Dairy News 23 June 2015

Dollar drop outweighs milk price fall. PAGE 3 TEXT AND AVOID FINE

Effluent monitoring PAGE 34-35

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TPP JUNE 23, 2015 ISSUE 337 // www.dairynews.co.nz

TIME TO TEAR UP TPP?

Long running Trade Pacific Partnership negotiations face uncertain times. PAGE 4

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DAIRY NEWS JUNE 23, 2015

NEWS // 3

Dollar drop outweighs milk price nosedive ANDREW SWALLOW

MILK PRICES were down again in international

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markets last week but the New Zealand dollar’s drop means prices are up in our money.

The fall on GlobalDairyTrade (GDT) was the smallest since values started sliding again in March with the overall index down 1.3% and whole milk powder (WMP) back just 0.1%.

The average price across all commodities was US$2409/t with WMP at US$2327/t, still 4% above its December nadir of US$2229/t. Drought fears induced a rally to US$3272/t in February but it’s been downhill ever since.

“It was another weak one: we’re sort of getting used to it,” commented BNZ senior economist Doug Steel after last week’s auction.

However, since the previous auction, on June 2, the NZ$ had fallen about twice as much as the 1.3% fall in GDT hence prices in local terms are up about as much as they were down in US$, he added.

“But we really need higher international prices to achieve our forecast and Fonterra’s milk price forecast before the season is done,” he warned.

BNZ’s current prediction is for a NZ$5.70/kgMS payout for 2015-16, compared to Fonterra’s $5.25/ kgMS milk price forecast. Given the volatility in the market there’s not really a lot of difference in those forecasts, he says.

“It’s almost within the margin of error.... The question is when will prices recover and will it be far enough to get the payout into the $5’s?”

If current prices and exchange rates persist, the payout would be “even lower than 2014-15’s $4.40,” he added, but such a scenario would almost certainly see the Kiwi fall “further and faster”, supporting prices in NZ$ terms.

While Steel didn’t mention it, weaker currency would likely mean prices of imported inputs such as fuel, fertiliser and PKE would rise but the gains in domestic milk prices should outweigh that downside.

Steel says the continued weakness in dairy markets is due to questions over stocks in China

and strong domestic production in that market.

“Demand from China is still not as strong as people thought it would be and therefore [China’s] impact on the market’s not as strong.”

Russia’s continued trade ban with the US and EU is another key factor. “Last year when they announced it [in August] they said it would be for one year. Now the debate is whether they will lift the ban.”

Meanwhile EU and US supply growth, while slowing, isn’t responding to low milk prices as fast as it might because markets for feed grains are extremely weak.

The response to the end of quotas in the EU in April also still remains to be seen.

“It’s not so much a question of whether Ireland and the other efficient producers are growing, as how do the less efficient nations respond. Will their governments support them or let the war of attriCon Williams tion begin?”

ANZ’s Con Williams also noted the NZ dollar’s positive influence on domestic milk values but flagged a concerningly flat WMP price spread.

“Across the last two auctions there’s been a bit of softening in those fourth quarter prices, particularly for milk powder. That suggests China’s import demand is not about to erupt anytime soon which is a concern for prices in 2015-16.”

ANZ’s forecast for the season is still $5-5.25/kgMS but if current prices and exchange rates remained it would be $4.20/ kgMS, he notes. “We still see the gain as achievable.”

Weaker currency plays “quite a part” in that view, as does a potential drop in New Zealand’s production due to lower cow numbers following high cull rates and

fewer conversions. Weather, notably El Nino, could also have an impact.

However, Williams doesn’t believe Russia will reopen its borders to EU and US product, so increased competition in other markets will remain. “The drive in Russia is towards self-sufficiency. That’s quite a structural change in the market.”

Currency cushion

Date

WMP in US$

US:NZ$ rate*

WMP in NZ $

December 3, 2013

$5035

0.817

$6163

June 17, 2014

$3658

0.868

$4214

December 2, 2014

$2229

0.787

$2832

June 16, 2015

$2327

0.698

$3334

* As recorded by Reserve Bank

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DAIRY NEWS JUNE 23, 2015

4 // NEWS

Trade talks on a knife edge PAM TIPA pamelat@ruralnews.co.nz

EITHER PRESIDENT Barack Obama gets legislation through US Congress for the Trans Pacific Partnership (TPP) to proceed or the trade agreement is all but finished, says NZ International Business Forum executive director Stephen Jacobi.

He remains hopeful Obama will succeed, because failure will have major consequences for his presidency and the US geopolitical situation.

“I think some clever people in the US are going to pull this rabbit out of a hat. If they don’t we are looking into a very dark place for TPP,” Jacobi told Dairy News.

Trade Minister Tim Groser also told Dairy News the window of opportunity for bringing the TPP together politically is slowly closing.

Developments last week mean Obama now has a one-month extension, until end of July, to get the TPA (Trade Protection Authority)/TAA (Trade Adjustment Assistance) legislation through, which would enable TPP negotiations to proceed.

Jacobi says even if that passes there is now no chance of TPP being concluded before the end of the year, pushing eventual ratification – if we ever get that far – well into 2016 and the US presidential campaign.

If the legislation fails it will be a major repudiation for Obama and a significant setback in his relations with the Congress, Jacobi says. Republicans will say he’s a lame duck president.

Obama has every reason to want to get this through as do a number of Republicans and Democrats. TAA, an existing programme of aid to workers displaced by trade deals, is favoured by the Democrats but needs reauthorisation.

“It defies logic that the Democrats have voted against it for political reasons. There are lots of reasons why TPP should come together but it is not

the first time the US has dropped a very large ball on international trade.” The Americans under a Republican administration walked away from the WTO Doha deal and it never got back on the rails.

Jacobi says if Obama fails, other economies won’t want to play ball with the US on the TPP, which has been on the table for five-six years. “The outlook would be too uncertain for everybody to risk wasting further time on things that may never be delivered. At some point you have to bring these things to a conclusion.

“Can it be resurrected in the next couple of years? Well maybe, but the world moves on. The fundamentals on why TPP would be a good idea remain.

Those will look to be resolved in different ways,” Jacobi says.

“It is more likely concentration will be on the RCEP Regional Comprehensive Economic Partnership (RCEP); there’s negotiation underway in Asia, where America is not involved, among 16 economies including China, Japan and India. I think a lot more focus will be put on that.”

China might put forward other proposals. “We know China wants to show its leadership in the area; they might see some mileage in a new initiative that wouldn’t involve the US. Doing nothing is not an option because we still need better rules and a better environment for trade and investment and we need access to some of those markets.”

Jacobi says either TPP moves towards a conclusion or there will be “something else”. “That has implications not just for us but for the US leadership. In economic matters and geopolitical issues it is much bigger than it might appear.”

Groser says hopefully sufficient congressional support will emerge to allow this package to move forward. “But if that doesn’t happen, we also need to be realistic that it could be some time before TPP can be progressed.”

The Government has also been

clear it will only sign up to a high quality TPP that delivers overall benefits for New Zealand. “It’s not after a deal at any cost.”

Groser says NZ’s key priorities in the TPP process remain securing market access outcomes that provide commercially meaningful access for NZ exporters, including dairy.

“That said, dairy remains one of the most sensitive issues in the TPP negotiations. While good progress has been made, further work is required to ensure the end result is acceptable to NZ and aligns with the objectives Leaders have set for TPP.” Groser says the US administration has been arguing that US legislators should support the legislation so the US leads the development of regional trade rules. The implication is a failure could indirectly strengthen China’s position geopolitically.

“China is obviously a key player in other processes such as the RCEP negotiations. But NZ sees the issues in more complementary terms: TPP and RCEP can be complementary stepping stones to the vision of a free trade area of the Asia Pacific, which is estimated to produce larger economic benefits than either process on their own, and China and the US can both help to achieve that

Stephen Jacobi

longer-term outcome.”

Groser says NZ is already strongly positioned in the region with FTAs in place with Australia, China, ASEAN members, separately with Singapore, Brunei, Thailand and Malaysia, Chile, Hong Kong and an economic cooperation agreement with Chinese Taipei.

“We are also working to bring the Korea FTA into force, and are currently participating in the RCEP (Regional Cooperation Economic Partnership) FTA negotiations. RCEP gathers together a different set of participants, who in some cases are and will increas-

ingly be significant economic powers, including China, Japan, Korea and India as well as all of ASEAN. “RCEP markets take 60% of NZ’s goods exports, with a combined GDP of US$23 trillion and three billion population.

“We are seeking to improve and/ or establish our access to these markets. We are also exploring ways to deepen NZ’s engagement with Pacific Alliance countries. All of these processes are distinct from our participation in TPP, and provide significant opportunities for NZ exporters.”

BIG DEAL BETTER FOR DAIRY A BIG trade deal like the Trans Pacific Partnership, involving a number of countries, could enable us to get access to markets with our dairy products which would otherwise struggle to get a deal with.

Kimberly Crewther, Dairy Companies Association of NZ executive director, says the significance of TPP for dairy is the opportunity to markedly improve dairy market access in the region.

“The negotiation includes Japan and Canada, both of

which maintain trade-prohibitive import tariff levels (200-300%) on many core dairy products.

Market access into the US and Mexican markets is also limited currently.

“There is a very thin market for globally traded dairy products. Trade liberalisation will also mean greater liquidity and lessened volatility.”

Trade expert Stephen Jacobi says our farmers in particular need access to some of those markets because, for instance, we don’t have a free trade agree-

ment (FTA) with Japan and Japan has now concluded an FTA with Australia.

“Japan has been reluctant to conclude a bilateral FTA with New Zealand in the past.

Australia has more to offer Japan in terms of access to resources etc and we present the Japanese with a number of problems, particularly in the dairy area, that they would rather not deal with.

“We were looking to get those sorted out through a TPP situation with a bigger deal on the table and more people involved.”

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DAIRY NEWS JUNE 23, 2015

NEWS // 5

Co-op trying to reconnect at shed level PETER BURKE peterb@ruralnews.co.nz

FONTERRA’S TOP

farmer contact in Waikato, Paul Grave, says he hopes he can improve the communication between the co-op and local farmers and other regional stakeholders.

Grave is Fonterra’s newly appointed cooperative affairs manager in the

region.

He says Fonterra previously took a centralist approach, but is now devolving more responsibility to a regional level to improve relations with farmer suppliers and others in direct contact with the co-op – local authorities, iwi, river authorities and DairyNZ. Going regional is intended to make sure Fonterra is “integrated”

TRANSPARENCY RULES ON GDT

into local rural communities.

“The very nature of New Zealand makes it hard for a one-size-fits-all approach, that’s why we have gone regional.

“There are a lot of different factors out there: my [counterpart] in Canterbury will be experiencing different things from what you see in Waikato.

For example, he’s got a lot of larger scale conversions with irrigation, with their own set of issues, whereas here we have a lot of envi-

PAUL GRAVE took up his present role after six years running Fonterra’s GDT platform. He’d also had sales roles in the US. He says the GDT is not a complex system; it is a means of balancing supply and demand in a transparent way without which it would be difficult to assess what was happening in the market.

Grave says anyone who thinks that because Fonterra has lots of specialist staff it should be able to accurately set the farmgate milk price one year out needs to understand the market complexities.

“To get it right it means you have understood what the US/NZ dollar is going to do, what the Euro and US dollar is going to do, what Putin is going to do in Russia and what the supply in Europe is going to do.

“Then it [requires] knowing what the supply in the US is going to do and by definition you need to know what the grain price is and what the milk price is going to be in those places.

“Also you need to know what the supply in New Zealand is going to be and… a whole lot of other geopolitical factors… to come to that final decision in 15 months,” he says.

Grave says the best Fonterra can do is arrive at an estimate and it’s not possible to get it right given the huge number of unknown factors – not to mention the volatile nature of the world dairy market.

Fonterra’s new cooperative affairs manager in Waikato Paul Grave.

ronmental issues such as the Waikato River – a big issue.”

Grave is concerned to connect with farmers during these tough times and explain to them what’s going on and why

and make sure they understand the problems.

“We have run a series of small shed meetings for up to 30 farmers – talking to them informally about some of the issues instead of having a big meeting in

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away feeling a lot better informed about what’s going on.”

Grave says a lot of information is sent to Fonterra farmers, and he sees an informal chat in a dairy shed as better for them.

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DAIRY NEWS JUNE 23, 2015

6 // NEWS

Houpapa confirmed as Landcorp chair PETER BURKE peterb@ruralnews.co.nz

MAORI BUSINESS

leader Traci Houpapa has been appointed chair of Landcorp Farming. She has acted in the position since May last year.

Houpapa is also the chair of the Federation

of Maori Authorities (FOMA), a collective with an asset base of $8 billion in primary industries, energy, tourism and other commercial interests.

She is also chair of the Te Uranga B2 Incorporation with major farming interests – dairying and sheep and beef – in the central

North Island, and she is a director of other companies – Maori and pakeha. Houpapa was in 2012 named one of the ten most influential women in New Zealand agribusiness.

She told Dairy News her Landcorp appointment confirms that the direction of the state-owned business

was supported by the shareholder – the Government.

She says chairing Landcorp is exciting, with the implementation of its new strategy focus on the core business and a diversification which includes sheep milking.

“We are seeing a different face of Landcorp

– a more focused and strategic face. Our board and team are focused on how we can transform NZ farming.

“Landcorp’s focus is predominantly on how we do business and drilling down to make sure we do the fundamentals right. Then we can look at doing innovative work

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on genetics, added value add and the value chain.

For example, we are working with NZ Light Leathers, Merino NZ and other industry partners.

More recently Landcorp has Traci Houpapa focused on how it can partner with iwi and Maori agribusiness. We have the ability to capitalise authorities.” to positively leverage Houpapa says in Maori farming into the dairying Landcorp mainstream. Landcorp is looking hard at is a great vehicle to help how it farms – milk facilitate that.” production and its Meanwhile former environmental footprint.

Invercargill MP and Its commitments with farmer Eric Roy has been business partners in appointed to Landcorp dairying will roll through board. over time.

Roy spent ten years in Houpapa is regarded Southland as an electorate as a highly influential and list MP for the and respected business National Party. He retired person and leader with a great understanding of from Parliament last year. agribusiness.

He has long been “The experience I involved in the primary bring as a Maori and a sector and now farms two mainstream farmer is properties in Te Anau and [combines knowing] leases a holding in the who we are and where we Hokonui Hills. are going – as Landcorp @dairy_news and as a New Zealand facebook.com/dairynews

Shaping the future of animal health

farming families to register with a medical practice in their new district.

June brings the start of a new dairy season and with it the movement of sharemilkers into and around their new region. However, registering with a new GP is often overlooked when families move into a new area, says WellSouth Primary Health Network GP advisor Dr Keith Abbott.

He says registering is an important part of the move, so health services can be accessed quickly when they are needed. It also means those needing health care will benefit from a subsidised consultation.

The process is simple: fill in an enrolment form with a local medical practice, and give consent for the new practice to source the individual’s health records from their old practice. That way the notes will be there the next time a family member needs to make an appointment.

And if you aren’t registered with any medical practice, now’s a good time to enroll: doctor’s visits are subsidised for enrolled patients, so routine visits are cheaper and certain PHO programmes may even be free.

Doctor visits are free for children under six in Otago and Southland if they registered.

“Medical practices aren’t only there for when you’re unwell; regular checkups and screening are a positive way to monitor and manage health, particularly if you are in a stressful job, smoke or don’t follow a healthy lifestyle,” Abbott says.

DAIRY NEWS JUNE 23, 2015

NEWS // 7

Drought-hit southerners find banks supportive PETER BURKE peterb@ruralnews.co.nz

FEDERATED

FARMERS

President William Rolleston says the situation of some dairy farmers in drought affected areas of the South Island is becoming desperate.

He told Dairy News he’s had reports of dairy heifers or cows being returned early and unannounced from dairy grazers who simply didn’t have the feed on their farms to continue feeding the animals. Inquiries by Dairy News suggest this sort of incident is isolated, but is occurring on some farms in the worst hit areas.

