Dairy News 16 April 2013 by Rural News Group

Global processor seeks a slice of New Zealand dairy. Page 3

more power for farmers New fence energiser Page 19

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april 16, 2013 Issue 288 // www.dairynews.co.nz

chopped down to size Fonterra downsizing Australian operations as major supermarkets dictate profit margins and competition rages for farmgate milk. PAGE 4

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Dairy News april 16, 2013

news // 3

Global processor breaks into South Island andrew swallow andrews@ruralnews.co.nz

Be prepared for adverse weather. PG.18

Feed trial sorts out cash-converter cows. PG.28

Setting up for next season’s production. PG.38

News �� 3-21 Opinion ��22-23 Agribusiness �� 24-26 Management �� 28-32 Animal Health ��33-37 mating management ��38-41 Machinery & Products ��42-46

ONE OF the world’s biggest dairy companies has broken ground on a site for a factory in the South Island. Inner Mongolia Yili Industrial Group wasted no time sending contractors onto the 38ha site alongside SH1 at Glenavy, South Canterbury following the Overseas Investment Office March 28 clearance of its $214m development. The OIO decision summary says Yili plans to “construct a milk processing plant… to produce base powder using various local suppliers. The base powder will be exported to China and used in the production of infant milk formula.” It will be the third large milk processing plant in South Canterbury, and the fifth in the wider region – possibly sixth if Westland decides to build at Rolleston. Reaction among local farmers is mixed. Unsurprisingly, Aad and Wilma van Leeuwen, vendors of the site to Oceania Dairy, and in turn to Yili, are pleased the development is finally going ahead. “It’s a major for South Canterbury,” he told Dairy News. “I don’t think a lot of people realise what’s happening here. Yili are a major player in world dairy markets.” Van Leeuwen was instrumental in the conversion of the Vegetable Processors’ site, 18km to the north at Studholme, to a dairy factory in 2007. The resulting business, New Zealand Dairies, ended up 100% owned by Russia’s Nutritek after falling into financial difficulties during construction. In May last year NZDL went into receivership and Fonterra bought the site. Van Leeuwen says competition for Fonterra is a good thing and with Synlait looking to consolidate supply closer to its factory at Dunsandel, central Canterbury, Yili will give dairy farmers in the far south of the province, and North Otago, another option. “The timing’s perfect really.” Currently 80% of the milk from van Leeuwen’s

Progress at last: dairy farmers and processing site vendors Wilma and Aad van Leeuwen are pleased to see the development start.

12,000 cows goes to Synlait, the balance to Fonterra. If all their 4.5m kg of milksolids went to Yili, it could be close to a quarter of the plant’s initial requirement, they believe. “Now they’ve started building and have people on the ground we can start to talk turkey.” The van Leeuwens say they’ll be looking to form a suppliers group to negotiate with the Chinese dairy company, as they did with NZDL. Other farmers in the area have reservations about the competition for Fonterra. “There are pluses and minuses,” Fonterra-supplier Robert Smith says. He won’t be switching supply from his current 2000 cows to Yili, but if he were to develop another property to dairy he’d consider if for the new milk. “You’d have to look at it very seriously because of the capital involved in supplying Fonterra.” His reservation is whether New Zealand dairying as a whole should be diluting Fonterra’s strength, not to mention Fonterra’s obligation to supply start-up competitors with 50mL of raw

milk/year for their first three years. No one from Yili was available for comment about the development last week but van Leeuwen says he understands the plan is for a 10t/hour, 19m kgMS/year dryer initially, with expansion to 30t/ hour capacity if the milk becomes available. Fonterra’s high share price will make supplying Yili an attractive option for conversions and/ or farmers looking to release capital, he believes, and with returns on Fonterra units way above most nations’ interest rates the cooperative’s share value is unlikely to fall. “[Fonterra] says it’ll be $5 by Christmas but I can’t see it.” Paul Park, managing director of Oceania Dairy, says he understands Yili’s plan is for a slightly bigger factory than the one Oceania outlined in obtaining resource consents for the site, but as it will be capable of producing infant formula, with imported ingredients added to the milk, the intake and waste output will likely be similar. @dairy_news facebook.com/dairynews

Dairy News april 16, 2013

4 // news

Fonterra axes Oz brands sudesh kissun sudeshk@ruralnews.co.nz

AUSTRALIAN SUPERMARKETS are ravaging all dairy prod-

ucts and this will get worse, an expert commentator predicts. Professor Keith Woodford, Lincoln University, says Australian supermarkets Woolworths and Coles have huge power, making life tough for food manufacturers. Fonterra is revamping its struggling Australian business, slashing the number of brands to rein in losses and hinting at more factory closures. The number of brands will be cut from 21 to five. Woodford says in the next one to two years the competition is likely to get even stronger because of as the move to supermarket house brands. “Fonterra is reacting to this by consolidating its brands,” he told Dairy News.

“The driving force is the move by Coles and Woolworths to their own private label or house brands, not only for fresh milk, but for all processed dairy products such as butter, cheese and dairy. This is putting a big squeeze on all other branded products.” For six months ending January 31, 2013, Fonterra’s ANZ business earned $98 million, 32% less than the previous year’s $145m. The ANZ business includes brands in Australia and New Zealand. In New Zealand the business, including Tip Top and Anchor, is doing well, but the Australian operation faces a double whammy: increased competition for milk supply at the farmgate and greater trade spending to maintain market share by consumer brands. Fonterra chairman John Wilson says shareholders will be concerned the Australian business is losing money, but is confident a

Milk supply deal A DECISION last November to reacquire the Norco Milk sales, mar-

keting and distribution business from Fonterra has enabled the northern NSW cooperative to sign a 5-year supply deal with Coles. The Lismore-based Norco Cooperative, which has 160 suppliers, will supply milk to Coles for its private label brand. Before the deal to reacquire its rights from Fonterra, Norco chairman Greg McNamara said it was contractually bound not to deal directly with retailers. “The securing of this contract to supply Coles brand milk is a reflection of the opportunities which are available to Norco given that it is no longer restricted in dealing directly with the retail channel,” McNamara says. “We are delighted to be able to provide this volume of milk to Coles customers and we believe that the contract will be beneficial for our dairy farmers.” Last week Australia’s biggest dairy co-op Murray Goulburn signed a 10-year agreement to supply fresh milk to Coles for its private label.

Fonterra is looking at working closely with Australian chefs to grow its food service business.

Spierings points out that the Australian business is facing pressure on both ends of the supply chains. Fonterra is fighting Australia’s biggest dairy co-op Murray Goulburn for milk at the farmgate. In the consumer business, two major retailers, Woolworths and Coles, are dictating prices. “We have a large number of brands and we’re rationalising [them]. We want less brands and more focus on advertising and promotion and innovation.” Fonterra’s food service business is said to be performing well and a network of chefs is expected to grow operations. “Our food service is strong business and we’re investing in that…. We’re rationalising the underperforming businesses and stepping up pace in the business doing well.”

management plan now under way can return the Australian operations to profit. Despite the poor performance, Wilson says Australia is a “home market” and there are no plans to withdraw. “We’re there to stay in Australia. The board is confident in the management’s plan to rationalise the business.” Fonterra has eight processing plants in Australia; it is closing a 100-year-old plant in Cororooke, Victoria. Fonterra chief executive Theo Spierings says at the end of the revamp the co-op’s assets in Australia will look different. “We will continue to rationalise our Australian operations and there’s more to come.” The co-op will also use milk collected in Australia for value-added products at the expense of commodity products.

@dairy_news facebook.com/dairynews

Yashili’s plans for Pokeno inner mongolia Yili wasn’t the only Chinese dairy company to gain Overseas Investment Office clearance for New Zealand plans last month: Hong Kong stock exchange-listed Yashili was cleared to build an infant formula plant at Pokeno, North Waikato. Unlike Yili, which has resource consents in place thanks to the groundwork of vendor Oceania Dairy, Yashili still has to gain resource management consents, for which it filed applications last week. Yashili’s operations manager Terry Norwood told Dairy News the proposed plant will make about 50,000t/year of various infant formulas. “We will be seeking to purchase raw milk on a large-scale but we want to do that from another dairy company. We want a fixed volume every month rather than the seasonal curve we would get buying from a farm-based operation.” Norwood says Yashili will be “looking to talk with Fonterra” about that supply arrangement, and possibly others. “We’ll also have a big requirement for milk powder.” Several other large-volume dairy ingredients, typically cheese byproducts such as whey powder and lactose, will likely be imported as they’re not available in sufficient volume in New Zealand. “New Zealand has a very small cheese industry relative to Europe and the US.” Norwood says Yashili chose New Zealand for its first plant outside China because of our international reputation for excellence in dairy processing, food safety, quality assurance. And it chose Pokeno for its proximity to ports and other infrastructure. In China Yashili is the second- or third-largest infant formula supplier “so a very large player,” he adds. Product made at Pokeno will be exclusively for Yashili. The OIO decision summary puts Yashili’s investment at $212m and notes “the applicant already sources milk powder from New Zealand for use in its products.” – Andrew Swallow

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Dairy News april 16, 2013

dairynz farmers forum // 5

Volatility ‘is the new norm’ pam tipa pamelat@ruralnews.co.nz

FONTERRA’S OPENING forecast payout for

2013-14 will be in the high sixes, predicts ANZ chief economist, Cameron Bagrie. And that’s a conservative estimate, he says. However he made the prediction against a warning that volatility is the new economic norm influencing everything – the global situation, currency, commodity prices. “I look at macroeconomic trends, where the currency is going, where interest rates are going and today there is no trend,” Bagrie told the DairyNZ Farmers Forum in Whangarei this month. “What you have seen for the past few years, with a helluva lot of volatility,

uncertainty – get used to it. That’s the new norm.” The trend for commodity prices for the past 40 years was down, he said. The trend was up at present but that was marginal. “You are probably talking 2% per year intertwined with a helluva lot of volatility. You will see commodity prices go up 30% in one year and down 25% the next.” He predicted the milk payout would continue to be higher than it has been historically and would keep having a six in front of it. But it worries him when people start putting turbo-charged estimates on the table, such as $9-$10/kgMS on what the dairy payout could be sustained at. Bagrie said everyone was focused on the drought but the global

scene was still also a powerful influence on key operating variables at the farming level. “It determines whether the New Zealand dollar is high or exceptionally high, whether it’s got a seven in front of it or an eight. It influences what the Reserve Bank does: when the global economy is wobbly there are interest rate cuts, when it is stable there are interest rate hikes. “When the global economy is awful you will be having a conversation with your bank manager about higher funding costs being passed on, if the global economy is stable those conversations disappear. “If you went for a march around Europe today you would come to the conclusion that Europe would be pretty

much rooted by next March,” he said. Globally many sovereign balance sheets are not pretty reading. The average level of debt across the OECD is about 65-70% of GDP. Some are more than 100% and they are not small countries. The problem has been “massaged” in the last few years with steps taken overseas such as printing money. This had put the global economy through several spirals in the last few years. “Eventually someone is going to ask ‘where has all the debt gone?’. The answer is the debt has gone nowhere – it is still there. That leads to a tipping point – trepidation – and the spiral is in motion again.” The spiral has occurred

learn to Live with the high currency PROBABLY NOTHING can be done to get the New Zealand currency down, Bagrie says. “Live with it,” he told the DairyNZ Farmers Forum. The Reserve Bank could try cutting interest rates. But the Australia Reserve Bank had cut the official cash rate by 175 basis points in the last 18 months to no effect. Bagrie said it was not the yield potential of our interest rates that was primarily driving the New Zealand dollar. “What is happening is portfolio flows, or real money, are chasing growth – what countries they think have got good economic prospects,” he said.

“We’ve got economic challenges but when you lie up the opportunity side of the ledger, it doesn’t look too bad. “That is bringing a sting in its tail – capital is naturally finding its way into New Zealand because when they line up our economic challenges we look somewhat of a tall pigmy. Pigmies are not very tall or attractive but we win the beauty pageant compared to the US, UK and Europe.” The only feasible option to deal with the New Zealand dollar was to lift productivity competitiveness. “We have got to get a bit more creative. I am not sure

the penny has dropped across all parts of society as to what we risk if we don’t get those productivity parameters lifted,” he said. “That gap that is undermining big parts of New Zealand I don’t think is going to be addressed by the New Zealand dollar coming down. And if it does, funding prices would be going up and commodity prices would be crashing.” He also repeated warnings about our competitiveness in China saying that the swing producers like America would gearing up and “places like Belarus are starting to milk a lot more cows”.

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Cameron Bagrie addressing the Farmers Forum in Whangarei.

several times in the last few years with interest rates, the New Zealand dollar and even commodity markets doing “more flip flops than walking the beach at Bondi”. “Right now the markets are doing what they’ve done numerous times in the past few years; they think everything is ok,”

Bagrie says. But to really break the circle of trust – or mistrust – [global] politicians need to show credibility and competency – an oxymoron. He cites the French president wanting to lift spending to 65% of GDP. But, as an aside, he warned when Europe’s economic model finally

breaks “you will see its rural sector become very smart, very efficient overnight. They will actually become a bit of a threat”. Bagrie said his message was that “flip flops, uncertainty, ups and downs are now the clear trend. Get used to it, this is the new norm. Plan for it in your budgets accordingly.”

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Dairy News april 16, 2013

6 // dairynz farmers forum

Profitability key issue on farm PAM TIPA pamelat@ruralnews.co.nz

THE KEY current issue for dairy farmers is profitability, short and long term, DairyNZ chief executive, Tim Mackle says. Before the drought DairyNZ estimated 25% of dairy farmers could struggle to meet farm working costs and interest or rent on the $5.50kg/ MS payout. With the drought, that figure could rise to 40%, Mackle told Dairy News at the Farmers Forum in Whangarei this month. Average production drop in the North Island was 15%. The recent Fonterra payout increase would not be enough to offset that, Mackle said. That means many farmers could face an account deficit going into the new season. Earlier he told the Farmers Forum that New Zealand is not the lowest cost producer globally anymore, based on a three year average, updated this year by DairyNZ’s economics team. Argentina, Ukraine, Uruguay and

Australia are now lower, but New Zealand is still the lowest cost producer at scale. “USA and EU, the other two big exporters, are still higher cost producers but they are not that far away,” he said. “Further analysis show the large farms in California of 2000-3000 cows

“Our competitiveness on the world market is key.” – compared to our large farms of 700 and above cows – are more cost efficient now on a US dollar basis. “So the point is we have to maintain our position. We do enjoy a large amount of profit on offer– we export a third of the world’s trade in milk products, two-thirds of the profits. We can’t let that go. We have to get that message across to everybody – the public, the regulators and all the people, our competitiveness on the world stage is key.” Mackle said profit underpinned

our competitiveness. Analysis of aver- our farm inputs. At that time the milk age farm working expenses from 2002 price went up so margins were maintained. to last year showed they were steady “But over that time the debt seruntil a big jump in 2007-08. This could vicing of those 2000 plus farmers be attributed to the last drought, and went up by 70c/kg so that is where at the same time costs such as energy, fertiliser, etc increased. DairyNZ chief executive But there was a good milk Tim Mackle speaks at price at the time. the Farmers Forum in Whangarei. But the point was, Mackle said, “we’ve stayed there” with working expenses. The survey was of about 2500 farms so was a good representation and it showed a jump of almost $1/kgMS. The biggest movement was feed related costs, up from 80c/ kgMS to $1.40/kgMS and it had stayed there. “I know in times like this you have to bring feed in, and cows have to be fed. I accept that but the point is we’ve stayed there so it’s more than that. We have actually increased

the squeeze is coming on. This is the challenge we’ve got – that combination of high farm working expenses and high debt serving and fluctuating milk price. This is why our R&D is so important going forward.”

