 hours per year on the two pilot farms: 15min/ day/employee through less searching, waiting and

An organised dairy is safer for workers.

unnecessary motion.

DairyNZ senior scientist Dr Jenny Jago took part in the training to help evaluate the system.

“The heart of Lean is empowering staff to enable them to make their own decisions and be able to make their work environment better.

“The staff took it on and cleaned up their dairies; they had a lot of pride in where they were working and organised things so it was safer.

They thought about how they were working and came up with better ways of doing things in and around the dairy.

“Racks were built for their fence standards, they organised all their cupboards. It wasn’t just overnight, they went through a process of learning how to do this, so they can sustain it.”

Synlait Farms livestock performance manager David Campbell says the system, intended for all 14 Synlait farms, promotes continuous improvement.

“The basis of Lean principles is that it becomes a journey for your business, so you never actually reach the end of a programme. The principles remain the same but how you adopt them continues to evolve within your business,” he says.

“By mapping processes we can identify waste, find the root cause of a problem and come up with a solution.”

Synlait Farms staff take part in the company’s InSynC launch day.

easier, faster and better A key Lean tool called ‘5S’ used on-farm involves action to make producing milk easier, faster and better: ■■ Sort – remove all unnecessary things from the workplace.

■■ Set in order – workplace is well organised.

■■ Shine – cleaning and inspection.

■■ Standardise – same task in the same way.

■■ Sustain – don’t slip back into old habits.

Dairy News november 13, 2012

28 // management

Environment advocate ready to lead THE NEW chairman of

the New Zealand Farm Environment Trust, Alistair Polson, believes good environmental practice and profitable farming go hand in hand.

“The wheel has turned completely since the days when the hero in the valley was the farmer who chopped down as much bush and scrub as possible,” he says. “Now the heroes are the farmers who are retiring native bush, fencing waterways and planting trees for shade, shelter and erosion control.”

He says the NZFE Trust has played a major role in ensuring farmers are encouraged and rewarded for using good environmental practices.

“We live in a community, so we’ve got to get it right for the people we share that community with, the markets we deal

with and for ourselves. If we don’t farm sustainably, we don’t have a business.”

His new role as chair of the NZFE Trust is a challenge he is looking forward to. He says his predecessor Jim Cotman has left ‘big shoes’ to fill.

“Jim has done great work during his time with the trust and my first job as chair will be to make sure the momentum started by Jim and the other trustees continues.”

Polson was appointed chair of NZFE Trust following the trust’s annual meeting on October 23.

North Waikato farmer Cotman will stay on as an advisory trustee in the interim.

Polson’s extensive experience in farming politics and business management includes serving as national president of Federated Farmers from 1999 to 2002.

Alastair Polson

Since 2004 he has been special agricultural trade envoy for New Zealand.

He is a former director or committee member of a number of rural-based organisations, including AgITO, the National Animal Welfare Advisory Committee, Veterinary Council of New Zealand and NZ Landcare Trust.

An agricultural science graduate from Massey University and a Nuffield Scholar, he has also held company directorships with two major meat companies.

Over the last two

years Polson has been on the judging panel for the national winner award in the Ballance Farm Environment Awards. The awards are administered by the New Zealand Farm Environment (NZFE) Trust.

“That’s given me a good opportunity to understand what the

Jim Cotman

trust does,” he says. “I’m impressed by what I’ve

seen. The programmes and initiatives developed by the trust have encouraged a whole new culture of sustainable land management.”

Three new trustees have also been elected: Andrea Hanna, Te Kuiti; Hew Dalrymple, Bulls; and James Hunter, Waipukurau.

Andrea Hanna and her husband Brian were supreme winners of the Waikato Ballance Farm Environment Awards in 1999, and Hew Dalrymple and his brother Roger were supreme winners for the Horizons region in 2007. James Hunter won the supreme award for the East Coast region in 2012.

trust has a key role to play FORMER NZFE Trust chairman Jim Cotman says it has played a key role in showcasing sustainable farming practices.

“Throughout my years of involvement with the trust, one constant has been the achievements many farmers have made in the stewardship of our land and resources. This flies in the face of comments made by some bigoted and probably politically motivated commentators regarding

farming in general.”

Cotman says it has been a huge privilege to lead this “brilliant organisation” and he has been inspired and motivated by the efforts and successes of his fellow farmers.“The celebration of their achievements is important and that’s something the trust set out to do right from the very start.”

Cotman, who with wife Raewyn owns a dairy

farm at Waerenga, east of Te Kauwhata, says his involvement with the trust has been “fun”, even if it has meant long hours away from the farm.

“Raewyn has been supportive and she’s picked up a lot of the workload on the farm for me. That’s enabled me to get out there and enjoy the job of meeting the farmers and agribusiness people I find so inspirational.”

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30 // management

Consensual approach puts sparkle back in Rotorua lake Trevor Hamilton and other dairy farmers around Lake Rerewhakaaitu ensure water quality is maintained while they continue dairy farming.

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While dairy farmers still suffer from the unfair stigma of ‘dirty dairying’ coined by Fish and Game, a group of farmers just south of Rotorua are demonstrating what they are doing for the environment. Reporter Peter Burke met one of the farmers, Trevor Hamilton.

LAKE REREWHAKAAITU is about

40 minutes drive from Rotorua. Rerewhakaaitu means ‘wandering spirits’ and the lake is one of a cluster which includes Lakes Rotomahana and Tarawera ,the scene of the volcanic eruption in 1886 which killed at least 100 people and buried the famous pink and white terraces.