Rolleston says this situation puts more pressure on dairy farmers already suffering from the low payout.

“What’s different about this drought compared with the

drought three years ago is that the dairy payout then was good and farmers had the flexibility to buy in supplementary feed. But now farmers are asking ‘shall we cull those cows earlier, reduce the

“We don’t want the banks to turn around and desert them. To be fair we are not seeing any signs of that, in fact quite the opposite.” size of our herd, retrench, batten down the hatches and sit tight for a couple of years?’ And that is the appropriate response.”

Rolleston says Feds still has an active drought committee and is

William Rolleston

monitoring the situation along with the added problems of a lower dairy payout. It is watching closely the issues farmers are likely to face in the coming months and what support they will need to deal with stress and their overall mental health.

“And we are talking to banks and making sure they understand the cyclical nature of farming: that dairy farmers get a payout of

$8.50 one year and all the banks love them, then next year they get $4.40. We don’t want the banks to turn around and desert them.

To be fair we are not seeing any signs of that, in fact quite the opposite.”

But Rolleston says the public and the NGOs need to understand that while farmers are very keen to do their bit for the environment, when times are tough they can’t make as much progress as when times are better.

“There needs to be some understanding of that as well. The rate of progress on environmental matters is likely to slow over the next couple of years. That’s the nature of life because farmers can’t do things when they can’t pay for them.” @dairy_news facebook.com/dairynews

Dairy price rise pushed out THE TREASURY is ruling out an early end to low

dairy prices.

Speaking to parliament’s finance and expenditure select committee last week, the secretary for the Treasury, Gabriel Makhlouf, predicted dairy prices would stay lower for longer. This conflicts with a forecast a few days ago by MPI that the farmgate milk price for the year to May 2016 would be $5.62/kgMS; Fonterra is forecasting a milk price of $5.25/kgMS. Makhlouf told the committee that dairy prices have fallen at each of the five Global Dairy Trade auctions since the treasury’s forecasts were finalised for the Budget Economic and Fiscal Update. He says Fonterra has twice revised downwards its farmgate milk price for the season just finished.

“While we anticipated continuing weakness in dairy prices in our forecasts, there is now a greater risk that prices could take longer to pick up, with the recovery starting later this year or in early 2016, rather than in the second half of this year as anticipated.”

Makhlouf says while this may not affect production levels and economic activity, it would lower the terms of trade and slow growth in the total dollar value of goods and services.

The current low dairy prices have been offset to some degree by shifts in the exchange rate, Makhlouf points out. The NZ$ has depreciated against the US$, largely reflecting the improving outlook for the US economy and in expectation that interest rates will soon rise there, and monetary policy ease in NZ.

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DAIRY NEWS JUNE 23, 2015

8 // NEWS

Chicory trims costs, expels black beetle PAM TIPA pamelat@ruralnews.co.nz

CHICORY AND its con-

tribution to a $37,000 reduction in feed costs was a highlight in a tough year with the payout drop

Megan and Michael Webster.

for the P3 Hauraki Focus Farm at Ngatea.

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Richard and Gillian Webster. The field day was one of about three held a year which can attract up to 80 people.

Webster Farms is in its second of three years as the focus farm for the P3 Trust, formed by nine farmers to increase farm profitability and sustainability across the plains for the benefit of the community.

P3 stands for ‘Productive and Profitable Plains’ and it has several projects run in conjunction with DairyNZ. A focus at the Webster Farm is testing grasses and feed crops which grow well in the clay soils. The previous Focus Farm – Angus and Karen MacInnes’s property at Waitakaruru – had a focus on mating, DairyNZ consulting officer Fiona Wade told Dairy News. (The field day was one of Wade’s last duties before she moves on to sharemilking.)

The Webster farm saved $37,000 in feed costs in the financial year to May 31, 2015. This was attributed to chicory providing good yields over the summer period (150t) and also replacing maize with PKE: 116t more PKE was brought in than the previous year, but 250t of maize was taken out of the system.

Another calculation showed that had the milk price stayed elevated – at about $6.50/kgMS – the farm would have been $100/ha more profitable than the previous season, partly attributable to the use of chicory.

Chicory has been particularly successful as an interim crop before resowing pastures and this was backed up by other farmers at the field day who were also using the crop.

It requires less handling than maize and the taproot serves well in dry conditions.

“The chicory has been a major success both as a summer feed and in getting our new grass programme heading along in the right direction,” says Michael. “The pasture has had a good strike and we’ve also done 50ha of undersowing this year;

that is all taking shape and looking good.

“We have a far better understanding of feed budgeting and are far more pro-active then reactive. At the moment we have a rolling feed budget update and do a weekly update. We are forever trying to find little scenarios and gains we can make.

“We have a much greater understanding of our business – of where we are and where we’re heading.”

Megan says having to record a lot of information for the Focus Farm project gave them greater ability to make decisions than if they had been flying blind.

“There are ups and downs but we get there in the end,” she says. The success graph is not always a straight curve up.

Milk production targets were not reached as it was hard to justify extra expenditure in this payout climate to chase production compared to the previous year. “Now we are being tested pretty hard as probably everyone in the room is,” Michael said.

Another farmer said after using chicory for three-four years there had been a marked increased in the persistence of new grass after the chicory because it got rid of a lot of black beetle larvae. “We have new grass that is four years old that is still good; going from grass to grass after three or four years we get pretty disappointed.”

With the switch to chicory and more PKE, Michael said he was not sitting on a tractor so much, and the PKE was utilised better than maize.

He said they don’t plan to put in more chicory as they think they have it “bang on”. He said he also thought they had “nailed” residuals and the staff also knew exactly what they were doing with residuals.

The focus for the next 12 months was getting the basics right, doing things better and working as a team. “Rather than doing things averagely, like everyone in this room we aspire to be in the top quartiles. That really drives us,” Michael said.

DAIRY NEWS JUNE 23, 2015

10 // NEWS

Opposition suggests pay out for co-op boss PETER BURKE peterb@ruralnews.co.nz

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Damien O’Connor

tough times.

That’s the message from Labour primary industries spokesman Damien O’Connor. He was responding to news that Fonterra may shed upwards of 1500 jobs in

a restructure, and to the financial problems facing dairy farmers because of the low pay-out and more hard times ahead.

O’Connor says many farmers are concerned about the performance

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She says to ensure Fonterra remains competitive in the market, its pay bands are based on industry standards obtained from independent remuneration consultants.

“Fonterra’s pay bands have never been linked to the milk price. However, short and long term incentive plans can be linked to the cooperative’s financial performance.

“We recognise that we have not met our farmer shareholders’ or investors’ expectations and that we need to significantly step up our performance. That is why Fonterra is undertaking a business review to identify areas where we can accelerate our strategy and improve performance.”

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of farmers. But the staff, though loyal, must be very unsettled.

He says for Fonterra to work through this challenging time will require absolute commitment from all staff, which he cannot see given the cloud of redundancy over them.

“Farmers can accept the fluctuating payouts if they have faith in the company doing the right thing.

This is a very complex company that has a huge challenge.

“If Fonterra can’t explain that in clear terms to their farmer owners and suppliers then they are in trouble and I think that is where we are at. The communication with farmer suppliers seems to be a consistent issue.”

O’Connor says he’s an absolute supporter of Fonterra and says his comments are intended to support farmers and to encourage Fonterra to succeed.

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of Fonterra, its problems, and some of the decisions taken by its chief executive Theo Spierings.

“I suggest Theo voluntarily cut his salary in half as an acknowledgement of his commitment to get Fonterra into a better place.

“The company can’t afford to have farmers who want to leave and… staff who will have to leave.

“The feedback I am getting from across the industry is that there is a growing level of frustration about Fonterra. Farmers are taking a big cut and that’s why I’m asking Theo to share their challenge to get through this. It’s not tokenism, but a genuine commitment to acknowledge the pressure they are all under.”

O’Connor says it’s important the chief executive of Fonterra has his management team and staff behind him and that he has the support

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‘FLATTER’ MOOD AT FIELDAYS DAMIEN O’CONNOR spent four days at National Fieldays, finding the mood “flatter” than in previous years.

He says while he knew of a couple of people who bought big ticket items, he felt most dairy farmers had battened down the hatches and weren’t spending.

It’s not only dairy farmers who are affected by the low payout, he says. Sheep and beef farmers who graze dairy stock are also caught in the downturn. And city folk are also vulnerable. “People in cities need to appreciate the situation because Auckland has a false economy with its house prices. That has them deluded about the economy and where it’s going.

Know your cows better than you know your children.

Problem. It’s cold, wet and dark and you’ve got a whole bunch of newborn calves. How do you know whose calf is whose with any certainty?

Further problem. When you’re seeking genetic gain in your herd, how can you maximise it when there is even the slightest uncertainty in the breeding worth of your replacements?

The solution would seem simple. If you know the genetic make-up of the cows in your herd then it would be a simple matter to match calves to dams. But like all things simple, sometimes it’s easier said than done.

In 2009 we developed our G3 DNA parentage verification programme. Today that programme allows over a thousand farmers to match calves to dams with extremely high accuracy.

At LIC, our business is about improving the genetics of the national herd and figuring out how to verify parentage is an issue that’s very much part of that business.

So records are more accurate, the right calves are kept year on year, and maximum genetic gain is achieved.

Improvement all round.

DAIRY NEWS JUNE 23, 2015

12 // NEWS Wendy Morgan, Seales Winslow makes a point at the workshop last week.

Simplicity key to calf rearing PAM TIPA pamelat@ruralnews.co.nz

THE MAIN message in calf rearing is to keep

things simple, do those things well and pay attention to detail, says Wendy Morgan, Seales Winslow nutrition and quality assurance manager.

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Morgan is presenting 15 Dairy Womens Network (DWN) Successful Calf Rearing workshops around the country; she has already held three in the South Island and kicked off the North Island workshops in Ngatea last Tuesday.

Morgan told Dairy News another key message is that what you do with the first calf should also be done with the last calf, even though there is stress and many jobs to be done.

“Make sure you are finishing all your calves as consistently as possible,” she says.

Morgan told the 40 people who attended the workshop at Ngatea she is excited about calf rearing especially focussing on small changes to see what can be improved in a farm situation without spending more money. She is keen to advise small differences and changes that would improve the calving experiences. It was good to get feedback from the audience who could share their own experiences.

She said she advises on best practice but seminar attendees should not feel pressure to follow all her advice if it doesn’t suit their infrastructure, etc.

“We are talking about best practice; we are not saying you must do everything we say here.” That could make it too stressful and would not lead to successful calf rearing. Anyone with issues should feel free to ask people at the workshops, in the industry or even their neighbours for help.

However, one reason attention was needed in calf rearing is because insufficient animals were entering herds at the ideal body weight: they should enter the herd at two years at about 90% of their mature body weight – for Holstein Friesians about 500kg. A number were coming at about 400kg which was about 75% of mature liveweight.

It is important to plan and make sure everyone onfarm knows what is going on, if you can’t be there someone else may have to take over, she told

the group.

Morgan told Dairy News they had had good attendances at the Successful Calf Rearing events so far. “We’ve been told they don’t normally get people turning up in Reefton and Havelock but we’ve had 20-25 people turning up to those,” she says. The workshops were held last year and people said they enjoyed them so she thinks word of mouth is getting around.

“People turn up to the Dairy Womens Network events because they know they are interactive. They tend to be people who want to help each other and give feedback. And it’s a safe place to ask questions: nobody would say ‘that’s a stupid question’. It’s a supportive group and that’s why we get a lot of numbers.”

Men have attended every workshop. Some people assume men can’t come to DWN events but they are welcome. One man came because his wife couldn’t, husbands and wives turn up together, or sometimes farm workers or owners – all sorts of different people.

Morgan, who lives in Morrinsville, has four Calf Rearing events this week starting in Kaitaia. The workshops continue in the north and south islands until July 22 – see www. dwn.co.nz/events.

The sessions include preparing a calf rearing plan, setting up calf housing and evaluating feed options. The seminar is designed for first-time rearers and the experienced.

Morgan has been working in animal nutrition for 13 years; she studied animal science at Nottingham University, an honours project looking at how different feeds for cows alter milk composition. She came to New Zealand seven years ago, initially working for NRM, and has been with Seales Winslow for two and a half years. She says agriculture does not get much focus or support in the UK. But in New Zealand there are huge opportunities.

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DAIRY NEWS JUNE 23, 2015

14 // NEWS

MPI predicting modest recovery in milk price PETER BURKE peterb@ruralnews.co.nz

THE MINISTRY for Primary Industries annual ‘Situation and Outlook Report for Primary Industries’ (SOPI) forecasts the farmgate milk price for the 2015-16 season to be $5.62/kgMS – slightly higher than Fonterra’s $5.25.

This reflects a modest

recovery in international prices and an assumed 5.4% depreciation of the NZ$ against the US$, MPI says. The milk price is projected to average $6.70/kgMS in 2017-19 due to a rebalancing of global supply and demand and continued gradual depreciation of the NZ$ vs the US$.

But MPI says these price projections are subject to several

uncertainties and risks worldwide including the political situation in Russia and milk production in other countries.

MPI remains overall optimistic about the long term future of the dairy industry. It says the value of dairy exports will drop by 22% in 2015 to just $14.1 billion and says four years will pass before the exports recover to over

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$18b, their level last year.

MPI director of sector policy Jarred Mair says while dairy accounts for 40% of New Zealand’s primary exports, the country is not overly dependent on dairy because it has a very strong mix of other primary products. Though the Chinese market is challenging, South East Asian markets are surging and new opportunities are

MPI is predicting this season’s price to reach $5.62/kgMS.

seen in Africa.

“Where there are big impacts in a global sense we will be exposed because we are predominantly an export nation. We are in a transition period, moving from a commodity base to higher value products – ingredients or consumer products. That is probably the biggest trend we have seen in the last two years and it will continue for the next two-three years.”

SOPI is by and large a statistical document with a range of predictions about each of the primary sector groups. It notes that China now takes 21% percent of our dairy products – way ahead of the mere 8% taken by the USA. It also notes that WMP at 40.2% remains the major dairy commodity exported, followed by butter, AMF and cream products at 15.8% and SMP, buttermilk powder and infant foods

at 13% .

Interestingly, it notes that China is the biggest market for WMP, SMP and butter and AMF products.

The USA is still our largest market for casein products and Japan is NZ’s largest cheese market.

MPI says in the short term, dairy prices are likely to remain low due to weak demand from China and Russia. It says the consumption of dairy products in China and many other Asian countries remains well below global averages. But it notes that increasing incomes, growing urbanisation, relaxation of the one child policy and a growing acceptance of dairy as part of the Chinese diet will contribute to a predicted 30% increase in consumption by 2024.

MPI says Chinese dairy production is also expected to increase, but more slowly than demand.

“By 2024, consumption in China is estimated to reach 63m tonnes of dairy products compared with production of only 48m tonnes. This estimated 15m tonne deficit is well above the 11m tonne import requirement in 2014,” says the report.

MPI says overall, milk solids production in NZ for the year ended May 31, 2015 is expected to increase by 1.8% to 1.86 billion kg due to a 3.4% increase in cow numbers and stimulated by record milk prices during the2013-14 season.

But it notes that percow production is down 1.6%.

MPI forecasts that milksolids production in this new season will fall as lower prices lead to cutbacks in supplementary feeding, but annual growth of 2-3% is expected to resume thereafter. @dairy_news facebook.com/dairynews

DAIRY NEWS JUNE 23, 2015

NEWS // 15

A wonder or a worry?

THE DOWNTURN in

dairy prices is affecting confidence in the sector.

In the KPMG Agribusiness Agenda, the head of global agribusiness for the organisation, Ian Proudfoot, says the extent of the downturn in milk returns for the 2014-15 season was not expected and has sharpened the focus on the progress the dairy industry has made in adding value to milk produced in New Zealand.

He says with more processors for farmers to supply, the increasing competition for milk is raising questions about the future structure of the industry and the necessary regulatory framework.