Dairy News april 16, 2013

dairynz farmers forum // 7

‘Have you shot all the cows?’ A PHOTO in the New

Zealand Herald of a cow being shot by a farmer was one of the first images a Chinese film crew saw when they entered New Zealand. The crew was sent from Sydney by a big Chinese network to report, in the Mandarin language, on the drought and the impact on the economy, said DairyNZ chief executive Tim Mackle. There was big interest from consumers of nutritional products – Chinese parents – about formula supply for their babies. “The crew got off the plane, purchased a New Zealand Herald and saw this photo of a guy with a rifle aiming at a cow,”

“Industry people will tell you if there’s something in our media or international media, they will be called by many customers within hours.” Mackle said. This was not the image we wanted to project to urban customers, here or overseas, he said. The film crew drove from Auckland airport to Hamilton through Ngaruawahia to interview DairyNZ at Newstead. There were not normally many cows on that road. When the film crew got to DairyNZ they asked “Have you shot all the cows?” It took 10 minutes to convince the crew that New Zealand still had cows and the drought

wasn’t that severe. Mackle told this story at the Farmers Forum in Whangarei to highlight “the intense interest in our dairy industry from our largest and growing market and the impact of a picture in a newspaper on what is going on here. We need to take that on board and understand we are in a fishbowl “. “Industry people will tell you if there’s something in our media or international media, they will be called by many customers within hours.”

The New Zealand Herald photo.

dairying concerns deep south CHRISTCHURCH URBAN residents hold the dimmest view of dairy farming of any New Zealand city, a DairyNZ survey has discovered. Chief executive Tim Mackle says they survey 1000 people every six months and also hold focus groups.

“You might be surprised to know that Christchurch is the city where we have the most problems towards dairy farms; they are 10% below everyone else in their positivity towards dairy,” Mackle says. “Invercargill is not too far behind, because of land

use change. Right across the country we’ve got issues with that. “So you do have to respond to these drivers and make the most of opportunities and actively manage those risks; they are threats to our industry.”

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Dairy News april 16, 2013

dairynz farmers forum // 9

Succession planning pitfalls ONE OF the most anticipated speak-

ers at the DairyNZ Farmers Forum in Hawera is Joan Baker, a succession planning expert. Baker, a respected business consultant and author, will offer farmers advice on how to achieve financial success. However, her particular interest is the major issue of succession planning. She comes from a farming family and knows first-hand the intricacies of succession. Her presentation will focus on the ‘soft’ side of successions. She says it can be quite easy to organise all the money and the legalities surrounding succes-

sions, “It’s actually very difficult for people to face up to the need to plan for succession and to think about what they want and to have the conversations with all the people they need to have them with to make it happen.” Baker acknowledges that the most difficult decisions concern the emotions involved: “What’s hard is for people to do the thinking and the talking that’s actually required to get them to the point of having a succession plan.” Baker says there is often an identity issue for farmers as they start a new life after handing over the reins on-

farm. “Usually somebody who farms identifies themselves as a farmer; men in particular tend to have a very strong identity with their work and often they have huge issues about who they will be once they no longer farm. Often they don’t do anything about creating a new life for themselves and it’s terribly hard for them to let go of their farming identity.” Baker hopes her presentation will encourage farmers to begin conversations about succession with their families and relevant parties. She says commonly farmers leave it too late. “They don’t talk within the family about

Forums to cover regional topics dates and venues: Thursday, April 18, Taranaki, The Hub, Hawera. Wednesday, May 15, Southland, Ascot Park Hotel, Invercargill. Tuesday, May 28, Manawatu, Woodville Racecourse. Regional topics covered at the events:

Taranaki Succession planning, oncea-day milking, GPS use on farm, nitrogen leaching, Forage Value Index – the new rating system for pasture grasses, pasture persistence. Southland Human resources, winter feed supply, nutrient use efficiency,

pasture species and diversity as related to nitrogen leaching, fertility, calf bedding, gibberellic acid. Lower North Island Succession planning, reproduction, nitrogen leaching, pasture persistence, mixed pastures, once-a-day milking, body condition scoring.

what they want and what the various children want; they’re worried about treating their children unequally and they solve the problem by doing nothing a lot of the time.” Baker wants to help farmers initiate the thinking and the talking that’s a necessary prerequisite for getting a successful succession. “I would define a successful succession as the farming couple getting what they want.” She believes the cost of not addressing the issue of succession is “very, very high and that’s a terrible result for a lifetime of hard work.” Other topics covered at some of the regional events include new research into once-a-day milking, the Forage Value Index – the new rating system for pasture grasses, pasture persistence, the benefits of mixed pastures and strategies to reduce nitrogen leaching. Farmers can view the DairyNZ Farmers’ Forum conference programmes for each region and register online at www. dairynz.co.nz/farmersforum. Registration is free to levy-paying farmers and their staff; there is a $50 charge for all others. Each event runs from 9.30am-2pm. Lunch is provided.

DairyNZ’s Farmers Forum is being held at Hawera this week.

Dairy News april 16, 2013

10 // news

Milk charges deferred SUDESH KISSUN sudeshk@ruralnews.co.nz

FONTERRA CHAIRMAN John Wilson says

a decision to defer capacity adjustment charges will help drought-stricken farmers. About 50% of suppliers

John Wilson

will benefit from deferring the charges until October, Wilson says. These can be several thousand dollars for an average farmer. Fonterra’s suppliers are required to forecast how much milk they will deliver in a season to help the cooperative plan and manage its processing.

Farmers who end up supplying below the capacity forecast are charged on June 20 and those oversupplying are compensated at the same rate. Fonterra doesn’t incur any expense in this exercise. However, this year the capacity charges have been deferred to help

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cash-strapped farmers in drought areas until October 20, when suppliers will get their final payout and dividend for the current season.

listened to its concerns. “Federated Farmers knew milk volume forecasts were being undershot in the North Island especially. Our members

“We are aware of the acute cash flow problems being faced by some of our farmers.” – John Wilson Wilson says the co-op will compensate farmers, mostly those in the South Island, who have overshot their forecasts on June 20. The co-op will meet interest charges on financing the compensation. “We are aware of the acute cash flow problems being faced by some of our farmers,” he told Dairy News. “Deferring the capacity adjustment charges is another way the co-op is helping these farmers.” Wilson says South Island farmers faced similar charges when bad weather affected their milk supply. The co-op also deferred charges in those instances. Federated Farmers Dairy vice chairman Andrew Hoaggard is pleased the co-op has @dairy_news

raised legitimate concerns about capacity adjustment charges and so we asked Fonterra to note them.” Hoggard points out the charges don’t apply to farmers supplying smaller co-ops Tatua and Westland Milk Products. He says many farmers are breathing a sigh of relief on hearing this news. “Fonterra needs to be recognised for doing this because it really is an abnormal season. The idea behind dairy farmers accurately forecasting milk production is to ensure the most efficient use of Fonterra’s stainless steel. “For some farmers this season these charges could have amounted to fairly large sums. It also means money, which is already in short supply, will now be saved.”

facebook.com/dairynews

Food safety, service deal NEW ZEALAND is to share its dairy-related food safety

expertise with China. An agreement signed last week in Beijing will look at the development of a China New Zealand agribusiness service and food safety centre of excellence in China. State-owned AsureQuality and PwC New Zealand signed the agreement with China Mengniu Dairy Company Ltd and COFCO Corporation Initially AsureQuality and PwC will work with Mengniu and COFCO on a dairy-related food safety and farm assurance project. As the partnership evolves, other New Zealand commercial and research entities with agricultural expertise will take part. AsureQuality chief executive Michael Thomas says the agreement acknowledges the expertise of AsureQuality and the benefits formal collaboration offers for the wider New Zealand agribusiness sector in the Chinese market. “We believe this partnership agreement will enable New Zealand’s world-class food safety models, agricultural systems and skills to be provided on a commercial basis in China. New Zealand Trade and Enterprise (NZTE) supports the project; it commissioned research by PwC in 2012 to identify international opportunities for New Zealand’s agribusiness sector. Also, agritechnology is a field of interest for New Zealand in China, as outlined in the NZ Inc China Strategy.

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Dairy News april 16, 2013

12 // news

Miraka building UHT plant to supply China PETER BURKE peterb@ruralnews.co.nz

THE MAORI dairy company Miraka, at Taupo, stole the limelight

Kingi Smiler

on John Key’s trade mission to China last week in Shanghai when it signed a joint venture deal to produce UHT milk for the new owners of the Crafar farms, Shanghai

BE IN TO

Pengxin. In front of a group of top New Zealand business people, including Fonterra staff, the chairman of Miraka, Kingi Smiler, signed the deal for his

company take milk from four former Crafar farms and eight local suppliers. This will be turned into high value 1L packs of UHT milk for export and distribution in China by

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Shanghai Pengxin. Smiler told Dairy News from Shanghai that Miraka will spend $25 million to build the new UHT plant adjacent to its existing milk powder factory which exports most of its product to Vietnam as part of another joint venture with the largest dairy company in that country – Vinamilk. “The new factory will take 80 million litres a year and we hope to be delivering some of the new UHT milk to China within about ten months. The UHT milk in 1L cartons will be for the growing ‘liquid milk’ trade in China. All the packaging will be done by us at our factory.” Because of the lack of refrigeration, UHT milk is the recognised substitute for fresh milk. Fonterra

also sells UHT milk in China, but Shanghai Pengxin’s deal with Miraka is seen as a coup for the Maori venture. Also of note is that Landcorp is managing Shanghai Pengxin’s farms. Miraka will take milk from just four of the former Crafar farms; the remainder will continue to supply Fonterra. Some of the farms are outside Miraka’s catchment area. Miraka has a waiting list of would-be suppliers; some them will likely pick up contracts as a result of this deal. Smiler says the deal, which took about a year to complete, reflects the synergy between Miraka and Shanghai Pengxin. “This is positive for Miraka and the trusts that form Miraka,” he says.

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THE VOLATILITY in dairy prices could drive people into non-dairy substitutes, says agribusiness expert Keith Woodford, Lincoln University. But he adds nothing much can be done about price fluctuations. “Volatility is something everyone has to learn to live with,” he told Dairy News. At the start of Fonterra’s 2012 financial year, whole milk powder prices were US$2600/tonne. The latest GDT saw the price touch US$5100/t. Forward contracts have sold WMP at US$6100/t. Fonterra last month lifted its payout to $6.12/kgMS – made up of a milk price of $5.80/kgMS and a dividend of 32c/share. The drought in New Zealand and reduced milk supply out of Australia and the US are putting upward pressure on prices. Demand for dairy products in China also remains high. Economists believe Fonterra’s payout could go up further. Woodford isn’t ruling out another payout hike. “Given the lateness of the season, I would expect Fonterra’s latest estimates of prices for this season to be reasonably accurate. But they could still rise somewhat higher.” Woodford believes it could take months for prices to settle. The fundamentals were in place for price rises prior to the drought but the adverse weather has temporarily sent those prices to non sustainable levels, he says. “Fonterra has had to drastically reduce the volumes being auctioned on GDT and this has left those buyers who have come to rely on the auctions scrambling for product to keep their supply chains flowing. “ In the long run this excessive volatility is not a good thing for anyone, forcing buyers to look for non dairy substitutes, Woodford says. “But there is nothing obvious that can be done to reduce the volatility, given that it is largely driven by seasonal events, and overseas governments no longer keep buffer stocks to even out these fluctuations.”

Dairy News april 16, 2013

14 // news

Westland commissions nutritional plant WESTLAND MILK Products is making in-roads into the international paediatric nutrition market, with the commissioning of a modern nutritionals plant at Hokitika. The new multi-million dollar plant started commercial production in February and already has committed customers, taking Westland from a dairy ingredient supplier to a new entrant in the infant nutrition sector. The Westland nutritional plant is a state-of-the-art Tetra Pak system comprising a wet mix batching system including wet and dry macro and micro ingredient handling areas, oil dosing,

vacuum mixing, homogenisation and pasteurisation. This wet mixing approach ensures a high degree of product composition control and consistency which is crucial for customers. Traceability of all ingredients is enabled through detailed logs and batch control software. The products are dried through evaporation and spray drying, and packed in a newly created high-hygiene area which staff enter via a second red-line zone and wear full coverage hat and facial masks in addition to the usual overalls, hats and boots.