Rerewhakaaitu is a small, shallow lake – just 530ha and a mere 15m at its deepest point. It’s noted for unique wildlife and as picnic spot and place for recreational activities. But in its catchment are 33 dairy farms, four of them owned

by Hamilton. He’s a big dairy farmer by anyone’s standards, owning properties around the lake and in Canterbury. His farms produce about 2.4 million kgMS annually.

He’s also noted for his views on succession planning and company structure.

Hamilton and the other dairy farmers value their excellent relationship with the Bay of Plenty Regional Council (BOPRC). Since 2003, the dairy farmers and the council have been working together to

essence of it is developing good communication and understanding between the two parties then seeing what farmers need to do to mitigate the effects on the lake of their farming operations.

“What we’ve undertaken to do is be ‘indecently’ audited on farm

by AgResearch and then,

“I also believe we have a duty to stay productive and profitable because unless we can stay profitable we can’t mitigate the environmental effects.” ensure the water in Lake Rerewhakaaitu is of a high quality, and that dairy farming can continue.

Hamilton is new on the scene, here only three years, but he’s enthusiastic and full of praise for what’s happened and the ongoing work. The

There are no restrictions on N leaching around the lake.

having seen the report, work out what mitigating action is needed, be it now or over a few years. We don’t have any restrictions on N leaching but people try to understand the issue and counteract this as much as possible, [seeing] whole farming systems,

and managing effluent such as by turning rainwater off raceways before it hits the catchments leading to lake,” he says.

Hamilton says for every economic effect there is an environmental effect; this demands getting the balance right. Farmers have to mitigate as much as they can their effects on the environment. “But [I come on] a little bit stronger in that I also believe we have a duty to stay productive and profitable because unless we can stay profitable we can’t mitigate the environmental effects. Quite often mitigating some of those environmental effects, such as by effluent disposal, requires capital injection.”

Hamilton says mitigating environmental damage to Lake Rerewhakaaitu has come at a substantial cost to him. He’s spent

Dairy News november 13, 2012

management // 31 Marked contrast in regional council cultures WHILE TREVOR Hamilton is impressed with BOPRC staff, he doesn’t show the same enthusiasm for the staff at Environment Canterbury (ECAN). He owns four dairy farms in that region and says there is a marked contrast between the cultures in the two authorities.

“ECAN seems to take the old bash-bash head-butting approach rather than a consensual approach that says ‘let’s do this together and see how we [can sort it]’.”

Hamilton experienced huge problems sorting out his Canterbury irrigation system and during one meeting a councilor “lurched across the room” at him.

“So we find ourselves having to give pushback on all issues in Canterbury with ECAN, whereas it’s more collaborative and consensual with BOPRC. I would like to see ECAN take a similar approach. Recently we had ECAN turn up and tell us our rubbish hole was too big and we needed it to be resource-consented. Our operations manager said ‘well this hole is for three farms’. Then this council employee said ‘well we can’t have three farms’ rubbish going into one hole’. It all gets a bit ridiculous really.”

Also, at a time when the farms hadn’t used their annual water take, one well over-ran its take for a couple of days. “They made a helluva big issue about it, which is pathetic,” Hamilton says. “Already it’s got my operations manager in Canterbury saying, ‘oh shit, here comes ECAN’, because they are acting like policemen rather than as advocates in how we can work this out in a partnership.”

Hamilton sees the BOPRC style producing a better overall environmental outcome: “A stance that says ‘we are in this together; we need to mitigate as much as we can together; how can we help you and how can you help us?” he says.

upwards of $220,000 building two new effluent ponds and putting a new crossing over a stream to prevent effluent entering it.

“By mitigating the effect we are trying achieve a licence to operate as productively as we do currently.”

Project Rerewhakaaitu has 100% buy-in by local dairy farmers. Hamilton says farmers value the lake for its natural aesthetic value to the environment. “Farmers have children and grandchildren who water-ski and swim in the lake. I live right on the edge of it and I don’t want to see it become some sort of cesspit.”

The locals’ efforts don’t stop at keeping effluent out of the lake: farmers led by Anne Koopal have cleared massive amounts of blackberry from a local stream and planted it in native trees. Support for this

Trevor Hamilton

has come from the Sustainable Farming Fund and BOPRC. Children from the local school are involved.

The Lake Rerewhakaaitu project is an outstanding example of what can be achieved when farmers and local authorities work together.

Hamilton says farmers met recently with BOPRC councilors and they too were impressed with the restoration work in this catchment.

Dairy farmers have done an independent audit of the lake and worked out mitigation action.

Dairy News november 13, 2012

32 // animal health

Student’s teat/mastitis study wins award MORRINSVILLE COLLEGE year-13 student

Nicolette Adamson has won a Gold Crest award for a study of the progression of teat damage to infection in dairy cows.

The aim of Adamson’s study was to investigate the relationship between skin thickening around the teat – called teat-end hyperkeratosis (TEH) – and mastitis, which is estimated to cost dairy farmers $180 million dollars a year. She also investigated the bacteria involved in teat infections.

Adamson found that skin thickening was associated with an increased risk of infection in the teat, as has been found overseas; however, she also found that some skin thickening can improve without treatment, something that was not known before.

Crest co-ordinator Jessie McKenzie from the Royal Society of New Zealand says the scheme helps students develop enterprise and entrepreneurial skills and teaches about setting goals, problem solving, risk-taking and perseverance.

“Nicolette has completed an exhaustive and outstanding study that

is of great interest to the local farmers and vets that she worked with and the wider dairy industry. The Royal Society of New Zealand is pleased to recognise her achievement.”