Proudfoot touches on the issue of the changing nature of the dairy industry with more processors entering the market that can offer attractive packages to supply them as opposed to Fonterra “Many scenarios were suggested, but few had Fonterra retaining more than 70% of total supply, and most had 15-20 companies picking up milk within the next 10 years.

As a result, overcapacity in dairy processing was raised as a real risk to the industry for the first time, particularly given expectations that demand for liquid products will outpace powders into the future.”

He also expresses concerns about the ability of NZ milk to retain a reputation premium in

the market. He says the involvement of Fonterra in a number of milk pools around the world, and greater involvement of international traders in the NZ pool, is a risk.

“People noted the experience of the Australian wheat sector that lost its reputation premium as traders became more involved in the industry and began selling Australian wheat as ‘Grade 1 wheat any origin.’ This would be a real concern if the same happened to New Zealand milk.”

Proudfoot says it is recognised that the regulatory environment that requires Fonterra to be all things to all people presents practical and strategic challenges to the co-operative, and will have to change if their market share reduces. He says the biggest challenge for the industry is how it can more effectively add value to our growing milk supply.

It was noted that the primary focus of the dairy industry over the last 10 years has been production growth. He says even with the value add investments made, this means the proportion of product being converted into specific value add product is now lower than 10 years ago.

“It is wrong to assume, however, that the remainder of our dairy production is being turned into basic commodity products.

We have some of the most sophisticated dairy ingredient processing capability in the world, and our ingredient and foodservice solutions are globally sought.

Over the last decade, the dairy sector has made a huge investment in processing assets to handle the growth in milk production, with most of this going into drying technologies,”

he says As well as a strong focus on the dairy industry, the KPMG report notes that biosecurity, food safety and the need to get more young people into the agribusiness sector are key issues in the minds of business leaders.

SOPI also notes that the need for high speed broadband into rural NZ is a high priority, now ranked

2nd equal.

Proudfoot states that people expect NZ agricultural businesses to deliver value from 21st century markets, yet we’re providing them with only 20th century communication services.

“Fast connectivity in rural areas not only supports economic growth.

It enhances healthcare

delivery, overcomes isolation and enables the unemployed to develop skills and become productive. In my view it was not surprising the issue rose up the priority ranking in this year’s survey,” he says.

The KPMG Agribusiness Agenda 2015 says the dairy industry is changing with more processors providing stiff competition to Fonterra.

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DAIRY NEWS JUNE 23, 2015

16 // NEWS

Awards now open to Auckland farmers FARMERS IN the Auck-

Penny Webster, Auckland Council.

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The awards facilitator, the New Zealand Farm

Environment (NZFE) Trust in partnership with Auckland Council will bring the contest to Auckland and farmers can enter the 2016 event.

NZFE chair Simon Saunders says Auckland, as New Zealand’s biggest urban market, “is also home to a large and diverse agricultural region with

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dairying, sheep and beef farming, forestry, market gardening and horticulture”.

“We look forward to working with Auckland Council to showcase what farmers in the region are achieving in environmental and economic sustainability.”

Auckland councillor Penny Webster, a former president of Auckland Federated Auckland, says the contest will be great for the region.

“Auckland’s large rural constituency on the northern and southern sides of the city is an important part of the regional economy. Anything we can do to help farmers improve their environmental sustainability is good for the region.”

Webster says the competition is also a good way for farmers to show urban Auckland that they take their environmental responsibilities seriously.

Auckland region’s northern boundary spans from South Head across to just south of Mangawhai, and out to Great Barrier Island. Its southern boundary encompasses Waiuku and Pukekohe and reaches across to the Firth of Thames.

Eleven regions are now

involved in the awards, Saunders says. The NZFE Trust is planning to ensure every farmer in NZ has the opportunity to enter the competition.

“Having Auckland on board is a huge step towards being able to offer a complete national scheme.”

Open to all farming and horticultural types, the awards promote sustainable land management by showcasing the work of people farming in ways environmentally, economically and socially sustainable.

All Auckland farmers, including orchardists, vegetable growers and viticulturists, are eligible to enter.

Entrants receive advice from competition judges on how to improve the sustainability of their businesses.

Information sharing is a key aspect of the competition. “Farmers in the Auckland region will be able to share knowledge and experiences with farmers from the other regions involved in the Awards,” Saunders says.

Entries open on August 1. Entry forms are available on the New Zealand Farm Environment Trust website: www.bfea.org.nz

New face in BoP team BAY OF Plenty farmers will see a new face at DairyNZ discussion groups, with the arrival of consulting officer Julian Reti-Kaukau.

He is one of four DairyNZ officers in the Bay of Plenty and will cover eastern Bay of Plenty including Whakatane and Opotiki.

In discussion group activity and events, consulting officers help farmers share knowledge and take information generated by DairyNZ R&D to farmers.

Reti-Kaukau says he is “looking forward to working with farmers as they face their own challenges and opportunities”.

Reti-Kaukau has farmed around the country in various ways.

“I had a good farmer as a role model who told me the best thing I could do, if I didn’t want to go to university straight away, was to farm different soil types nationwide. So that’s what I did.”

Reti-Kaukau has farmed in Kaitaia, Thames, Pukehohe, Palmerston North and King Country over the past eight years and before coming to DairyNZ was an agriculture tutor.

If you’re thinking farm automation, there’s one company thinking the same.

There are 4.9 million cows in New Zealand. That’s a lot. It’s a lot when you’re milking them. And it’s a heck of a lot when you’re trying to increase their productivity and profitability.

Which is where we come in.

At LIC, we started over a hundred years ago, improving the genetics of the national herd. But just as farmers are doing things that they never imagined

ten or twenty years ago, so are we.

In the early 1990s, we developed MINDA® that’s now the standard for over 90% of dairy farmers.

In 2003, we established the Protrack™ automated drafting system that helps farmers work smarter, faster and better. And this year we joined up with DAL, leaders in the technology of in-line milk monitoring systems.

Now we are LIC Automation.

A company devoted to developing industry-leading, end-to-end automation systems for the dairy industry.

If you’re thinking farm automation, there’s one company thinking the same.

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DAIRY NEWS JUNE 23, 2015

18 // WORLD

Record farm production buoys producers AUSTRALIAN FARM production is expected to top A$53 billion this year.

Latest figures from the Australian Bureau of Agricultural and Resource Economics and Science show the total value of farm exports in 201516 as A$41.8b.

“That’s money in the bank for the Australian farming and agribusiness sector at a time when it couldn’t be more important,” says Minister for Agriculture Barnaby Joyce.

Farm production value directly supports the livelihoods of Australian farmers and regional communities and makes a powerful contribution to the national economy and the way of life of all Australians, he says.

“The Australian Government understands the importance of the contribution of agriculture to the national economy year in, year out.

“That is why this government has prioritised the opening of new export markets, reduced barriers

Barnaby Joyce

to trade, prioritised investment in R&D and productivity and reduced the burden of red tape on producers

by A$24m.

The Abbott Government has made free trade agreements with China, Japan and Korea and opened six new live export markets in the last two years.

Joyce says expanding overseas market opportunities for Australian farmers is essential to the nation’s

bottom line. “Australian farmers are trading in a competitive market and many factors affect the prices they receive.”

The National Farmers’ Federation (NFF) sees the record earnings not as a one-off, but as an emerging trend significant to the Australian economy.

The NFF says it is working to maximise Australia’s potential as an agricultural exporter, with the implementation of True Aussie – a premium brand for quality, safe and reliable food products, which will form a unified mechanism to strengthen Australia’s position in export markets.

About 80% of Australian agricultural produce is exported, and agriculture is forecast to remain a strong contributor to export earnings in 2015-16 despite a slight decline in value to A$41.8b. Exports will be reduced as a result of improving seasonal conditions driving up domestic demand for livestock as producers seek to restock, it says.

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AUSTRALIAN FARMERS are welcoming the

Federal Government’s moves to improve country of origin labelling on food.

The Australian Government has completed a two-month industry consultation process; consumers now have the chance to make submissions.

National Farmers Federation president Brent Finlay says public concern over country of origin labelling has resulted in numerous inquiries, reports and proposals in recent years.

“Finally the Government has listened to farmers and consumers on the need to improve the domestic labelling requirements,” he says.

The Government has come up with a series of options that could be used on food and beverage labels with the aim of clearly communicating that the product was made, grown or manufactured in Australia or how much of the ingredients in the product are locally grown.

Finlay says it’s not as easy as it sounds but we must have a system that improves consumers’ understanding of where their food comes from so they can make informed decisions.

Brent Finlay

“From a farm business perspective, labelling laws must be practical to implement, not impose unreasonable costs and must not lead to adverse trade implications,” says Finlay.

“Any improved labelling arrangements must remember that Australia is a net food exporter and must have a system that is equitable and does not compromise our export markets.

“We must also remember that almost all Australian agricultural produce is exported and while this announcement is welcomed for the domestic market we also need to develop a national brand for Australia’s agricultural exports.

“Australian farmers want consumers to have clarity and make informed choices on the products on the shelves and the NFF will continue working with the Government on the arrangements to ensure they are equita-

ble, clear and continue to provide Australian farmers with improved market access.”

Minister for Agriculture Barnaby Joyce said the work to improve country of origin food labelling was to make sure Australians had clear and concise information about the food they buy.

“Many consumers and food producers feel strongly about the need for clearer country of origin labelling,” says Joyce.

“It’s important that people can make informed choices about the food they buy at their local supermarket. We want Australians to have confidence in knowing where their food is coming from.

“Australians have asked for simpler food labelling and the Government has listened; now is the chance for people to have their say on simpler and more logical ways to present the information.”

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AUSTRALIAN DAIRY company Lion last month opened its specialty cheese making facility in Tasmania.

Lion says The Heritage is the largest specialty cheese plant in the southern hemisphere. $150m has been spent on its upgrade.

The plant is now among the world’s most technologically advanced for making specialty cheese. The work has improved the site’s capacity, capability, environmental impact and safety, the company says.

Lion chief executive Stuart Irvine says specialty cheese will be a key value driver for its business.

“This growing category is important to our customers. Lion is proud to be the clear

category leader, with a powerful portfolio of brands that Australians know and love – South Cape, Tasmanian Heritage, Mersey Valley and King Island.

“We have room to increase specialty cheese consumption and maximise the impact of our portfolio, and our strategy is focused on unlocking this opportunity.

Lion’s investment in The Heritage is integral to this, as we work to optimise the performance of our supply chain and achieve competitive efficiency and scale.

“The expanded site will also help us grow capacity and capability to innovate in specialty cheese, ultimately driving higher margin sales that deliver sustainable returns to Lion and through the whole supply chain.”

DAIRY NEWS JUNE 23, 2015

WORLD // 19

Egypt JV to broaden Arla’s reach EUROPEAN DAIRY

co-op Arla Foods and the Egyptian milk processor Juhayna are to form a joint venture to sell Arla products there.

Juhayna Food Industries is Egypt’s leading processor of UHT-milk, yoghurt and juice. But it has limited production of butter, cheese and cream, in which Arla has specialised in the Middle East and Africa.

“It is a good match for

both parties,” says Arla’s senior vice president of the Middle East & Africa, Rasmus Malmbak Kjeldsen.

“Juhayna has a nationwide distribution network, and we are not competing within the same product categories. Together we now get a broader product portfolio, which strengthens the business of both parties.”

Juhayna owns 51% of the new company; Arla

Nestle plant in Tianjin, China.

owns 49% and will manage the business. The aim is to start local production in Egypt.

“We have built our entire business in the Middle East through cooperation with local partners,” says Kjeldsen. “Arla excels at making joint ventures succeed, and that is

a business model we will use to establish ourselves in other African markets as well.”

The new company is expected to start with 40-50 employees and to have about 100 within the next year or two.

Egypt (pop. 90m) has a growing economy and

the purchasing power of consumers is increasing.

Consumption of homemade dairy products is falling as people prefer commercially processed and packaged retail products.

Egypt has a limited number of supermarket chains, but countless small

one-person shops whose stock must be delivered to the door. Juhayna has developed a distribution net covering the entire country.

“Our products will now be able to reach all corners of Egypt. Today our business is merely scraping the surface, but [soon] we

will be able to drastically expand our distribution to reach millions of new consumers,” says Kjeldsen.

The new company, to be named ArJu Food Industries, will start sales in October 2015. Arla expects its revenue in Egypt to exceed $144 million in 2020.

Look forward to this calving season!

Nestle digs deeper in China THE WORLD’S largest dairy company, Nestle is

spending $23 million to boost its ice cream business in China.

The company has opened a new production line in Tianjin to produce its popular Nestle 8Cubes brand, and is increasing its cold storage capacity in Guangzhou.

Nestle 8Cubes, available only in China, is a bitesize snack of individual ice cream cubes with a crunchy chocolate and sesame seed coating.

“This investment will enhance our ability to meet increasing consumer demand for our products,” says Ouyang Kai, vice president of Nestle Greater China region’s ice cream business unit.

“It also underlines our confidence in the long-term dynamics of the China market.”

Nestle has two ice cream factories in China, which produce Nestle brand products as well as the local brand 5Rams.

The 5Rams brand is known for its range of ice cream cones, which include flavours such as purple yam, lychee, and melon, as well as a selection of ice cream sticks in flavours including red bean, green bean and chestnut.

Nestle says it is looking to a long-term sustainable ice cream business in China.

“In the vibrant Chinese market, to expand production capacity and increase investment demonstrates our Chinese ice cream market confidence and determination, and helps us meet growing Nestle consumer needs.

“We constantly strive to meet consumers’ desire for ice cream products of high quality, innovation and safety,” the company says.

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DAIRY NEWS JUNE 23, 2015

20 // OPINION RUMINATING

EDITORIAL

TPP’s future up in the air

MILKING IT...

One rule – yeah right

What now for freebies?

IS THIS another example of the urban/rural divide in New Zealand?

Police in South Auckland are letting unlicensed young Maori drivers off the hook if they catch them driving illegally: instead of fining them they are referring them for training.

Yet farmers caught riding quads without helmets are copping hefty fines. One Blenheim couple were fined $20,000.

What’s happened to ‘one rule for all’?

ARE DAIRY farmers responsible for providing breakfast to needy children? We don’t think so.

With the milk payout falling and little sign of a bounce-back in the near future, many farmers are struggling to break even.

Yet, Fonterra is forking out nearly $20 million for milk for schools.

The management review of Fonterra should be widened to include freebies Fonterra is giving the community; these might be a good public relations exercise but in these tough times every dollar should be returned to farmer shareholders, not thrown at a need the Government must take responsibility for.

Keeping abreast of research

LIKE IT or not, it’s another marketing coup for Lewis Road Creamery.

The owner of the hugely popular chocolate milk is making headlines again. In a bid to raise money for breast cancer research, Lewis Road has emblazoned its blue top 1.5L organic homogenised milk with a red label reading ‘Breast Milk: the cow’s milk that funds the cure’.

For every labelled bottle sold (RRP $6.09) Lewis Road will donate 20 cents to Breast Cancer Cure, the research foundation that originally pitched the idea to the dairy company.

The labelling move is slated by breastfeeding advocates but Lewis Road Creamery says it did not intend to mislead customers.

Consumers think it’s a brilliant marketing ploy.

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SHE WEARS skin and meat every day, is known as Lady Gaga and is the top performer among her peers.

A cow named Lady Gaga has taken home the top prize from the German Holstein Show in Oldenburg, making her the closest thing to a ‘Miss Germany’ in the bovine world.

Gaga beat about 200 competitors from all over Germany and Luxembourg to take the coveted ribbon and be known as Grand Champion for two years.

THEY SAY good things take time.

However, the time taken by Trans Pacific Partnership (TPP) negotiators is testing the patience of stakeholders; doubt is setting in among the 12 countries involved.

A number of deadlines have come and gone; even the socalled ‘end game’ has been with us quite a while. Yet an agreement still seems far, far away.

The recent move by the US House of Representatives to deny President Obama the power to fast-track negotiations has delivered a blow to the faltering TPP talks.

Even the New Zealand Government, once optimistic about TPP despite the passing deadlines, is in doubt.