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DROUGHT RAVAGED farmers are turning to ANZ for financial relief and assistance. ANZ’s managing director commercial and agri, Graham Turley, says the drought is affecting all farmers in some way. No one region in particular stands out to the bank. Rising costs and reduced revenue caused by the dry conditions have left many out of pocket, nationwide. “As with any serious weather event that impacts dairy and meat production; the effects of the drought won’t just be felt locally, but right through the economy,” Turley says. He observes that while not all farmers have felt the full extent of the strain, such as those with adequate irrigation, most are struggling. “Clearly cash flow for most has been impacted. Revenue has fallen and expenditure has increased,” he told Dairy News. Some relief has come for dairy farmers with the recent Fonterra pay-out. Turley believes, “The Fonterra payout is welcome news; it will certainly help to ease the pressure.” ANZ is responding to farmers’ financial pleas, offering services to provide support where possible. “We are offering farmers a package of options to help meet their shortterm cash requirements and re-establish their farms to full performance when conditions improve.” Temporary overdrafts, access to short term funding and waiving fees are some measures implemented by the bank. ANZ’s drought response is said to

have helped reinforce its position as the CANSTAR Best Agribusiness Bank 2013. The title is granted to the institution that delivers and combines the best product and services to customers. “We are delighted the new ANZ has taken out the award that was won by The National Bank last year,” says Turley. CANSTAR New Zealand national manager Derek Bonnar is impressed with the performance of the ANZ. He says, “ANZ’s recent support of drought affected farmers is one example of this.” Graham Turley

Swaps row simmers on THE INTEREST rate ‘swaps’ controversy simmers on as the Commerce Commission awaits more submissions from farmers to further the enquiry. Several complaints have been received from farmers claiming they have been misled by certain banks in the way they promoted the scheme. Commerce Commission chairman Mark Berry says, “We have information from around 60 complainants at this stage, but will need more people to come forward if we are to form a complete picture of the issue.” ANZ’s Graham Turley believes the swaps still have “a role to play.” He says the ANZ, “supports the Commerce Commission enquiry,” and it will await the findings before commenting further. The commission is inviting affected farmers and others who may have been involved with swaps to read information on its website and complete a questionnaire. www.comcom.govt.nz/interest-rate-swaps

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Dairy News april 16, 2013

news // 15

Draining the Tararuas into Wairarapa UP TO 60,000ha in Wairarapa could be irrigated within a decade if plans by Greater Wellington Regional Council and other parties come to fruition. Wairarapa traditionally goes dry in summer, hence plans to build dams that could be good news for dairying and high value crops, leading to economic growth in the region. A group called Wairarapa Water Users is spearheading the project, announcing results of a study by consulting engineer Tonkin Taylor into the viability of an irrigation scheme. The engineer has looked at possible dam sites and recommended nine options for further investigation: two south of Martinborough and seven north of Masterton and near Mauriceville. The study is funded by Greater Wellington and the Government’s Irrigation Acceleration Fund run by MPI. Greater Wellington chairwoman Fran Wilde told Dairy News that during winter millions of litres of water pour off the Tararua Ranges into the sea, yet in summer Wairarapa gets dry. An irrigation scheme would

transform Wairarapa and the greater Wellington region, she says. Irrigation would not solve all Wairarapa’s drought problems because much of the region is steep hill country. The group has looked at what’s happened elsewhere in the country, finding many similarities. “I’ve been looking at Canterbury and of course there is significant dairying there. Other major users of irrigation are growing crops, doing general arable farming and [growing] export seeds…. Exporting flowers would also be an option for us, but we’d have to fix Wellington airport for flights to key markets.” Wilde says dairying would benefit from irrigation, so would the environment. Environmental groups are involved in the project and are part of the governance group, she says. “They understand we are putting a lot of science into our water investigations on this project and we were doing that for the regional plan anyway. There will be strict rules for the users of this water. We won’t tolerate any environmental misbehavior. We will expect people to do the right thing. Many

farmers here are doing the right thing; they know it can be done, they just have to make that commitment.” Wilde says quite by

chance Greater Wellington is reviewing its regional plan at the same time as central government is developing its own water management and

RMA reforms. By the time any irrigation scheme is in place, the new rules will also be in place, making it easier for everyone. The scheme could take

five to eight more years to complete – all going well. Fran Wilde

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Dairy News april 16, 2013

news // 17

‘Green drought’ kicks in situation rural New Zealand families find themselves in, Guy says. Guy says though much The barbecue season of the country is now in has been too long this a ‘green drought’ phase, summer, and urban New overall the drought has Zealand understands the been very ‘patchy’. drought has Speak“Most farmers aren’t caused heartache ing to Dairy for rural families News during a interested in a handout, says it’s visit to farms what they want to know is tooGuy early to quanin Manawatu that the government cares tify the overand Tararua, and responds”. all effect of the he noted that drought on dairy while many pasfarmers. they are happy with the tures have ‘greened up’, News of the Fonterra government response to the country is nowhere advance payment has been their plight and the packnear the end of the well received and will help ages we have announced. drought. Some regions Most farmers aren’t inter- farmers pay for the addihave had very little rain tional supplementary feed ested in a handout, what – “Northland, parts of they need. they want to know is that Waikato, King Country, During a recent visit by the government cares and Rangitikei and parts of Guy to the West Coast he responds.” Hawke’s Bay”. heard from “older” farmMost New Zealanders Guy says he is ers that “in living memory are sympathetic to the impressed at farmers’ they have never experi-

PRIMARY INDUSTRIES Minister Nathan

incredible resilience, given the challenges they face: “… drought, floods, snowstorms and earthquakes. They will get through this present crisis and the feedback I am getting is

challenging stuff out west TARANAKI HAS some challenging micro-climates, so dairy farmers there will have to carefully manage their way through to next spring, says DairyNZ consulting officer Katrina Knowles. Every farm in the region effectively has its own microclimate and every farm is individual, she says. She and others can give theoretical advice, but it’s the practical implementation that counts. “So people could take stock off to make sure they don’t overgraze pasture. They can put their stock on a feed pad but that could create problems. So farmers need to take a holistic view of the situation to get the right outcome. “The big thing is

Primary Industries Minister Nathan Guy with Janine and David Swansson at their farm.

brown and dreadful looking. But since the recent rain it’s turned around incredibly quickly and now

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that people have to look at their feed budget. They need to know what feed they have got ahead of them and to manage this right to the takeoff date of spring. That’s why they need a full feed budget.” Knowles says farmers higher up and close to Mt Taranaki will get greater temperature drops in winter when the grass won’t grow. Snow has begun falling on the mountain but it’s anyone’s guess when the grass will stop growing, she says.

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Dairy News april 16, 2013

18 // news

‘Be prepared for adverse weather’ peter burke

PAHIATUA DAIRY

farmer David Swansson says farmers need to be better prepared to deal with events such as droughts, floods and

storms. After getting caught a few years ago he vowed never to let it happen again. Primary Industries Minister Nathan Guy recently visited David and Janine Swansson’s farm while touring drought

affected regions. Now in their eighth season on the farm, they milk 240 cows and produce 100,000kgMS/year. They won the local sharemilker of the year competition and are involved in the rural support trust.

They live in a high rainfall area – about 1800mm a year which enables them to recover from drought a lot easier than others. Swansson says they suffer from a ‘green drought’ and don’t ‘white out’ like parts of Wairarapa and Hawke’s Bay. So far he’s spent about $4500 on additional feed for his young stock. “I’d rate my position as comfortable and improving; I’m probably a lot better off than others. We are now on 16 hour rotation with our milking and we’ll be able to carry on now to the end of the season thanks to the followup rain we had a few days ago. Now we can start putting on some nitrogen and building up covers.

After being badly burned several years ago I vowed I would never leave myself short of supplements.” Swansson says he’s got 14ha of maize to come back and says he’s not intending to buy in supplements; rather he wants “to live within the boundaries of the farm”. To help make this possible he has two support blocks. While many farmers in his area are facing major problems with Horizons Regional Council’s One Plan, Swansson has proactively dealt with potential issues. His catchment is not classed as ‘sensitive’; his nutrient leaching is a mere 14 units/ha. The target for his farm is 24 units/ha so he’s well in the

clear. Certainly the runoff helps him achieve that number. Swanssons have invested in technology as part of their ‘future proofing’ of the farm. For example, they have just built a lined effluent pond “bigger than required to future proof the business”. “We also run GPS units on the tractors used for spreading fertiliser. While I can’t put an exact dollar figure on it, I know I am now using 15% to 20% less fertiliser than I was.” They have also put in a feed pad and pay close attention to feeding their cows well. Swanssons pay a lot of attention to risk management and planning. When they look at any new ven-

ture they try to identify the negative as well as positive outcomes and have planned options to deal with these. “I’ve gone away from the sacrifice paddocks we used to use; they were going to be turnips because environmentally pugging the paddocks is not a very good, so hence the feed pad.” Swansson says a common sense and practical approach is required. He’s seen plenty of theoretical models from ag students and consultants, but these have to be adaptable on the farm. In farming one has to plan but at the same time be flexible and above all be prepared for any eventuality.

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Janine Swansson takes Primary Industries Minister Nathan Guy on a tour of the farm.

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IF ALL FARMS WERE EXACTLY ALIKE,

Dairy News april 16, 2013

news // 19

Energiser links fence and farmer BETTER CONTROL of

livestock is the promised payback from work by a Massey University industrial designer and Gallagher Animal Management to produce gear to enable farm workers to discover potential faults in their electric fencing. Tony Parker, Massey, and Mark Harris, Gallagher, say the equipment results from international research by a cross-disciplinary team of design, marketing and engineering specialists. Parker is associate pro vice-chancellor at the university’s College of Creative Arts; Harris is marketing manager at Gallagher. Parker led the industrial design and worked as part of the Gallagher’s project development team to bring the products to market. The system includes a fence energiser with a separate, remotely mounted control panel, a portable hand-held fault finder remote, and permanently installed fence monitors that continuously check a zone of paddocks for fence performance. The new system powers an electric fence and monitors its performance. If a fault

occurs the system reports to the user via text messaging. All the fence energiser products will be at National Fieldays in June. Parker says they “exemplify the critical role design plays in creating desirable and internationally competitive manufactured products and services”. Electric fences’ effectiveness can sometimes be hit by, say, bad weather. Harris says these new products “allow the fence to speak to the farmer”, even when he is not around the farm, representing a leap forward in practical electric fence technology. A drop in fence performance triggers an alarm, displayed on the energiser controller and simultaneously sent to the farmer’s phone via text. Power to the fence can be turned off remotely to enable repairs, then restored using the same devices. “The consequence for the farmer is that he knows whether the fence is functioning or not,” Harris says. “Farmers have always had a problem from time to time with fences not

working and they usually only know after an animal escapes, but with this technology we can let them know in advance if there is a fault.” Parker says the project involved many challenges and opportunities. “Transforming customer requirements and technological possibilities into a desirable system of products is a wicked problem. You cannot calculate the right answer, you have to design the best solution possible using a combination of research, creativity, visualisation, prototyping, critique and testing.” Parker has worked before with Gallagher on energiser and livestock

weighing and electronic identification products.

Tony Parker (right), Massey University, says the new products allow the fence to speak to the farmer. Below: Fault finder remote.

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Dairy News april 16, 2013

20 // news

Otago bucks awards trend RECORD ENTRIES in this year’s

Ben Sanders is the only Otago representative at the dairy awards national final.

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Dairy Industry Awards, which wrapped up late last week with the West Coast/Top of the South region, were achieved despite a record low in Otago. Organisers are at a loss to know why the farm manager, and in particular sharemilker/equity farmer (SEFOTY) categories failed to attract sufficient entries to hold a credible competition in the region. “If we knew the reason, we’d have fixed it,” national convenor Chris Keeping told Dairy News. “We know the number of 50/50 sharemilking positions in the region is declining and we often struggle for entries in the region.” This year SEFOTY entries bombed to just two, and FMOTY entries only marginally better at four. With such low entries organisers didn’t consider the awards would be a worthwhile competition but rather than pull the pin completely, entrants were given the chance to go through the judg-

ing process and the feedback from that. Similarly, sponsors were given the option of presenting their merit awards, or not. No outright SEFOTY or FMOTY winners were announced, so neither will progress to the national awards in Wellington in May. “To run a credible competition you must have at least seven entries, we believe,” says Keeping. A highly commended award was made in the SEFOTY category, going to Shaun Thomas, a 50/50 sharemilker with 470 cows on David and Christine Benny’s farm, Balclutha. In the FMOTY competition Neil Molina, who manages a 2300-cow farm for Greg and Kelly Kirkwood’s Concept Holdings at Ranfurly, was named Best Otago Farm Manager of the Year. Local convenor Lorraine Johnson says while it is unfortunate for Thomas and Molina that the entry level wasn’t sufficient for them to progress to the national level, they are

eligible to enter the awards again next year, which isn’t normally the case for regional winners. “We felt really bad for the group that did enter,” she told Dairy News. “They’re very motivated, capable young people.” SEFOTY and FMOTY entrants in the region were told there would be no progression to the national level for the region’s winners before judging commenced, and given the option to withdraw, she adds. “They all decided to carry on which was great.” Johnson and husband Tim, who won the region’s SEFOTY title in 2011, pulled out all the stops to encourage entries, even cold calling on farms to see if a manager or sharemilker was part of the set-up, but to no avail. Part of the reason for lower entry levels than elsewhere is simply a numbers issue, she suggests. “There are only about 400 dairy farms in Otago whereas there are 1600 in Southland, so pro rata we probably didn’t do so badly.”

Sanders off to the final BEN SANDERS beat a field of 14 entrants to win the 2013 Otago Dairy Trainee of the Year title and, unlike the region’s top SEFOTY and FMOTY entrants, progress to the national awards in Wellington.

The 25-year-old Clinton herd manager is focused on growing his asset base by increasing cow numbers, which he then leases. It’s part of his plan to be a farm owner by 40. Sanders and other winners

were announced at an awards night in Balclutha, April 6, attended by 180. “It was the only region that was down. “Every other regional dinner was a sell-out,” notes Keeping.

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Dairy News april 16, 2013

news // 21

Another Canterbury clean sweep? CAN CANTERBURY

repeat its clean sweep of the Dairy Industry Awards come the national event in Wellington in May? That question was posed at last week’s Canterbury / North Otago regional final awards night in Ashburton, prompted by the region’s representatives having taken all three titles last year. Taking the crusade to the capital for the region this year will be 50/50 sharemilkers Morgan and Hayley Easton, who won the Sharemilker/Equity Farmer of the Year title,

Farm Manager of the Year Richard Pearse, and Dairy Trainee of the Year Adam Caldwell. Judges said the sharemilker/equity farmer contest was tight, and they were extremely impressed with the calibre of entrants and the businesses they run. Morgan (30) and Hayley (27) have for five years developed the 365ha property of David and Clare Easton on the south side of the Waitaki river, increasing cow numbers from 450 to 1350. It’s the first time

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they’ve entered the awards and they won $18,600 in prizes. “We wanted to have most of the development done before we entered and have the farm both running and looking the way we wanted,” they said. Morgan is Bachelor of Agricultural Science, Lincoln University, and Master of Science in Agricultural Economics, obtained on a Fulbright Scholarship at Purdue University, USA. Hayley is Bachelor of Arts in Geography and Management, Leeds University, and was an assistant accountant until the couple’s first child was born last year. “We feel the knowledge gained from our education has helped us achieve our farming goals.” They aim to own a farm within five years and

they’ve expanded their AI programme to increase young stock and improve herd breeding worth with that in mind. They’re also planning to take on a second sharemilking position. SEFOTY runners-up were 50% sharemilkers Andrew and Hayley Slater from Dorie; lower order sharemilkers Nigel and Gina Gardner, Culverden, were third. FMOTY winner Pearse contract milks 955 cows for Graham and Jane Thomas at Ashburton. He is committed to two more seasons with the Thomass and then plans, with partner Susan Geddes, to go sharemilking or into an equity partnership. To progress they believe a good image “is crucial to our success”. “We highly

It’s an old saying, but for three lucky Dairy Industry Awards entrants, that’s all it took for each of them to land a $4000 farm bike. All who entered the awards before December 1 and underwent the judging process were eligible for the earlybird prize draw of three Honda XR125 Duster farm bikes – one for each category of the awards. Of the record 566 entries, 428 were eligible, with the SEFOTY bike going to Steve Henderson and Tracy Heale, Winton, the FMOTY bike to Hayden George, West Coast, and the trainee bike going to Reece Cox, Taupo. “It’s a generous incentive and has helped to get entries in early and dissipate the late rush,” national convenor Chris Keeping says.