Teat-end hyperkeratosis (TEH) is a thickening and protrusion of the skin that lines the teat canal and surrounds the external teat orifice. It is a normal physiological response to the forces applied to the teat skin during milking and is often caused by poor milking practice such as high milking vacuum, faulty pulsation and over-milking.

Nicolette Adamson

The teat-end is the cow’s first line of defence against bacterial infection either from the environment or from other cows through the milking machine. This means that if the integrity of the teatend is damaged, by hyperkeratosis, for example,

that first line of defence becomes compromised and the health of the udder can become affected.

As TEH affects the defensive properties of the teat, this means that the occurrence of mastitis in the teats with TEH could increase. This is due to the fact that the callosity of the teat-end provides a breeding ground for bacteria and these bacteria could then enter the udder, allowing infection to occur.

The most reliable method of judging how severe TEH is, teat-end scoring – an objective

measurement of the severity of the levels of keratin that are protruding from the teat-end. It involves individually scoring each teat-end during milking directly after cup removal and before teat spraying.

Cow-level mastitis can be assessed through the use of a somatic cell count (SCC) test. The result reflects the severity of an infection, which is directly associated with clinical or sub-clinical mastitis.

Studies done overseas have shown that there is a linear relationship between teat-end score and SCC but no research

The study looked at skin thickening around the teat and mastitis.

has been done in New Zealand’s pasture-based system.

The aim of Adamson’s study was to investigate: • The relationship between TEH and SCC at four time points through-

out the lactation.

• The relationship between TEH and other cow-level risk factors.

• The relationship between TEH and bacteria cultured, conductivity and SCC at quarter-level in late lactation.

Age, herd and production factors cause TEH FACTORS AFFECTING TEH were found to be age, herd and production. Cows aged five years and older were more likely to have TEH than the younger cows. Cows with higher production tended to have more TEH than cows with lower production.

Cows with TEH (one or more quarters R or VR) were 1.2 times more likely to be infected (SCC >150K) at any time point throughout the season but the risk of a cow with TEH being infected was higher at herd test two than at the other tests.

Cows with a VR teat-end were 1.7 times more likely to be infected than a cow with an N teat-end.

Cows with TEH at herd test one were 1.7 times more likely to acquire a new IMI between herd test one and two.

In the quarter-level bacteriology study, TEH tended to be associated with SCC infection

(>150K) i.e. quarters with TEH ‘R’ or ‘VR’ were 1.6 times more likely to be infected, but there was no relationship between TEH and bacteria cultured or TEH and conductivity.

The findings from this study could be used by vets for mastitis investigations on-farm. Knowing the relationship between TEH and likelihood of infection enables the advisor to understand the degree to which the TEH is contributing to the mastitis problem on farm. By understanding the normal change in occurrence of TEH over the lactation, and the change in relationship between TEH and SCC over the lactation, a vet’s recommendations to a farmer about the prevalence of TEH may be different. This information could enable farmers to look for and record TEH, which gives them another tool when selecting cows for culling or causes of recurrent mastitis by specifi-

cally focusing on the cows with VR teat ends.

Conducting the project over a number of seasons would allow more information to be gathered on the previous season’s SCC and teatend score data. More information needs to be gathered on the causes of TEH and how it can be prevented at herd level, and why there is a change in the degree of association between TEH and SCC as the lactation progresses. More research needs to be done to look at quarters with TEH in early lactation and the types of bacteria cultured from them. Bacteriological samples need to be taken from more cows with a higher prevalence of TEH. Adamson was supervised during the project by teacher Alison Dawson. www.royalsociety.org. nz/teaching-learning/crest/gold/recipients/2012/ nicolette-adamson/

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Dairy News november 13, 2012

animal health // 33

Dr Peter Younis (second from right) has been on several overseas tours in recent years to assist with the establishment of dairy herds in Pakistan, China and Sudan.

Globe-trotting vet eyes herd health, farm data quality RICK BAYNE

AN AUSTRALIAN vet has returned

from a world conference with new emphasis on herd-based health management and the need for quality data.

Peter Younis, from south-west Victoria, attended the World Buiatrics Congress in Portugal after winning the Bovine Practitioner of the Year award from the Australian Cattle Vets Association. Younis, who is a partner of The Vet Group and is based in Timboon, won the national award for his contribution to the veterinary profession, the cattle industry and his local community.

Younis says the conference had been enlightening. “Of particular interest to me were the sessions on cattle medicine in developing countries and about new approaches to a herd-based approach to animal health. While the individual cow is still important I am interested in how we can better monitor animal health on a herd basis. There is a lot of room for improvement in this field.”

Younis says he also brought home a new desire to push for better data management.

“I am now more convinced than ever that farmers need quality data that they can use and this is a vital industry issue that we must address.”

Younis has been on several overseas tours in recent years to assist with the establishment of dairy herds in Pakistan, China and Sudan. He was working in a “dingy office” in Lahore in Pakistan when he learned of his national award. “I came in after a long hard day and checked my email and had to read it three times to realise they meant it was for me.”

He has worked with corporate dairy enterprises to establish protocols and train farm workers for the induction of export heifers and describes the work as challenging and rewarding. “It is fascinating that I can use my experience and skills but still learn new things. There is no manual for this type of work. Basically we are up-skilling people to help them to establish their herds with Australian dairy cattle.

“The animal management principles are

basically the same but you have to learn to work within the constraints of a lack of expertise, facilities and infrastructure. It is challenging but it is in everyone’s interest that the cows are well looked after and the people are very keen to learn.”

