Dairy News 13 October 2015

Fonterra predicts TPP dairy rethink. PAGE 3

Com m an RECONNECTING der M A X 2014 WITH FARMERS 7 1 5 01963 DeLaval’s0 new regional head

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Kubota eyes more power PAGE 34

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Fonterra predicts TPP dairy rethink. PAGE 3

RECONNECTING WITH FARMERS DeLaval’s new regional head PAGE 23

BIG IS GOOD Kubota eyes more power PAGE 34

OCTOBER 13, 2015 ISSUE 344

// www.dairynews.co.nz

‘LOW PAYOUT BEST TIME TO INVEST’ Wardville farmers Shane and Jacque Ashley’s new milking shed… PAGE 8

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DAIRY NEWS OCTOBER 13, 2015

NEWS // 3

Dairy tariffs ‘will be back on table’ PAM TIPA pamelat@ruralnews.co.nz

Fonterra chairman John Wilson predicts market access for dairy products will be up for renegotiation.

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10 years they got it wrong by opposing dairy tariff removal in the Trans Pacific Partnership (TPP) negotiations, says Fonterra chairman John Wilson.

Market access for dairy products will go back to the negotiating table for TPP countries within five to 10 years, Wilson predicts. Dairy negotiators in TPP understood the benefits “but were not brave enough to show the leadership to transition their sectors into total trade elimination,” Wilson says.

Other countries will want to join the TPP and Wilson predicts within five to 10 years dairy tariff elimination will be looked at again.

“The problem is we have very strong protectionist lobby groups focused on how dairy, for example in the US, has operated over the last decade rather than what the potential is for the future,” Wilson says.

“The dairy industry in the US will look on this in five or 10 years and recognise the TPP got this wrong -- that they should have been driving far harder for total tariff elimination alongside New Zealand and Australia. They are already the biggest exporter within the TPP region; they export more than we do in dairy within the TPP region.

“They already export 15% of their production; that is already about three quarters of NZ’s production, so they are already a significant exporter globally as well.

“So, a huge opportunity for their exporters; but their exporters tend to be more on the West Coast and the protectionist group is more in the Midwest or towards the north-east and, given how difficult this whole negotiation became politically -- not just in dairy but in autos, biologics, tobacco, sugar and rice -- that ambition of tariff elimination unfortunately hasn’t won the day.”

Regardless, it is important that TPP has been concluded and must now be enacted, says Wilson.

“I have great confidence that within five to 10 years our negotiators will be renegotiating market access

because there will be other countries that want to enter TPP and the political and economic environments will be different. There is a greater chance you will continue to get elimination of tariffs at a greater rate than at the moment.”

NZ’s beef sector got a good outcome because they worked with the other beef sectors around the world particularly led by the US cattlemen, says Wilson. They came up with a good agreement among themselves and were able to work alongside their negotiators.

“While we tried hard to do that with the US dairy industry, unfortunately the US dairy industry took a protectionist approach ultimately, rather than showing leadership on tariff elimination,” Wilson says.

“That’s not unique to dairy; it happened in other cases, for instance sugar.”

Wilson says the principle of tariff elimination is now deeply embedded. They have eliminated tariffs over time through many product lines, but not all, in a number of countries.

“We’ve got to continue this conversation and this pathway. With all trade negotiation, it is not necessarily the next 10 years that benefit, it is the next half generation of people who come along, particu-

larly farmers who will benefit from it, and that’s the importance of continuing this work.”

Wilson says there won’t be any details out for a while – the text is not due for a few weeks. The negotiators say there will be about $100m more of dairy trade for NZ. “While we have strong indication from our negotiators of what the content is, until the final text has all been thrashed out we don’t actually know exactly what the outcome is,” he says. “We know what the direction of travel is, but the exact tonnage and the exact time period, and exact product lines -- we don’t have detail of those yet.

“The good news is there is more access for a whole lot of NZ primary products – wine, beef and a few others.

“For dairy unfortunately we are in a position where tariff elimination was what TPP was all about but over the last two years, tariff elimination was taken off the table by Japan, Canada and the US industry.

“The deal is disappointing because we haven’t got total tariff elimination and we’ve only got it on a number of product lines, but it is still a better position than we were in last week.”

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DAIRY NEWS OCTOBER 13, 2015

4 // NEWS

Fonterra predicts price rise PAM TIPA pamelat@ruralnews.co.nz

GLOBAL DAIRY Trade prices

are coming back relatively quickly and Fonterra expects whole milk powder prices to keep climbing over the next six months, says Fonterra chairman John Wilson.

The overall index rose by a further 9.9% at the GDT auction last week.

The GDT whole milk powder

index lifted 12.9% overnight, with an average price US$2824/MT. The skim milk powder index rose 13.4% with the average skim milk price at US$2267/MT. “It is good to see prices moving up,” Wilson told Dairy News.

“We have known right through that the current global prices are unsustainably low.

“They are the result of a unique situation where we had far too much supply in 2014 because of good weather and really high

prices globally, so dairy farmers produced more milk. We had the impact of Russia and China -- the two big demand markets of the world -- with Russia closing its market effectively, particularly to European products, and China changing its in buying profile.

“You had this reaction where global dairy prices dropped to unsustainably low levels. We are now seeing that market slowly come back into balance and we

believe it will do so over the next six months or so.

“Pleasingly we are seeing it come up relatively quickly and we would expect whole milk powder prices to continue to climb to that US$3000-$3500/MT level over the next six months, maybe earlier.

It will depend on where milk production comes from and how much milk is produced globally over the next six months.” @dairy_news facebook.com/dairynews

TPP outcome ‘a big disappointment’ THE TPP outcome for

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dairy is a “big disappointment”, says Dairy Companies Association of NZ (DCANZ) chairman Malcom Bailey.

“New Zealand has pending trade deals coming up, for example a potential free trade agreement with the European Union,” he says.

“The problem is when you do a poor quality deal in TPP you are not exactly establishing the sort of precedent you want.”

But, dairy aside, overall it is a good deal for NZ, Bailey says, and should be supported.

Bailey told Dairy News he can only hope the commercial reality of market changes may mean some countries will realise that maintaining border protection doesn’t make sense.

“We are still looking at a backdrop of world dairy demand exceeding world dairy supply over time,” he says.

“We hoped out of this deal to see a significant lift in the amount of liquidity in world dairy trade -- that is more tonnes crossing international borders to try to [smooth] volatility.

The big drop in prices has really hurt our farmers this year and anything that can mitigate that volatility over time has to be welcomed.

“It is a big disappointment because these other countries’ farmers face that volatility eventually and we would have thought they would want to see a better outcome too.

“Without doubt a better outcome for dairy in TPP would have helped that volatility but it

Malcolm Bailey

wouldn’t remove it – that would be pie-in-the-sky thinking. But any increase in world trade would help mitigate that volatility.”

He says there are definitely some gains for dairy but he is concerned about when there may be another opportunity to advance on these results. “This trade deal is a oncer,” he says.

The TPP has to be ratified through the parliaments of every country but he has not heard that would be stumbling block.

“Nothing can be taken for granted, including New Zealand. But a key thing a few months ago was the United States passing the Trade Promotion Authority which leaves their congress with a simple ‘yes’ or ‘no’ vote; they can’t unpick the detail and say ‘we like this bit but we don’t like this bit’ and try to change the deal. That would have been no good at all.”

The timetable in the US is a lot longer, with a 90 day notification and another 90 days before the congress can deal with it.

But Bailey says he hugely appreciates the effort made by our negoti-

ating team. “We are saying it was underwhelming for dairy and it definitely was. But a huge effort was made over there by [Trade Minister] Tim Groser, [chief negotiator] David Walker and the rest of the negotiating team. They really put their bodies on the line for it. The odds were stacked against us and we did make the progress we wanted.”

Bailey said he had been asked not to divulge any detail of the deal at this stage.

“But we have made it clear that according to our initial ambition to get new market access -- originally it was to see all tariffs being eliminated so there would be open access to markets -- we have ended up falling quite short.

“That is no criticism of our trade minister and his team because they worked really hard to get the best deal possible.

“We were just up against the odds in the people representing the dairy industries, particularly in the United States, Japan and Canada.”

– Pam Tipa

DAIRY NEWS OCTOBER 13, 2015

NEWS // 5

Opening trade borders will smooth prices PAM TIPA pamelat@ruralnews.co.nz

BETTER DAIRY trade

between key economies by tariff elimination would reduce volatility in global dairy prices, says Fonterra chairman John Wilson.