Back in 2011 TPP leaders committed themselves to concluding a “high quality, ambitious and comprehensive” agreement.

It’s now not clear whether the TPP will live up to this vision.

Most commentators agree that a number of issues continue to hamper the conclusion of the negotiation. One of them is dairy, among the most highly protected product groups globally. For example, Japan and Canada have import tariffs on dairy products exceeding 200%.

The US is also reluctant to open its borders to dairy products from NZ. TPP outcomes must be ambitious, comprehensive and commercially meaningful for dairy and other products; anything less will be unacceptable to NZ dairy farmers.

Free trade agreements are complicated; all countries need to give a little in order to achieve the greater good. But substance must shape the negotiating agenda.

TPP will be completed once negotiators have developed consensus positions to put to ministers. Right now this seems far, far away. With the US turning its attention to presidential election primaries, a two-year delay seems inevitable.

The lack of progress means some TPP economies have already departed from consensus on the main issues.

Australia and Japan, for example, concluded a bilateral FTA that sets a low benchmark for liberalisation and the US and Japan may well have agreed – though we don’t know for sure – that some tariffs will remain.

New Zealanders negotiate trade agreements because we seek advantage as a trading nation. Our domestic market is small and our access to local capital is limited, so we need to look externally for growth and development.

And international markets have not always been kind to NZ. We learned here a generation ago that protection is the worst enemy of innovation and competitiveness. That same penny is beginning to drop in Canada, the US and Japan. Yet their politicians are unwilling to play ball, leaving TPP’s future up in the air.

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DAIRY NEWS JUNE 23, 2015

OPINION // 21

Plan to regain the driving seat, regardless of payout FONTERRA HAS

announced a best-guess payout forecast of $5.25/ kgMS for 2015-16.

The bigger surprise was the final payout for 201415 of $4.40/kgMS, down another 10 cents.

Let’s look at what that could mean for your farm business for the next 12-18 months.

If you have not yet run a cashflow budget for the next 12 months, now is the time. If you do not know where to start, or what prices to use, call your banker and ask him/her to help you.

The sooner you take stock of reality, the better you can make accurate decisions. Banks can be more accommodating if a plan is in place, monitored and adhered to.

Zero-budgeting is a good way to create a budget. This takes time, but it drives better costcontrol. Zero-budgeting means you go through each category in the budget, line-by-line, and cost out what the major items will be. These should be the ‘must-have’ items, not the ‘nice to have’ items.

Setting the budget is the starting point. Monitoring against actuals helps guide you as the season progresses, meaning timely decisions can be made (use of financial packages like Figured or Cash Manager can make this easier).

Given the current payout and likely low prices for 6-12 months, an obvious question centres on what can be done to reduce costs. There are no silver bullets, but careful consideration of costs is a must.

Areas to target vary from farm to farm; each farm has its own areas where the best efficiency gains can be made.

Generally, the biggest cost items should get the most attention, such as feed – 32% of farm working expense (FEW) – which has doubled in the past 10 years from $0.80/kgMS to $1.60/kgMS. At 11% of FEW, fertiliser can also reduce costs.

If soil pH is above 5.8, no

lime is needed. If Olsen P levels are >30-35, phosphate can be withheld for two years with little to no effect on pasture production. And K and S leach, so reductions here should be done carefully, backed up by plenty of good soil test data.

Wages are also a big part of FWE (19%), and this may or may not be able to be reduced. Perhaps the relief milker will be used less this year?

Repairs and maintenance account for 10% of FEW and can be deferred to other years. But this is merely delaying what is normally sound investment, and it should be done with care.

Animal health also needs to be looked at, even though this is lower at typically 7% of FWE. In animal health expenses, large differences exist between farms. Zero-budget this area to cut out the extras.

Ask yourself, did I farm effectively before using this product?

One of the biggest uncertainties we’re now dealing with are significant swings in dairy payout within seasons. Plans made in June can be totally out of alignment with reality six months later, which is exactly what we saw last season.

This highlights the need to monitor budgets and adjust accordingly but it also shows that your farm system needs to be robust enough to handle large changes in payout.

Does your farm system and financial position allow you ride through two tight years and one good year?

I recommend you stick with the farm system that works for your personal and your farm’s physical strengths (ie. as opposed to alternating between systems, according to the current or forecast payout).

Run your farm through the comparative stocking rate tool to see where your farm sits; see if you are under- or over-stocked for the amount of total feed running in the system.

There is a healthy tension between production per cow and per hectare that needs to be found.

To maximise profitability, your farm should be in the range of 75-80kg liveweight/tonne of feed supplied.

Check out DairyNZ’s calculator on their website.

Finally, don’t ignore

the facts, and don’t procrastinate. Seek help from people around you – friends, neighbours and rural professionals.

Get to a DairyNZ Tight Times field day to pick up tips that you can apply to

your farm.

A plan in place and closely monitored should put you back in the driving seat of your business, regardless of payout.

• Darren Sutton is an LIC FarmWise consultant.

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DAIRY NEWS JUNE 23, 2015

22 // AGRIBUSINESS

Volatility new norm for farming RECENT EVENTS

confirm that unexpected change and volatility have become the norm for farming. They highlight the need for farming businesses to get better at measuring the impact of new scenarios for proactive risk management and

enhanced business resilience.

While this requires more detailed planning, the benefit is increased agility to respond to the unexpected in a positive way.

Current fluctuations in dairy prices are a prime example. After

in the last few years.

Understandably, many are struggling to integrate this new trading environment into their budgets and strategic plans.

No matter how well businesses have done their homework, few will have anticipated the extent of change being

record returns last season, prices have now slumped well below the cost of production.

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experienced. It seems we are in a phase where the randomness of factors influencing markets demands a rethink of traditional forecasting techniques.

Success in this relies on a mix of planning for the future, learning from the past while striking a balance between ‘controlling the controllables’ and letting go those things beyond immediate control.

To be effective, budgets must be based on credible assumptions for business performance and market trends. To accommodate volatility these now need to be calculated on product price and cost ranges rather absolute estimates.

This enables quick assessment of the impact of change through budgets that measure ‘sensitivities’ rather than ‘certainties’.

Until now farming businesses have been relatively onedimensional in their focus on product prices as a determinant of profit.

This risks incomplete assessment of business outlook compared to budgeting that places more emphasis on trading margins. Awareness of cost structures against the impact of changing product prices on profit is increasingly important.

Another component of effective forecasting is the ability to learn from history. This applies to everything from climate trends to physical and financial performance.

Obviously technology can make a significant contribution here, however I have seen many situations where people have had simple but effective manual recording systems for what’s happened on farm.

This enables identification of similarities between emerging scenarios and past events. Such information can contribute to a pragmatic ‘been there, done that’ philosophy in the face of challenging situations.

It reminds farmers that while the circumstances confronting their business may be unexpected, they are often not too different

from many of the things overcome in the past.

Recognising this increases confidence and self-belief to overcome adversity.

The final ingredient is commitment to ‘controlling the controllables’. This means focusing on areas of influence rather than getting caught up in issues beyond the operation’s direct control.

An option slowly being adopted by New Zealand operators is the ability to fix trading margins. This involves having certainty about key contributors to cost structures and product prices. An example of this is the recently introduced option to secure guaranteed milk prices for a portion of supply as offered by Fonterra over the last couple of years. Interestingly this is reported to have been undersubscribed.

Taking opportunities to fix revenue complemented by proactive management of fixed interest rates and contract rates for feed inputs is likely to be ‘business as usual’ for farming in future.

This more comprehensive approach to forecasting will enable a more agile and timely response to ‘leftfield’ events. We can no longer rely on extended lead times that enable anticipation of negative trends. It’s now a matter of defining what these might be and designing response strategies that can be implemented at short notice.

When this is combined with a ‘no surprises’ culture built on high-quality banking relationships, best practice staffing strategies and credible professional advice this strategy can significantly strengthen the business.

Yes, farming is becoming more complex.

The big payback from these systems is development of farming operations that can move quickly to capture opportunity that would not exist without change.

• Kerry Ryan is a Tauranga agribusiness consultant.

Contact him at www. kerryryan.co.nz

DAIRY NEWS JUNE 23, 2015

24 // AGRIBUSINESS

Vietnam offers big opportunities – PAM TIPA pamelat@ruralnews.co.nz

VIETNAM OFFERS big opportunities for smaller New Zealand dairy companies, says New Zealand’s trade commissioner and consul general in Vietnam, Tony Martin.

The opportunities lie in both actual dairy products or in products, services and expertise to help Vietnam develop its own dairy industry, Martin told Dairy News.

Vietnam has plenty of arable land and has historically grown products like rice, coffee and tropical fruits. But with 90 million population, growing wealth and changing diets, people want more protein.

“Dairy is a big part of that. Vietnam imports about 70% of its dairy; there is no way they can produce enough to sat-

isfy 90 million people’s demand, so it is a big export market for New Zealand milk powder which is great,” says Martin.

“Longer term, Vietnam wants to push its own production of dairy just to keep up with the demand.

But even though they currently import 70% of their dairy, in 15 years they will probably still need to import that proportion.

“But they need to invest in growing their own dairy production at the same time, so we have a multitude of companies that have fantastic expertise and capability in the areas Vietnam is looking for.”

They need help in establishing good breeding programmes for dairy cattle, developing good milking systems and establishing integrity through supply chains to

manage food safety.

“At all these types of things New Zealand is world class. There are great opportunities for New Zealand companies to partner with businesses in Vietnam and in other countries in similar situations around the world,” Martin says.

Vietnam’s dairy sector is dominated by three big players, one local player and two international companies. The remaining 25-30% of supply is small-time farmers with two-three cattle. To grow the overall size of the market, investors are coming in to challenge the bigger players, Martin says.

A delegation came to National Fieldays representing a big Vietnamese conglomerate with interests in commercial and residential property but it wants to invest in agri-

Vinamilk, Vietnam’s biggest dairy company has a 17% stake in Miraka Dairy, Taupo.

culture and plans a dairy proposition soon. They visited to look at how New Zealand does dairying and our levels of expertise.

Vietnam has a lot of dairy technology and expertise so there are opportunities in consulting, farm management, services and breeding programmes and milking systems – the whole spectrum, says Martin.

The average GDP in Vietnam is about US$2000 so people don’t go to the supermarket and buy three 1kg blocks of cheese each week.

“But certainly in food service there are a lot of fantastic resorts and hotels for the tourist trade that provide great oppor-

tunities for New Zealand companies to export our value added products up there,” says Martin.

“Over time, as Vietnamese consumers and consumers right across the Asia region increase their protein intake there are opportunities for other types of products – yoghurts, cheddars and other protein rich dairy based products.

“At New Zealand Trade and Enterprise (NZTE) we try to find where the pockets of growth are for NZ companies that intend to export to that part of the world.

“If they are persistent and keen to look at a longer term strategy then markets like Philippines,

Vietnam and Indonesia, and to a lesser extent Myanmar, are great for New Zealand type products.”

Although not as familiar with other Asian countries as he is with Vietnam, Martin says he knows the Philippines is keen to increase its own production but faces the same challenges as Vietnam with the climate and does not have as much access to good farm quality land as other places.

“The same formula applies: we produce the best dairy in the world, we have the best systems, milk production, milk quality and food safety and our products are perceived as being premium.

“So in the short term there are lots of export opportunities for New Zealand products in those markets. Longer term we will see more of this trend – our expertise moving from just shipping our product in containers to shipping our intellectual property and our expertise. We are world leaders in this area.

“We have free trade agreements with ASEAN nations so we get really favourable import duties and it is good way to facilitate trade between countries because these countries know they can’t do it all themselves.

“So for the most part they are supportive in helping us to introduce

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DAIRY NEWS JUNE 23, 2015

AGRIBUSINESS // 25

s – trade commissioner dairy company in Vietnam, it has about a 50% market share of consumer product sold in Vietnam and is a famous brand in Vietnam. It has been very successful in expanding distribution and production capabilities. It has about a 17% share in the Maori dairy company Miraka.

“Vinamilk is very smart, has a good connection with New Zealand and it is a huge advantage for

them to have that investment. It gets them much closer to our industry.

“This is part of the trend that will continue.

It makes it interesting and a bit challenging for us because on the one hand we want to increase the growth of our high end, good quality product exports out of New

Zealand. When it gets to market, in some cases it will be on the supermarket shelves competing with other companies we are dealing with on a domestic basis who are trying to increase their own production. We are mindful of this.

“But pointing in the right direction is that over-

New Zealand Trade Commissioner in Vietnam, Tony Martin.

SUPERIOR KOREAN QUALITY

FOREIGN DOESN’T MEAN TOO HARD NEW RESEARCH just completed by Tony Martin shows many New Zealand firms could be missing good export opportunities in emerging markets.

As a masters student, Martin has just completed a thesis with Massey University on how small businesses select their export markets and find partners to do business with.

He focused on the food and beverage sector because of its importance to the NZ economy.

He says there is a trend for smaller NZ companies to select markets they are familiar with rather than consider broader options.

“There’s a level of comfort or familiarity about countries we know more about and are more culturally aligned with, such as Australia, the UK, the US, Singapore and Hong Kong,” Martin told Dairy News.

“They are much more front-of-mind for a lot of our smaller and medium sized companies than, say, Asia, South America or the Middle East.

“The point of the research was to see if that is influencing the way small companies start their internationalisation process. The research told me that when the companies want to actively go out and develop international markets they normally will follow the path of those more familiar countries, so they go to Australia, UK, US and so on.

“But if they get an inquiry or an order for a product from a country they don’t know much about, one they are less familiar with, then sometimes that can be a catalyst to become interested in that country. But it is very rare for them to proactively go out to these less familiar countries.”

Some companies are unaware of the options which would help break down some perceived notions about these less familiar countries. “So when a country has language, or cultural or historical differences, it doesn’t necessarily mean it is more difficult to do business in than a country we are more familiar with.”

NZTE has offices in these countries and people who speak the languages. “We have people who understand the culture and can help to facilitate entry into these markets. The attractive thing about many of these emerging markets, or markets we are less familiar with, is they are growing rapidly and they want products we produce.

“The point of this research is not to open the floodgates and say ‘everyone should be coming to Vietnam’ or ‘everyone should be going to Indonesia’. It is about [indicating to] companies where the opportunities lie and with NZ Trade and Enterprise we follow where the companies want to go and that works well.”

But there is a need to better inform NZ companies about opportunities in markets they are less familiar with.

all demand is increasing significantly, so we have to look at both sides of the equation in developing trade with Vietnam.”

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DAIRY NEWS JUNE 23, 2015

26 // MANAGEMENT The sensor is attached to the cow’s tail and alerts the farmer an hour before calving.

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that tail movement could help anticipate calving.

Four years of product development later, Moocall was launched commercially in Ireland in January 2015. The sensor is said to have won many design awards.

The device is to go on sale in New Zealand and Australia via au.moocall. com and through local distributors.

Non-invasive sensors connected to the cow’s tail detect when birthing is imminent, sending an SMS text message alert directly to two mobile phones. Moocall measures over 600 data points per second to determine the onset of calving, then sends the alert.

To date, Moocall has sold devices to 2500 farms in 16 countries and about 10,000 calves have been born using it.

After receiving the first text message the farmer will have on average an hour’s notice before the cow calves. Easy calvings may result in shorter notice periods and difficult calvings could generate a text two-three hours

before; a second reminder text is sent one hour after the first text.

The calving sensor has an embedded smart m2m sim that can work over different networks, even on remote farms.

Austin says there can be black spots on some parts of a rural farm. “Our calving sensor can pick the strongest network to help ensure a text is delivered at the right time,” he says.

How many Moocall devices does a farmer need?

Austin says one device is adequate for a farm with up to 50 head.

“Farmers know their stock and if they manage the placement of their device well, they can capture as many as six-seven calvings per week with just one device.

“Bigger farms may require more than one unit. Pedigree breeders may also benefit from more than one unit.

“Farmers are less likely to require notifications when the bulk of their herd is calving, as the herd tends to be more closely supervised at this time.”