Raised on a sheep farm at Port Campbell, Younis graduated from the University of Melbourne in 1976 but wasn’t initially able to follow his dream of becoming a rural vet specialising in cattle health. “At the time there were virtually no rural jobs.

The industry was in a significant downturn with abattoir costs exceeding the value of cull cattle.”

Instead he spent the first three years of his career working in a small animal practice in Tasmania, which he described as a great learning experience, before returning to south-west Victoria where in 1983 he became a partner in the Timboon Veterinary Group.

Since then Younis has seen major changes in farm animal care. “Farm expertise has increased dramatically. When I started out half the cases I dealt with were for milk fever but now we have ways of preventing that.

“There have been huge changes in the way we feed cows and in cow production, which have brought with them other challenges such as mastitis, lameness and calf management issues. But generally farm expertise has increased and it is very rewarding to work with farmers who know a lot about animal health.”

Younis was the first Victorian to receive the award. He was honoured for his commitment to the veterinary and dairy industries and his support of the local community.

As an industry trainer he has been a strong supporter of vet students and the dairy industry, and he has contributed to many state and national veterinary and cattle projects, including InCalf and the national dairy herd fertility project, mastitis research and Countdown Downunder.

He has written numerous articles and helped establish protocols for the on ship management of dairy export heifers.

“I feel very blessed. I’ve been at this for over 35 years and still doing a job that I really enjoy,” he says.

Dairy News november 13, 2012

34 // animal health

Mop the floor with your bull management MATT REYNOLDS

THE GENERAL decline in fertility and increasing dairy herd production demands make mop-up bulls critically important.

Bulls on many dairy farms are not being effectively utilised and are often a danger to the farmer and the farm’s economic viability.

Effective mop-up bull management should be a priority for every dairy farmer in order to avoid the need to rebreed cows or heifers. Appropriate bulls should be capable, healthy and safe.

A ratio of one bull to 40 cows ( joined and unjoined) should be used with this number increasing if there is a tighter

mating period. This number relates to both his ability to identify cows on heat and his serving capacity. One of the easiest assessments of a bull’s serving capacity is scrotal circumference and this should be considered when buying bulls.

One method available to assist in reducing the risk of unsatisfactory joining results and maintaining the bull’s sexual interest is rotating his team between a rest paddock and the herd, with a second bull team also running an alternate rotation.

A week is generally a sufficient rest period for a healthy bull team.

Bulls should be grouped with equivalentsized bulls and ideally they will have grown up

with one another. When managing bull groups try to avoid shuffling bulls between groups as each time a new bull enters a group, the whole social hierarchy will need to reestablish and this process can lead to stress and injury. Stress should be avoided due to its impact on future sperm production, with both environmental and management stress having an impact.

Included in this is nutritional stress, so bulls need to be adequately fed.

Bull health is the most important factor limiting the reproductive potential of bulls on farm. In many instances the bulls are not at an appropriate condition score, not vaccinated or are afflicted with some form of ailment.

Effective mop-up bull management should be a priority for every farmer, says Matt Reynolds, Victoria.

Ensuring the bull is free from injury and/or structural defect is a priority when assessing a bull’s ability to get cows in calf. The bull’s conformation is important due to the strenuous nature of mounting cows.

A bull with foot, leg or back issues will struggle to mate cows and if the issue is significant enough, may not even attempt to mount.

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Eyes, nose and mouth are also crucial because a bull requires these senses to identify cows on heat.

The final health component is vaccination, due to a bull’s capacity to expose a large number of cows to disease.

This means vaccinating bulls for 7 in 1, pestivirus and vibriosis as well as any other vaccine you are giving the cows. Have the vet check them at least

one month before the joining period.

Personal safety is also an important issue that deters many dairy farmers from using bulls and, as a result, is costing them in reduced conception rates and a need to spend extra cash on AI programs.

This issue is best managed through a zero tolerance approach to aggressive behaviour.

If the bull is aggressive,

towards people or other cattle, definitely don’t keep him.

In summary: unhealthy bulls do nothing but cost you money and waste your time. A healthy bull can improve the fertility and the economics of your farm system.

• Matt Reynolds is a dairy extension officer with the Department of Primary Industries, Warrnambool, Australia.

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FORAGE TECHNOLOLGY company Grasslanz Technology is rejecting claims of uncertainty about the effects of AR37 endophyte on livestock.

The company says following 12 years of scientific trials, livestock performance of AR37 is equal to that of nil endophyte and AR1. It says there is some risk of ryegrass staggers. “Both these facts have been well recorded in scientific literature and marketing information about AR37.”

The company also clarifies that AR37 is not available at this stage to be licensed to companies other than PGG Wrightson Seeds and NZ Agriseeds.

According to the company, AR37 provides greater insect protection than any commercially available ryegrass endophyte. It also provides continual protection against Argentine stem weevil, adult black beetle, pasture mealy bug, root aphid and porina. It improves tiller density and persistence of perennial ryegrass and maximises animal performance.

Editor’s note; The article referred to by Grasslanz was supplied by another seeds company. Dairy News apologises for any misunderstanding caused by the article.

Dairy News november 13, 2012

animal health // 35

Plan should fit your needs WHEN NOVEMBER

rolls around in a spring calving herd, thoughts turn to getting cows in calf.

The options are simply overwhelming when it comes to joining programmes. In my practice, we have every extreme, ranging from herds where the gate is simply opened from the bull paddocks and the boys are set loose to do their work, to wholeherd synchronisation with fixed time AI. In recent years, fixed time AI (FTAI) programmes have gathered some momentum as herds become larger and heat detection becomes increasingly difficult.