“If we could go to total tariff elimination and therefore free up a lot more trade between these key economies of US, Japan, Mexico, Canada and the others within the TPP region, that would eliminate some of the volatility,” he says

“My view is that is understood by the participants in TPP but they were not brave enough to show the leadership to transition their sectors into total trade elimination.”

If you open barriers to trade you get less volatility.

“When prices go down or up quickly New Zealand’s farmers are the first to benefit or otherwise from prices moving quickly,” he says “We feel it first of all.

The Europeans feel it next -- they tend to be about six months behind us -- and

Trade Minister Tim Groser (right) with his TPP counterparts in Atlanta this month.

the US tends to be another 6-12 months behind that again. If you look back over the last 7-10 years of increased volatility you see that.

“You see this lag between when New Zealand dairy farmers have global commodity prices impacting their payout and it flowing through to European and US farmers. With tariff barriers and markets semi closed – not open to free trade and open markets – it certainly accentuates volatility.”

Federated Farmers President Dr William

Rolleston says the deal, although not as comprehensive as we would have liked at the outset, appears to be beneficial for agriculture and New Zealand.

“While it would have been great to see dairy tariffs eliminated altogether and for a greater range of products, preferential access to new dairy quotas into these markets should

be helpful.

“Overall dairy will still reap the benefits of tariff savings into other TPP markets and further progress on dairy access can be made in the future,” Rolleston says.

The Government has to secure parliamentary approval for the deal.

Rolleston says while these trade deals are never

$102M TARIFF SAVINGS The NZ dairy industry will save about $102m in annual tariffs when TPP is fully implemented, Mfat says.

NZ currently exports $4.6b in total dairy products to TPP countries.

A key outcome of TPP negotiations is that $826m of NZ protein products into the US will be duty free when the agreement comes into force, with zero duty on New Zealand dairy exports within

all WTO tariff quotas.

Tariffs will be zero on infant formula in 10 years and on milk powders and some cheeses after a “transition period” according to Mfat. NZ will have access to new tariff

quotas for several key products in the US, Japan, Mexico and China.

In Japan $217m of NZ’s exports of high-protein products will be duty free; after 15 years $349m will be duty free.

perfect, opponents of the TPP should consider the serious consequences that would be faced by New Zealand if we were not part of such a trade agreement, should the Government be unable to secure Parliamentary agreement.

“In other words, while we still await much of the detail, it’s clear that we are better off today than we were yesterday. The conclusion of the TPP

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negotiations is the start of a journey of trade liberalisation, a journey some countries find harder than New Zealand.”

“Tariff savings of $259 million per year, including $72 million for meat exports and $102 million for dairy exports, will provide an ongoing boost to farmer’s incomes and for the economy as a whole. It also improves competitiveness for our products in TPP markets.”

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DAIRY NEWS OCTOBER 13, 2015

6 // NEWS

New Plymouth council quitting Tasmanian dairy AUSTRALIA’S LARGEST dairy

farm could change hands before Christmas.

The Van Diemen’s Land Company (VDL) in Tasmania, owned by the New Plymouth District Council, is talking to potential investors, as confirmed by VDL governor Keith Sutton.

“VDL is dealing with a number of parties looking to invest in the company,” he told Dairy News. “VDL expects an outcome to be announced well before Christmas.”

The farms are owned through New Plymouth council’s Perpetual Investment Fund (PIF), which gradually increased its ownership in the farms to a majority holding over a number of years.

The council’s PIF was created from the $259m sale of the council’s shares in lines company Powerco in 2004.

Established in 1825, VDL is located in the picturesque northwest of Tasmania, where it owns and operates 25 dairy farms, a dairy support unit and a standalone heifer rearing operation. Including replacements VDL Keith Sutton runs about 30,000 dairy livestock.

VDL is one of Australia’s oldest companies, established in London in 1824 by 11 men closely connected with the English wool trade and textile industry.

VDL became part of the New Zealand publicly listed company Tasman Agriculture Ltd in 1993. This went into voluntary liquidation on October 31, 2001, following a restructuring of its

New Zealand Farms, and its shareholders received one share in Tasman Farms Ltd for every share held in TasAg by way of an in-specie distribution.

In June 2004 VDL bought all the shares in Tasman Farmdale Ltd, which owned land in the Circular Head region of northwest Tasmania.

Tasman Farms Ltd, an NZ company, is the majority shareholder in VDL, owning 98.42% of shares on issue.

In late 2007 the New Plymouth District Council (NPDC) bid to buy Tasman Farms Ltd. In February 2008 this bid was finalised, the NPDC buying 74.33% of Tasman Farms Ltd. NPDC has since increased its shareholding to 100%.

Revised TB plan pleases majority CHANGES PROPOSED to the TB

Plan by a review group are said to have gained the support of most submitters.

Plan governance group chairman Chris Kelly says it proposes that the TB Plan should focus on eradicating bovine tuberculosis from farmed cattle and deer within about ten years.

“It will take longer to clear TB from possums and other vectors in remote back country, but it is important that Chris Kelly our farming sector be rid of this serious disease as fast as possible,” he says.

The group’s final proposal for changes was given to the Minister for Primary Industries Nathan Guy this

month. The changes are intended to advance the progress made by OSPRI under the current TB Plan.

Kelly says his group considered a range of technical and scientific advice, and believes the eradication of TB from New Zealand is feasible and economically justifiable.

The proposed changes to the TB Plan were put to farmers, local communities and other stakeholders in June and July this year. About 400 submissions were received on the draft plan proposal, and the governance group took them into account in its final proposal to Guy.

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DAIRY NEWS OCTOBER 13, 2015

NEWS // 7

Oz farmers take on militant unions over China FTA AUSTRALIAN DAIRY farmers are

doing their bit to get the free trade deal with China over the final hurdle.

The Australian Dairy Farmers (ADF) and the United Dairyfarmers of Victoria (UDV) have called for a “show of strength” against a union campaign, backed by the federal opposition, which threatens to derail the China Australia Free Trade Agreement (ChAFTA).

At least 300 farmers came together at regional roadshows across the state, making a resounding call for the ChAFTA to be ratified by the end of the year. They started in Warrnambool, touring through Colac, Timboon, Tatura, Cohuna, Leongatha and Warragul.

ADF president Noel Campbell says the dairy industry needs to be heard to make sure the “game changer” deal happens.

The ChAFTA took 10 years to negotiate and is worth a projected A$11 billion to the Australian dairy industry. Camp-

Australian Dairy bell says there is urgency to Farmers president Noel the campaign for the deal Campbell speaking at the Warnambool to be signed this calendar roadshow. year to ensure a reduction in tariffs later this year and another in January.

He says the first priority for farmers should be a letter and email campaign to local and ALP MPs, but taking to the streets is also on the agenda.

“If needed, get on a bus and go to Melbourne and get your friends and neighbours and the whole community behind you. Make a noise,” he said.

“I’m not saying ‘go into the streets and go up against contrary to union reports, the FTA the police’ but make sure the commu- would protect jobs in regional Austranity knows how important it is. Delay- lia and that the union campaign was ing this trade deal means lost jobs and “not based on facts”; Campbell also lost opportunities for farmers.” dismissed the campaign saying ChiUDV manager Vin Delahunty says nese companies would have to follow

s. on NZ farm d n e g le is a a’s a 500FM and Hond n io s n The Hond e p ble vel sus ith selecta s long tra W . e in g n It feature e 475cc e system, th l injected k e o fu L x n e ra v T pro n 4WD ra and prove k c lo go. And fo iff to d d e e n front e ere you price of th ts you wh e e g th r M F fo 0 g 50 steerin et power g e m ti d limite model! r steering e w o p n o n

due process on 457 visas and first seek local labour, adding “agriculture generally does not use many workers on 457 visas”.

However, he admitted the union campaign had gained traction. “It is clear this campaign has gained community following. I hear a lot of talkback on suburban radio and it’s probably 10 to one against the ChAFTA. That’s negative for us so we’ve got to tell Victoria the facts.”

In response to a question, Campbell says it is hard to say how many more cents per litre -- or cents per kgMS -- farmers would receive under the deal. But the long-term benefits would be big for the industry.

“It’s significant if you want the confidence to invest on your farm, and it would take some shock out of losses we make at certain times.”

Campbell told Dairy News he was not confident the deadline could be reached in time, especially because many crossbench senators have expressed their opposition to the deal.

“It’s frustrating from an industry perspective.

“We would like to think it could be resolved by the end of the year, but it’s getting harder every day as we get closer to the end of the year.

“We were hoping with the change of Prime Minister that we might see an opportunity for the parties to come together but so far that doesn’t appear to have happened.”