CALLING FOR HELP Moocall devices are particularly valuable to farmers in the following circumstances: ■■ Early or late calvers (stragglers) ■■ Heifers ■■ Nighttime calving ■■ Pedigree breeds where vet assistance is often required ■■ Farmers with other jobs which keep them away from the farm ■■ Where there is distance between the farmhouse and the herd or calving sheds.

DAIRY NEWS JUNE 23, 2015

MANAGEMENT // 27

Tutsan control dilemma A STUDY by AgResearch

of highly invasive tutsan (Hypericum androsaemum), has found there is no quick fix for controlling and eradicating the weed.

Fertiliser co-op Ravensdown sponsored the study.

Found throughout New Zealand, Tutsan is unpalatable to livestock but can be harmful if ingested. Like St John’s Wort it contains hypericin, which causes photosensitisation and extreme skin sensitivity (hyperaesthesia) in cattle.

In the past tutsan has been held in check by tutsan rust (melampsora hypericorum), but in the central North Island the plant is showing resistance to rust and spreading rapidly in hill country.

“The biggest problem with controlling tutsan at the moment is that the most effective herbicides are toxic to clover, which

is counter-productive in the type of country where this weed is an issue,” says George Kerse, Ravensdown business manager agrochemicals.

“In the absence of other solutions such as biological control, some farms might have to use chemical controls and sacrifice clover growth, though the fact that there is no damage to grass lessens the impact,” he says.

It can take 6-12 months for clover to re-establish after spraying.

Products that contain triclopyr and picloram appear to be the best available option at present, but these still require repeat treatments. Ravensdown’s Eliminate Brushkiller contains both ingredients.

Biological control options are still being explored by the Tutsan Action Group, founded in 2011 and supported by the

Sustainable Farming Fund.

Tutsan Action Group chairman Graham Wheeler says progress on biological controls is promising, but still a way off.

“Most important is that farmers need to deal with the weed as soon as it appears,” he says. “Tutsan isn’t only a problem on poor land and if outbreaks are

desirable species and stock grazing.

“There is no silver bullet available now which can solve the tutsan problem,” George says. “While we will continue to hope for a breakthrough biological treatment, at present chemical control supported by sound management practices is the only option.”

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environmental planning, says consultant Charlotte Glass.

Glass, who this week will lead Ravensdown’s ‘getting started with farm environmental planning’ workshop at the South Island Dairy Event (SIDE), says many regional councils have chosen to use farm environmental plans (FEPs) to ensure farmers meet environmental obligations.

“FEPs are increasingly becoming mandatory conditions for resource consent for particular land uses or practices,” Glass says.

“But if you take time, plan ahead and understand the FEP process, you will see opportunities to optimise your business. Look at it as a successful way to manage environmental risk and future-proof your farm. You can add real value now and in future.”

Glass comments that, for example, GST and National Animal Identification and Tracing, originally thought to be a hindrance, have turned out to be beneficial planning tools.

“When GST returns were first required, it seemed like there would be no benefit, but in fact it helped farmers focus on budget and variance reporting and for many, provided the necessary prompt to focus more regularly on the financial side of the business.”

The SIDE takes place at Lincoln University from June 22 to 24. Ravensdown’s workshop, presented by Glass and Ravensdown farm environmental consultant Anna McLachlan, will walk farmers through the nutrient management and irrigation sections of DairyNZ’s Sustainable Milk Plan (SMP).

The SMP, now being developed, is designed to be a nationwide standard template that meets the requirements of regional councils and milk companies. It is the same as a FEP. The FEP process is new territory for the industry and only a few professionals have the knowledge and training required to produce plans. Regional councils are also at different stages in deciding how to monitor environmental obligations. “It’s a complex picture, so it will take time to develop and refine,” Glass says.

not dealt with [promptly] the weed will spread.”

The study says it is important to control isolated plants and to re-plant bare sites with more desirable, competitive species.

Improving fertility can help prevent seedling growth and this must be supported with the application of fertiliser, oversowing with

There’s no quick fix for the highly invasive tutsan.

Our Area Managers are 100% dedicated to helping farmers produce quality milk We’re well trained and experienced when it comes to dairy hygiene and healthy udders - and want to be part of your team. + We’re all about empowering your team We believe it’s really important to arm your staff with best practice solutions for optimal dairy hygiene and animal health.

Here are some things we can help out with:  Managing on farm costs with tailored teat spray and hygiene systems  Checking your equipment and application  Empowering your staff by training them on chemical safety, mixing and dilution rates, application of teat sprays and farm dairy wash procedures  Trouble-shooting hygiene or mastitis issues Team work, hands-on knowledge, quality milk. It’s a pretty simple formula.

To speak to your local FIL Area Manager, please call 0508 434 569 or visit www.fil.co.nz

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DAIRY NEWS JUNE 23, 2015

MANAGEMENT // 29

Feed data to grow profit from supplements FEED SUPPLIER

GrainCorp Feeds has teamed with independent research and technical specialist Dairy Club to help GrainCorp dairy farmer customers using supplementary feed to achieve maximum profit.

The farmers will have access to Dairy Club’s online milk prediction tool Tracker which measures milk production and shows how they can achieve maximum gain.

Dairy Club research shows that about $200,000 of efficiency and productivity gains for the average farm can be achieved using Tracker, which is the equivalent to adding over $1.50/kgMS to the milk price.

“We feel it is more important than ever to focus on how we can help farmers achieve profitable milk production,” said GrainCorp Feeds general manager Daniel Calcinai. “We will work with customers to identify the potential on their farms

and work on cost effective options for productivity, health and fertility for the short, medium and longer term” GrainCorp Feeds’ territory managers will be able to use Tracker to show farmers what’s happening on their farm, where the gaps are, and then make recommendations for feeding, including when to feed, what to feed, and what that means to them financially.

Dairy Club’s James Hague says the types of feeds used are critical to achieving better feed conversion efficiency from the whole diet.

“In the end, Tracker helps farmers plan and measure feed conversion efficiency and the margins they are making. They’ll see their progress weekby-week which will allow them to make changes quickly to maximise their production.”

Calcinai says it is essential that the investment farmers make into supple-

mentary feed achieves a good return, otherwise it is just a cost.

“This is why we are investing in tools and systems that give our customers the option of increasing support to achieve profitable results,” he said.

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Scholarships take graduates to Holland

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TWO UNIVERSITY graduates are on an expenses-

paid trip to Holland to study herd management via scholarships from CRV Ambreed.

Nicole Steele, Massey University, and Peter West, Lincoln University, will visit the company’s head office in Arnhem to learn about the AI industry and CRV’s herd management work.

Steele graduated MSc (animal science) last year but she won her scholarship in 2012. She says she is looking forward to learning more about dairy systems in Holland and will use the knowledge in PhD studies next year.

“I want to gain more knowledge of the challenges faced by dairy farmers globally, the level of farmer participation in herd improvement schemes and CRV’s work in disease control and prevention using genetics and breeding.

“Ultimately I want to help New Zealand farmers be competitive with the rest of the world. This trip will help me to get a greater appreciation of the dairy industry across the world, which I haven’t been able to get from my university studies alone.”

West, BSc (Hons), graduated in 2012 and is now a project analyst at Farm Source, a Fonterra subsidiary.

“New Zealand’s dairy industry is coming under greater pressure globally. This trip will provide a chance to learn more about the dairy industry overseas and bring those learnings back to New Zealand,” says West.

CRV Ambreed offers two scholarships each year to an undergraduate science student from Massey and Lincoln universities. Now in its fifth year, the scheme has paid out $150,000.

Colin Templeton (left) and Kim Johnstone (centre) of GrainCorp Feeds, and Ken Winter (right) of Dairy Club at National Fieldays.

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DAIRY NEWS JUNE 23, 2015

30 // ANIMAL HEALTH

Teats help calves growth from day one CALVES THAT suckle

on Peach Teats have higher growth rates than those which don’t, according to trials commissioned by its maker Skellerup.

Calf rearing expert Dr Bas Schouten was in charge of the project – small-scale observation trials on spring- and autumn born calves, the

company reports.

Schouten measured liveweight gain and growth rates in the first seven days, and compared other key calf performance indicators including speed of drinking, curdling, rate of metabolism and lactose absorption.

Dairy farmer and Peach Teat founder Robert

McIntyre says the consistency of results for Peach Teats are familiar to hundreds of rearers who have used them for 20 years.

“They’re the gold standard for discerning rearers… and this is why,” McIntyre says.

For optimising calf development from day one with a view to rear-

ing better, longer lasting heifers with less genetic wastage, good teats are essential.

“A calf that struggles to get started on a teat never catches up. Think of how much has been invested in getting that calf on the ground in the first place, and the expectation of her future productivity;

Dr Bas Schouten

Suckling on Peach Teats help calves growth, according to new trials.

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no wonder using the right teats is a priority.”

If farmers aren’t feeding these calves properly, they’re wasting time and money already spent on producing the calves, and compromising their growth, development and performance.

McIntyre says Peach Teats were used in a recent Swedish study, in which calves were fed specifically for high daily growth rates and achieved up to 1kg liveweight per day.

Peach Teat is designed to simulate natural feeding, squirting milk into the calf’s mouth as during real milk let down, delivering a full mouthful with less effort.

This season Skellerup will donate 10c to the IHC for every Peach Teat sold during June.

The company’s national manager Perry Davis says rearers like the teats because they’re effective, easy to clean and fit virtually any feeder, and they are ideal for sick or weak calves. “With nonvalve teats, milk is often pushed back into the feeder and weak calves can

struggle to get a proper drink.”

But Peach Teats have two valves: a primary flap valve at the back of the teat, which closes when the calf suckles to ensure milk is squirted out the end of the teat; and a secondary valve, which uses transverse slits at the nipple end of the teat to minimise leaking.

This means the calf does not have to work hard getting milk from the feeder.

Davis says the benefits of Peach Teats can be quantified via a few simple questions: how many calves do I plan to have in each pen? how many people do I have available for the job of looking after those calves?

“If you have two staff raising 500 calves, for example, it’s unlikely those staff will get around the calves more than once a day, so they need to know the calves are all drinking well.

“And how experienced are the workers? How much time will they have for cleaning and hygiene?”

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DAIRY NEWS JUNE 23, 2015

FEED/ANIMAL HEALTH // 31

Higher input systems can make money LAST MONTH saw the release of the 201314 DairyNZ Economic Survey, which contains a wealth of data on the average physical and financial performance of 301 randomly selected owner-

operator herds during the 2013-14 season.

It shows that high input farms (system 4 and 5) milked more cows and produced more milk than low input (system 1 and 2) farms. Even though

they had slightly higher expenses and a lower dairy operating profit per kgMS, high input farms had a higher operating profit per hectare because they produced more milk. They also had a greater total

Table 1: Owner-operators Production Systems 2013-14 season.

Farm System % feed imported

1 & 2 (Low) Low input, grass or 4-14% for dry cows

Effective area (ha) Peak cows milked Stocking rate (cows/ha) Kg milksolids sold Milksolids per ha Milksolids per cow Dairy grass farm revenue ($/kgMS) Dairy operating expenses ($/ kgMS) Dairy operating profit ($/kgMS) Operating profit ($/ha) Total return on assets (%) Total return on equity (%) Growing in equity (%) Closing term liabilities ($/ kgMS) Debt to asset (5)

3 (Medium) 10-20% for dry cows & to extend lactation

4 & 5 (High) More than 20% imported feed

131.2 334

146.8 413

153.1 474

2.5 115,093 877 345

2.8 156,397 1,065 379

3.1 195,442 1,277 412

8.34

8.29

8.27

4.95

5.13

5.29

3.39

3.16

2.98

2,905

3,363

3,797

9.0%

9.5%

11.1%

12.1%

12.6%

15.7%

8.9%

9.7%

13.6%

21.90 42.0%

19.63 43.1%

18.69 41.4%

Table 2: Average Profitability of Owner-Operator Production systems from 2005-06 to 2013-14.

Growth in equity and return on equity figures are from 2006-7 to 2013-14.

Farm System

1 & 2 (Low)

Operating profit ($/ha) Total return on assets % Total return on equity1 % Growth in equity1 % Closing term liability/kg milksolids

3 (Medium)

4 & 5 (High)

1,848

2,062

2,274

7.0

7.0

7.7

7.8

8.5

9.8

8.0

8.2

10.0

19.23

18.60

18.54

return on assets, lower closing term liabilities per kgMS and the lowest debt to asset ratio (Table 1) when compared to low and medium input systems.

While it is interesting to look at a single season’s data, long term average performance is even more fascinating. An analysis of the past nine seasons shows that on average, high input systems made more money and had the highest growth in equity and the lowest closing term liability. (Table 2) Intensification is not wrecking the profitability of New Zealand dairy systems. The most profitable farm system is not necessarily the one with the lowest inputs or the lowest cost per kgMS. There are huge variations in the profitability of all dairy farm systems.

Every farmer must find the optimum balance between controlling costs and maximising milk production in their system.

Whether you have chosen to operate a low, medium or high input make sure you do it well.

• Ian Williams is a Pioneer forage specialist. Contact him at iwilliams@genetic. co.nz

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DAIRY NEWS JUNE 23, 2015

32 // ANIMAL HEALTH

BCS app launched at Fieldays A TOOL allowing farmers

to body condition score cows on a smartphone was launched by DairyNZ. The app gives farmers the opportunity to use DairyNZ’s ‘Body Condition Scoring Made Easy’

DairyNZ launched the BCS app at the Fieldays.

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DairyNZ animal husbandry specialist Andrea Henry says condition scoring cows is such an important job, DairyNZ wanted to make it as easy as possible.

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DairyNZ looked at other apps in the marketplace and decided that none had everything farmers were saying they wanted, she says. So it created its own.

“The whole idea of the app is to help farmers get better and more consistent at scoring their animals,” says Henry. “Using this app, when you are scoring animals you will be more accurate. And you are more likely to do it often because it’s easier.”

DairyNZ’s ‘Body Condition Scoring Made Easy’ field guide has been built into the app so users can compare the field guide’s pictures to the cows in front of them.

She says feedback from farmers showed how important it was to be able to compare a visual guide to the real cows in the paddock.

“What farmer has the field guide with them 24/7?

But they do have their smartphones with them – it’s very rare these days for people to be away from their phone. You’ve literally got the information at your fingertips.”

The app enables a farmer to follow a cow’s progress through the

season and to graph the progress of the entire herd. The app can flag cows and enter their identification numbers into the phone.

“Let’s say you drive past a cow and see it is lame or you see three cows in heat. That’s fine but can you remember which cows they are? Now you can act immediately.”

The entire herd can be identified on the app with their individual IDs. The information gathered by the app on any particular cow can then easily be emailed on.

DairyNZ brand marketing manager Andrew Fraser says the body condition score app follows DairyNZ’s other app, its farm dairy effluent calculator, but he’s expecting the BCS app to be more popular. “The dairy effluent calculator is something you do every once in a while; this new one is going to be used all the time.”

The development of more on-farm apps is inevitable, and a pasture assessment app will probably be the next one to be made available after the body condition score app, he says.

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BODY CONDITION score (BCS) is to be included as a new trait in breeding worth (BW) from February 2016, says DairyNZ. Breeding worth provides farmers with an economic measure of genetic merit (profit per five tonne of dry matter) and is calculated for all dairy cattle.

During a national breeding objective review in 2012, BCS (particularly late lactation BCS) was identified as an important trait with economic value to farmers.

NZ Animal Evaluation Ltd (NZAEL), a subsidiary of DairyNZ, estimates the economic value of BCS to be $106 per BCS score. It was also determined that rates of genetic gain in BW would be enhanced by the inclusion of the BCS breeding trait. This view is supported by national and international review.

NZAEL manager Dr Jeremy Bryant says the economic value of BCS comes from two components.

“The first and main component is the increased value of a cow with good condition milking well into late lactation, rather than drying her off early because she is too thin.

“The second component is the reduced cost of a cow maintaining condition, as compared to a cow that loses condition in the spring, and as a result requires more feed through autumn or winter when it is more expensive.”