2012 Sharemilker/Equity Farmer of the Year title holders Sarah and Enda Howe.

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Dairy News april 16, 2013

22 // opinion OPINION Ruminating

EDITORIAL

Size doesn’t matter

milking it... A bob each way

TALK ABOUT having your cake and eating it too. The New Zealand Herald business pages last week prognosticated about how the drought was going to knock 0.7% off growth, and other such dire predictions. But further on in the real estate pages, in a classic exhibition of self-interest, the Herald reassured readers that the drought would have no impact on the farm real estate market or, presumably, real estate advertising revenue.

‘Hally Mclally from Donaldson’s Dally’

CABINET MINISTER Steven Joyce last week launched the Chinese language version of the children’s book Hairy Maclary from Donaldson’s Dairy at an event in Shanghai. Great news for China’s kids, but Milking It wonders what will be lost in translation. ‘Dairy’ is a peculiarly Kiwi word for local store: even readers in other English speaking countries assume the dog’s from a dairy farm or small milk processing factory. So what’s the betting we get Hairy Maclary from Donaldson’s Farm in the translation? Or should that be Hally Maclally from Donaldson’s Dally? And as for the followup story, Hairy Maclary’s Bone, no doubt some Chinese will think butcher Samuel Stone has ulterior motives in giving our dog a bone!

Needs a cuppa

AS MUCH as Milking It hates to accuse the green brigade of hysteria, this rates a mention: Soil & Health says GE crops pose more than a just a wee threat, they will actually wipe New Zealand out. “Inevitable cross contamination by GE crops, if released in New Zealand, pose a $59 billion threat to the New Zealand economy,” wailed Debbie Swanwick, Soil & Health. By her reckoning, that is the total dollar value of our agricultural, forestry, fisheries and tourism sectors… annihilated. Someone needs a cuppa and a lie down.

Cool stuff

GIVE A cow a cold shower and it will produce more milk. That is the hope of the owners of a dairy farm in Dubai, which has installed a state-of-theart shower system for its 11,000 cattle. So far, the cows at the Al Rawabi dairy farm in Dubai’s Al Khawaneej seem well pleased with their showers. “When they lie down, it means they’re comfortable,” said Rami Hamad, the farm manager. “And since they started showering, they’ve been very happy.” Last February, the farm installed 20 motionsensing shower sprinklers that switch on when a cow is under them. The farm’s 2300 cows shower each time they are milked – three times a day; the other 8700 shower once a day.

NEWS THAT Miraka has signed a multimillion-dollar, jointventure deal with Shanghai Pengxin to produce UHT milk shows how smart our small, entrepreneurial companies can be. Let’s take nothing away from the great work Fonterra and its predecessor the NZ Dairy Board have done; New Zealand needs them. But the Miraka deal shows the value of these innovators. In just two years Miraka has set up a joint venture with the biggest dairy company in Vietnam, Vinamilk, and is shipping product to many parts of the globe. It has a waiting list of suppliers which speaks volumes. This latest deal with Shanghai Pengxin shows that big overseas international companies have faith and confidence in some of our niche providers. The Miraka deal is timely in other ways. It comes just days after an MPI report which highlights the potential of Maori agriculture: $8 billion dollars if Maori land was managed to its potential. Miraka is showing what can be done; so are many other Maori trusts – role models for Maori and pakeha farmers. Take PKW in Taranaki, Fonterra’s biggest milk supplier in the region, producing upwards of three million kgMS/year. And dozens of other trusts and incorporations are worthy of mention. The example of Miraka and its trusts should inspire others to follow suit and we would hope Miraka will share knowledge to lift the performance of others. The challenge for Miraka, as with all successful small companies, is to retain competitive advantage. It must also keep fostering the ‘personal touch’ – workers in tune with managers and leaders to achieve company goals. Miraka has a strong company culture and the positive spirit of the workforce is evident when you visit their plant. Being small and successful is not easy; hopefully Miraka can continue to do deals and retain a ‘family’ culture.

Got something on your mind? GOT SOMETHING on your mind about the latest issues affecting our dairy industry? Put your pen to paper or your fingers to your keyboard, and let our readers know what you think. Contact us by either post or email. Don’t forget to put your name and address. Note: Letters may be edited. post to: Letter to the Editor PO Box 3855, Auckland 1140. or Email: dairynews@ruralnews.co.nz

Dairy News april 16, 2013

opinion // 23

The drought has disrupted farm management plans this summer in Hawke’s Bay and other parts of the North Island. Photo: Trish Hart

Thriving in adversity needs precise timing MOST DAIRY farms are only

slowly emerging from the drought that has been a sharp shock to farm management plans this summer. For most farms the production season has ended abruptly, and prospects for autumn and winter have been affected dramatically. Regardless of cause, such events reinforce how much the management of adverse events depends on the timing and execution of decisions. What are the key ingredients of an effective response? It has long been recognised that the difference between the top 10% of farming operations and the next group down is their timing. Most operations respond to adverse events with similar strategies; what separates the two groups is that the top 10% group not only does the right thing, they also do it at the right time. This requires quality information, consultation with professionals to secure ‘sounding board’ opinions, and proactive communication with key stakeholders – especially financiers. Firstly, ensure decisions are based on credible information, not just on imagination. As pasture growth rates, climate outlooks and soil moisture deficits change by the day, planning a farming operation becomes a rollercoaster ride. The usual reference points available during a more typical transition between seasons are less available so the impact on feed reserves, cow condition and production forecasts becomes much more difficult to measure. Farmers who put extra effort into securing reliable information and analysis of their position are better positioned to respond. Almost all the operations I work with have a farm supervisor or agronomist involved in

“Local and national news media again seem to have been obsessed with negative comment about the drought. You cannot get away from this but you can limit your exposure to this.” their on-farm planning. A key benefit of this is that they build up a history of accurately measured data on farm and herd performance. This offers even more advantage during times of climate challenge through greater accuracy of planning and budgeting. A key strength is an objective view benchmarked against similar operations for improved perspective. Collaborating with these professionals when forecasting financial effects adds significant value through greater confidence in budget assumptions. Synergy between clients and their professionals enables robust assessment of all likely scenarios -especially the worst-case outcomes that can be tempting to avoid. The next priority is to keep financiers and other key stakeholders informed. The policy of delivering bad news early ensures everyone has time on their side. This usually results in a more constructive response as financiers recognise that everything possible is already being done to mitigate the effect of adverse events. It has been pleasing to see supportive response of banks during these difficult times. Perhaps the most important objective in these situations is to ensure the impact on the business is as much as

possible ‘ring fenced’ to the current season. This is illustrated by the current situation where the likelihood that milk prices will rise because of international shortages of dairy products will most likely flow through to improved prices next season. Those who have had the courage to make the hard decisions about the current season and protect next year’s output are likely to be well rewarded. It’s not easy to forego the perceived cashflow benefits of continued production. However ensuring herd condition and pasture covers are on track to achieve the best production next season is likely to be a much more profitable strategy. The final and most important step is to ensure everyone’s mental approach remains right. Local and national news media again seem to have been obsessed with negative comment about the drought. You cannot get away from this, but you can limit your exposure to it. Keeping work/life balance right, planning proactively, working closely with financiers and sharing concerns with family, friends and business associates will increase the chance of coming out on top. • Kerry Ryan is a Tauranga agribusiness consultant available for face-toface or online advice and ideas. Contact him at www.kerryryan.co.nz

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Dairy News april 16, 2013

24 // agribusiness

Drought erases SOE’s profit forecast STATE FARMER Landcorp says the

drought has wiped out the $6-8 million profit it forecast for the 2012-13 financial year and forestalled a full-year dividend. For six months ending December 31, 2012, the SOE reported a net profit of $2.5m and, as the half-year report went to the printer, it forecast an operating result of $6-8m for the full year. “Since then, Landcorp has experienced the worst widespread drought in many years. “As a result, it is unlikely the company will report an operating profit for the year and consequently it is not likely to pay a full year dividend.” Milk production was up 6% for the half year compared to the previous year. But milk production for the full year was expected to take a hit. A highlight of the half year was the launch of its partnership with Shanghai

Pengxin, the buyers of 16 former Crafar farms. The company has paid $21.4 million stocking the farms in central North Island and Manawatu. Current sharemilker arrangements continue during the transition period, until the start of the 2013-14 season. Plans for the farms (5689ha effective) include more spending by Shanghai Pengxin to lift productivity and a Landcorp-led farm training programme from 2014-15 onward. On the Wairakei Estate dairying complex near Taupo further areas of forest are being cleared for conversion to pasture. Landcorp is working with property owner Wairakei Pastoral Ltd on plans to grow the estate’s herd over the next four years (from 7000 cows currently). The six current dairy units will be reconfigured for more effective operation as more pasture becomes available.

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Young go-aheads typify contest winners THE GOALS of the 2013 South-

land Sharemilker/Equity Farmers of the Year, Don and Jess Moore, are to optimise production and maximise profit to reach farm ownership and enjoy a balanced lifestyle. The Moores, who won $18,400 in prizes, aim to achieve this by growing their business using sustainable farming and human resource practices. The other big winners at the 2013 Southland Dairy Industry Awards held at the Invercargill Workingmen’s Club were Daniel and Emma Todd, the region’s 2013 Farm Managers of the Year, and James Warren, the Southland Dairy Trainee of the Year. Don and Jess Moore, aged 28 and 26, are in their second season 50% sharemilking 950 cows for Jeff and Edith, and Bruce and Sue Cunningham at Gore. They have been on the farm five years, spending two years managing, and a year lower order sharemilking before progressing. A former deep sea fisherman, Don Moore, won the 2010 Southland Farm Manager of the Year title. The couple say there are many benefits to entering the awards. “It makes you look at your business through a microscope and delve into the how, why and where to in every aspect – from the day-to-day running to our goals for the future,” he says. “We also enjoy the opportunity to network with some of the standout leaders in the dairy industry, as that is what makes this industry so strong.” The couple say communication and maximising low cost production are strengths. “On a large farm, it’s

Don and Jess Moore.

important that people are kept well informed. For this reason we focus on keeping up communication and having systems that assist us to do this so that everyone knows what they are responsible for.” Second in the Southland sharemilker/equity farmer contest were Tokanui equity farm managers Chris and Lynsey Stratford, who won $10,400, while Winton equity sharemilkers Andres Patino and Jorgelina Leiva were third, winning $5200. The 2013 Southland Farm Managers of the Year, Daniel and Emma Todd, want to grow their livestock numbers quickly and profitably so they can progress to 50% sharemilking within four years. The couple, who won $9150, contract milk 377 cows for Rob and Karen Duthie at Rimu. “Our contract milking position is enabling us to grow our livestock numbers, and thus helping us to grow our equity and reach our goals faster.”

The Todds say they work well as a team, as they are able to use their individual skills and expertise to the businesses’ advantage. Daniel Todd, aged 25, has a practical farming background while Emma Todd, aged 26, holds a Bachelor of Commerce and is an associate chartered accountant. “Our practical farming experience mixed with accounting, taxation and human resource management skills have been a successful combination for us, enabling us to focus on the parts of the business we love to do and giving us more time together as a family.” The couple had entered the awards once before, saying it forced them to step out of their comfort zone. “We loved the challenge and the ability to network with other farmers and industry representatives.” The 2013 Southland Dairy Trainee of the Year, James Warren, says there are great opportunities to progress in New Zealand’s dairy industry.

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Dairy News april 16, 2013

agribusiness // 25

Canadian co-op studies Fonterra ramsey margolis

CANADIAN DAIRY

farmers Don Dietrich and Larry Parkin are two members of the Gay Lea Foods Cooperative delegate body, the equivalent of Fonterra’s Shareholders Council. As part of their cooperative’s training programme, Dietrich and Parkin got the task of examining how dairy co-ops operate in New Zealand, so they approached Cooperative Business New Zealand for assistance. Particularly interested in how Fonterra operates, they want to compare this with the Ontario Supply Management system which markets milk by a quota system and pays farmers different prices for butterfat, protein and other solids. The two are keen to learn to what extent New Zealand co-ops are successful in looking after members’ interests, and whether the direction taken is responsible for their success. An important aspect of their study is a comparison of the legislative and business circumstances of Canada and New Zealand, and what result this has on the strategic directions dairy

co-ops take. To what extent, they also want to know, have cooperative values and principles guided the development of dairy cooperatives, and how has this differed in the two countries. They are also looking at external influences on dairy cooperatives, such as what happened when New Zealand dairy products lost guaranteed entry to the UK in 1973. Formed in 1958 and owned by a quarter of Ontario’s dairy farmers, Gay Lea Foods Cooperative makes products from which its 2011-12 revenue was C$539 million. Farmer members own three shares for every 1000L of milk produced and get a ‘patronage’ payment of C$0.90 per hectolitre on top of the milk price. The Gay Lea Foods delegate body is large – 60 members elected in four zones. Meeting quarterly they elect two delegate members to each of three board committees: audit, governance, and training and development. Don Dietrich is a delegate to the governance committee. With the slogan, ‘Better Together’, Gay Lea Foods promote themselves strongly as a cooperative. They measure success not

CMY

in brief Vodafone connects with Fieldays VODAFONE WILL be the National Fieldays Innovation Partner for the next three years. The Fieldays Innovation Centre has as its centrepiece an inventors contest. Entrants are educated on how to take the next step towards commercial success. News media take a close interest in the products that emerge. Vodafone will have an important role in helping individuals and agribusinesses innovate and demonstrate the value they add, Fieldays says. Vodafone head of rural marketing, Darren Hopper, says it has a strong relationship with Mystery Creek Events Centre and they recognise the importance of National Fieldays. “Vodafone is excited about our relationship with Mystery Creek and the Fieldays Innovation Centre. We look forward to supporting and helping showcase Kiwi innovation.” The company will set up a prize fund for a new Fieldays Innovation category – ICT (information and communications technology). $5000 will be offered for technology and support including hardware, connectivity and technical advice. “The innovations Centre and competition will play an important role in defining new ways of working,” Hooper says.

just in financial terms, but as a reflection of an approach which leverages cooperative principles and values to create what they describe as ‘a winning combination’ of employees and members, products in the market place, customers and vendors, as well as the charities, other co-ops and the co-op asso-

ciations they support. The Gay Lea ‘Leadership in Governance: By Farmers For Farmers’ programme, in which Dietrich and Parkin are taking part in an inaugural advanced level programme, was recognised with a Cooperative Governance award at the recent Canadian Cooperative Association

annual meeting. The question that came to mind after talking with Dietrich and Parkin, however, is: what can New Zealand’s dairy cooperatives learn from Gay Lea Foods? • Ramsey Margolis is executive director of Cooperative Business New Zealand. www.gaylea.com

Don Dietrich

Dairy News april 16, 2013

26 // management

Share, equity farmer started young James Courtman

sudesh kissun sudeshk@ruralnews.co.nz

JAMES COURTMAN

is young, ambitious and already successful. The 28-year old has Australian and Chilean dairy work experience. He’s currently 23% share-

milking 870 cows for Mark and Dianne, and Richard and Karyn Townshend, Ngatea. Earlier this year he won the 2013 Auckland Hauraki Sharemilker/Equity Farmer of the Year title. In February he contested the regional Young Farmers Competition final, win-

ning the AGMARDT agribusiness challenge. Courtman says he entered the dairy awards for the first time “to challenge myself, to develop better goals, and to try and win”. The son of a dairy farmer, Courtman says he has taken interest in the industry from ‘day one’.