He says the ADF would continue to pursue a positive result and urge the ALP and cross-benchers to put politics aside “and support something that is clearly in the nation’s best interest”.

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DAIRY NEWS OCTOBER 13, 2015

8 // NEWS

Low payout best time to invest in rotary WHAT HAPPENS when

an unsustainable farm dairy needs to be replaced but the need coincides with a low payout season?

Wardville farmers Shane and Jacque Ashley were faced with this dilemma in the spring of 2014, says Waikato Milking Systems (WMS).

“It was taking nearly four hours to put 630 cows through the 40-bail rotary built in 1988, so the last cows at each milking were spending as much as eight hours a day off pasture, standing on concrete,” Ashley said.

“The slow milking time was justifiable when the cows were doing 25L a day but production has improved and at 35L per cow the old shed was being found out. It had become unsustainable and had to be replaced.”

The purchase of the 236ha farm in 2001 was a return home for the Ashleys, who began farming in Waikato during the 1980s.

“Our goal was always farm ownership, so after sharemilking in Waikato we moved to Northland to

build equity and over 14 years purchased and operated three small (120-150 cow) farms. The sale of those properties enabled us to return home to Waikato.”

They started with 112ha, later buying two neighbouring blocks of 50 and 74ha to make up the current 236ha which milks 650 Friesian/Jersey and crossbred cows. The herd produces 640kgMS/cow and has a breeding worth of 160 and production worth of 230, putting it in the top 5% in the country.

Around 1.8 tonne of maize and 1 tonne of KPE per cow is fed per year plus pasture.

The need to contain costs was fundamental to the decision to build a new farm dairy.

“The existing yards were well integrated with the feedpad, effluent and electricity so we decided to retain them, demolish the old shed and build again on the same site.

This meant demolishing the old and building the new had to be completed between seasons.

ditional concrete type. A concrete platform weighs 35 tonnes, and must then carry 30 tonnes of stock.

The Centrus weighs only seven tonnes – 42 tonnes fully loaded -- so it needs less energy to turn it and it suffers less wear and tear.

“We also liked the deck surface’s resistance to chemicals and effluent; it will never pit like concrete and will always look good.

“The variable speed platform, milk pump, drive and vacuum pump drive draw power only on demand so it’ll be cheaper to run.”

The dates of the project are indelibly printed in Shane’s memory.

“We dried off on March 1 and started demolishing the old shed the next day to get a clean compacted site for the builders arriving on March 9.

“We had an incredibly tight time-frame: the herd was due to start calving in 16 weeks on July 14, with 330 cows due in the first 11 days, and we had no plan B, no alternative shed to use so the new dairy had

Wardville farmers Shane and Jacque Ashley.

“In a normal year the cows are only out for two months and we needed at least twice that, which meant drying off the cows two months early, on March 1.

“The opportunity cost of drying off early was less because the payout was down: it would have been unaffordable at $8/kgMS, so we decided this was the time to do it.”

Decision made, the Ashleys then spent a month visiting dairy farms to look at new rotaries. “We visited 20 rotaries during October 2014 and looked at a range of options, finally opting for a Centrus 54-bail platform from WMS. “Overall we liked the simplicity of the Waikato systems; you go into any one of their sheds and

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there’s no clutter, but more importantly we were won over by the technological advantages of their composite platform.”

The deck sections of the Centrus 54 are formed in a multi-layer laminated process including Kevlar, a material used in the construction of aircraft, so the platforms are five times stronger and 80% lighter than the tra-

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to be completed and ready to go.”

The first milking was on July 9.

The WMS plant has electronic cup removers, bail restraints, auto wash and provision for the SmartSPRAY automatic teat spray system.

“We’ve got happier staff whose time milking has reduced from eight hours to five and a half. The deeper bails and rubber mats seem to make it easier for the cows to load on the platform and the overall environment is quiet and clean.

We’re delighted with this shed, there’s nothing we’d change.”

Ashley advises farmers facing the need to replace their sheds in tight times to do their homework and look at all the options.

“You don’t need to go the whole hog if you opt for a system which is modular; just build the basis of the shed and add technology modules when you need and can afford them.” @dairy_news facebook.com/dairynews

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DAIRY NEWS OCTOBER 13, 2015

NEWS // 11

‘We do enviro differently’ PETER BURKE peterb@ruralnews.co.nz

FEDERATED FARMERS dairy chairman

Andrew Hoggard says he’s intrigued at the way most other countries deal with environmental issues on dairy farms.

Just home from the World Dairy congress in Lithuania, he says most countries in the northern hemisphere, including the US and Canada, focus their regulations on inputs, whereas in New Zealand the focus is on outputs.

Hoggard says environmental issues were a big topic at the congress and he learned from a Lithuanian delegate how his and other nations manage the environment.

“They have rules on how much effluent they can spread to land; they are focused on the inputs

into the farming system.

But NZ we have Overseer and the focus is on what a farmer must ultimately control in terms of outputs. The Lithuanian delegate and the others didn’t seem to understand and grasp the idea of measuring the output. So in that sense we are different from the rest of the world.”

In Europe, for example, the legislation is prescriptive: a large rulebook sets out under what circumstances effluent can be spread or sprayed on pasture. The law tells farmers what to do, whereas in NZ the law states what outcomes have to be achieved and the onus is on the farmer to run his system in such a way that he meets the law.

During the congress the TPP talks were in full flight and when Hoggard told the audience that freeing up trade would

Strong winds wreak havoc DAIRY FARMERS in Otago and Southland have

taken a hit from unseasonal high winds that have demolished haybarns and generally disrupted their farming.

Stephen Crawford, Federated Farmers dairy chair in Otago, says three of his haybarns have had walls blown off. And the winds have cut his power.

“It was a pain for dairy farmers trying to milk. I have two cowsheds and when the power went out I got the generator connected and then suddenly the power came on again. It was pretty challenging.”

The power cuts were typical of what happened right across Otago, he says. Some people were without power for 36 hours.

A nearby sheep farmer had his lambing pens blown across the paddocks.

“There were times when I found it hard to stand up in the paddocks because the gusts were so strong,” Crawford says.

At Colac Bay, Southland, the dairy chair of that province, Graeme McKenzie, was one of the first farmers hit by the winds. They look out onto Stewart Island and there isn’t much between his farm and Antarctica, he points out.

The first sign of trouble came when he was watching the rugby on television and service was disrupted by the winds.

“We had power out for 12 hours, but in the end it didn’t cause too much disruption. Trees were blown down and sheds were damaged. Because of the loss of power some farmers had to delay milking.”

But McKenzie says they are used to the high winds and are set up to handle them.

Likewise in North Canterbury where Cameron Henderson noted that wind two years ago blew most of his trees over so there wasn’t a lot more the wind could do.

Some sheds were damaged but the power was not cut. He says the early warning from MetService gave farmers time to move irrigators to where they could save them from the wind’s effects.

solve a lot of the volatility problems in the global dairy sector his remarks were met with stunned silence.

“I told them the present volatility is caused because dairy is such a thinly traded market and that when you get a small supply increase or a small demand decrease that has

a big impact. The fact is a 1% production increase can result in a 40% price decrease. The suggestion that trade liberalisation might solve this didn’t meet with much favour,” he says.

The other major issue raised at the congress related to the anti-milk lobby, Hoggard says.

Overseas every week there are reports about the value or otherwise of milk -some saying milk is great, a few that it’s bad. The notion that milk is bad has little traction in NZ, Hoggard says.

The only adverse material he’s seen is on the SAFE website which he dismisses as nuts.

Andrew Hoggard

DAIRY NEWS OCTOBER 13, 2015

NEWS // 13

Dairy out to lure skilled workers THE DAIRY industry has

unveiled a new joint workplace action to attract skilled workers.

DairyNZ chairman John Luxton says one aim of the industry’s 10-year strategy is to see 90% of dairy farm businesses having quality work environments by 2020.

The new Sustainable Dairying: Workplace Action Plan is a joint campaign by Ministry of Primary Industries, Federated Farmers and DairyNZ. Luxton says the components of this new plan should ensure the strategy works.

“We are competing with all the other career opportunities on offer across the globe. We’re not always the most attractive choice for many young people these days and we need to be if we want to develop and retain the workforce we need,” he says.

The new plan proposes five aspects of good people management: balanced and productive work

time, fair remuneration and wellness, wellbeing and health and safety. Key expectations are that the industry will improve its record in health and safety and that all businesses will meet legal and employment requirements.

A dairy employee guide has been produced and measures are in place to track the industry’s progress against the plan.

Federated Farmers dairy chair Andrew Hoggard says the quality of the work environment a farmer provides is central to attracting and retaining staff.