When I worked in the USA, FTAI was the basis of the whole reproductive programme. This was largely because the herd size at 3200 cows did not allow for easy detection of heat, and planned breeding was the only real way to manage such large numbers of cows.

There are many advantages and disadvantages of FTAI programmes that you must understand before you embark on this breeding adventure. There is a very important concept when it comes to breeding programmes – the difference between conception rate and submission rate and the impact these two measures have on the final pregnancy rate in the herd.

Conception rate is a measure of the number of cows that become pregnant from a service, whether natural or AI. Submission rate is basically the proportion of cows in the herd eligible to be mated that actually are mated over a given time.

Pregnancy rate is a far more important measure and driver of production as it is a function of both submission rate and conception rate. It is possible to achieve quite

good pregnancy rates with quite low conception rates if the proportion of eligible cows mated is very high. This is the basis of the success of most FTAI programmes. On the contrary, spectacularly poor reproductive performance will result if only 50% of your herd are mated during the joining period no matter how high the actual conception rate is; it comes back to the basic principal that you can’t get pregnant if you have never been mated.

It is essential for dairy farmers and advisors to focus considerable energies on ensuring that factors such as semen handling and storage, Insemination technique and timing are excellent. Now is the time to ensure all staff or contractors to be used in your AI programme are up to the task by refreshing their skills and by ensuring that the logistics of getting the whole herd bred over quite a short time has been considered and planned for.

It is also critical that the health and fertility of ‘mop up’ bulls and the cow herd are also as good as you can possibly have them, and that they are clean and on the right nutritional and body-condition trajectory. Yet all these efforts amount to nothing if cows don’t ever get submitted to a mating during the joining period.

This is where synchrony programmes form an important – in my mind essential – part of the reproductive toolbox.

By using synchrony, it is possible to mate 100% of your breeding herd multiple times during the joining period and you will increase the number of pregnancies generated simply as a function of the high submission rate.

There is a huge number of various synchrony programmes and the whole

thing is quite confusing as to what is the best and most economical programme for you. There is no point setting up the whole herd for a FTAI if you cannot possibly join all the cows requiring insemination on that day; with FTAI, there is only a very narrow window of opportunity in which you will get

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• Rob Bonanno is the past president of the Australian Cattle Veterinarians Association and a director of the Shepparton Veterinary Clinic, Victoria.

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Dairy News november 13, 2012

machinery & products // 37

Stock home helps save pasture, farmer’s energy gareth gillatt

A COVERED feedpad

from Herd Homes has helped a Hikurangi farmer and sharemilker take care of pastures and keep workload and waste down.

Glenn and Kristine Redwood are lower-order sharemilkers milking 230 cows off a 160ha Hikurangi dairy farm owned by Lew Ringrose, 10 minutes north of Whangarei.

The Hikurangi area is known for being wet, and though their farm never floods, Glenn Redwood says it gets its share of water, with pastures being sensitive to pugging from June to late September.

While the farm has had a woodchip standoff pad for two or three seasons before the installation of the Herd Homes shel-

ter, Redwood says it never stood up to the challenge.

“We couldn’t clean it and it wouldn’t last the whole winter... it just lasted 6-7 weeks.”

Redwood went shopping for a solution at the Northland Field Days, deciding between solutions that used concrete floors and limestone floors. “We decided to go with a limestone floor because concrete can be quite hard on cows’ feet.”

Herd Homes spent one month putting up the structure and it took Redwood and Ringrose a bit longer to install the feed troughs and gates. Redwood says the shed was all completed by the middle of June.

“It took them a bit longer because this was the first structure of its kind and they had to

source the right materials.”

Now that the structure is up, Redwood says they are already seeing the benefits. “It’ll take a few seasons to pay for itself by helping us repair damaged pasture but we’re already seeing improving pasture.”

One benefit Redwood didn’t expect to see are the time savings the standoff shelter brought. In the 2011-12 season he had to stand stock in the cowshed yard as well as the woodchip pad and found that he was having to spend time shifting stock around to make space for essential jobs like milking.

This isn’t a problem now and Redwood says that time required for herd management is a fraction of what it used to be.

“Before once the cows started calving I had to get

rid of the dry cows before I could start milking but now I can put the dry cows in the shed and leave them there until I finish milking.”

Clearing effluent out of the shed also doesn’t take too long, according to Redwood. “I just spend 10 minutes a day scraping it out into a pit then don’t worry about it until summer.” The pit is only 5m2 and “a couple of metres deep”.

Redwood says it has managed to handle most of the waste generated although they do plan on roofing it and increasing the size for next season.

“It was good that we didn’t need to worry about spreading the effluent in the winter. It’s one less job to do when we are getting cows and calves in.”

The shed, which is 42m

Glenn Redwood

long and 16m wide, provides shelter for the animals but doesn’t get hot, according to Redwood.

“We might put shade cloth on the trussses inside of the Herdhome and use it in the height of summer to get them in the shade.”

Herd Homes director and founder Tom Pow says when coming up with the concept of the shelters he took a page from nature and made sure air vents were at the top and

bottom of the walls to guarantee airflow.

“If you go under a tree in the height of summer on a still day there’s always a breeze so I asked myself why that was.”

Air circulation is vital in the sheds says Pow as it prevents ammonia build up. Ammonia inhalation can make stock listless and limit production and is often a problem with other covered areas where stock spend large amounts of time. “When there’s no

airflow going through a structure there’s nothing to take the ammonia away.

Too many sheds are built from a greenhouse and construction background and its causing problems.”