Bryant says both these components are based on the value of increased BCS in late lactation rather than early in lactation.

DAIRY NEWS JUNE 23, 2015

EFFLUENT & WATER MANAGEMENT // 33

Effluent app aids nutrient loadings, application rates GOOD EFFLUENT

management requires having a well-designed system and processes for workers to ensure the effluent collected is applied to pasture in the right quantity at the right time, says DairyNZ. Get it right and your farm will save fertiliser, improve soil condition, prevent animal health issues and comply with council rules or resource consent.

The key to all this to understand soil water deficit – essential to prevent ponding and runoff and to avoid applying effluent to saturated soils.

Soil water deficit is

the amount of water, or effluent, which can be applied to the soil before it reaches field capacity (the amount of water held in the soil after excess water has drained away).

If effluent is added at field capacity it will likely result in ponding, runoff or leaching.

According to DairyNZ, the average dairy cow produces about $25 worth of nutrients annually as farm dairy effluent (FDE) – from a 400 cow dairy herd about $10,000 of nutrients annually.

If these FDE nutrients are used effectively the fertiliser bill can be much reduced.

The DairyNZ farm dairy effluent spreading calculator (an app) allows farmers to easily calculate nutrient loadings and application rates for dairy effluent based on a number of customisable inputs.

This means farmers can manage the application of their effluent nutrients with greater precision.

There are two calculators in this app: a quick calculator for spray irrigation systems such as travelling irrigators and sprinklers, and an advanced calculator for slurry tankers and muck spreaders. It is also available as an Excel

spreadsheet if you prefer to use your computer.

The effluent app allows farmers to calculate nutrient loadings.

ASK THE RIGHT QUESTIONS ON SOIL, LANDSCAPE WHEN DECIDING whether to install or upgrade a farm dairy effluent system it’s important to ask the right questions, gather information and take professional advice.

You want the system to work well for many milking seasons so consider the following: ■■ Find the right person for the job ■■ Establish your system requirements ■■ Make sure future plans are

taken into account.

Most crucial is how landscape and climate affect effluent management. The main factors in the success of effluent application are: ■■ Soil drainage characteristics ■■ Landscape contour ■■ Rainfall and soil moisture deficits.

Management practices need to be matched to soil and landscape risk to prevent loss of effluent into the surrounding

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New Zealand soils are classified in high and low soil risk categories for farm dairy effluent application.

New technology allows for the development of tools and programs to help with effluent, water, and nutrient management decisions on farm.

Many expensive regional council fines can be avoided if a fail-safe device is installed on an irrigator.

DAIRY NEWS JUNE 23, 2015

34 // EFFLUENT & WATER MANAGEMENT

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them money of fertiliser.

Developed by agricultural scientist and entrepreneur Bridgit Hawkins, chief executive of ReGen, the app enables farmers to know the exact status of their farm before they turn on their effluent irrigator. It equips them to manage effluent, nitrogen and water using data collected from their farm and analysed by a software package. The information comes to them daily.

Farmers using the system buy, in effect, a weather station that measures rainfall, soil moisture, temperature, wind speed and direction.

These devices are connected to a telemetry device that automatically sends this data into the cloud every 15 minutes via the cellphone network and from there ReGen analyses that information and sends the results back to the farmer.

“What we do is ask ‘what is the capacity of your soil? what are your consent conditions?’ Then we say ‘for you today it

ReGen chief executive Bridgit Hawkins.

“When you have staff or multiple farms you can’t be everywhere all the time, so it’s ideal to have a system working in the background and providing sound advice every single day and then being able to monitor what happens.” is appropriate to irrigate effluent’.

“Having done the cal-

culations with our software we can send a text to the farmer saying, for

FROM REPOROA TO THE CLOUD BRIDGIT HAWKINS grew up on a sheep and beef farm at Reporoa and later graduated in ag science from Massey University.

Much of her career was in science commercialisation, working for AgResearch, SpectraNet and the Danish Technology Institute.

She was able to found ReGen when sensing technology, telemetry, the internet, broadband and cell-

phone networks improved. These technologies enabled this app to become a reality.

“This technology was enabling decision support to be done in a different way for farmers.

ReGen grew out of saying ‘we could do this and that, and farmers could make better decisions if they had access to real time information.”

example, ‘today you can irrigate 4ms’. And if he follows that recommendation he can be sure he will not risk breaching conditions on leaching run-off and is following best practice.”

Hawkins says of the 150 customers they have so far, most are early adopters and innovators – people who understand the value of information.

Many are Southland farmers, whose drivers are the clear compliance requirements of the regional council. The

ReGen system enables those farmers to meet those requirements.

“It’s hard for farmers to meet some of these requirements. Our system takes out the fear factor – the worry about inadvertently making a mistake and getting fined for it.

They are unsure about all the things that need to be managed.

“When you have staff or multiple farms you can’t be everywhere all the time, so it’s ideal to have a system working in the background and providing sound advice every single day and then being able to monitor what happens.”

Hawkins says historically a lot of farmers have relied on their intuition and observation to make decisions, but that is not the only way. Having a tool

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DAIRY NEWS JUNE 23, 2015

EFFLUENT & WATER MANAGEMENT // 35

s can avoid a fine working overnight in the background analysing data as ReGen does is another option.

“While we are a software business, our focus is that it must work for the farmer. So all our developments -- not just the effluent and nitrogen products, but also our irrigation programme – have started with the farmer.

We’ve asked them what their challenges are and about the environment they work in and how they take in information, when and how.

“Then we’ve worked back from there. Rather than starting with the technology and saying ‘we can do all these great things’, we have asked ‘what do you need as a farmer to manage better?”

The system is self-monitoring and can check sensors and detect and deal

with problems before the farmer even knows about them.

Subscribers to the ReGen service are farmers who realise the value

ReGen has already secured 150 customers.

of good data driving productivity and profitability; they don’t necessarily have to be very tech savvy, Hawkins says.

“We have some users who are not overly competent on their computer but what we deliver is simple

– through a phone; it’s not a high tech product. There is a tremendous amount of technology underneath it, but how the user interfaces with it is simple: all you have to do is turn on your phone and you have access to the information.”

The cost varies to buy into the service: the initial cost of the weather station is $4000-$7000, a subscription to the effluent and fertiliser systems is around $1900 and the irrigation system is charged on a per hectare basis. As

ALSO GOOD AS A FERT APP THE REGEN app also allows the user to maximise the use of fertiliser.

Bridgit Hawkins gives a typical example of a farmer planning to spread urea, for which the app has a standard price.

The farmer can select an application rate of, say, 75kg/ha. “He then presses the ‘calculate’ button and, based on his soil condition and the proposed fertiliser application rate, the app comes up with the likely response rate he’s going to get.”

The app can then work out the value of putting on fertiliser to grow grass as opposed to the cost of buying in supplementary feed.

“We are trying to enable farmers to know when nitrogen is a good cheap source of feed and how to use it sustainably. It’s not fertiliser advice, it’s giving them the tool to make an informed decision and maybe look at some alternatives.”

While the app is popular with

well as the daily text, subscribers receive a monthly report so they can analyse their data.

Expensive? “If a farmer was to get a fine for wrongly spraying efflu-

dairy farmers, it is also a valuable tool for horticulturalists, especially for, say, frost monitoring. And it has wider uses in precision agriculture.

“In the broader sense it asks ‘how can we make the right inputs at the right time?’ Some of the solutions we are starting to scope up are building a growth model for particular crops.

When you know what is driving the stage of growth of a crop such as maize, because you are measuring air temperature and soil temperature and rainfall you can make some timely decisions.

“When a crop like maize gets to a certain stage that’s the time you want to be applying fertiliser as opposed to having it set on a calendar basis because every year is different.

“We are enabling efficient use of a resource to get a better outcome for the farmer and a better environment,” she says.

ent on their property that could easily be $5000 or $10,000,” Hawkins says.

“Then there’s the savings for using effluent efficiently and the same for irrigation. In the case of

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DAIRY NEWS JUNE 23, 2015

36 // EFFLUENT & WATER MANAGEMENT

Making better use of farm nutrients

Euro submersible pumps now lasting longer

LIC IS joining forces with Precision

Farming Ltd, supplier of GIS-based systems that manage the application of farm nutrients to optimise pasture growth including fertiliser and effluent.

Precision will share its nutrient management functionality for integration with the co-op’s Minda farm management system used by 90% of dairy farmers.

LIC chief executive Wayne McNee says it would provide enhanced information for farmers about their pasture and feed availability.

“With a predominantly grassbased industry we recognise pasture management and feed optimisation is important.

“Seamless integration of farm information like fertiliser, effluent, water and irrigation will complement our existing pasture management tools in Minda.”

Precision Farming’s system records spreading and nutrient activity on 4500 farms, based on data generated by 720 of the country’s

Brendon Cane (Precision Farming), left, and Wayne McNee (LIC) signing the agreement at National Fieldays.

estimated 800 commercial fertiliser spreading trucks.

Precision Farming also markets fertiliser monitoring GPS equipment direct to farmers, for use on selfspreading equipment and for GPS guidance and control of tractors, sprayers and harvesters.

Brendon Cane, managing director of Precision Farming, says the partnership will make it easier, faster and more profitable for more farm-

ers to use integrated farm management information to support better decisions.

As a contractor himself, he appreciates the benefits of reducing the time and cost, and often the guesswork, in improving pasture performance as part of overall farm profitability. “With the current economic environment, finding any inefficiencies in operating expenses is more important than ever.”

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DELAVAL SAYS it has updated its line of submersible pumps, making them more robust and long-lasting.

Submersible pumps are taken for granted until the day they break down, the company says.

“Submersible pumps are the forgotten heroes of many farms, pumping away water from silage tanks, pumping urine or in manure sewage tanks, pumping sewage water or excess liquids in the milking parlour.”

DeLaval offers a stainless steel pump that suits areas of high acidity such as pressed water from silage or urine drainage. The pumps are lighter than the rest of the DeLaval line, making them easier to move.

All the company’s pumps are mobile, easy to install and easy to operate. The cast-iron pumps have their motor in an oil-bath ensuring that the pump can work in tough environments without overheating.

The cast-iron pumps can also deal with thicker water and are often used in

slurry pits and similarly difficult conditions. “They work efficiently and effectively, doing an extremely important job, night and day for years and years,” says Eva Ramvall, head of farm supplies at DeLaval.

“It’s critical to be able to remove sewage water, urine or liquid-rich manure on a farm, so everything can function smoothly. It’s not a glamorous product in that sense but it is an important one, which is why we emphasise the need for robust and hard-working pumps. ” DeLaval’s newly updated line of submersible pumps is intended to improve on the pumps it has sold for many years.

“Our pumps should go unnoticed.

They should just work and work and work,” says Ramvall. “Nobody wants a pump breaking down. All our pumps are easily moved but we don’t want farmers having to move them unnecessarily so we make sure they are reliable and do the job well.” www.delaval.co.nz

DAIRY NEWS JUNE 23, 2015

EFFLUENT & WATER MANAGEMENT // 37

Single-operator spreader gets job done, gets going MARK DANIEL markd@ruralnews.co.nz

TOPLINK MACHINERY exhibited at National Fieldays the Tramspread contractor unit, a self-contained system that enables one-man operation and the ability to arrive on farm, set up quickly and spread effluent, then pack up and move to the next job.

Built around a tandem-axle box section trailer, the unit comprises a 900L priming/holding tank initially primed via a vacuum pump driven by a small Honda engine.

The main pumping unit, a Bauer SX2000, has 150mm inlet and twin 125mm delivery outlets, and offers a typical output of 120-130m3/hour depending on material consistency and terrain. This unit is driven by a reconditioned John Deere engine typically sourced from a combine breaker in the UK. At the front of the unit cradles carry the twin spool of delivery pipe, each with a capacity of 1000m of 100125mm pipe or 600m of 150mm. Connection is then onwards to a tractor

linkage mounted dribble bar assembly in the paddock.

For one man operation an optional remote-control system for the pumping station is offered.

Once the field work is completed, a 170m3 compressor system takes care of blowing out the lines, before the move to the next job.

Tramspread contractor unit at the National Fieldays.

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38 // EFFLUENT & WATER MANAGEMENT

Free environment plan on offer Farmers in Waipa River catchment are being offered free consultancy.

DAIRY FARMERS in the Waipa River catchment are being offered free consultancy to develop environmental plans as part of a project to improve the health of the Waikato River.

The joint effort by DairyNZ and the Waikato River Authority is intended to improve nutrient and sediment loads in the Waipa catchment and encourage more efficient water use.

The Sustainable Milk Plan (SMP) project will be in stages, beginning in spring in the Mangaotama, Mangopiko and Kaniwhaniwha catchments. It is supported by Waikato Regional Council, Waipa District Council, Federated Famers, local iwi, milk supply companies, the fertiliser industry and the New Zealand Institute of Primary Industry Management.

DairyNZ is managing the project, under which a free environmental plan will be handed to farmers

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“We’ve created a model that supports farmers to make changes through advice and customised plans. We talk to them about their farm… to set out a plan farmers can see will work for their farms and for the local environment.”

The project is demonstrating to policy makers and the wider community that farmers are committed to sustainable dairying and improved water quality, says McHaffie.

practice and becoming more efficient in the use of resources which can bring environmental benefits and save money by making operations more efficient.

“They also know that having a sustainable milk plan will give them a head start in coping with changing regulations.”

Project manager Nicola McHaffie says SMPs are not to tell farmers what to do, but to help them identify risks and find practical solutions.

More funding ANOTHER $6 million is available for clean-up projects in Waikato.

The Waikato River Authority last week opened its fifth funding round for river clean-up projects, inviting applications online via its website (below). Applications will close August 14.

As part of the funding process the authority has also reviewed and published its ‘Funding Strategy 2015’, also available online.

Authority co-chairs John Luxton and Tukoroirangi Morgan say funding priorities include the Waipa and lower Waikato River catchment, wetland restoration and projects to improve water quality.

“Our funding strategy is relatively unchanged from the previous year,” says Luxton. “We know many projects require multi-year planning and delivery, so we know we must be consistent in our approach to signal what is important. This will ultimately give the best outcome long-term for the river,” This year’s funding strategy statement also sets out the river authority’s fencing standards for funded restoration planting. It includes sheep and cattle and electric and standard fencing.

Where project money is spent on land improvement a covenant may be required. This is more likely when project funding exceeds $100,000.

To date the river authority has given $22 million to 141 projects over four funding rounds from 2011. www.waikatoriver.org.nz

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to help them assess their businesses for environmental risks and opportunities and help them plan for the future.

The plan outlines specific achievable activities agreed with farmers, developed by DairyNZ consultants who then support the farmers in implementing the plan.

DairyNZ spokesman Adrian Brocksopp says a similar project in the Upper Waikato catchment saw 640 farmers develop sustainable milk plans.

“Our Upper Waikato project was… a good example of farmers caring for water. It was a finalist in the Ministry for Environment and Department of Conservation’s Green Ribbon Awards.

Farmer involvement in the project wasn’t compulsory but those in the upper Waikato realised that taking part paid dividends for their own farms, the river and for the wider catchment.

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DAIRY NEWS JUNE 23, 2015

EFFLUENT & WATER MANAGEMENT // 39

Perceptions, reality must align GOOD MANAGEMENT

practices for water quality in Canterbury are detailed in a new document published last month.

The contributors are the primary industries, Environment Canterbury, AgResearch, Plant and Food Research and Landcare Research.

The document is a key part of the Matrix of Good Management (MGM) project for Canterbury.

Federated Farmers’ environment spokesperson Ian Mackenzie, one of the MGM group, says public concern about water quality and environmental stewardship is prompting farmers to show they

are getting land, plant and nutrient management right.

Central to this is “good management practice”, published in the MGM summary – “the first of its kind,” Mackenzie says.

“This document goes beyond a list of practices good for water quality; it outlines good management practices that all farmers, regardless of sector, are expected to achieve.

“As a first step to get all farmers up to a high standard of environmental awareness, we needed to agree as a sector what good management practice looks like. We have to involve farmers in that process to

help us define it in practical terms.