“Most dairy farm businesses have positive workplaces because farmers see the benefits for everyone if they can get and keep good staff. This is why DairyNZ and Federated Farmers have worked together on this plan.

“We recognise… practice is not uniform across all businesses and that parts of our industry need to lift their performance to make dairy farming more attractive to a greater

number of employees,” Hoggard says.

“A good work environment does not stop with just doing the minimum.

“We’re encourag-

ing farmers to go from good to great as employers and we’re supporting them with tips, tools and resources to make it easier.”

John Luxton, outgoing DairyNZ chairman.

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Michael James Whitelockhad earlier pleaded guilty to 12 charges, including ill treatment of animals, unlawful possession of firearms and attempting to pervert the course of justice.

The Ministry for Primary Industries says the sentence was imposed in Greymouth District Court.

Whitlock was also disqualified from owning animals for 10 years. He was the dairy manager on a Landcorp farm near Westport from July 2012 until his suspension in September 2013. MPI began investigating that month after a Landcorp manager arranged for a vet to examine the herd.

Of the 1100 animals, 152 cows and 57 heifers had broken tails. The vet told investigators he had never seen so many animals with broken tails as at the Totara dairy unit on Cape Foulwind.

MPI animal welfare manager Peter Hyde says the offending involved horrific animal abuse directed at dairy cows on a property in Westport.

Four and a half years imprisonment is believed to be the longest prison sentence imposed for welfare offences against farm animals. The next largest sentence was 2 years and 1 month imposed on a Waikato farmer in 2013.

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14 // NEWS

Dairy women celebrate success, hard work DAIRY WOMENS

Network will hold its annual meeting this week with the theme celebrating success and reward for hard work.

Chief executive Zelda de Villiers says there is plenty to celebrate: higher membership and event numbers, new commercial partners, financial stability and innovative ways of working.

“Looking back at the last 12 months, we have achieved a lot,” she says.

“It has been a year of growth and change and developing pilots -- in particular with the modified Dairy Modules in place of Dairy Days.” The modules have drawn bigger numbers, she says.

“Dairy NZ was instrumental in the development and funding of the

module concept and we are grateful for their ongoing support.”

Some 991 people attended the Dairy Modules in the last financial year, half of them nonDWN members. Membership rose from 5000 to 8100 in that time, and event numbers from 134 to 214.

“We… are committed to offering and facilitating quality connections for our members that make positive differences to their personal lives and businesses,” says de Villiers.

“An organisation that connects like-minded, successful people is necessary at the best of times and crucial in the current climate.

“With our commercial partners we have been

able to offer a wide range of opportunities for our members to connect, learn and upskill in the business of dairying.”

The network signed up commercial partners LIC, Whatever Marketing and FMG during the 2014-2015 financial year.

MSD Animal Health and Farmsource increased their support, and “a very generous donation” came from gold partner ASB. The network has reestablished inactive regional groups, recruited new regional convenors and increased the regional group count from 26 to 33.

“We have developed and centralised our database so we have a much better understanding of the demographic and profile of our members.

“Justine Kidd also

Tony and Shona are growing their skills

signed on as our board chair…. She is doing a wonderful job, as are the rest of our dynamic team.”

The network held a conference in Invercargill in March, with trade stands and “inspiring” key speakers. de Villiers says the network is stable financially, its first audit showing it to be on track to keep growing its balance sheet year on year.

Its next conference will be in Hamilton in May, themed ‘United to succeed’.

“And upcoming modules ‘Taking care of your cash’ and ‘Step up to safety’ are relevant to the climate.”

The network has set up a group at Lincoln University for young women entering farming.

to protect their future

Bull sale at Hangawera Station.

Bulls sell out TAINUI GROUP Holdings’ annual

Hereford sale at Hangawera Station this month was a sellout; all 159 bulls were sold for an average $2800 per head.

Prices were markedly up on last year’s sale and bids reached as high as $3200.

Rural operations manager Ian Mathieson says the bidders were eager.

“We had 60 registered buyers at the station Monday and we sold all the Herefords presented. The weather was fine and it was a family day out for many, given that it was school holidays.”

Mathieson says its finance plans were

a magnet for would-be buyers.

“We had some positive feedback on the finance plans available this year. It’s been a tough season, particularly for dairy, but we worked hard with our agents PGG Wrightson and RD1 Livestock.

“Months of preparation went into this day and it was great to see it go really well,” he says.

All the Herefords sold were purebred, aged 18-30 months. They were fertility tested and double vaccinated and tested for bovine viral diarrhoea (BVD) and enzootic bovine leukosis (EBL).

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DAIRY NEWS OCTOBER 13, 2015

16 // NEWS

Can volatility be managed?

JO BILLS

LAST MONTH we highlighted the

greater volatility the global dairy industry has experienced in recent times. As the current cycle runs its course, there is predictable discussion about how dairy market volatility can be somehow curbed or at least managed.

In New Zealand, the industry most exposed to price volatility, the discussion has taken an interesting turn with the imminent disappearance of Fonterra’s guaranteed milk price scheme (GMP) after this season.

The GMP was introduced in April 2013, and allowed participating farmers to lock in 75% of their production at a guaranteed price, announced at the start of the season. At the time of the GMP launch Fonterra said: “As well as providing farmers with the certainty they are looking for, GMP also has benefits for the co-op. That’s because we know how much a certain proportion of our milk will cost us for the season and this in turn provides us with another selling tool when talking to our customers, some of whom are also looking for price certainty.”

After an apparently successful pilot involving 328 farmers and 15 million kgMS the scheme was expanded for the 2014-15 season to 60m kgMS and farmers were given two opportunities to lock in prices – for 40m kgMS June and the remainder in December. In June this year, with the commodity market clearly sliding, there were reports that the initial June offering of 40m kgMS locked in at up to NZ$5.25/kgMS was oversubscribed, with more than 400 farms applying to use the scheme. So far so good, right?

Well, no, in September came a brief announcement that GMP would cease because, said Fonterra, it hadn’t gained the widespread support of farmers: “While some have used it to smooth onfarm incomes, others felt it did not treat all farmers equally and fairly.” The GMP covered less than 4% of Fonterra’s 1614m kgMS intake, so in a year in which it offered the greatest attraction for suppliers, many would have missed out.

The initiative has now been handballed to the NZX, which has been working on a milk price risk management tool, but with no launch date as yet. So it seems futures and derivatives are at least part of the answer to help manage

NOT JUST PASTURE

Jo Bills

price volatility.

The Irish industry, one of the most exposed to global commodity markets in the EU, certainly thinks so. The Irish Cooperative Organisation Society (ICOS) recently called for a fully functioning European dairy futures market to allow farmers, or cooperatives on their behalf, to hedge their milk price positions. However, a trickle of trades in an SMP futures product offered on the Eurex exchange dried up in May this year and the trade was suspended.

Despite the apparent need, it seems the European dairy sector has little appetite for futures.

In the US a well-established futures

NOT JUST FEED

exchange covers milk and key dairy products, and though it is a growing exporter most of the milk output is still consumed domestically. It should all be sunshine, lollipops and snoozeville when it comes to price volatility, right? Wrong. We have tracked the allmilk price for US dairy farmers before and after milk futures were introduced in the mid-1990s; since then price volatility has increased, not lessened. It is almost inevitable that if a futures market is to develop enough liquidity it will include players not directly involved in the physical market – sometimes with more or less information than those who are! This can potentially give rise to even greater variability in prices that is often not supported by market fundamentals, just the result of pure speculation.

From the other end of the supply chain, major UK retailer Tesco has recently said it will expand its Tesco sustainable dairy group of direct milk suppliers, citing the removal of EU quotas and increased volatility as key factors.

While it seems no one benefits from volatility – from farmers to end users – and the discussion seems to peak when

the market bottoms, we are no closer to finding the desired silver bullet.

Also, very little discussion in the industry touches on the whole volatility story for farmers, who must also deal with input prices – mostly feed – that are often just as variable.

For many Australian dairy producers, the answer to effective risk management may be much less sexy than futures and derivatives. It may be entering into a long-term supply contract where that option is available, and at the same time locking in feed – and knowing with certainty what the margin will be for the next three years. For others it may be the deft use of farm management deposits – which will hopefully become even more amenable in future – to smooth income over years.

Whatever the tool or strategy, there also has to be the realisation that managing price risk often means sharing some of the upside, as well as the downside, with partners up and down the supply chain. This requires a marked cultural change for our industry, and the realisation that while you may not always ‘win’, you may sleep better at night.

• Jo Bills is a director of Victoria food consultancy firm, Fresh Agenda.