Redwood says while it has been used extensively the floor and walls of their shed hasn’t deteriorated in the least. “It all looks like the day when they put it in – no rips, tears or anything.” www.herdhomes.co.nz

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Dairy News november 13, 2012

38 // machinery & products

Global thrust to 2013 Fieldays THE PROSPECTUS

has been released for next year’s National Agricultural Fieldays , June 12-15 at Mystery Creek Events Centre, Hamilton.

Organisers report

Organisers report healthy interest in agribusiness sites at the 2013 Fieldays.

healthy interest with 72% of all agribusiness sites reserved. The theme is ‘Getting down to business in the global economy’ which highlights New Zealand’s position as an inno-

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site redevelopments for the 2013 event including a new Mystery Creek Events Centre headquarters at the main entrance. Six different areas have been renovated to improve and increase pedestrian flow while creating an extra 2000m2 of exhibiting space.

“The ever-popular Kiwi’s Best has been renamed “Kiwi’s Best Kitchen”, and will be almost double its previous size. Showcasing New Zealand’s finest food products, it will now also house a specialised beverage section for New Zealand beers, wines and spirits. The celebrity chef for 2013 is yet to be announced.

“The Innovation Centre has developed into a greenhouse for local innovations, fostering initiatives and creating a platform for inventors to take the next step, be it from backyard invention to market-ready production, or from developed product to international export item”.

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vative agribusiness-driven economy to capitalise on the growing international demand for food, protein, and agricultural expertise.

Now in its 45th year, National Fieldays annually hosts about 1000 exhibitors on 1400 sites within the 40ha exhibition space.

The annual four-day event attracted 125,000 visitors in 2012, providing exhibiting businesses the “ultimate connection” to farming customers, locally and internationally.

National Agricultural Fieldays chief executive Jon Calder says: “We are acknowledged as a window into one of the most innovative, forward thinking agricultural economies in the world. We are excited to be able to provide a platform at Fieldays 2013 for New Zealand agribusiness to showcase its capability and innovation; demonstrating to New Zealand and the world why we are international leaders in pastoral faming.”

The National Fieldays Society says there will be many improvements and

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prime cattle competition held Tuesday at the North Canterbury Stock and Station Agents Association weekly Canterbury Agricultural Park prime market.

Ben Manson’s steer easily beat last year’s winner by topping the one tonne mark. He was sold for $1890.

Canterbury A&P Association president Richard Lemon presented the winner with the trophy and prize ribbon, commenting that their steer’s size was quite impressive.

The organiser of the competition, John Honeybone from Rural Livestock, commented on the excellent sale and the good cattle on offer. “Overall the cattle were right up to expectations with some excellent cattle entered,” said Honeybone.

November 6 was the last sale before the annual Canterbury A&P Show. Work has since begun on preparing the saleyards for the influx of livestock for the three days of the show.

2011 heaviest steer winner Jack McDrury will accompany his father John and the 2010 winner, a Charolais and Friesian cross steer named Prince Charles, to this year’s Canterbury A&P Show. Charles weighed in at 1234kg when he won the competition and Showgoers can enter a competition to guess his current weight at the Show.

Entry is by gold coin donation with the winner receiving a fishing charter trip for 12. All proceeds go to Abreast of Life, a group of breast cancer survivors living in Christchurch.

This year’s 150th Canterbury A&P Show will be held November 14-16 at Canterbury Agricultural Park in Christchurch.

Dairy News november 13, 2012

machinery & products // 39

Tornado whips up Oz storm chris dingle

BUSINESS IS down but Australian farmer Pete Smith has no plans to part ways with his new Welger Tornado RPC 445 baler/wrapper.

Smith, from Tatong in north-eastern Victoria, about 30km south of Benalla, had owned his Welger Tornado for about six weeks when Dairy News caught up with him in the middle of a contracting job on the last day of October.

The Tornado is a big unit when you compare it with the usual round balers; it is 5.8m long, 2.8m wide and 3.35m high. Smith operates it with either a

210hp Case Puma 210 or a 110hp Case Maxxum 110. Both appear to handle the job well.

He runs a contracting business as well as milking up to 180 cows on his own property with his wife Beth and says that he is lucky to have someone at home looking after the dairy while he’s out contracting. Smith does the morning milking and then heads out on the contracting during the season. It is a mixed herd of Holsteins and crossbreds, they calve in spring and autumn and milking is done in a 10-a-side double-up shed.

“We bought this place 10 years ago and resurrected the shed,” Smith says.

“The home farm is 132ha and we lease

Peter Smith runs a contracting business as well as milking 180 dairy cows with his wife, Beth.

The Welger Tornado RPC 445 baler/wrapper is a big unit compared with usual round balers.

a further 400ha for Angus cattle and to run the replacement heifers.”

Their four children; Stuart, who is 16, Kate 14, Grace 11 and William, 7, are all at school in Benalla.

Before he decided to purchase the Tornado, Smith had two Welger 420 balers and a wrapper. He traded one of the balers in on the Tornado, kept the other one and the wrapper was put up for sale. “The Tornado is nice on hay so the other Welger is now for sale,” he says.

Smith explains that they had the idea for about two or three years to move up to the baler/wrapper combination; “With the Tornado you don’t have to run a separate tractor.”

When it came to making the actual decision to buy he says that he’s found that Welgers are exceptionally good balers with exceptionally good back up.

Like many farmers with their machinery, “a lot of it comes down to the dealer”.

The Welger brand is marketed and distributed by Lely Australia and the machine was bought through O’Connor’s in Shepparton. Smith says he gets good service and assistance from them.