“We are now well on the way to getting industrywide agreement on what ‘good’ looks like in farming that protects water quality.”

Mackenzie says the practices published list the outcomes farmers anywhere in NZ could reasonably be expected to achieve.

“The summary arises from 18 months of discussions at farmer workshops and with individual farmers, rural professionals and industry representatives.

We’ve tested this with different groups including leading farmers to make sure it’s practical and do-

able. We want to get consistency in everyone’s approach to this topic.

“It’s tough for farmers if they keep getting mixed or confused messages from different bodies.

“We hope this document will give farmers certainty on what they need to concentrate on to lift environmental performance.

The public can also see the kind of responsible farming practices needed to protect water quality,” he says.

Industry, government and community leaders have approved the practices. They include: Locate and manage farm tracks, gateways, water troughs, self-feed-

ing areas, stock camps, wallows and other sources of run-off to minimise risks to water quality.

Manage the amount and timing of fertiliser inputs, taking account of all sources of nutrients, to match plant requirements and minimise risk of losses.

“The details on how exactly the good management practices will be used and reflected in council plans and policies are still being worked out with everyone. Their successful uptake will need to be underpinned by industry extension programmes for farmers and supported by farm environment plans,” Mackenzie says.

Ian Mackenzie, Federated Farmers

Dairy effluent solutions!

Croppers offered better plan CANTERBURY CROPPING

farmers now have access to a Farm Environment Plan (FEP) template developed especially for their farm system .

The Template for Arable Enterprises has been developed by FAR and approved by Environment Canterbury as meeting all the requirements of Schedule 7 of their proposed Land and Water Regional Plan. This means cropping farmers now have access to an FEP which recognises the intricacies of their enterprise. It is hoped the template will be acceptable or easily adaptable for other regions.

The template was developed

by Diana Mathers, FAR’s research manager for farm systems, who says that because most cropping farmers also graze livestock throughout the year the process wasn’t straightforward.

“There isn’t any such thing as a

‘typical’ arable farm. They may be growing any combination of cereals, herbage or vegetable seeds, or maize. They may be making hay or silage, and grazing sheep, cattle or deer – or not.

“And whatever they do grow or graze is likely to change from year to year, and even within a year, depending on markets and weather patterns. This required devising a template that would meet prescriptive regulatory requirements, but be flexible enough to accommodate the ever changing rotations of a cropping farm.

“We wanted our FEP to be as short and easy to fill in as possible, and we have finished up with an interactive template that can be downloaded and filled in on a computer or, for those who prefer it, printed off and filled in by hand.”

The template is approved by Environment Canterbury’s Farm

Nick Pyke

Environment Plan assessment panel, whose chief executive, Bill Bayfield, says they are impressed by its quality and by the detailed guidance notes produced to go with it.

FAR chief executive Nick Pyke says a farm environment plan specifically designed for arable farms is important as it recognises their unique requirements.

“Arable farms are many and varied and can contain several management blocks. This template allows farmers to clearly identify any risks associated with management practices such as irrigation, nutrient and effluent use, and other potential problem areas such as silage or offal pits. We have also included a farm biosecurity section, which is not a requirement, but which many farmers may wish to consider.

“We have asked some of our growers to ‘test drive’ it, to ensure it is practical and easy to use, and their feedback has been positive.

Also we plan to run workshops in the next few months to introduce growers to the template and help answer any questions on filling it out.”

The template is available on the FAR and Environment Canterbury websites.

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DAIRY NEWS JUNE 23, 2015

40 // EFFLUENT & WATER MANAGEMENT

Pipeline friction effects overcome by diameter MARK DANIEL markd@ruralnews.co.nz

EFFLUENT HAS become a

big topic over the last few years, with major pressure being put on farmers by their regional authorities to clean up their act.

While there has been major investment in effluent ponds and storage tanks, what are the mechanics of getting ‘harvested’ effluent out onto paddocks to unlock its full potential?

There is a common misconception that to pump effluent over any reasonable distance from a storage area you will need a pump with high flow rates and high pressure.

Anyone who has sweetened the missus up by creating a water feature in the garden will know that the flow over the waterfall needs lots of water to create the

desired effect – it’s advisable to use larger diameter hose.

The physics of the matter is quite simply friction. When pumping with a 150mm delivery hose, the pressure drop resulting from frictional losses will be only about 25% of that in a system using a 100mm hose.

Looking at a typical 100mm set-up with a flow rate of 150m3/ hr pumped over 1000m, the likely pressure drop is about 12.6 bar, and the effluent will travel at 4.5m/sec.

Upsizing to 150mm hose with a corresponding set-up will see a system pressure drop of only 4.8 bar, and the effluent travels in the pipe at a speed of 3.04m/sec.

So it stands to reason that if you can reduce your overall system requirements for very high pressures by fitting bigger diameter hoses, there is huge potential saving fuel for the pumping tractor and

a corresponding reduction in wear and tear on the pump and the pipeline, while delivering the required volumes of effluent during the working day.

We can look at the mechanics in more detail by comparing four typical set-ups, all trying to deliver 170m3/hr: ■■ System 1 600m of 150mm supply hose; pressure loss 1.52 bar 400m of 125mm drag hose; pressure loss 2.41 bar Total pressure required 3.93 bar ■■ System 2 600m of 150mm supply hose; pressure loss 1.52 bar 400m of 100mm drag hose; pressure loss 6.34 bar Total pressure required 7.86 bar ■■ System 3 600m of 125mm supply hose; pressure loss 3.62 bar 400m of 100mm drag hose; pressure loss 6.34 bar Total pressure required 9.96 bar

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System 4 1000m of 100mm supply hose; pressure loss 15.86 bar Total pressure required 15.86 bar Note that in examples 1 and 2 the output requirement of 170m3/ hr was achieved with a tractor running at 1450 engine rpm, and the pressure requirement in example 4 is not achievable even with the best products in the marketplace.

So while it’s sensible to do some homework and find the best pump and spreader system for your particular operation, don’t overlook the need for a pipe that can deliver the volumes with low pressure drops.

A 150mm pipe might show a reduced effluent speed in the pipe, but that pipe has a 50% greater carrying capacity and is the easy way to get high daily delivery rates and reduced fuel/ power costs.

■■

The larger the delivery hose, the better.

DAIRY NEWS JUNE 23, 2015

EFFLUENT & WATER MANAGEMENT // 41

Water storage project step closer to fruition

Pond owner first in charge of safety SAFETY AROUND effluent ponds is

essential.

In general the Health and Safety in Employment Act (1992) rules bear on ponds’ operation rather than their design and construction, so they affect the pond owner more than the designer or builder.

The following safety features are recommended for all ponds regardless of size or type of lining: Fencing - All ponds should be fenced with netting to keep stock and children out of the pond.

Escape ladders - All ponds should have

at least one permanently placed ladder or alternative escape means.

Anchor points - Pontoons should have anchor points to improve stability.

Hazards must be signed and people – farm staff, contractors and visitors – told about the dangers.

Safety is also a key during pond construction; supervising engineers have some health and safety responsibility for construction workers during construction.

Preventing injury by accidentally falling into the pond is the main concern under the Act.

GOT YOUR EFFLUENT WOF? THE DAIRY effluent ‘warrant of fitness’ (WoF) is a voluntary programme assessing your effluent system.

It helps farmers understand how to keep a system fit for purpose and capable of being compliant 365 days a year.

A dairy effluent ‘WOF’ looks at your farm’s effluent

consent or permitted rules: are all requirements being met?

It views the nutrient budget and checks nitrogen loadings, and runs the dairy effluent storage calculator to estimate if there is enough storage for the farm effluent system.

Checks are done over the storage facility for signs of

possible risk areas; all catchment areas, particularly standoffs, feedpads and underpasses, are also inspected.

The application depth and rate of the irrigation system are also looked at and it identifies the hazards and notes general health and safety requirements.

IF ANYONE CAN MAKE IT RAIN, RAINER CAN

IRRIGATION NZ has welcome progress on the Wairarapa Water Storage project.

However, INZ chief executive Andrew Curtis says the momentum must be maintained and outstanding issue resolved within 18 months.

“It is encouraging that the Wairarapa Water Storage project has moved to the next stage with two possible sites selected for water storage,” says Curtis.

“To maintain this momentum it is important that any outstanding issues are worked through in the next 18 months before the consenting stage. This will avoid lengthy and costly processes at that point which can jeopardise the project.”

Over the last four years the Wairarapa Water Storage Project leaders have engaged with the community so all stakeholders are taken into consideration.

In addition to this, there is collaborative work being done, through the Ruamahanga Whaitua zone committee, on freshwater management in the catchment.

Both of these, plus clear national policy guidance on water, should result in an optimal outcome for all, including sensible nutrient limits to protect local rivers, says Curtis.

“The potential for the Wairarapa is huge. Introducing a reliable water supply is a big economic driver – as has been demonstrated in other regions like Mid-Canterbury which is thriving and has very low unemployment – and there are many communities in the Wairarapa Andrew Curtis in great need of similar cated new money to the Irrigation wealth and job creation.

“This can be done by further agri- Acceleration Fund and it is being cultural growth and diversification. put to good use funding important There are already the beginnings of community infrastructure projects a significant viticulture and horti- like this one, which will bring much culture sector in the Wairarapa and needed, long term and sustainable with reliable water, production can growth to this large and important be extended to vegetables and seeds. region on the outskirts of New Zea“The government has just allo- land’s capital,” he says.

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42 // EFFLUENT & WATER MANAGEMENT

Get an accredited Non-chemical filter contractor lifts water quality DESIGNING A new effluent system?

Then do it once and do it right with an accredited system design company.

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IRON CONTAMINATION in dairy

farm water supplies causes turbidity problems that lead to water restrictions, says Waikato milking technology company Longveld.

Corrosion and system blockages cause further downstream issues, and water unpalatable to stock lowers milk production.

Longveld in 2014 launched a new type of non-chemical iron filter designed to address these problems and to help lift milk production. The filtration units have flow rates of 12,000 to 200,000L per day.

Called Iron Out, the unit comes with a money-back guarantee to remove iron from water. It provides milking equipment washout water that doesn’t negatively impact milk quality, the company says.

Longveld sales manager John Martin says the Iron Out is easy to use and costs little to maintain. “It will continuously process water 24/365 without expensive chemical dosing or constant maintenance.”

It uses a floating polymer filter media said to be superior to sand or chemical filters. It requires little maintenance, no scalping and the filter media lasts 15 years with an occasional top-up.

Features of the system include high reliability; no chemicals; continuous removal of iron, dissolved gases and suspended solids; adapts to changing iron loadings; and automatically backwashes.

Automatic backwashing is triggered by an increase in resistance through the floating polymer filter media as the iron and other contaminants are being removed. So the system self-adjusts to changing iron loads in the feed water to give stable, repetitive results.

Iron Out is designed for the nonchemical removal of high levels of dissolved iron (up to 50mg/L or 50ppm), dissolved gases and suspended particles.

The company says it also knows about switching to gas in dairy sheds.

“Using a Bosch commercial boiler, the Longveld dairy hot water system is saving farmers thousands on their energy costs and supplying 85oC water whenever it is needed. Once iron contamination

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Martin says gas hot water is proven to save up to half the cost of electric water heating. And 55oC ondemand tap supply “comes into its own for cleaning up after vet visits or for mixing calf feed”.

“You don’t need to turn your cylinder on to get a bucketful of hot water.

It also removes the hazard of taking 85oC water straight out of the cylinder and hauling it around the shed in buckets.”

Waitoa farmer Carl Steiner has installed Iron Out and the company’s dairy hot water system.

Says Steiner, “We quickly saw the economics of it. Once we had processed all the information and analysed the nuts and bolts of it all, it was a no-brainer.”

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DAIRY NEWS JUNE 23, 2015

EFFLUENT & WATER MANAGEMENT // 43

Effluent pond level tester meets council, industry standards A NEW means of monitoring change in the level of effluent ponds is now available to Southland farmers.

The system, used in Waikato and Canterbury, is accurate to 0.8mm says the supplier, Opus Rural Services.

The Opus Pond Drop Test (OPDT) system was developed by engineer Dr Marc Dresser, a rural consultant with the company.

Dresser designed, built and tested the OPDT with engineer colleague Andy Johnson (CPEng). Dresser

now builds the equipment and trains national operators.

“The test provides clear, industry accepted results that indicate with scientific precision whether a pond is leaking and by how much,” Opus says.

“It does this using a 48 hour test calibrated on site in specific test liquid and data logs pond information every ten seconds, taking into account rainfall, evaporation and atmospheric pressure change. Such precision

testing helps ensure dairy effluent systems are compliant and efficient, while offering farmers accurate information to help make informed decisions as to pond replacements or repairs.”

The OPDT can be used on all liners, pond types and with many liquids, providing results in line with or above regional council requirements and industry standards.

The test is approved by Waikato Regional Council, Environment Canterbury, dairy companies The OPDT is already in use in Waikato and Canterbury.

OPDT system designer Dr Marc Dresser.

and DairyNZ. Opus last month met with 30 people from local council and dairy industry agencies to mark the launch of OPDT in Southland. Dresser told the group the OPDT is “desperately needed technology” because regional councils are demanding proof of pond integrity.

The OPDT is calibrated on site in specific test liquid; results are logged in every 10 seconds. Results take into account rainfall,

evaporation and atmospheric pressure change.

There are some prerequisites for OPDT to work.

The pond must be at least 75% full. Dresser says this ensures most of the wetted area of pond sealing surface is tested. There should be no crusting in the pond and there is a wind limit.

Waikato Regional Council says evidence provided by the OPDT satisfies its requirements and “is accepted as an appro-

priate test for assessing effluent pond sealing”.

Environment Canterbury says it has been impressed. “We are satisfied that the OPDT satisfies the requirement

for Canterbury Regional Council in that it provides an acceptable effective standard for monitoring pond level change.” @dairy_news facebook.com/dairynews

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DAIRY NEWS JUNE 23, 2015

44 // EFFLUENT & WATER MANAGEMENT Avoid use of sacrifice paddocks close to waterways.

Protect wet pasture, keep waterways clean BALA TIKKISETTY

SO-CALLED SACRIFICE paddocks are a last

resort option for protecting wet pasture from the effects of stock trampling in winter.

Far better is to use a dedicated, specially built pad to feed out supplements or to prevent stock from wandering all over the farm and damaging pasture along the way.

However, the use of sacrifice paddocks is better

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than no winter stock management at all to protect pasture. So there are recommended ways to minimise the bad effects of using sacrifice paddocks – if they have to be used.

Before detailing those practices it’s worth recapping on why winter stock management to protect pasture is so important.

Winter grazing can markedly affect late winter and early spring feed supply from pasture, damage soil health and undermine the health of waterways.

With soil health, every effort must be made to keep soils in good physical and biological health as they are the farm’s most valuable resource.

Moist and wet soils are less able to support the weight of grazing stock than dry soils and are susceptible to compaction and pugging. Treading on moist soils can lead to compaction and grazing on wet soils can lead to pugging damage. The resulting damage to pastures influences their current and future use.

Compaction and pugging influence the supply of air, water and nutrients to the roots, which significantly affects pasture productivity. It also creates the potential for sediment and nutrients to affect the health of waterways and groundwater.

Research data indicates that spring pasture production may be reduced by about 10% for every 10% of the paddock pugged.

As I’ve indicated, treading damage and compaction can be minimised by confining stock to standoff pads or feed pads at times of greatest risk.

That’s the best bet for minimising pasture and general environmental damage.

For those who cannot do this, selecting a sacrifice paddock on which to stand off stock from other pasture or to feed out is the last resort option.

Usually a paddock with rundown pasture is selected. Ideally, there should be enough shelter available that stock can be continuously housed in these paddocks without undue stress.

As part of ‘on-off’ graz-

ing, stock are moved between normal pasture and the sacrifice paddock.

If used in this way for more than a few days, the sacrifice paddock will likely be severely damaged and require a full pasture renovation.