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DAIRY NEWS OCTOBER 13, 2015

NEWS // 17

Looming health crisis in China PAM TIPA pamelat@ruralnews.co.nz

CHINA WILL soon have

200 million people with chronic illnesses and it will demand food with health benefits, said Paul McDonald, pro vice-chancellor at Massey College of Health.

“Our economic value is linked inextricably to our ability to produce extra health value,” he said.

Producing “safe food” goes beyond what we have traditionally thought, he said, and extends to the need to produce foods which help with metabolic disorders and other chronic illness.

China, our largest export destination for food, has 100 million people aged over 40 who have some type of chronic illness: heart disease, stroke, cancer and diabetes are the big ones. That is expected to increase, even double, over the next 15 years to 200 million -- and that’s just one country.

“The Chinese are currently spending more and more on health care; their health care expenditures are growing by 11.8% per year,” said McDonald.

“That’s more than four times the rate it is growing here in New Zealand and we know how we are struggling. Most of that is related to the growth in chronic illness.”

Of those 200 million people, up to 40% can be prevented from develop-

ing chronic illness as a result of changes in diet.

If we don’t produce new healthy food products our export market may not expand.

“China will absolutely demand that the food they import will keep their citizens healthy,” McDonald said. “The reason is not

by 1% per year over the next 20 years, it would be worth $16.5 trillion.

“From an economic viewpoint it is an imperative, and what a huge opportunity it is when you take the example of the product Anlene and develop more products that prevent and

help manage this massive increase.

“I am just talking about China: we are seeing a worldwide epidemic in chronic illness. The opportunities for this country to meet that market are substantial and imperative to our long term economic growth.”

Massey University food scientist Professor Paul Moughan said along with the one billion people globally with malnutrition problems because of too little food, conversely there’s a worldwide epidemic of obesity. And many Asian people, while not looking obese, are

“packed with fat within”.

Too many people were eating too much of the wrong types of foods, he said. That brings about the metabolic syndrome seen in developed countries and increasingly in developing nations.

This is associated with obesity, high blood

pressure, diabetes and cardiovascular disease – all largely preventable by diet and lifestyle “The metabolic syndrome is rife in developing countries and often you might go to Asia and you don’t necessarily see a lot of people who are classically obese.”

Paul McDonald, Massey University.

just because of health care expenditures but also the effect on the labour force.

They have a growing problem with the ratio between those members of the population in the workforce and those no longer in it. Of those 200 million, 50% are still in the workforce. The more intense the spread of disease, the more the impact on their productivity as a nation.

“For the 200 million expected to have chronic illnesses there is an opportunity and a need to produce food that will help their symptoms and the exacerbation of their symptoms to help them manage and keep them in check.”

The World Bank has reported that if China was able to reduce one disease (cardio-vascular disease)

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DAIRY NEWS OCTOBER 13, 2015

18 // WORLD

Hollywood role puts cheese in spotlight EUROPEAN DAIRY co-op Arla Foods is teaming up with Hollywood on its latest cheese promotion.

A global push on Arla’s Castello cheese will piggyback on the release this month of the movie Burnt, starring Bradley Cooper and Sienna Miller, in which the cheese will make a cameo appearance.

Arla Foods and The Weinstein Company have struck the deal, hoping Castello will be seen by millions of moviegoers and food-lovers.

Even a few seconds in a Hollywood

movie with stars like Bradley Cooper, Sienna Miller and Emma Thompson is the dream of many actors, so it’s a dream come true for the Castello brand, Arla says.

Cooper plays a two-star Michelin chef, Adam Jones, obsessed with creating ‘taste explosions’. He sets out to land his own kitchen and a third elusive Michelin star with the best of the best on his side.

The movie cameo spearheads the largest-ever global promotion of Castello, targeting the US, UK, Australia

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Arla’s Castello cheese has made its Hollywood debut.

and Scandinavia, Arla says. Castello is also licensed to run promotions globally featuring Burnt and the cheese.

“It’s always special to land your first role in a Hollywood movie,” says Francesco Leone, vice president and responsible for the Castello brand in Arla Foods. “We know there is a documented effect on sales in having your brand feature in a movie of this size.”

Castello cheese is sold in 80 countries, the biggest sales being in Germany, Scandinavia and USA.

Coinciding with the movie launch will be advertising in North America, Europe, Australia, Asia and the Middle East.

“We will entice consumers around the world to be inspired by the story of Adam Jones and recreate delicious recipes and cheeseboards using Castello cheese, which pay tribute to the movie,” says Francesco Leone. “We will encourage foodies… by giving them access to one-of-a-kind recipes from the film.”

Finns take lactose- free milk abroad FINLAND DAIRY co-op Valio is taking its

lactose-free milk to global consumers.

It is looking beyond neighbouring countries and those buying from the company’s foreign subsidiaries; new and revamped products will go on sale in Central Europe and China.

Valio says it launched the world’s first totally lactose-free milk drink in Finland in 2001, then set about developing a range for local markets and licensing the technology worldwide.

The co-op’s patented technology for lactose-free dairy partly digests the proteins, making products that suit sensitive stomachs. Research indicates that incompletely digested milk proteins in the gut may cause unpleasant stomach symptoms.

Valio claims the widest selection of naturally healthy, quality lactose-free products, “yet with all the natural taste, vitamins and minerals people expect,” says Pia Jormanainen, senior vice-president business development new markets.

The range includes a semi-skim milk drink, a high protein milk drink, Barista milk for coffee, whipping cream, butter and a spread.

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DAIRY NEWS OCTOBER 13, 2015

20 // OPINION RUMINATING

EDITORIAL

A grumpy win

MILKING IT...

Selling TPP

THE TRANS Pacific Partnership (TPP) trade deal is signed. Now comes the hard part.

The leaders of the countries involved will have to turn their attention to selling the deal domestically after the controversy over the secrecy of the talks.

In New Zealand Prime Minister John Key should get over the line with support from ACT and United Future.

Spare a thought for Canadian PM Stephen Harper; he’s facing a general election next week.

It’s all in the timing

FONTERRA’S mishandling of a message urging farmers to curb PKE usage onfarm hasn’t gone down well.

Fonterra’s regional heads of co-op affairs have been inundated with calls from farmers; the PKE usage guidance came out of the blue and days before the latest round of farmer meetings by directors.

Surely, the co-op could have floated the plan at farmer meetings before going public with it. This is another example of the co-op putting the cart before the horse.

Time to come inside

UK pollie urges more veges

FIRST, THE sound of cowbells and yodeling.

Then the guests emerge from the green hills: Swiss brown cows with bells as big as their heads, accompanied by little white goats and cowherds in traditional red-and-yellow costumes.

In the village of Urnaesch and across much of Switzerland, crisp autumn days are the time to welcome cows returning from their grazing in high alpine pastures to the lowlands to beat the snow.

The ceremonies, known as Alpabzug, Alpabfahrt or the Desalpe, are among the many cultural rites that still mark the seasons in this country of deeply rooted agricultural traditions.

The event has also become a tourist attraction, with the train from Zurich full that morning for the 90-minute trip.

UK FARMERS are facing a new threat, this time from an opposition MP. According to Labour’s new spokeswoman for farming, meat and dairy eaters should be treated in the same way as smokers and targeted with ad campaigns urging them to become vegetarians, Kerry McCarthy, who has admitted she is a “militant” vegan, was appointed shadow environment secretary in Jeremy Corbyn’s front-bench team, alarming countryside campaigners who warned that her veganism and strong opposition to hunting and the badger cull would harm Britain’s farming industry.

She said that although progress had been made to improve animal welfare, ultimately people needed to give up meat or dairy if they really wanted to protect animals.

AS ALL Blacks coach Steve Hansen would say, a win is a win, albeit an unconvincing one with plenty of room for improvement.

In much the same way dairy is a winner in the new TPP agreement, but the margin is almost the margin of error. As one insider somewhat cynically said, a whopping 3% concession on dairy exports to Canada: how grateful should we be?

It would seem that the US flew its protectionist stripes in technicolour until the bitter end. But behind the scenes there must have been dissension in the ranks of the US camp. The dairy farmers wanted protection, while the beef farmers wanted a more open market and asked their negotiators not to let the protectionist demands of the dairy farmers jeopardise the TPP. It’s interesting to reflect on the motivations of the participants.

The word ‘fear’ was a common one and a key driver in how the negotiations played out It’s clear that other New Zealand primary exporters will do better out of the TPP than dairy, but despite the limitations on dairy it is still much better off than had it had no deal.