From left: Richard Townshend , James Courtman and Mark Townshend.

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“It’s been a pretty good journey so far, I’ve learned a lot,” he told 100 farmers at a field day on the farm. Courtman’s philosophy is to maximise production and keep costs down. “The strengths of the business are its focus on operating costs and executing the production plan, which happens because of good skills and strong accountability.” Having good staff is also a key factor. Courtman employs three staff. “When my staff fail, I’ve failed,” he says. “Human resource is a major aspect of this business. I insist on building and developing staff as well as having clear communications with farm owners.” Courtman holds weekly meetings with staff and files weekly updates with Richard Townshend. A Bachelor of Commerce from Lincoln University, Courtman aims to own up to 30% of a 200,000kgMS business

within two years and 100% of the business by age 35. Developing leadership and exploring other interests outside the farm are also on his mind. Courtman, who also won the Federated Farmers leadership award, is chairman of the local young farmers club. He’s also in the Kaihere cricket club and is keen to taking a coaching role. Courtman thanked the Townshends for giving him the opportunity to develop his dairy management skills. Mark Townshend says profitable farming is almost impossible without good staff. “Sometimes people say corporate farmers only care about profits and not people. I don’t agree. Profitable farming is difficult, maybe impossible, without good recruit-

ment, good development and providing good performers with opportunities.” Mark recalls an old saying his father Gray told him 30 years ago: bad bosses have a knack of finding bad employees. Presumably the converse also applies, he says. Townshend says he

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sees nothing wrong with working young people hard provided they are rewarded with remuneration and opportunities. This is where corporate farming can be great, with opportunities for justified internal promotion, he says. @dairy_news facebook.com/dairynews

Top performers THE FIELD day was attended by six parties associated with Dairy Direct, a consultancy company operated by Richard and Karyn Townshend (Townshend Group): ■■ Regional Sharemilker of the Year James Courtman. ■■ Michael Courtman (brother of James) and partner Laura McGuire. Both entrants in the awards in 2011 at dairy assistant level. Sharemilking on the Challis family farm, a Dairy Direct-overseen 500 cow operation which is growing to 800 cows next season. ■■ Paul and Amy Koppens, 2012 winner Farm manager of the Year. Started in the group June 2012 with a 280 cow sharemilking position. Increasing to 475 cows 2013-14. ■■ Michael and Claire Newson, 2012 runner-up Sharemilker of the Year. Started in 2005 as sharemilkers on 180 cows, increasing to 400 cows and then 500. Left last season to take up their own 50/50 sharemilking position. ■■ Jono Singer and Aimie Law, 2013 sharemilker entrant. Started in the group six years ago as a farm assistant. Progressed to sole management of 240 cows for three years. Left for a larger position for two years and back in the group as a 380 cow sharemilker in 2013-14. ■■ Adriaan and Tassia van Rooyen,2013 sharemilker entrant. Just finishing their first year sharemilking 500 cow stud operation.

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Dairy News april 16, 2013

28 // management

Cash-converter cows sorted peter burke peterb@ruralnews.co.nz

SCIENTISTS FROM

DairyNZ, LIC and the Australian dairy industry have been able to prove that some calves and cows are more efficient converters of feed than others. A trial to this effect, running for almost six years at the Westpac Taranaki Agricultural Research Station (WTARS), near Hawera, was instigated because no data was available on this subject for dairying, says Kevin Macdonald, a senior scientist with DairyNZ. He has worked on the trial since it began. “We didn’t know whether the cow that produced the most milk ate more or less than the cow that produced a lot less milk. So our aim was to

identify gene markers to indicate which were the most efficient converters of feed into product.” The trial began with calves, about 1050 in feed facilities in New Zealand and a similar number going through a research centre in Australia. “We couldn’t put that many cows through the trial, so the calves were used as a proxy for cows in respect of live weight gain. The calves were 6 – 8 months of age and they were in the pens at WTARS for 60 days. We measured their intake each day and weighed them three times a week. They were fed lucerne cubes imported from Canada for the trial. From these trials we were able to calculate which animals used feed more efficiently than others.” The use of the lucerne cubes was critical to the

trial: moisture levels in pasture can vary, but the cubes provided a consistent feed quality that could easily be weighed and hence provide accurate data. Kevin Macdonald says while all the animals may have eaten a bit more feed than normal, this didn’t matter because the trial was to obtain accurate data and comparisons. The results of the calf trials are surprising. The most efficient calves ate up to 20% less feed than the inefficient, suggesting a saving to a farmers of $180-$200 in taking them though from weaning to when they first calve. The next stage of the trial has been to see if the feed conversion efficiencies in calves could be translated into lactating cows; the answer is ‘yes’. Macdonald says the dif-

Kevin Macdonald says the trial has identified gene markers in cows who are efficient converters of feed.

ference in lactation was not as pronounced as in the calves – about 4%. Using gene markers

LIC identified for ‘residual feed intake’ from the calves, 214 five- and six-year-old cows were

selected and bought from Waikato and Taranaki. They were relocated to WTARS and over a season

208 were put through the feed facilities and fed lucerne/pasture cubes imported from Australia.

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Dairy News april 16, 2013

management // 29

in feed trial The results were similar to those from the earlier lactating cow trial. The cows identified by the RFI markers as being most efficient were the most efficient. A trial on 44ha involving 126 of these cows, with a range of stocking rates, is nearing the end of its second lactation. The aim of the trial is to study how cows with differing efficiencies react to a range of stocking rates. As well as identifying efficient cows, part of the trial measured the amount of methane given off by individual cows, Macdonald says. “When we put the cows through the respiration chambers at the centre for greenhouse gas emissions in Palmerston North there was no difference in the amount of methane being produced from each kg of drymatter

RUMOUR: “MILFOS WAS BOUGHT BECAUSE IT’S IN FINANCIAL TROUBLE. THEY WON’T BE AROUND IN A FEW YEARS TIME.”

FALSE! A calf ready for feeding.

eaten. So if efficient cows eat less, and produce the same amount of milk, they will have a lower methane production per kg of MS produced.” This trial has only involved Holstein Friesian

cows. Macdonald says the Australian scientists are planning to do some work with Jerseys and he hopes New Zealand may be able to piggyback off their work. “Because the results we got from the Holstein

Friesians between ourselves and Australia were almost identical, we may be able to rely on their results from the Jerseys without having to do it ourselves. At that point we can look at the kiwi cross.”

‘World-class’ science reveals feed converters DAIRYNZ’S CHIEF scientist, Dr Eric Hillerton says the findings of a feed conversion study by his organisation, LIC and the Australian dairy industry has exceeded his expectations and is world class science. Hillerton announced the results of the trial at a field day in Hawera recently. The researchers discovered that certain calves and cows have specific genetic markers which identify them as more efficient converters of feed to food. This is exactly what the world needs, Hillerton told Dairy News. Organisations such as the Food and Agriculture Organisation (FAO), looking for ways to feed the world’s increasing population, see this sort of science as critical for the future. “They are looking at the macro picture for food production to feed the supposed 9.1 billion people [alive] in 2050. We are short of high value foods like meat and milk. They point to the importance of improving the conversion of relatively low value fibre feeds; the stuff we feed our ruminant animals is where a lot of progress Eric Hillerton can be made. So being even more efficient converters of fibres like grass into human foodstuff is a major challenge.”

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Lucerne cubes imported from Canada for the trial.

Hillerton says New Zealand is noted in international science, and at a ‘macro political’ level is doing important work. “It’s good to feel we’ve got New Zealand dairy farmers ahead of the game. All the trials we’ve done stack up to show we’ve got a real ‘stretch’ piece of science here that’s something new, novel – something our dairy farmers can exploit.” It’s all about “stretch”, says Hillerton, “… being brave and having bold ideas and going on and trying. Some

will succeed and some won’t and unless we stretch we’ll never know. I tell my young scientists often that there is nothing wrong with a negative result. It just tells you which direction you should be going in. You ask a question, you get an answer and it helps you ask the next question.” Hillerton say he’s immensely proud of the individuals with the imagination to have done the work and put together the partnership. “It is bigger than any individual group could possibly do. What we have to do next is to take this achievement and look at how can build on it. In New Zealand we are small. We can’t afford one of everything. So we have to focus on partnering, on- or offshore, and recruit the people who can help us achieve our targets.”

GEA is committed to the Milfos brand, product range and customers. Plus, with GEA’s backing Milfos has more money for research and development and is better positioned to support our customers now and into the future.

CENTRED AROUND YOUR FARM NOW & INTO THE FUTURE | 0800 GEA FARM

Dairy News april 16, 2013

30 // management

Time to embrace irrigation culture stuart reid

THIS YEAR you’ll have

learned the value of even small amounts of rainfall – as if you didn’t know

This year everyone has learned the value of even small amounts of rain.

already. You will realise that about half the rain that arrives on your property runs off the farm in winter so the next revolution in dairy farming will be to store winter rainfall

FENCING TIME WITH

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and irrigate it in summer. Even if the amount of water stored is small, it may keep your farm alive. Those of you who built larger effluent ponds will have managed to keep some life in your effluent block pasture at least. Dead pasture only gets back to full performance after a couple of years following its re-sowing, so not letting it die off in the first place is important. It may save the cost of re-sowing, and diminish the subsequent pasture related losses. If climate change factors are already having an impact on your farm, then think about capturing water. Not all of you will be able to build dams to do this. Some farms are too flat, in which case you build a bigger effluent pond and conserve whatever comes from the yards and shed roof. We can show that 1mm of extra rain on 100ha is worth about $1000, so think what would happen if you could apply 20mm twice over the whole farm in summer (40,000m3). In ‘good’ years it would add to production, in ‘bad’ years – like this one – it would keep your farm alive, at least. This leads me to suggest that your effluent irrigation equipment should not be designed just to spread manure but to irrigate it. Design it to be able to deliver proper water irrigation, even if the amounts are small. The same equipment can then be used to water irrigate from the dam later on. Bear this in mind when you buy new effluent plant, especially if you also have a gully that might eventually become a useful dam. We have recently asked the Waikato Regional Council whether they would frame policy on this because it may be the next pressure point for policy makers. This year we have had more enquiries about dam construction as a conse-

quence of the drought and changing climatic conditions. You appear to be warming to the idea of some form of drought insurance schemes, and these are usually waterbased. You might also start planning to put money aside for capital projects. Consider the farmer who

Stuart Reid

had built a dam and had it filled by November 2012. He will have invested quite heavily in the project, but his losses in this year’s drought will be far less than yours, partly because his farm will recover quickly, while yours will have taken a two-year knock and next year’s drought might double your problem. His early investment will have reduced his losses in bad years, but will have added to production even in good years. Why? Because that extra water even in good years will still assist in growing more grass. There may be some cases where a number of you can get together to construct a pond you can all use – a mini-scheme, if you like. It’s happening in Canterbury and Otago quite regularly, but then they have an irrigation culture which the rest of you have yet to buy into. So remember this – about half the rainwater that arrives on your farm runs straight off. The other half (the stuff that wets the 200 mm layer of soil on your farm) is the stuff responsible for your entire income. • Stuart Reid is a professional engineer at Revolution Technologies, marketing integrated water and effluent irrigation systems.

Check out the latest news and information at www.dairynews.co.nz

Dairy News april 16, 2013

management // 31

RUMOUR: “ALL OF THE WESTFALIASURGE DEALERS HAVE BEEN BOOTED OUT & THERE’S NO ONE TO SUPPORT WESTFALIASURGE SHEDS.”

Christine Finnigan says OAD takes the stress out of the operation.

Loving the results and the lifestyle peter burke peterb@ruralnews.co.nz

A RECENT Small Milk and Supply

Herds (SMASH) field day near the Manawatu township of Sanson attracted 50 farmers. The field day was held at Christine Finnigan’s property where she milks 226 cows once a day. The objective of the day was to see how Finnigan was managing her property and hear about how she goes about this and also to hear from Colin Holmes, an OAD advocate. Finnigan grew up on a dairy farm, graduated Bachelor of Agricultural Science and then worked as a sharemilker on farms including one with 2000 cows in 1990. But in 1995 she came back and took on the management of the family farm close to the small settlement of Glen Oroua. She also worked full- and part-time as a consulting officer with DairyNZ while bringing up her children. This is her fourth year at OAD although before that she’d gone to OAD in autumn. She says this helped take the stress out of the operation, was kinder to the cows, preserved cow condition but still enabled her to achieve milk production targets. Finnigan’s move to OAD was partly, but not entirely, for the lifestyle. “I also thought I had the herd to do it. One of the provisos of going OAD was that we retained profitability. The goal was to achieve twice a day production. We also aimed to improve our herd alongside that so that they are well suited for what we do. Another goal is to sell more surplus livestock than we do,” she says. She also points out that managing pasture for OAD is the same as TAD. It could be said that Finnigan is a perfectionist. Certainly she has specific goals and a strong focus on achieving ‘best farm management

practice’. She’s a strong believer in breeding worth (BW) and says this makes for long term sustainability – a key message from DairyNZ and LIC these days. She’ll be drying off her herd shortly with the focus on making sure that next season is a good one. “Doing the basics right works for me,” she says. Having a small herd has advantages and disadvantages, she says. “I think there are a lot of things you can do with a small herd that you can’t do with a large herd. One of the advantages is you are able to pay greater attention to detail, but you don’t have economies of scale. As an aside some

of the large herds don’t manage to capture either. “On a small unit you have to do all the jobs yourself, but the jobs aren’t as far away and as big. For staff there is the opportunity to do all the jobs and not just be a milk harvester or a tractor driver so you acquire a broader range of skills.” Finnigan employs a manager – for the past year former DairyNZ consulting officer Scott Ridsdale. He has resigned to go consulting and another manager will take his place. Finnigan will maintain her supervisory role and says she’ll be on the farm at the key times.

Top OAD farmers excel OAD ADVOCATE Colin Holmes says some of the top OAD farmers are doing exceptionally well. Speaking at a SMASH field day near Sanson recently, he noted they are above average for production per hectare for the North Island and their fertility is almost twice as good as the average for that season. “I know of one farmer achieving 91% of his herd in calf in six weeks and just a 4% empty rate after 10 weeks. Compare that with the New Zealand average which is about 65% in calf after six weeks and 15% empty rate in ten weeks. These people are doing good production with less effort by not milking twice a day so why wouldn’t people think seriously about OAD. No one is trying to persuade anyone to do anything, but why wouldn’t they think about it seriously?” Holmes says OAD people still get ridiculed by some TAD people and he recounted a story which illustrated how some OAD people feel.