“The biggest thing was learning the system, the dealer ‘babied’ me along, and once I had learned it, it’s been great.”

The baler has a bale chamber diameter of between 0.9 and 1.6m, with a width of 1.23m. In addition to a variable baling chamber, the automatic wrapping system is variable as well. Lely says the time that the Tornado takes to wrap a bale is so short that the output of the variable round baler can be utilised to its full potential.

The pick-up width is 2.25m and Welger developed a completely new tine design for this machine.

The baler/wrapper combination averages 73 rolls per hour and Pete uses an inoculant on the bales. It has done 3000 bales in the six weeks that he has owned it, but Pete admits things have not been so good for silage around this district this year.

At one stage, he says, he would make 30,000 bales in a year, but there are not as many bales around this year because of the move to spring calving, and farmers preferring to leave the paddocks for grazing, because of the relatively high cost of baling.

“This season we’ll do about 6000 bales - it’s a quiet year.”

He also runs a Shuitemaker forage wagon for contracting jobs on pit silage, and was flat out on that for three or four weeks. Other equipment in the business includes a Lely mower and a Claas mower, a Vicon mower/conditioner, a Lely tedder and a Vicon Andex rotary rake.

Smith says he plans to keep the Welger Tornado running for about the next five years.

The baler has a bale chamber diameter of between 0.9 and 1.6m, with a width of 1.23m.

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Dairy News november 13, 2012

40 // machinery & products

‘Super pump’ makes contractor a onestop manure shop CHRIS DINGLE

AN AUSTRALIAN farm

contractor at Barongarook, in Victoria’s Western District, recently cleaned 1.5 megalitres from a customer’s effluent pond and spread it over the farm paddocks.

It took 94 loads and

The super pump does it all, says Australian contractor Steve Lynch.

Steve Lynch did it in less than two days, this efficiency attributed to a stand-alone Houle ‘super pump’ to agitate the material in the effluent pond, break down the solids and shift it into his new 16000L Houle manure spreader. Then he spread the manure on the paddocks in a 12m swath.

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Lynch has been contracting five years; he was previously a logging contractor, running some beef cattle on his smallholding. Now he handles all sorts of farm contracting including cultivation, sowing and spreading liquid fertiliser, as well as his recent foray into manure. He got into this side of the business because many of his dairy customers had asked him to look at providing a service to spread effluent from their storage ponds.

He looked at available systems and machinery, noting that some contractors in his area were using umbilical spreading systems, with a high pressure pump transferring the effluent to a spreading toolbar usually through about 1.6km of hose. He concluded that umbilical systems are perhaps not ideal when thicker material needs to be spread and that the length of hose would not suit him.

Several of his customers needed to spread effluent a few kilometres away from the ponds. He found that the set-up time, rolling out and retrieving the pipes can be high. He also wanted a solution that would allow one man operation; an umbilical system appeared to present a challenge.

A few contractors who had used vacuum tankers told him these were slow to load and unload when the effluent got thick. If the effluent was very thick, sometimes they could not load at all. Many farmers had commented to Lynch that they were just too slow.

The tanker needed to be quick to set-up and be able to load effluent of different consistencies quickly. If he could find a machine matching these criteria, he would have something new and different which would meet his customers’ demands.

So the decision was made to purchase the Houle EL48 tandem spreader with a 16,000L tank through GEA Farm Technologies Australia.

This ‘contractor specification’ model comes with load sharing suspension, double caliper disc brakes and a steering axle. An onboard centrifugal pump is available to load and unload the spreader, but Lynch chose to go for the Houle PTO super pump to increase the efficiency of the operation.

With the separate loading pump, there is no need to connect suction hoses.

Material is pumped into the top fill hatch using the Houle.

“The issue was to have a cost-efficient way of getting manure to the furthest points of customers’ properties,” explains Lynch, “and this system does that really well. The major reasons that I went for the Houle machines were the sheer size of the tanker and the ease of operation – it’s a one-man job.”

At the time of our visit in early May, he had only had the tanker and pump for a month but said that it was making a big impression in the area.

“I’m finding that farmers around here are moving away from urea and more towards the concept of biological farming.

“I’ll go anywhere,” he says. “I’m a one-stop manure shop.”

The Houle tanker is operated by a 220 hp Deutz-Fahr Agrotron TTV630 and Lynch recently bought a second-hand JCB3220 to run the pump. He can sit in the Deutz during the filling procedure and operate everything by a remote hand-controller supplied with the Houle set-up. The controller has 20 function buttons to handle all the aspects of the pump, including six spare buttons if he needs to upgrade anything.

These pumps can load at up to 12,000L/min. in low consistency liquid material, so it takes less than two minutes to fill the tanker. In very thick material, the spreader loads within two minutes.

The performance is excellent in effluent ponds.

Dairy News november 13, 2012

machinery & products // 41

Heat detection advances on show in Europe COW HEAT detection features in products being launched this week in Europe by the Dutch company Nedap. It will show a a neck label for realtime heat detection, and a cow positioning and heat detection system, both at EuroTier 2012 in Hannover.

The company says its cow positioning and heat detection technology registers the position of individual animals in the entire barn, and simply indicates this data on a digital map of the barn. This position can be read from a PC or a smartphone or tablet.

“Tracing animals that, for example, require individual care is no longer a time-consuming job,” Nedap says. “Dairy farmers who work with an automatic milking system or with a large herd will experience the substantial benefits of this method; searching for a cow is now

a task of the past.

“As an additional advantage, the Nedap cow positioning and heat detection method can be optionally combined with the Nedap ISO identification technique for management applications such as feeding, separating and milk measurement. In these instances the dairy farmer needs just one system and one neck label to trace, care for, monitor and identify individual animals.”