From a dairy perspective the TPP is a long game – probably intergenerational. In other free trade agreements NZ has negotiated, such as the FTA with China, there are review clauses. At this stage we don’t know if there are any in the TPP, but we do know that if another nation joins the group, as part of their entry process there will be negotiation.

This could be code for a review which may see some incremental improvements to the dairy situation over time.

Also, while the TPP has in the past been discussed as being a US-led move to contain China, the view in Washington has softened in recent years. China has said it is watching the development of the TPP carefully and is engaged in its own rival trade negotiations. Many in the US business community feel the real promise of the TPP lies in opening its membership to other countries, particularly China.

The current members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. And already lined up hoping to get in are South Korea, Taiwan, the Philippines and Colombia.

Free trade is not something superpowers like the US, Canada and Japan embrace. They are dyed-in-the-wool protectionists and splendid isolationists at heart. Add to that the enormous power wielded in those countries by numerically small farming lobby groups.

Weaning farmers and governments off addictive subsidies and protection policies is not easy and free traders such as New Zealand have their work cut out to effect change. But although the TPP is far from perfect, at least there is a deal and any benefit to the dairy industry is better than none.

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DAIRY NEWS OCTOBER 13, 2015

OPINION // 21

There’s a Gaucho treated seed, and then there’s the rest!

Fonterra’s advice on PKE use is causing a stir among farmers.

Good intention, poor execution FONTERRA ADVICE

on using palm kernel extract (PKE) has caused a stir amongst farmers throughout the country.

I was at the World Dairy Summit in Lithuania when this surfaced; despite being half a world away, I saw Fonterra’s guidance go down like a lead balloon.

Once again Fonterra’s communications have let them down; the initial media release was lacking in detail, before the story predictably began to change.

At first the talk was about customer perception, but then we started hearing about composition issues. So now we have a confused message out there; is the issue customer perception or manufacturing suitability?

Both are justifiable reasons for Fonterra to come back to farmers and tell us there is an issue to address; but they need to be upfront as to what the actual situation is.

There are reasons why we should be informed and why we should take action. The farm is the first stage of the food chain that delivers nutrition to the consumer.

We need to know clearly and unambiguously what exactly the consumer wants. We also need to ensure they get the

experience they want, and if there are quality issues we need to understand those too.

Most customer experience stems from what happens onfarm so we should ensure that what happens onfarm is in line with what the market wants. If we ignore what the customers want, they will duly switch to people who can cater to their tastes. So if there truly is a premium for pasture based produce then we need to know.

However, will this guidance actually do anything to encourage farmers in the right direction? Some perhaps, not all.

Here’s the issue: I’m a farmer who uses a lot of PKE and I have a neighbour who does the same. I reduce stocking rate to reduce PKE usage and help with the marketing image, or the quality control issues, but my neighbour doesn’t.

If the positive image persists then, yay! I get a pat on the back for upholding the industry’s image and a premium price.

Meanwhile my neighbour makes more milk and benefits from that premium price too.

But if there are too many like my neighbour and our reputation and premium take a hit, then I take the hit in price along with my neighbour, though he still produces more milk.

Andrew Hoggard

We are relying on everyone to think about the greater good and ignore the individual benefits from going against that greater good.

If the issue was quality, arising from, say, somatic cells, then again Fonterra’s ‘guidance’ has the same problems: those who act on it get no extra and again end up paying for those who don’t.

So if we want change let’s signal that desire for change with a price signal. Other companies, such as Synlait, take such an approach. For me, if Fonterra is concerned about the use of PKE and other such factors, then providing that price signal is important.

So for consumer perception the price signal could take the form of some sort of bonus. In respect of quality issues

it needs to be treated as somatic cells would be, for example.

I would have handled this PKE issue differently: first an upfront discussion with all industry players, then an airing of the issue on the director’s roadshow, then getting rid of the bloody spin.

If the issue is milk composition then say so, and we can start talking about how this would be tested and what the demerit system would look like. If it is truly about consumer perception, then again talk to farmers and get their feedback on the best way to tackle it.

Fonterra’s intention is likely correct; the execution and communication with farmers is sadly lacking.

• Andrew Hoggard is Federated Farmers Dairy chairman.

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DAIRY NEWS OCTOBER 13, 2015

22 // AGRIBUSINESS

IN BRIEF DairyNZ AGM MINISTER FOR Primary Industries Nathan Guy will attend DairyNZ’s annual meeting in Waikato this week.

He will address the Morrinsville meeting,

where chairman John Luxton will be farewelled, ending at least ten years service to dairy industry bodies.

DairyNZ chief executive Tim Mackle is

pleased the minister is attending.

“His visit reflects the high regard we all have for John and his contribution to DairyNZ,” he says.

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THE DEVELOPMENT of 10 to 20

more popular health-orientated products such as Fonterra’s Anlene would make New Zealand a rich country again, a ‘New New Zealand Forum’ in Auckland heard this month.

And the fast growing number of Chinese people with chronic illnesses will welcome and need these products, the joint Massey UniversityWestpac forum heard.

Massey food scientist Professor Paul Moughan said Anlene, a milk drink designed to help avoid osteoporosis which is a big problem in elderly Asian women, has been a huge success.

Sales are $600m to $800m per annum and heading for $1b, he said.

“The profit margins on Anlene are very very high. If this country had 10 or 20 Anlenes we would be absolutely made.

“Our position in the OECD rankings would be right back up where they were in the 1950s when at one stage we led the world in the OECD economic rankings.

“We can put ourselves right back up there. It would be done again on the back of our comparative advantage – farming and the production of high quality foods.”

But Moughan said it would be done

this time by combining our ability to produce great foods with our ability for doing unprecedented science in agriculture, food and those related disciplines. “You bring those two together, you get that mixture; I think there is a tremendous opportunity here for our country,” he said.

Another Fonterra example is a cheese product called Inner Balance.

“It is not sold as a cheese, it is sold as a probiotic… a source of beneficial bacteria to underpin good gut health.

Once again it sells very well and it is a very high profit margin product.”

He also cited some infant formulas high in omega 3 fish oil, certain vitamins, and in the fatty acid DHL for brain health; these could be marketed not just as an infant formula but as a product to give a child the best brain development.

“Once again it sells very well, very high margin, because it is backed by science, by evidence and it has a story around it; this is not just the story of the wonders of New Zealand and our great ability to produce food, but also the backing of science evidence -- hard core material the world will want to see more and more.”

He also gave examples of products coming out of the Riddet Institute Centre for Research Excellence that he co-leads with Professor Harjinder Singh. The centre wants to ensure its research is taken to a practical endpoint. “So we also have a

small team of product developers taking the bright ideas and transferring them right through to products.

We are trying to show by example that this can be done.”

One product allows iron to be taken up by humans in a bio-available organic form, and it allows iron to mixed into food formats in a way that doesn’t muck up the food. “When you add iron to food it does all sorts of things that make food hard to process and store. This is clever technology that encapsulates the iron and stops it having all these reactions.

“Another is sold offshore, bringing a nice return for New Zealand; we can put fish oil into foods at a very high level. You can eat one muffin in the morning and get your daily dose of 1000mg -- about four-five of the tablets -- and you won’t taste or smell or have any hint of fish.

“These sorts of products are going to be the future. Many of them are protein-based and are building on New Zealand’s amazing ability to produce very high quality proteins at competitive prices.

“There’s nothing surer that over the next 30 years there will be a great demand for proteins to get balanced diets into the many [people who] need to be fed.

“We can provide the proteins… and the functional foods based on protein that are science embedded and capture a high margin.”

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DAIRY NEWS OCTOBER 13, 2015

AGRIBUSINESS // 23

Dairy tech giant eyes local market leadership SUDESH KISSUN sudeshk@ruralnews.co.nz

DELAVAL HAS

appointed a new regional head.

Andrew Pooch, who took up his new role earlier this year, is keen on connecting DeLaval better with New Zealand farmers.

“My mission is to elevate DeLaval back to being world leader in New Zealand – a position we used to occupy,” he told Dairy News.

To do that, it’s crucial to understand what NZ farmers want, Pooch says.

He is keen to introduce equipment and technology which has already been proven in other countries which is quickly gaining relevance here. However, New Zealand will remain a major manufacturing base for DeLaval.

“We still manufacture a great deal of equipment in NZ to distribute to the rest of the world; it’s certainly not our intention to make everything overseas and import as we see strength in our local manufacturing capability” DeLaval’s main businesses in NZ is supplying milking machines both conventional and robotic as well as providing after sales services to farmers.

Pooch notes there is strong competition in all sectors, leading to DeLaval losing some ground.

“If you look at conventional milking, rotaries and herringbone, we have very good local competitors in the area,” he says.