SMASH field day particpants.

FALSE!

FACT: WE’VE GOT THE MOST COMPREHENSIVE FARMER SUPPORT NETWORK IN THE COUNTRY, BAR NONE! By combining the Milfos and WestfaliaSurge support networks GEA Farm Technologies now has a nationwide network of 35 Service Partners - 26 of them service and support WestfaliaSurge sheds. That’s over 50% MORE support locations than ever before. Plus, GEA has 7 Field Service Technicians, 11 Area Managers and 16 Hygiene and Animal Health experts available to support your farming business.

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Dairy News april 16, 2013

32 // management

Low planting lifts water quality THE BENEFITS of keeping stock out of waterways with fencing can be boosted by a planted margin, which will help improve water quality. Long dense grass, flax, sedges and rushes serve as a filter to help remove sediment, bacteria and nutrients (mostly phosphorus) from surface runoff. The

planting shades narrow waterways (less than 2m) and improves the habitat for fish. There are a number of locations where low planting will be most effective at improving water quality, such as along drains and small lowland streams that feed into main rivers; areas with significant runoff;

and beside waterways strip grazed in autumn and winter. Other ideal locations are beside vegetated drains in areas with poor soil drainage or pugging and moderate slopes, and where paddocks are cultivated. In general, the steeper and longer the slope feeding into the waterway, or the more poorly drained the soil, the wider the planted area needs to be. For gently rolling land, a margin width of 1-3m per 100m of slope feeding into the waterway is ideal. In areas with steeper slopes or poorly draining soils, a grassy margin of 10-15m per 100m of adjacent slope is recommended. Getting plants in the ground Here are some simple reminders to help get plants off to a good start: ■■ Plant on an overcast, wet or windless day (if

you can) Handle plants carefully to avoid root damage ■■ Set plants out to check for correct spacing ■■ Dig a good size hole and loosen the soil ■■ Set the plant in the hole and fill three quarters full. Give the plant a gentle lift to set the roots in a natural position and continue filling with soil, firming as you go ■■ Stake plants to help find them again at weeding time. ■■ Weed growth (especially gorse, broom and blackberry) can be a problem in low planting areas, so it’s important to manage it from the outset. • This article is adapted from the fourth in a series of nine DairyNZ Farmfacts on managing waterways on farms. They can be viewed at www. dairynz.co.nz in the Farmfacts – environment section. ■■

There are several specific locations where planting can have the greatest benefit on water quality.

Ideal locations ■■

■■ ■■

■■

Along drains and small lowland streams that feed into main rivers Areas with significant runoff Beside waterways that are strip grazed in autumn and winter Beside vegetated drains in areas with poor soil drainage or pugging and moderate slopes Where paddocks are cultivated.

In general, the steeper and longer the slope feeding into the waterway, or the more poorly drained the soil, the wider the planted area needs to be.

Dairy News april 16, 2013

animal health // 33

Happier cows will make more milk pam tipa

pared to humans’ ability to see about one million. If you take red tones out of vision, contrast increases markedly and shadows look extreme, explains Leach. Consequently a

WHAT’S A cow’s field of vision? How well do they smell? What is their sense of taste? Do they feel pain as we do? Many seasoned dairy farmers at the Dairy Women’s Network conference thought they had a good grasp of such things but Chris Leach, DairyNZ developer, animal husbandry and welfare, surprised many with the answers. Understanding why and how cows react to us is the basis of good stockmanship and unwittingly stressing cows can cut production up Chris Leach to 10%, he warns. Surprising fact number block of shadow can look like a hole to a cow. They one, Leach revealed, is get used to shadows they that a cow’s field of vision see daily, but something is 330o. Many workshop participants thought it was different will throw them. Smells are another much narrower, but they driver of behaviour and evolved as preyed-upon cows can smell things up animals so a wide field of to 8km away. It’s a very vision was an advantage. important sense for the With such a wide field animal, notes Leach. of vision, they are wary “It can have a devasof anything that disaptating effect on cow flow pears into their blindspot if you are not aware of it: behind them: if you do, for instance, home-kill or you risk being kicked someone spreading blood or making the cow turn and bone.” round. Herd hierarchy is To the front cows have strongly linked to smell, a limited area of binocuas shown by experiments lar vision so cannot judge that found social order distances or depth well: among cows unaltered by they need time to check steps or changes in layout. blindfolding. Cows can smell fear in Vertical vision is limited the form of pheromones to about 60o. “Cows are in urine, sweat and dung designed to look down; if of other cows. A fearful they have to look up they cow in the milking shed can’t see where they are sends a sensory message placing their feet.” to others through her A project where Leach pheromones in urine or and colleagues had to use dung. a cherry picker amongst “Think about creating a herd showed the limits the dairy as a safe zone for of cows’ vertical vision: once the cherry picker was cows and they will be far more ready to come onto above a certain height the the platform... Try to keep cows were unconcerned painful procedures out of because they couldn’t see there if you can.” the operators. Given what cows eat, Cows’ colour vision many workshop particiis also limited. They see pants thought their sense a spectrum of blues and of taste must be dull, but yellows – about 100,000 it’s better than humans’. different colours – com-

Cows have two to three times as many taste buds as humans, using them to identify good, bad or toxic food, hence the need for sweeteners to mask bitter flavours such as zinc in water, but also the danger in loss of bitterness where toxic plants have been sprayed off or conserved. High pitched noises, such as whistling, are unpleasant to cows and studies show shouting and whistling can be more stressful for the animal than being slapped or hit – not that the latter is acceptable either. As for what to have on the radio in the shed: research has shown country and western is the best. Cows are sensitive to touch and feel pain as we do. However they are prey animals and try to hide pain. Do stroke, scratch and lightly pat cows, says Leach. Fellow DWN conference speaker and dairying specialist Mel Eden says spending a lot of time in dairy design and management brought him to the

conclusion we needed to understand cows better. “The attitude of the person will affect the cow. With good attitude you get the benefit of calmer cows and better production.” An excellent exercise is to measure how quiet cows are: with low fear you should be able to walk within 2.3m without a reaction; with average fear 5.3m; high fear 12m. Eden suggests using the reaction distance as a tool to measure the impact of management changes. Leach says it will take three to six weeks for better handling of the herd to be translated into cow behaviour. One farmer said they had top staff but they could be impatient. They did an experiment timing staff doing a rushed milking and then a calmer, less stressed one. It was timed from the start of milking to wash up, because stressed cows excrete more. The rushed job was no faster. The experiment had given staff more acceptance of the need for calmer milking.

Mood makers Good cow mood makers: ■■ Food. Calm, quiet, familiar environment. Companionship: don’t draft singles. ■■ Scratches, rubs and pats. ■■ Good light. ■■ No rush or crush – plenty of space. Bad cow mood makers ■■ Fear. ■■ Shouting and loud noises. ■■ New sights, smells and sounds. ■■ Isolation from herd. ■■ Aggressive people and dogs. ■■ Hits and slaps. ■■ Moves from light to dark. ■■ Rushing and overcrowding. ■■ Direct bright lights, e.g. headlights. ■■ Good stockmanship gains: ■■ More efficient milking. ■■ Improved staff motivation and retention. ■■ Better cow health, notably less lameness and mastitis. ■■ Easier drafting, stock identification and restraint. ■■ Fewer repairs. ■■ Improved productivity. ■■ ■■

RUMOUR: “MILFOS PRODUCTS ARE NO LONGER MADE IN NEW ZEALAND”

FALSE!

FACT: MILFOS PRODUCTS ARE STILL NEW ZEALAND MADE, AND WILL REMAIN THAT WAY. Our manufacturing operation in Hamilton produces 95% of what Milfos sells - from rotary platforms to CNC machined brackets. FIL was also purchased by GEA Farm Technologies almost three years ago and its products are still made in Mount Maunganui. FIL and Milfos manufacturing operations will remain in New Zealand, employing 150 local staff and purchasing supplies from many New Zealand businesses. The investment by GEA Farm Technologies hasn’t changed our manufacturing operations, it has boosted our research and development capabilities.

CENTRED AROUND YOUR FARM NOW & INTO THE FUTURE | 0800 GEA FARM

Dairy News april 16, 2013

34 // animal health

Market approves of animal health float THE NEW Zealand head

of the world’s newest standalone animal health business, Patrick Dorahy, is enthusiastic about what it means for farmers, vets

Patrick Dorahy

and pet owners. Zoetis, previously known as Pfizer Animal Health, became a reality on February 1 when 20% of the animal health busi-

ness was listed on the New York Stock Exchange by its parent Pfizer. The 86 million shares were listed at US$26/share and reached US$31/share the same day.

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PAH 1091

Crowd noise on the terraces reached fever pitch as Hadlee began his run-up. Border looked around indicating his intention to drive to the boundary. Hadlee reached full speed and at the last minute changed his grip to release what would become one of the most legendary deliveries of all time, ensuring NZ a historic first test series win in Australia.

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ing edge of innovation in product design and in services provided to customers that complement the company’s pharmaceuticals. “The dairy business is significant and we have been fortunate to work with leading researchers who have developed label extensions and programmes tailor made for the dairy situation here. In 2008 the portfolio was diversified with the acquisition of Catapult

“The dairy business is significant and we have been fortunate to work with leading researchers who have developed label extensions and programmes tailor made for the dairy situation here.”

The Third TesT in PerTh – nZ v AUs, wiTh The series locked AT 1-1... ...and New Zealand yet to win a test series on Australian soil, Richard Hadlee faced a defiant Alan Border on 83.

“The creation of Zoetis marks a milestone, in the animal health industry as well as for the company. Public listing of the largest animal health company is a strong indicator of our faith in the sector. As a standalone animal health company, we now have a clear focus for our efforts, that is to offer solutions to the animal health sector, across a range of products and services,” says Patrick Dorahy, Zoetis general manager for New Zealand.

The new name Zoetis originates from the Greek word ‘zo’, signifying the bond between human and animal, and the word ‘zoetic’ meaning ‘pertaining to life’. The name Zoetis aims to capture the focus on animals, companion and livestock, and the needs of the people charged with their care. While the name Zoetis is new, Dorahy emphasises the company retains the people, and investments in research, development, and innovation that Pfizer Animal Health was known for. Zoetis retains the global reach with presence in 120 countries, manufacturing sites in 25 locations, and 9500 people supplying product, supporting customers and developing new technologies. The company retains a strong local presence in New Zealand. “Our goal is to improve herd productivity and pet wellness,” Dorahy says. “We do this by working with customers to better understand their needs and find solutions to those needs through local innovation and the assistance of global expertise” Dorahy says New Zealand has been at the lead-

Genetics and with further investment through Ovita and Agresearch a suite of DNA tests have been developed and marketed globally. Bopriva was developed specifically for New Zealand bull beef farmers with a vaccine to increase bull productivity and simplify management. New Zealand was the first country to launch Startect, a new combination drench for tackling sheep drench resistance. Veterinarians have also benefitted from information from Zoetis. Its Infovet is a data gathering tool that assists farmers and dairy vets better manage herd health. Dorahy says over the past year a lot of effort had gone into splitting company systems and operations from the Pfizer business to ensure a seamless transition to Zoetis. “As we launch Zoetis we hope our customers see a retention of the things we believe we do well, delivery of quality products and educational packages supported by high calibre people. We also believe we can do more, with a complete focus on animal health we aim to work even more closely with our customers,” he says.

Dairy News april 16, 2013

animal health // 35

Susanne Clay

Inside help on cow’s rumen function, health sudesh kissun

THE DAYS of observing and physically examining each cow to discern abnormal rumen function will soon be a thing of the past, says the developer of the world’s first wireless device to track the health and fertility of cows. Kahne Animal Health, founded in 2002 by a Gisborne drystock farmer, hopes data collected from trials on different farming systems will quantify benefits of its Sentinel electronic rumen monitor. Trials begin in June on five farms, each using 300-400 Sentinels. The device is a sensor in a cigarshaped cylinder inserted into the rumen of a cow. During milking it transmits to the farmer all data collected at five-minute intervals since the previous milking. The company is also developing a fertility monitoring system called Catalyst. Kahne general manager Susanne Clay says by the time milking ends, the Sentinel would have sent the farmer alerts on cows “functioning outside normal parameters”. “The farmer can draft the animal aside and start work on early treatment,” she says. Clay says farmers want an indicator of potential health problems in cows. “With larger herds visible observations are becoming more difficult. We have a lot of things we’re currently measuring on farm: we measure the inputs and the outputs. This is the first time we’re actually measuring where that feed is converted to energy and being able to manage to that.” Kahne in 2011 assigned engineers and telemetry specialists to develop the Sentinel and Catalyst for commercialisation. The recently awarded $1 million grant from Callaghan Innovation is pivotal to enabling the company to do its large-scale farm

trials and develop applications, Clay says. Researchers worldwide have so far bought 500 prototype units. Kahne will be at the National Fieldays where farmers can register interest and get on their mailing list. The company will take orders from New Zealand farmers for delivery in December. Each Sentinel will cost about $100 and is expected to last three-four years. Different farmers will see the value of the Sentinel differently, Clay says. “For some farmers the ability to get an

Sentinel cigarshaped cylinder will monitor the cow’s rumen.

indicator of potential health problems before they manifest themselves and impact animal health and productivity will drive incremental production; for others the focus will be more on improved nutrition management to optimise performance. “If your animals are in better condition through the year, this should also provide you with better in-calf rates. “You can also optimise your supplementary feed. Some farmers spend a lot of money on supplementary feed. If you’re able to optimise that… use that supplementary feed more efficiently, you can increase your production. “Whether it’s lower input cost or higher productivity, being able to manage that fermentation component should drive value from a number of different areas. “There is also the potential for decreased use of antibiotics because you are able to identify the animal earlier and minimise the non-production days, and the ability to reduce involuntary culls. “Those are all key performance indicators that we will be assessing.” 3599 Metabolizer halfpg vert.ind1 1

9/11/08 9:20:42 AM

Dairy News april 16, 2013

36 // animal health

in brief Ferret trapping FERRETS ARE being trapped in western Southland to find out where bovine TB still exists in wild animal populations. Ferrets indicate whether the disease is present in other wildlife, particularly possums, and can spread

TB to farmed cattle and deer. TBfree Southland Committee chairman Mike O’Brien says ferret trapping plays an important role in protecting cattle and deer herds from TB-infected wild animals.