Aside from that severe damage, other disadvantages of sacrifice paddock use include damage leading to improper drainage, more runoff and a higher risk of sediment, effluent and nutrients getting in waterways and groundwater.

There’s also an increased risk of mastitis and lameness in muddy conditions, and animals may not get their full daily feed requirements.

A further risk is that soil potassium levels can get too high, as a result of potassium being excreted in stock urine, which can predispose calving cows to metabolic problems.

Some of these risks can be lessened by a range of techniques.

Don’t spread feed in the same area all the time. Use different spots around the paddock.

Drag a set of light harrows around the paddock occasionally to help break up excreta. This ensures good exposure to sunlight that will kill pathogens and parasites that could otherwise build up in the paddock.

Avoid use of sacrifice paddocks closer to waterways, property boundaries and significant ecological features such as wetlands, caves and geothermal features.

Direct any runoff in the paddock on to flat ground with rank grass.

When use of a sacrifice paddock finishes, re-sowing should be done after a light cultivation.

With any renovation it is important not to leave it too long before the first grazing. A simple way to check when pasture is ready is to grab some grass between thumb and forefinger and gently pull upwards. If roots come up, wait a bit longer.

• Bala Tikkisetty is a sustainable agriculture advisor at Waikato Regional Council.

Contact him on 0800 800 401 or bala.tikkisetty@waikatoregion.govt.nz

DAIRY NEWS JUNE 23, 2015

MACHINERY & PRODUCTS // 45

Turning ideas into cutting edge design markd@ruralnews.co.nz

WMS TALE OF SUCCESS

WAIKATO

■ Hamilton based

MARK DANIEL

MILKING

Systems (WMS) is the story of the Kiwi business that turns ideas into cutting edge design and technology, and delivers its products to dairy producers throughout the world.

Their efforts were recognised at Fieldays 2015 with the Premier Award for International Innovation won by their Centrus 84 rotary platform.

Taking over four years to develop, test and bring to the market, the Centrus 84 is aimed at operations that milk several thousand cows daily, operating on a 24/7 basis The platform is made as a multi-layered laminate using composite materials that include Kevlar, making it 85% lighter than a typical construction and up to eight times stronger than con-

■ 120 employees ■ Five divisions: head office, rotary, stainless, composite technologies and WMS United States ■ Exports to 30 countries including China, US, UK and Russia.

crete. This construction means reduced maintenance on the running gear beneath and major savings in power consumption, as the platform requires only three 2.2kW drive units.

The overall construction is 14, six bail segments for easy shipment to the construction site, with each unit being self-contained, and incorporating the mounting system needed to attach to the steel ‘I’ beam. When the units are

Dave Cassells, WMS with the award.

bonded together with a high strength adhesive the deck connects directly to the ‘I’ beam without the need for any steel substructure. The composite nature of the platform makes it impervious to urine or dairy shed chemicals, so it is guaranteed a long working life.

The individual bails are of heavy duty construction in generous dimensions that suit typically larger framed northern hemisphere cows. Underfoot, spe-

cially formulated mats give comfort for the cows and make for a quieter milking environment.

Rotational speed is controlled by a Schneider variable rate system directing the three motors that transmit power via drive rollers in contact with both sides of the ‘I’ beam. WMS’s pivot rollers keep perfect alignment between the platform and the ‘I’ beam: 100% contact area maximises performance and mini-

mises wear and tear.

Summing up the company’s win, Dave Cassells, executive manager international sales and events, said “I’ve been in the business for 40 years, and I’ve seen rotary milking systems evolve from the old steel ones to what we have now.

“Your gut tells you the Centrus 84 is a unique idea. In a nutshell it’s moved the bar higher, its cutting edge technology.”

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Winter HerdHomes® shelters users throughout New Zealand enjoy control over their winter grazing without the damage associated with wintering on farm. Feed costs are down due to far higher utilisation and lower maintenance requirements plus calving is in a warm dry environment.

Make the decision, build a HerdHomes® shelter and take control of your winter.

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DAIRY NEWS JUNE 23, 2015

46 // MACHINERY & PRODUCTS

Standout innovators carry away prizes MARK DANIEL markd@ruralnews.co.nz

AS USUAL the Fieldays Innovations area drew large crowds, showcasing the that special breed of New Zealander who comes across problems, thinks out a solution and builds it, then has the courage to

let it be poked and prodded by the public. The following stood out: Ag Oxi-Jet from Felton: winner Tru-Test Grassroots innovation Award.

This wash-down nozzle introduces air into the water flow as it passes through a venturi in the body of the nozzle, so increasing the volume of

water. This saves up to 40% of the water needed for effective wash-down.

Made of anodised aluminium, the nozzle has a sturdy feel and should endure the rigours of the milking shed and collecting yard.

Fence Step, Bechler Steel: winner Tru-Test Grassroots Merit Award.

This unit uses a galvanised steel step and clamping system that can easily be fixed to round or square posts in areas where people need to get over

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DAIRY NEWS JUNE 23, 2015

MACHINERY & PRODUCTS // 47

Safer storage tanks for AdBlue TONY HOPKINSON

WITH THE increasing use of AdBlue as an additive to diesel powered vehicles to reduce exhaust emissions and with more storage needed, Sebco Fuel Storage Systems launched a new range of storage tanks at National Fieldays.

“Contractors and trucking firms and smaller operators were using 20L and 200L containers with an overriding concern for contamination,” said Sebco director Ed Harrison.

All modern tractor and higher powered truck engines are now believed to be using AdBlue as an additive to reduce emissions, including John Deere which recently

changed its engine configurations. Fonterra’s tanker fleet is believed to be using it.

To avoid confusion Sebco has chosen a colour scheme for the AdBlue tanks that is a reverse of the colours of the diesel tanks: a blue container with a grey lid signals AdBlue.

“Major damage can be caused to truck and tractor engines if AdBlue accidently enters the diesel system.”

All AdBlue dispensing stations have electric pumps, either mains operated or with 12V rechargeable batteries and have electronic fuel level indicators with optional measuring and reporting options.

The pumps are designed to pump Ad-

Blue which has different resins and consistency from diesel and pumps slower for the reduced volumes.

The AdBlue dispensing stations come in three

sizes; 1300L, 2300L and 4750L, priced from $6300 to $16000 excluding GST. Tel 027 308 2800 www.sebco.co.nz Ed Harrison, director Fuel Storage Systems Ltd.

@dairy_news facebook.com/dairynews

40,000 cows say they prefer a Redpath clear roof shelter … if cow’s could talk

Over 125,000 people attended the 2015 National Fieldays.

T C E R I D BUY rmlands/CRT h Fa

or throug

Farming’s brave new world MARK DANIEL markd@ruralnews.co.nz

FOUR DAYS in Waikato during winter with the usual

mix of rain, wind and the odd glimpse of sunshine, flavour free food from who knows where, and around 125,000 people: you’ve got it – Fieldays 2015.

With changes such as filling in the lake to make more site space, and moving the tractor pull down next to the river, on the eastern boundary, there was a new look to the central area.

The Innovations Awards area pulled in the crowds and unearthed some Kiwi ingenuity so simple that it was clever, while at the other end of the spectrum some of the hi-tech gadgets launched was cutting edge and world beating.

What’s for sure is that agriculture has come a long way from the good old bugger leaning on the gate and knowing four whistles for his best dog. Today’s modern farmer will probably be using an i-Pad to control a drone that monitors and herds his sheep, and using apps on his phone to control electric fences and irrigation pumps. And he will milk cows that wear transponders around their necks to detect oestrus and control drafting gates.

It’s a brave new world; thankfully there’s still Waikato Draught.

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DAIRY NEWS JUNE 23, 2015

48 // MACHINERY & PRODUCTS

New in tractor, machinery role MARK DANIEL markd@ruralnews.co.nz

THE TRACTOR and

Machinery Association (TAMA) has a new president: Mark HamiltonManns, of John Deere, took the reins from the president of six years, Ian Massicks of Kubota NZ, after his six years in the role.

TAMA represents the interests of importers and manufacturers of tractors and machinery, keeping an eye on legislation and safety, and trying to ensure edicts originating Parliament are workable when they reach farms.

It also strives to ensure that modern agricultural

Kronos 500 on display at the Fieldays.

Harrows with power MARK DANIEL

Outgoing TAMA president Ian Massicks (left) hands over the reins to Mark Hamilton-Manns.

markd@ruralnews.co.nz

AFTER

machinery, sourced from many countries, meets required NZ standards, and it provides members with historical data on sales by area and machine type.

Asked how Fieldays was panning out for

TAMA members, Massicks commented, “I arrived at Fieldays with a little apprehension, but have found little negativity, and indeed there was some business being done,” despite the market for tractors to the end of June

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being down around 20%.

Massicks said, “while that’s disappointing, it comes off the back of 2014 which was a very big year for sales, and one could argue that 2015 is just coming back to a little normality.”

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THREE years evaluating the Moreni brand’s suitability for the New Zealand market, Ag–Attachments launched it at National Fieldays.

Hailing from Brescia in Italy’s northeast – the home of power harrows – Moreni is a fourth-generation company that was founded around 90 years ago.

Specialising in soil engaging equipment, they appear to be using steel in all the right places.

The Kronos 500 folding unit on display has a heavy duty headstock which attaches to the front and rear of the transmission trays, and looks capable of taking up to the 350hp limit that might be attached to the front. Drive is split from the central gearbox to lateral units that transmit power down into the beds.

A feature of the harrow is the closer spacing of the rotors: the 5m machine on

display was carrying 22 rotors, compared to the more typical 20 items on competitor machines. This results in finer tilth and needs lower horsepower per metre.

The other interesting point is the rotors are timed on their shafts to ensure good overlap, and results in the area where the harrows meet at the centre being worked out fully, rather than the more typical set-up of a ripper tine fitted to scratch out the unworked area.

The shafts through the transmission tray are a one-piece forged unit that supports the bearing assembly on the upper section and the blade holder below. The shaft assembly is easily removed for any bearing replacement, but this is probably a rare occurrence as the units have twin double labyrinth seals to stop soil ingress and keep stones away from the tray.

Ag-Attachments managing director Geoff Shuker commented, “We wanted a power harrow that could last the test, and the Moreni showed us it can. www.agattachments.co.nz

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DAIRY NEWS JUNE 23, 2015

MACHINERY & PRODUCTS // 49

Mighty Elephant beet washer and chipper MARK DANIEL markd@ruralnews.co.nz

WITH A history dating

back to 1990, and a background based on serving the sugar beet industry in the UK and Ireland via a supply partnership with Armer Salmon (AS), Cross Engineering had to make a major change of direction when the only sugar beet factory in Ireland closed and AS was forced into liquidation.

Fortuitously, the growth in anaerobic digesters gave the company an avenue to produce beet cleaning equipment as the crop became important in this area, not least because the gas production could be started after 15 days, compared to maize which took around 55 days to ferment.

With the massive rise in the plantings of fodder beet in New Zealand, it made sense to look at supplying machinery for the sector, and the Elephant looks like it might fit the bill nicely.

Mounted on a semitrailer chassis, and moved by a tractor cab unit, it is easily moved from job to job, and being fully selfcontained is easy to set it up, carry out the work, pack up and move to the next job.

Power comes from a 120hp JCB Dieselmax engine that delivers the necessary get-up-and-go to the hydraulic systems that are the heart of the unit.

‘Dirty’ beet is loaded into the hopper at the front of the machine where a cyclone effect removes stones and any large particles of dirt.

Debris is transferred by an elevator into a trailer for eventual removal.

Beet then moves into the wash cycle which ensures the crop is clean and safe for cattle and presents an acceptable sample for anaerobic digester plants. The wash has a recycling system that removes dirt from the water to ensure minimum amounts are used for each job.

From the cleaning area, washed beet is transported by elevator to the discharge point where the choice is either to discharge into a trailer for onward transportation or direct into a stack.

There is also an option at the end of the discharge elevator to engage a chopper unit to cut up the beet.

This is swung into work hydraulically and uses a rotary drum to slice the beet, with a degree of chop influenced by a hydraulically adjusted re-cutting

frame. The chopped material can then be fed direct to cattle, or as is becoming more common, ensiled normally with citrus pulp or forage maize.

With outputs around 100 tonnes per hour for

washing only, or 80 tonnes when chopping, the Elephant will make a large pile of cleaned beet by the end of the working day, and no doubt increase the popularity of this crop. www.crossagrieng.ie

With an increase in fodder beet plantings in New Zealand, an Elephant fodder machine makes sense.

A N E W A P P R OAC H T O E N G I N ES

A chopper unit cuts up the beet.

At the heart of any Deutz-Fahr tractor is its engine. It’s therefore reassuring to know that Deutz is one of the largest independent manufacturers of diesel engines in the world. Our modern high torque, low emission and fuel-efficient engines are supplied to many of the world’s leading automotive companies and are performing tirelessly in every corner of the globe. To join the record number of farmers benefiting from the power and efficiency of a Deutz engine, contact your Deutz-Fahr dealer today.

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DAIRY NEWS JUNE 23, 2015

50 // MACHINERY & PRODUCTS

Genesis points to the future ADAM FRICKER

THE AUSTRALIAN

motoring press, known to take themselves a bit seriously, have been quite dismissive of Hyundai’s large, rear wheel drive, six cylinder sedan, the Genesis.

They practically invented that segment, they said, and the Korean upstarts were dreamin’ if they thought they could match the mighty Falcodores. To be fair, Australia makes a damn good large sedan these days, but the Bruces have never man-

aged to screw one together as tightly as the Hyundai Genesis.

An ambitious project for Hyundai, and by their own admission, a brand build that “demonstrates where the brand is going”, the Genesis is up there with Lexus in refinement and build quality. The Dairy News Ford Falcon XR6 is a smooth enough car, but the Genesis is on another level.

It is big, at 5m long, and heavy at just over two tonnes, but the 3.8L, direct injection V6 copes easily, its power and torque of

232kW and 397Nm pushing the car to 100km/h in 6.5 seconds, the eight speed automatic quietly swapping cogs in the background beneath all the sound proofing.

Noise suppression is impressive, an area Hyundai has put a lot of effort into. Double glazing helps, but the engineers spent many hours tuning the suspension on Australian roads to ensure the ride was smooth and quiet, aware that noise is a big part of people’s perception of ride quality.

The comfort and

Hyundai Genesis

luxury on the inside also impresses, with only the odd hard plastic surface to remind you what you’re

driving. Standard equipment levels put German luxury brands to shame; there is no options list

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for the Genesis because Hyundai NZ has already ticked every option box available. Panoramic sunroof, auto-levelling headlights, 17-speaker Lexicon sound system – you name it, it’s got it.

The active safety features like heads-up display, lane-change assist and blind-spot detection are worthy of special mention, being effective and non-intrusive. In fact, all the on-board equipment is well-laid out and effortless to use, not something you can say about all luxury cars which have delegated many basic functions to a computer interface controlled by a mouse.

Most people who saw the car thought it looked fantastic, and it does. It’s a head turner, and you just know the envious onlookers don’t realise they’re ogling a Hyundai. The usual game with Korean cars is to look for hints of other brands they’ve copied. The Genesis design truly stands on its own merits.

Did we feel we’d taken

a huge step down when we had to return the Genesis and slide back into the XR6? In respect of luxury, refinement and specification, yes.

Dynamically though, the Falcon feels sharper and better sorted through a series of fast corners.

Chalk one up to the Bruces then.

Actually, chalk two up to the Bruces, because as a value proposition, fortysomething grand for an XR6 seems a better deal than $99,990 for a Hyundai. Or is it? You’ll pay $30,000 on top of that for an equivalent European car, then you’ll have to tick a few expensive option boxes to match the Genesis for kit.

Overcome the brand snobbery that afflicts the luxury car buyer and the Genesis looks like a good buy. Convincing customers that the badge is worth it won’t be easy, but that’s what we said when Hyundai launched the Santa Fe at prices up to $80,000 and there are plenty of them on the road now.

For Accelerated Rumen Development in Calves

Agritrade_DairyNews_2015_June_rumenX.indd 1

15/06/15 12:22 pm