In after-market service, farmers have a lot of choice; they can buy products directly from manufacturers or rural retailers.

They also have a choice of buying from dealers who represent companies like DeLaval.

Pooch believes local dealers have to develop closer working relationships with farmers.

“With farmers, our dealers are delivering more than just products; they have to develop a relationship.”

Robotics remains a major focus for Pooch; in

New Zealand the uptake of robotic milking machinery is lower than in Australia, Europe and North America.

It’s a clear technological leap and normally a small group of farmers are early adopters. Pooch believes DeLaval and other robotic milking suppliers must ensure these farmers succeed.

“We need to grab hold of early adoptor farmers and help them become very successful,” he says.

“When another group of farmers see their success and the benefits robots can offer, they will jump on board.

“It’s a bit like any other technology -- like VCR or DVD players -- few people jump in early; when the rest see it as a good idea they all adopt it.

“I think the role of suppliers in robotics is to ensure farmers are well supported to deliver great results; we need to show how robots operate in NZ’s grasslands environment and can do so successfully.”

Pooch says farmers have expectations to see paybacks from robotics and rightly so. While robotics is in its infancy in NZ, about 50% of European farmers are using robots to milk cows, and more farmers in North America and Australia are embracing the technology.

Pooch is confident once NZ farmers see the benefits that come with robotics, NZ will see an increase of robots being installed nationally.

“We just have to work harder to get the early adopters into it and be very successful. We also have to do a better job in NZ of communicating the benefits; it’s not about installing a robot and then going fishing.”

Pooch believes robotics help attract younger workers to the sector and keep the farming business within the family.

He says the younger generation’s fascination with technology means they are enticed towards a future in milking cows after seeing a robot operate and understanding the

possibilities it brings.

Robots change the farm management; instead of having a worker milking cows they use their time more effectively in other areas, doing the chores a farmer usually has to pay

someone else to do.

Pooch says it’s important to make the case for robots.

“We have to start demonstrating some of the success stories; we can start showing farm-

Andrew Pooch, DeLaval.

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DAIRY NEWS OCTOBER 13, 2015

24 // MANAGEMENT

Nutrient loss under spotlight NEW ZEALAND’S shift

from a pasture-based model to high feed-input dairy farms will come under the microscope in a joint research project.

The two year project, led by AgResearch’s Dr Stewart Ledgard, will use case study farms varying in intensity of feed use to examine effects of their system changes over the last decade on emissions, production and profit, and will test options for improving their sustainability.

“Locally there is strong interest in understanding implications for water quality of dairy intensification through increased use of supplementary feeds and how effects can be minimised; and internationally there is a desire for food products to be produced with efficient use of resources and reduced wider environmental impacts,” says Ledgard.

“This project will apply a mix of regional and interna-

tional market related methods.”

The project also involves Ballance Agri-Nutrients, AgResearch, DairyNZ and Tatua, in partnership with the Government’s Sustainable Farming Fund initiative.

Ballance science extension manager Ian Tarbotton says the industry recognises the rise in high feed-input farms in the past 10 years, but there is no holistic approach to determine when the higherinput system has an adverse impact on the farm business and beyond.

“This project… will evaluate the whole farming system, accounting for all land and brought-in feed through to water quality and energy use.

“We will be able to help farmers with nutrient use efficiency and farm system monitoring through increased farmer awareness of the hotspots for nutrient losses.”

Tarbotton says that over the last decade dairying has

Ian Tarbotton, Ballance AgriNutrients.

Heifer grazing new in Taupo A NEW dairy grazing site near Taupo

changed, seeing larger average herd sizes, higher milk production and stocking rates and a rise in land prices and farm debt.

While different studies had been done, few have looked at the economic and wider environmental impacts or taken a whole-of-farm view.

“Future farm systems will have different monitoring, metrics and thresholds for onfarm decision making. New indices will come from this research such as water use/ kgMS or nitrogen leached by profit level.

“Farmers will be able to rely on better evidence-based sci-

entific information to drive their farm decisions rather than defaulting to routine decision making.

“Farmers need insight into the implications of environmental policies on water and nutrient loss to ensure their increase in feed doesn’t push them outside these limits.”

will be focused on heifers, says the owner, Wairakei Pastoral Ltd. Its 3500ha grazing site on Wairakei Estate will adopt best environmental practices, doing the ‘right thing by the land’, the firm says.

Kiwi Grazing operates three farms -- Tainui, Waimana and Tauhara – all new, on free-draining soils.

The preferred vet for the site is Tony Parsons, Taupo Vet Services, providing a “strong animal health focus”. The company also has long standing relationships with other suppliers in the Taupo region.

It says it expects to record weight gains and animal health and will communicate these to its clients – including daily weight gains on each animal, Minda weights and regular reports.

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DAIRY NEWS OCTOBER 13, 2015

MANAGEMENT // 25

Bug strategies beat plain old spraying AN ONGOING trial of

integrated pest management (IPM) strategies in forage brassica crops is showing positive signs, says the insecticide maker Dupont.

The is the first year of a three year evaluation by Plant & Food Research as part of a Ministry for Primary Industries Sustainable Farming Fund (SFF) project titled ‘IPM strategy development and demonstration for forage and seed brassicas’.

An IPM approach to pest control uses beneficial insects (such as natural predators and parasitoids), management methods and, when necessary, selective insecticides to kill pests in crops. IPM has been successful in the New Zealand horticultural industry for many seasons, Dupont says.

The study aims to look at the benefits of an IPM programme in brassica crops versus the use of traditional broad spectrum insecticide. This latter affects target pests and beneficial insects and it can lead to spikes in populations of unwanted insects at various times of the season.

IPM uses chemistry such as DuPont Exirel insecticide which selectively targets pests such as Cabbage white butterfly (Pieris rapae), Diamondback moth (Plutella xylostella), Soybean looper (Thysanoplusia orichalcea), European leaf miner (Scaptomyza flava) and Grey cabbage aphid (Brevicoryne brassica).

It also leaves key beneficial insects in the crop where they can keep killing pests that reappear in the brassica crops.

In trials in Canterbury in forage and seed brassica crops, a farmer’s standard programme was compared alongside an IPM strategy.

In all sites predators such as lacewings and ladybirds were active, although it was the parasitic wasps that seemed to have the biggest impact on reducing aphid and diamondback moth pressure.

Results of the first year showed the importance of relying on predators and parasitoids in conjunction

with selective products from chemical companies for an overall IPM strategy.

Farmers who took part in the first year were positive and better understood the role beneficial insects can play in brassica production.

Results from the year showed IPM could kill pests as effectively as the conventional approach and with fewer insecticides.

The arrival of pests such as Diamondback moth into a crop was generally followed by parasitic wasps, and the use of an insecticide such as Exirel could help kill the pests while beneficial numbers were increasing.

At an irrigated kale paddock on a sheep and beef farm Diamondback moth caterpillars were present at the beginning of December.

Numbers kept rising and at the end of December the broad spectrum insecticide Lorsban was applied to the conventional side and a selective Bt insecticide was applied to the IPM side.

Caterpillar numbers declined on the conventional side and, after a small decline of the IPM side and some feeding damage, a decision was made to apply Exirel insecticide across the whole paddock on January 9. On the IPM side, as a result of the Bt spray, high rates of parasitism developed and the reduction in caterpillars from the Exirel insecticide in combination with the presence of the parasitic wasps meant that a good kill was maintained for the rest of the season.

High rates of parasitism were noted on the caterpillars in the weeks that followed and numbers remained similarly low across the whole paddock from mid-February onwards.

An additional spray of Ampligo insecticide on February 18 on the conventional side did not visibly alter the diamondback moth abundance compared to that on the IPM side where parasitic wasps were killing the caterpillars.

Aphids were not found in the crop until mid-January, but the numbers did not build too rapidly (possibly because there were

already lacewings and other predators present in the crop). A month later, aphid-associated parasitic wasps were present and these maintained good kill levels in the rest of the crop.

The project will continue to June 2017; yield results and gross margins will be examined.

Expanding IPM systems could raise the financial and environmental performance of these

crops, Dupont says. There is growing interest from farmers wanting to adopt new pest management practices, and agronomists wanting to offer a wider range of services to their clients.

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DAIRY NEWS OCTOBER 13, 2015

26 // MANAGEMENT Mike Bailey, LIC FarmWise consultant.

Coping with El Nino MIKE BAILEY

WEATHER FORECASTERS are

predicting an El Nino weather pattern this season which could be the strongest yet, resulting in a drought similar to the 1972-73, 1982-83 and 1997-98 events.