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Oz synch scheme helps ensure daily milk flow ABOUT 80% of the

milk sourced by Riverina Dairy factory in Albury, Australia, comes from Riverina Milk, which runs 1500 cows at Corowa. To guarantee a constant supply throughout the year the dairy operation has streamlined every aspect of its year-round breeding programme. Eighteen months ago the entire Fixed Time AI programme was contracted out to breeding specialists Nu-Genes which now manages and implements the programme, which involves joining up to 100 cows each week. For farm manager Jim Simpson the benefit of this change in responsibilities is measured by better conception rates. “It certainly costs us to have Nu-Genes out here every week, but with their skills we get higher conception rates,” he said. “We’re able to deploy our own staff into other areas of farm management.” Adam Quarrell from Nu-Genes manages the programme and is on farm three mornings a week. Using Bayer fertility regulators to synchronise cow ovulation, the breeding programme starts with a PG (prostaglandin) injection when the fresh cows are 37-43 days in milk. This stimulates cycling in the cow and is followed by a second injection 14 days later to catch any cows that didn’t start cycling first time round. About 40 fresh cows 73-79 days in milk are inseminated every Thursday of the year. To minimise disruption to the herd’s feeding routine and other farm work, all the AI work is undertaken at milking time on the rotary platform. “The Fixed Time AI programme enables us to predict everything on particular days,” Quarrell said. “We are at the dairy three mornings a week and achieve the same or better results than a more labour

Michelle Caccianiga administers injection and compliance for pre-synch ovsynch.

intensive heat detection programme.” A heat detection programme would require an experienced person to be present seven hours a day. This person can be better utilised in another area of the business.

paramount as is rigorous record keeping. “We need to make sure it’s the right cow and not one that’s already pregnant; that she’s had enough days in milk after calving to be ready to start cycling again and that we give her

“These programmes require precision. Managing irrigation, cow health, hay contractors, feeding and the 101 other jobs on the farm interrupt the synchronisation programme. To get it right you can’t afford distractions.” With a FTAI programme, every treatment stage is predicted for a particular day. All joining activity is concentrated into a six week period in which cows get up to three chances to conceive to AI. “After that we only have three choices,” he said. “We can put them out with the bull, AI them one more time or put them in the DNB (do not breed) group and milk them until they are not paying their way.” The programme is driven almost entirely by pregnancies and there is a meticulous focus on system compliance. “The key to success is being absolutely on top of compliance,” said Quarrell. “That means making sure it’s the right cow, the right injection and the right time.” Attention to detail is

the right drug, in the right volume, with the right equipment. “It can’t be yesterday or tomorrow because if we missed five out of 100 we would be down to 95% compliance. When you work that out over a herd of 1500 we would have missed 75 submissions.” Achieving as close to 100% compliance as possible ensures conception rates are generally about 40%. A good understanding of the dollar value of what they are doing with the breeding programme is important. Fertility regulators can be costly so volumes must be measured and targeted to each animal to get 100% effectiveness and a satisfactory return on investment. Quarrell said their success is based on good man-

agement of what they can control. This is achieved by making sure all records are up to date and by having good communication with the farm management team so they know where each cow is up to when it comes on to the farm. “By working together they can do what they do best and we do what we do best,” Quarrell said. “These programmes require precision. Managing irrigation, cow health, hay contractors, feeding and the 101 other jobs on the farm interrupt the synchronisation programme. To get it right you can’t afford distractions.” Achieving satisfactory breeding results requires constant attention. There is always room for improvement. For instance, during the recent summer there was a drop in conception rates due entirely to the heat affecting the cows. Simpson thinks this kind of situation may need to be managed differently. “While we are seeing good results from the fixed time AI programme, we may need to build greater flexibility into the system to cope with factors outside our control,” he said. “Good communication between breeding contractors and farm management is needed to address these and similar issues as they arise. Success is always a work in progress.”

Dairy News april 16, 2013

animal health // 37

BOVATEC BIG GIRLS PERFORM BETTER IN THE SHED.

Lifting conception rates by 50% of non-cycling cows can be improved 50% by combining a progesterone implant with a cycling programme, say Australian vets who studied 19 dairy herds. Warrnambool Veterinary Clinic were sponsored by Zoetis (formerly Pfizer Animal Health) to research 19 western Victoria dairy herds. Done in 2011-12, it involved 1751 head of cattle and compared protocols for the treatment of non-cycling (anoestrus) dairy cows. The objectives of the trial were to generate Australian specific data on the treatment of non-cycling dairy cows and review the benefits of using a CIDR device in these cows. CIDR cattle devices are administered vag-

inally and contain the natural hormone progesterone. Dr Jon Kelly, lead researcher from Warrnambool Veterinary Clinic, ran the six-month project to generate specific advice for farmers when dealing with their non-cycling cows. “Our research has confirmed that the addition of a CIDR into an OvSynch program improves the first conception rate by almost 50% over Ovsynch alone,” says Kelly. “These results were particularly apparent in younger cattle.” Even with the addition of CIDR into the program, the cost per CIDR pregnancy versus an Ovsynch pregnancy is reduced by at least $30, because more calves are conceived. A programme including a CIDR

was found to deliver a first service conception rate equivalent to the remainder of the herd that cycled naturally, while the Ovsynch treated animals did not perform as well. Treatment cost, including products and vet expenses for the CIDR based programme, was about $41. However, the gain of additional AI calves with superior genetics and therefore more replacement heifers to choose from, represents a significant opportunity and sound investment. “CIDR programs are helping to mitigate the financial losses that can burden local producers when their cattle are not cycling, and pregnancies are being gained by back up bulls, not quality AI bulls,” Kelly says.

Getting cows to ideal BCS RANGE IN body condition score

(BCS) is as important as average BCS at calving, says DairyNZ. The ideal BCS of 5.0 for mixed age cows and 5.5 for first and second calvers is a target for each individual animal, as well as a herd target. The cows at greatest at risk of poor reproductive performance are the first and second calvers. “We know that within a herd there is always going to be a range of BCS, as each animal will have a slightly different metabolism, intake and milk production,” DNZ says. The challenge is to get the spread in BCS at calving as small as possible around the targets. Aim for at least 90% of mixed age cows being BCS 4.5-5.5 at calving. Managers can use various strategies to get every cow close to her ideal BCS at calving, such as: Drying-off low producing, fat cows early. These cows put fat on their back instead of milk in your vat. When feed is short, herd milk production commonly increases by drying-off the

low producing fat cows as the other more productive cows are fed better. In addition there is often an area of low quality feed on the farm where these cows can be put to maintain themselves, such as steep sidelings or gullies. Ensure heifers are on track for weight and BCS. Check every four to six weeks that replacements are gaining enough weight and remedy any. Aim to have these at BCS 5.5 when they return from grazing, as they will put little weight on (and often lose weight) while they adapt to being in the herd. Well grown heifers introduced to the mixed age cows during the dry period will compete well as milkers. Give the first calvers more time dry than older cows. Young cows are still growing to reach their mature weight and often have lower intakes. Therefore, they are only able to put weight on slowly, and require more time to get to target condition. Split dry herds on BCS and time

until calving. If you dry-off all at once then it is necessary to split the dry cows into herds based on condition and expected calving date. This allows for preferential feeding to get all cows to target BCS. Even if not enough feed is available to put on extra condition, creating herds is still a good idea, as it protects the younger cows from competition from the older more dominant cows. If supplement is going to be fed then feed it to the herd you want to gain the most condition or that needs to put it on fastest. Staggered dry-off based on BCS and time to calving. The principle here is that every dry cow can be fed the same, but the difference is how long she is dry for. Part season once-a-day (OAD) milking for all or part of the herd. Cows that are milked OAD are less likely to milk off their back than cows milked twice-a-day and when well fed will put more weight on during lactation, DairyNZ says.

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The more palatable ionophore 3 Zoetis New Zealand Limited. Level 3, 14 Normanby Road, Mt Eden, Auckland 1024, New Zealand. Tel: 0800 650 277, Fax: 0800 628 629. BOVATEC is a registered trade mark of Zoetis Inc. or its subsidiaries. ACVM Registration No’s A6956, A9679, A10829. 1. Data on file. 2. Nussio et al. 2002. Scientia Agricola, 59, 3: 421-426. 3. Erickson PS et al. Ionophore taste test preferences of dairy heifers J Anim Sci. 2004;82:3314-3320.

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Dairy News april 16, 2013

38 // mating management

Better bulls from feed trial FARMERS CAN benefit imme-

years at the Westpac Taranaki Agridiately from a feed efficiency trial cultural Research Station (WTARS) by scientists and geneticists from near Hawera. It was to identify LIC, DairyNZ and the Australian gene markers in animals for ‘residual feed intake’ (RFI) – the differdairy industry. LIC’s general manager for ence between what an animal eats and what we would research and expect it to eat for development, its live weight and Richard Spellevel of growth or man, told Dairy production. News they now Spelman is a have bulls in quantitative genetitheir Alpha catacist who did his PhD logue which show in the Netherlands a bull’s residual and has been with feed intake (RFI) LIC for 22 years – or feed conver- Richard Spelman the last 14 in their sion efficiency. He says as well as looking at R&D division, which he now leads. LIC was involved in the inithe breeding worth (BW) of a bull they can look at its RFI. “BW still tial design of the experiment and explains more than 90% of a bulls its role has been to help select the gross efficiency, but the RFI has the calves and cows and hand these potential to account for an extra 5% over to DairyNZ to do the research which will be in the feed conversion at Hawera. “When they generated all that of the progeny of the bull.” The trial has run for almost six data, that came back to us to get all

the animals genotyped, and then we went through and analysed the data with the Australians to see if you could predict residual feed intake from the genetic markers. We can to a certain degree; it’s not a perfect estimate by a long way but it’s enough to make a difference in the selection of animals.” He says as a result of the trial LIC can now take a DNA sample from a bull, run it through their DNA marker panel and then can estimate its residual feed intake. “This has about a 10% reliability which in scientific terms is very low,” he says. Spelman says BW is for producing more sustainable animals which stay in the herd longer and are the most efficient converters of feed into farmer profit. “We have this target of a 4% productivity gain per annum for the industry. Genetics is 60% of that and residual feed intake just helps this along.”

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Time to set up cows for next season’s production THE DECISIONS farmers make now will determine how much this year’s drought affects next season, says LIC’s Jon Nicholls. Nicholls, who leads FarmWise consultants, says farmers will be drying off earlier than usual this season because prolonged production could come at a cost to cow condition which, if not recovered before calving, can impact animal health, production and reproduction. “The season is pretty well over now, thanks to the drought, so farmers now need to be doing what they can to set up their farm and their cows for next season, and that includes getting them at target condition for calving. “Cow condition at calving is crucial and sufficient feed is the key to that. Once dried off, cows need time to put weight back on before calving otherwise the risk of it negatively impacting on next year’s 6-week incalf rate is much greater and that will affect future production.” Nicholls says farmers are aware of this, many having already cut their losses in favour of cow condition and milk solids at the next season. Waikato sharemilker Dan Hinton is one such; he recently decided on two farms to dry his 850 cows off two months earlier than usual because he believes it will be better in the long run. He decided this after reviewing cow condition, feed on-hand, pasture cover and time left until calving, and he’s comfortable with the amount of income he’ll sacrifice, because the risk from continuing to milk was too high. “It was too hard on my cows, feed and pasture, and I don’t want this drought to stuff us up for the seasons ahead. I’d rather have one year down in production by 10%

than three seasons down at 20%. “That’s what I learned from the last drought: we have to be proactive with these decisions because they have long term consequences and I’ve worked too hard to lift my 6-week in-calf rate to have it drop back down because of this drought.” With the workload reduced and the decision made, Hinton’s looking forward to fishing and spending more time with his young family, knowing he’ll get off to a good start next season. “I’ve now got three months of joy before the hell sets in with calving. We’ll have them back in the shed milking in no time, and those are the milk solids to target now.” His cows are his focus now, ensuring they are well-fed and in top condition during the lead-up to calving and mating. “We aim for fat cows at calving; if you don’t get that right then it makes everything hard for the season, especially with mating because it dictates the calving pattern which has the biggest impact on production. “It’s not just about whacking in semen at mating time, it’s about drying off at the right time, feeding them enough and making sure they are not losing condition, and that’s 365 days of the year.” It’s a method that has paid off for him, helping to increase his 6-week in-calf rates, drop his empty rates and get more days in milk. And it’s relatively easy for any farmer to adopt, Dan said, with programmes available to help. The 6 Week Challenge, developed by LIC to support the DairyNZ InCalf programme, is free for all farmers and designed to help them implement a yearround approach to improving herd reproduction and get more cows in calf quicker. www.6weeks.co.nz

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Dairy News april 16, 2013

40 // mating management

Pregnant cows may need more maintenance energy pam tipa

DRY PREGNANT cows may need up to 40% more maintenance energy than the current recommended levels shown by DairyNZ studies, says researcher Kristina Mandock. A series of DairyNZ trials from 2009-2011 show that dry, pregnant cows may need daily about 2-3kg more dry matter than the current standard levels, Mandock told the Farmers Forum in Whangarei. Mandock said results of trials showed their cows under study needed on average 117 megajoules of metabolisable energy (ME) to maintain their body weight including pregnancy. “This was much more than the current recommendations of about 80-90 megajoules and this would mean that dry cows, two months pre calving, would need 10-11kg of dry

matter per day to maintain their liveweight and pregnancy with no loss or gain of body condition,” she said. The current recommendation was 7-8kg of dry matter per day. The findings contradict current recommendations for maintenance feeding, the forum heard. However, whether those will be adjusted and how much variables in the study influenced the result is still under discussion. As way of background, Mandock said in the 1960s researchers in the UK and America did a lot of research on maintenance requirements of dairy cows. They put them in a calorimeter – a big box that measures everything that goes in and out, i.e. urine, faeces and heat the cow produces. From that they could derive the energy requirements and expenditure of those cows. “What they found was cows needed 45 megajoules of metabolisable

energy to maintain their vital body functions,” says Mandock. “If you convert that to pasture that would be about 4kg of dry matter of pasture. So this has been upgraded for dry dairy cows to 60 megajoules of ME per day or about 5.5 kg of dry matter of pasture. “We added another 20 to 30 megajoules for pregnancy activity; that would result in 80-90 megajoules per day and this would make 7-8kg of dry matter per day for a dry, pregnant dairy cow.” But Mandock said they were hearing from farmers that their cows were losing condition when they met those current recommended requirements. “That gave us an incentive to look at it again.” They used 53 dry crossbred cows at a DairyNZ research farm, and the cows had transponders around their necks specific to one particular gate. “This enabled us to mea-

Kristina Mandock says pregnant cows may need more dry matter.

sure the individual intake of each cow. “The cows were seven months pregnant and the average liveweight was 526kg. We fed them indoors for 38 days and released them onto a bare paddock overnight to best mimic the real farm situations.” This produced the “surprising” results outlined above. An audience member asked if this meant DairyNZ was going to change its recommended figures and facts. “We are currently discussing this,” Mandock replied. “This is very specific: those cows got fed

autumn pasture and we think there is something we can’t explain in autumn pasture that makes it inefficient for liveweight gain. We can’t distinguish whether it was pregnancy or maintenance because our cows were pregnant so we are currently talking about it. There are no decisions yet.” Summing up, a DairyNZ convener said: “The key take-home message is, often people underestimate what their animals need for maintenance and body condition score gain, so underestimating may be even more dangerous than we thought.” Kristina Mandock gets her message across in cartoon form at the Farmers Forum.