Last year Nedap launched a new system for heat detection: the lactivator real time. Dairy farmers who use this system now no longer depend on set times and fixed data reading locations in, for example, a milking parlour or feeding station.

“This system detects heats 24/7 in the entire barn,” the company says.

“The Nedap RealTime heat detection technology can identify heat from

a large distance; up to at least 50m around the antenna or about 1000m around the antenna in the long range version. Until now, only a leg tag was available.”

At the EuroTier 2012 Nedap will introduce

the RealTime Neck label for Heat Detection. The neck label measures the acceleration over three dimensions by means of a G-sensor; resulting in accurate recordings of the behaviour of individual animals.

Nedap neck label for real time heat detection.

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Dairy News november 13, 2012

42 // machinery & products

Sharper, tighter on twisting back-roads THE NEW Kia Sorento R

is more sophisticated and starts at a lower price than the outgoing model, says Kia Motors.

Sharper and more aerodynamic styling to the 2013 Sorento R includes LED daytime running lights, part of a new headlamp cluster that angles in towards the more aggressive tiger nose grille and new front bumper, which contains vertical-axis fog lights. There’s also a new tailgate with LED rear combination lamps, new rear bumper and an expanded range of wheels

that include larger diameter (19-inch) alloys.

Built on a new platform, major upgrades include a stronger, yet lighter re-engineered bodyshell, enhanced powertrain for improved fuel economy with lower emissions and revised suspension for a smoother ride, sharper handling and greater refinement.

“The changes have turned what was an extremely good vehicle into an extraordinary one,” says Todd McDonald, general manager of Kia Motors New Zealand.

The new generation Kia Sorento R – more refined and sophisticated.

“The best way to appreciate the new Sorento R is to take it for a long drive on twisting back-country roads – the ride, handling and road-holding have been transformed.

It’s engaging and entertaining in a very sophisticated way.”

The 2013 Sorento R range includes 2.4L petrol and 2.2L diesel in urban and AWD in various specification levels all with three rows of seating for seven occupants and pricing starting from $46,490 + ORC, a reduction of $500, in spite of higher equip-

Safer for driver, pedestrian KIA SAYS the upgrades have made the new Sorento R even safer and expect it to score enhanced 5-Star Euro NCAP and ANCAP ratings when tested and an improved pedestrian injury score, thanks to another innovation called ‘active hood system’, which raises the bonnet in an impact to reduce head trauma.

The latest electronic stability control is fitted to all Sorento R models and features hill start assist to prevent roll-back when starting on an incline. Braking distances have reduced as a result of an increase in front brake disc size from 298mm to 320mm.

The already acclaimed R-series 2.2L diesel engine, which powers all but one model in New Zealand, has

“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

been enhanced, too. Already one of the most powerful (145kW) and tourquey (436Nm) diesel engines for its size, the R2.2 is also one of the cleanest for its size with CO2 emissions as low as 187g/ km. There is also a 2.4L petrol engine option in the Urban 2WD and AWD models.

Kia’s 6-speed automatic transmission, with sequential manual shift, is now standard across the range. Fuel economy has been improved through ‘neutral control’, which automatically shifts the transmission from ‘D’ to ‘N’ when the car is stopped for more than a few seconds – reducing engine load. The gear selector lever has also changed to a straight gate layout.

Thanks to the powertrain

upgrades and weight reduction of up to 141kg on some models (an 8% reduction), fuel economy in the combined cycle is down an average of 4%, to 7.1-to-7.3L/100km (ADR), depending on model.

Inside, there’s a new optional LCD instrument cluster, new dashboard and controls, with tactical surfaces and trim that imparts a more luxurious feel. All Sorento R models come with cruise control and steering wheel controls for the 6-speaker touch screen audio, dual zone air conditioning, trip computer, rain sensors, remote locking and reversing sensors with rear camera that now displays in the dashboard. Leather (with front seats heated) is standard from EX models-up.

ment levels and an all-new chassis.

Kia is also introducing a new top-of-the range model to head the line-up – the Sorento R Premium, which comes with a full luxury package, including a two-part panoramic sunroof and powered blind that runs almost the length of the roof, ventilated front seats and new adaptive headlights that automatically point in the same direction as the vehicle resulting in improved driver visibility at night.

For the first time in a Kia, there is also the new ‘smart park assist’ function that automatically parallel parks the vehicle, hands free (on Limited and Premium only).

The most important feature of the latest

Sorento R is the all-new platform, which has increased torsional rigidity in the body by 18%, using more high tensile steel than most vehicles in this class. Key changes to the suspension system, including brand new subframes, larger bushes, high performance dampers and the introduction of a motor driven power steering system (MDPS) with stronger mountings, have led to a more sophisticated and balanced mix of ride, handling and road holding. The ride height has also been lowered 10mm to further improve on-road handling.

Although the handling bias has shifted towards on-road motoring, the latest model is still a capable off-road per-

former when fitted with Kia’s full-time all-wheeldrive system that distributes drive to wheels with more traction when it senses slippage. The front and rear axles can also be locked 50:50 to enhance traction up to 30km/h. Approach angle is 19.7-degrees, departure angle 22.4-degrees and ramp-over angle is 17.1-degrees.

The new platform delivers another bonus: more legroom for the second and third row passengers – up 30mm and 9mm respectively, due to a reshaped floor.

Second and third row seats can be folded to provide 2052L of cargo carrying capacity.

Passengers will also notice a quieter cabin.

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