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in brief BCS warning SENSIBLE MANAGEMENT of body condition score (BCS) is crucial for the protection of next season’s production, says DairyNZ. Mixed aged cows need to be at BCS 5.0 by next calving, first and second calvers at BCS 5.5, so pulling condition off them now for the sake of continued production makes no sense. “It will cost you far more to put it back on later,” it says. It wants farmers to monitor the BCS of their cows and heifers regularly (every 3-4 weeks), even if away grazing during summer dry periods. Management options include: Getting all known culls off the farm as soon as possible. Don’t carry cull cows for the sake of it. If sending them to slaughter, remember they must be fit for transport and able to bear weight on all four limbs. Dry mature animals off based on BCS and somatic cell count (SCC). As a safeguard, have a final dry-off date and stick to it. Drying off low producers and young stock early, when they are in good condition also makes good sense, as it will reduce the pressure on the available resources. Milking low BCS cows once-a-day in early autumn.

Dairy News april 16, 2013

mating management // 41

Warnings on OAD milking during feed shortage costs of milking cows once a day (OAD) when you’re short on feed will be shared by scientists at the North Island DairyNZ Farmers’ Forum events during April and May. DairyNZ began its regional Farmer’s Forum events in Whangarei on April 5. Two remaining North Island will be at Hawera on April 18 and Woodville on May 28. Extreme weather, such as now, and flooding in late winter and early spring, can create short and long term feed shortages. DairyNZ scientist Jane Kay says for many years farmers have used OAD milking as a means of alleviating nutritional stress on the cow. Kay led a DairyNZ study that compared OAD with twice-a-day milking when cows’ feed was restricted, still within safe levels, for three weeks in early lactation. The research discovered extra losses in milk production when underfed cows were milked OAD, both during the experiment and after feed intake had been restored. In addition, milking OAD did not improve the loss of body condition caused by restricted feeding. Milking OAD did

improve animals’ shortterm energy levels, and reduced the risk of metabolic disorders associated with the lack of feed. Less time spent milking can also reduce stress on staff, and free up time to do other tasks. “Farmers need to be aware of the costs and benefits to milking cows OAD when feed is short. Ideally you’d bring in feed supplements during a severe situation, but that can be challenging; there can be a shortage or the cost is restrictive.” Kay says every farmer’s situation is different, and there was no silver bullet for addressing the challenges the current climate is creating. “It is far better to plan to milk once a day before feed runs short than to be forced into it by a severe shortage of feed, but it could still be an option during the summer months. It can reduce the time spent walking the cows in the hot summer afternoon and if carried on for long enough will improve cow body condition score before dry-off. “At this stage it is important to be looking ahead to next season and having a plan for improving body condition scores to ensure your herd is in

good condition for next year’s production.” DairyNZ’s advice was to control the controllables as much as possible such as cow culling, better feed management, drying off early, re-sowing pasture and cow condition. DairyNZ chief executive Dr Tim Mackle said each year the Farmers’

Forum provides a great opportunity for dairy farmers to see how their levy is invested and to learn about dairy industry research and development work relevant to their region’s farming issues. “Our Farmers’ Forum has become an annual gathering and every second year we go out to

the regions and customise forum topics based on locally relevant issues,” said Mackle. “The programmes are designed by the local DairyNZ team to address local challenges and

opportunities. A number of the region’s farmers will talking at the events about their own experiences implementing research on farm.” The forum also includes time for informal

discussions with DairyNZ scientists and developers plus others who lead industry research and development programmes. www.dairynz.co.nz/ farmersforum.

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Dairy News april 16, 2013

42 // machinery & products

Herd Homes builds on stronger trusses STRONGER ROOF trusses are

allowing Herd Homes to span up to 20m, so farms can retro-fit the Waikato firm’s roofs over existing yards and pads. “It’s allowed us to cover feed pads, dairy yards and our Herd Homes,” chief executive Hamish McMillan told Dairy News at the recent South Island Agricultural Field Days, Lincoln. The old design was adapted from glasshouse roofing using light steel and came in one width – 10.3m. The new design uses cold-rolled steel and can be made to fit up to nearly twice that, he explained. “It’s a lot more robust. We’re building the first half dozen now.” One is being installed near Matamata and four more are destined for a farm near Balclutha, Otago. McMillan says there are about 350 Herd Homes nationwide and more going in all the time. “It tends to go in clusters.” The main appeal is protecting pas-

ture from damage during wet weather, and being able to manage effluent produced off-paddock efficiently and simply. Effluent collects in a sump below a Herd Homes’ slatted floor which once or twice a year is removed so a loader can drive through to dig out the muck for loading into a spreader to go out onto the farm.

“The effluent management is very simple. There are no scrapers or anything to breakdown.” Capital cost per cow is typically $1500-1800. McMillan says the plastic roof cover might need replacing after 7-8 years, which for a 200-cow unit currently costs about $6000, but everything else is designed to last at least 50 years.

Alternative semen suppliers looking for customers THE RECENT South Island Agricultural Field Days at Lincoln saw several of LIC’s competitors exhibiting, putting their case for looking beyond the local cooperative when ordering next season’s bulls. Among them was World Wide Sires, the global arm of two US farmer-owned cattle breeding cooperatives. “We’ve got access to the best bulls in the world, not just New Zealand,” World Wide Sires’ John Bannatyne told Dairy News. New Zealand’s herds represent just 4% of the world’s dairy genetics and contrary to the impression some give, it is not the only country with pasturebased systems, he added. “Our bulls’ progeny are proven in 92 different countries under a wide variety of management systems and climates. You can go through what’s available and pick what will suit a New Zealand system.” He was also quick to counter the perception that using overseas genetics risked importing a fertility prob-

John Bannatyne

lem. “One of the highest-ranked bulls for fertility in New Zealand is one of our bulls.” The company is a subsidiary of Select Sires, Ohio, and Accelerated Genetics, Wisconsin. Jersey, Ayrshire, beef and HolsteinFriesian bulls are available.

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Dairy News april 16, 2013

machinery & products // 43

Effluent Expo ‘should happen more often’ EXHIBITORS AT the one-day Effluent Expo in Waikato last month say good farmer turnout shows demand for specific advice. About 500 farmers attended, many wanting to discuss the cost of upgrading effluent systems and compliance issues. AgFirst spokeswoman Kate Ody says farmers who visited its stand also enquired about construction of weeping wall and mechanical separation systems, and how to consider the different nutrient loading of different types of effluent. “As always cost and compliance were key levels of concern. As we were also discussing water use within the farm dairy and how it can influence effluent systems, many inquries were about advice on completing the Variation 6 – water consent applications,” she told Dairy News. Ody, who coordinated the first expo in 2011 as a Waikato Regional Council employee, suggests it may

be time to hold two events every year. “I still consider the expo to be a success but the demand for our accredited system designers [suggests] it’s time to move biannually for the event…. “However I see merit in having other singular focused events that farmers can be benefit from, perhaps something for the beef and sheep sector where resources for on farm advice are limited.” Firestone Lining Systems product manager Vaughan Podbielski was also happy with the turnout. He says the drought was on the minds of farmers. Podbielski says it will attend the “effluent focussed” annual event with Waikato Regional Council and wants other regional councils to hold similar events. “The regional days, especially Mystery Creek, are good but often too generalised and do not deliver the same bang for your buck,” he says.

“Therefore it was disappointing that ECAN decided not to host an effluent expo this year, but instead elected to incorporate it with the Lincoln Field Days.” WRC spokesman

Alan Campbell says the big turnout was a “very healthy” sign of the industry’s commitment to doing the right thing with effluent. The expo had 44 exhibitors.

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Dairy News april 16, 2013

44 // machinery & products

No more sludge in ponds NO JOB is too big or too

hard for Numedic’s new pond mixer, says company director Peter Reid. The new mixer has been designed to eliminate the problems of crusting and agitation of dairy effluent ponds, he says. It also meets the challenges of high input farms and large effluent ponds. Reid says the mixer will break up the thickest crust and mix the contents of any shaped effluent pond quickly and efficiently. “No longer will you be left with a metre or two of sludge at the bottom of your pond that you cannot

pump,” he says. “Superior mixing will let you utilise the entire pond, not just the top 70%, enabling you to reclaim back all of your storage pond capacity. No longer will you need multiple mixers on your pond, or mixers that require to be run for long periods of time.” The mixer is positioned in the centre of the pond on a pontoon. Two opposed mixer blades pointing downwards draw the effluent towards the mixer and create a swirling motion in the pond. Blade speeds are selected depending on the pond dimensions and thickness of the material that requires mixing. The blade speeds are controlled through a variable speed drive that can also be programmed to rotate at slower speeds as the pond level reduces

which helps prevent liner damage. The lower unit, incorporating both propellers, rotates through 360o. It can be locked in eight different ‘stir time’ positions for variable lengths of time (see chart). “We have found that time intervals of between 5-8 minutes per position are best,” says Reid. These stir times can be altered and programmed with the variable speed drive. After the pond has been mixed in position #1, the lower unit rotates to position #2 where the change in directional flow ensures it begins mixing a new section of the pond. When the mixer has moved through its eight different stir positions it has mixed all 360o of the pond leaving no dead or unmixed areas of the

Numedic’s new effluent pond mixer makes short work of crust.

pond, irrespective of shape. The Numedic pond mixer has been operating on a 60 x 20m stor-

age pond since September 2012 where it has been operating well. Reid says typical responses from farmers

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Dairy News april 16, 2013

machinery & products // 45

Tough decks for heavy loads BEST BARS Ltd makes

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is using advanced polymers and wood, combined with transport grade plywood flooring to produce a deck that “looks great and retains its strength and durability”. “It still looks like the decks used on farm utes for years, but the lighter design allows more to be carried.” A full range of accessories can be added to make the Advantage decks even more versatile, including tool trays that slide underneath. For wellside utes Best Bars has re-engineered its trifold Advantage tonneau cover to keep goods

hidden and dry. It resembles a hard surface but is made from fabric, superior for covering the cargo areas of working utes. It can be

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• Fuel-injected 4 stroke, 4 valve engine • Semi-auto 5-speed transmission • Hi-Lo ratio, with reverse

4X4 MANUAL

PLANNING FOR winter maintenance of dairy sheds raises the issue of cracked concrete floors and walls, observes coating and paint specialist Regis Coatings, Christchurch. Cracking and erosion of such surfaces raises hygiene problems which can be used as a reason for downgrading milk, reducing payment for milk production. Regis Coatings specialises in providing complete repair and paint coating schemes to resolve these issues. The company says its Cretex repair epoxy fillers and Epotread coatings will transform worn floors and walls. “These products have been used successfully now for many years, and they have an enviable track record of durability and cost effectiveness in the dairy industry.” The Epotread water based epoxy system also provides a protective coating on new floors, making them easier to clean and ensuring an easily maintained hygienic surface.

6,995

LT-F400L2

EXCLUDING GST

Hygiene threat diminishes with epoxy coatings

0800 SUZUKI | WWW.SUZUKI.CO.NZ

It’s SUZUKI’S…

• • • •

Sealed rear brakes Twin shock rigid rear axle Comfortable T-shaped seat 24 Month/15,000km warranty

2WD MANUAL

• Smaller turning circle than most 4x4s • Sealed rear brakes • Twin shock rigid rear axle • Comfortable T-shaped seat • 24 Month/15,000km warranty

Suzuki Fieldays™ has arrived again, bringing some much-needed relief with it! Take the pressure oﬀ with the exceptional quality and low prices of the best value farm vehicles in New Zealand.

4,795

DR200SE

EXCLUDING GST

Trojan FARMBIKE

• • • • • •

Quality made in Japan Dual side-stands & comfortable seat 200cc electric start 4-stroke 5-speed Handlebar-mounted carrier Large mudﬂaps

3,195

TF125

$280

EXCLUDING GST

Mudbug FARMBIKE

• • • • • •

Quality made in Japan Dual side-stands Comfortable seat Handlebar-mounted carrier 125cc 2-stroke 6-speed

These offers are valid until 30 June 2012 or while stocks last, and only available at Fieldays or participating Suzuki dealers. Prices are recommended retail, excluding GST. Models shown are indicative only and may differ to the actual sale stock. Some models may not be available at all participating dealers. Savings shown include GST. Offers not available in conjunction with any other promotions. promotus 4930DN

$220

Dairy News april 16, 2013

46 // machinery & products

Lifting performance of pro balers NEW HOLLAND has launched a new BigBaler range said to be capable of lifting farm capacity 20%

and improving bale density by as much as 5%. Features include the maker’s new MaxiSweep

pick-up and enhanced precompression chamber crop flow monitoring. The machines also have New Next Generation Big Baler.

Holland’s CropID system and double knotting technology intended to help professional hay and forage operators improve their baling. Built at Zedelgem, Belgium, it has been engineered “to meet the stringent quality, productivity and reliability requirements of modern baling businesses”. The four model range produces bales from 80x70cm to 120x90cm. Crop-to-crop flexibility is said to be impressive the BigBaler “promises performance in conventional

The new balers lift farm capacity by 20%.

crops and non-traditional crops such as sugar cane and maize stover”. “Over 200,000 bales, equivalent to ten seasons output, were produced before even the first production BigBaler rolled off the line,” says New Holland product specialist

0800 686 334 www.numedic.co.nz MANUFACTURE AND DESIGN AGENTS NATIONWIDE, EXPORTING WORLDWIDE

New Zealand Patent appl. No 599021

MS1404

NEW GENERATION POND MIXER Mixes and breaks up the thickest crust

■■

Benefits of the New Generation Pond Mixer: • Multi directional positioning • • • •

Twin opposed multi speed propellers Vigourous agitation State of the art technology Programmable for your pond

www.newholland.co.nz

Bigger and better

■■

Total Pond Solution!

Greg Moore. “The prototype models spent two harvesting seasons, and baled about 20,000 bales in New Zealand in a variety of crop types and conditions and performed exceptionally well.”

■■

Up to 20% capacity increase and up to 5% denser bales for improved productivity New MaxiSweep pick-up performance for improved feeding Variety of crop processing options for tailored crop management Best-in-class SmartFill feed indicator system ensures uniformly dense and well-shaped bales Plunger speed increased to 48 strokes/minute for faster crop throughput Improved knotter shielding and impressive cleaning performance increase bale productivity Colour touchscreen monitor for wide-screen baler management Improved lighting package and operator comfort boosting performance.

B&LIC0241

MORE THAN EVER 2013 Bull Catalogue out now Whatever your breeding objectives, we have the largest selection of bulls to help you get more performance than ever. Contact your local LIC Customer Relationship Manager for more information. MORE OPTIONS. MORE CONTROL. MORE PERFORMANCE.