Those droughts had devastating effects on farming businesses, but we can learn from them to minimise the impact of any El Nino weather pattern this season.

Here are some strategies to help farmers get started -- to prepare now and as the season progresses.

Make a plan Sit down now and write/draw a summer management plan. Writing this down will help you to follow a sequence of events and get your timing right. It also helps your team (including family) get up to speed with your thoughts and the strategies you are putting in place. It also allows for valuable feedback.

To start with, critical cropping decisions will soon need to be made. Turnips, chicory and maize all need to be planted in October, whereas sorghum or millet give you the flexibility of a later planting date; this all needs to form part of your planning. Planting 10% of your farm in turnips will generally give you enough feed for 60 days supplementing. Chicory planted at 3.5ha/for 100 cows should allow for a 21 day rotation with a daily break of 2-3 hours.

Get started on the rest of your summer management strategy. Set out your key decision points regarding round length, stock condition, production per cow, SCC threshold and feed management. Herd testing will be an integral tool to help with the monitoring and decision making.

Decide on a date when critical action on those decisions points needs to occur, and what action you intend to take.

Monitoring starts now Take a look at your current situation and start monitoring now. It is good practice and you will use the infor-

mation now and after Christmas. This includes feed reserves, pasture covers, and body condition score.

Honestly assess how the current general climatic situation is affecting your property. This becomes your point of reference. Then create decision rules. These are deadlines for when you will need to make decisions about certain aspects of the farm. Add these details into your written management plan and be sure to act on the decision rules you create.

Create proactive drought strategies Many of these strategies will likely form part of any summer management plan but will need special consideration this season to keep one eye on the potential drought.

If you are cropping get it in early.

Don’t scrimp on crop establishment; every hectare needs to be producing as much as possible.

Don’t waste grass, harvest what you can afford and defer what you cannot.

If you are going to defer, try to roll the feed ahead that appears at the top of the wedge each round and treat as a crop.

Use nitrogen to help push feed into the summer months.

Get your round out to 30 days by Christmas. Reassess if necessary what criteria will trigger feeding supplements: has anything changed -- payout, feed price, and drought outlook?

Be flexible.

Be smart if you go into the market for feed. Compare feed options on cost/ megajoule of metabolisable energy (MJME). Remember when it’s dry you may be looking for the cheapest protein source. A good general guideline for buying feed based on cents/kgDM is paying no more than 5% of pay-out.

At $4.60 that’s 23 cents; remember to factor in the utilisation.

Keep as many cows as possible milking as long as possible until the rain comes, but also try to avoid feeding excessive amounts of supplements to cows producing at very low levels. The DairyNZ supplement calculator (at www.dairynz.co.nz) is good for helping with short term feed decisions.

Body condition score (BCS) your

cows and act with sufficient time to achieve the target for next season’s calving: BCS 5.0 for mature cows and BCS 5.5 for second calvers. To regain 1.0 BCS will require 170-200kgDM, depending on feed type, so avoid taking too much weight off your cows. Get onto this early and establish a system that allows you to whole herd score. And get help if you need it. The DairyNZ website has a list of consultants certified to body condition score if you require assistance or want an objective evaluation.

Consider once a day (OAD) milking or three times in two (3 in 2) days, to help reduce stress on cows and help to slow a decline in condition. OAD is best before production declines from 1.3ms/cow per day, and 3 in 2 after AI is finished.

Organise your pregnancy testing for the earliest possible date and react to the results.

Protect your pastures. Be prepared to sacrifice a paddock. Cows will overgraze if allowed to, limiting a paddock’s ability to recover. Target a paddock that might be a candidate for re-grassing in the future.

Make sure you have enough feed on hand for your cows once it rains. Allocate 10-14 days of supplement -- about 100kgDM/cow. This will help give pasture time to recover and establish some base and body while maintaining cow intakes.

Keep in touch with your grazier and be aware of what’s going on in that environment. You need to protect the young stock; they are the future productive potential of your herd.

Lastly, make use of your network of friends, discussion groups and trusted advisors. Talk to other people around you and don’t hesitate to ask for help if you need it.

Having a plan and following the rules you put in place will go a long way to helping to ensure the effect of any El Nino induced drought is minimised and does not linger into the subsequent season.

• Mike Bailey is LIC FarmWise consultant. www.lic.co.nz

DAIRY NEWS OCTOBER 13, 2015

MANAGEMENT // 27

Passion and innovation in smaller herds THIS SEASON many

farmers, particularly sharemilkers, are questioning their decision to go dairy farming, but Northland sharemilker Gavin Hogarth has tried different career options and smaller herd farming is the one that suits him best.

But the tough financial climate has led to strategic changes onfarm this year.

Six years ago Hogarth and his partner Jody Hansen shifted from Waikato to Northland to take up a job offer. They are now in their fifth season 50:50 sharemilking in the Bay of Islands. They are smaller-herd farmers, milking 180 Jersey cows through a 20-aside herringbone shed on the 60ha (eff) farm.

Dairy farming wasn’t his first career choice.

“I was brought up on dairy farms and in and around the dairy industry,” he says. “But when I left school the last thing I wanted to do was milk cows. I did an apprenticeship with the Post Office, went to Australia and drove trucks and courier vans.”

However, after meeting Jody, Hogarth had a change of heart and went to where he started, on a dairy farm. It has been the right move for him. “I get on well with animals,” he says.

“They trust you a lot more than people. I couldn’t work in an office with people; it would drive me round the bend. I also enjoy the challenge of it: getting what you can out of your cows.”

Working with animals is not the only satisfaction Hogarth gets from farming in the Far North.

“Someone said a while back that if you can farm north of the Auckland harbour bridge you can farm anywhere in the world, because it is so different from anywhere else.

In Northland we can get 200mm of rain in one day in summer and you can see a swamp halfway up a hillside. This is a very wet farm, the annual rainfall is about 1200-1400 mm; last

winter it was half under water.”

Smaller herd farming suits Hogarth. He has worked in large herd businesses, but they weren’t the right fit for him. “You get to know your animals,” he says.

“They know you, you know them. If I had a big herd I would have to deal with staff. When you’ve only got yourself to worry about, you’ve only got yourself to blame. You are responsible for what happens, and you are also responsible for any mistakes: it is very simple.”

He believes many innovations have their genesis on smaller herd farms. “By necessity people on small farms have to come up with ways to fix problems themselves. If small farms weren’t around I think a lot of No 8 wire inventions wouldn’t happen because people aren’t out there in situations where they have to come up with the solution to problems.”

He also thinks smaller farms allow people to follow their dreams.

“Probably a lot more work goes into breeding to fit purposes on smaller farms. I know a guy whose sole game is production. He milks 40 cows, winter and spring calving, and his cows average 600-700kgMS/year. That is his passion, seeing what you can get a cow to produce. You couldn’t afford to do that on a big farm; you couldn’t put that work and effort into it. Without little farms you are not going to get people who put their life into following their passion.”

This season is particularly challenging for sharemilkers and the situation is no different for Hogarth. “To cope with the low payout we are milking OAD. The theory is that reducing feed demand – because the cows aren’t walking to the shed twice a day -- will reduce boughtin feed. The impact of OAD on production has not been too dramatic so far this season; looking at a three year rolling average we are only 3-4% behind.

“Jody has also gone back to work full-time; it’s the first time she has had

a full-time job since we have been in Northland.

She is working in Whangarei, about an hour’s drive away.”

Hogarth is on the Northland committee for SMASH (Smaller Milk

and Supply Herds) and he gains much from his involvement.

“When you go to events you meet different people and you hear things from different perspectives. You get ideas for solutions to

some of your problems as you find out how other people are dealing with them.

• Louise Hanlon is an executive committee member of Smaller milk and Supply Herds (SMASH).

Northland sharemilker Gavin Hogarth.

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DAIRY NEWS OCTOBER 13, 2015

28 // ANIMAL HEALTH

Less burping increases production i “About 6% of the food the cow eats is converted to methane gas, which is wasted food and energy. Considering cows burp about 600 litres of methane daily, if you save the energy it has to go somewhere – we expected it to go into milk or milk fat.”

JEANETTE SEVERS

INVESTIGATIONS INTO methane at Ellin-

bank Research Farm, Victoria, Australia, have uncovered surprising and unexpected outcomes for milk production and animal health.

Several projects measuring methane emissions from dairy cows have calculated increased weight and milk production responses.

The methane creates a loss of energy, so reducing emissions enables the energy to be metabolised elsewhere, according to the scientists.

“Methane is energy and a greenhouse gas, 25 times more powerful than carbon dioxide,” said Dr Peter Moate, senior research scientist at Ellinbank.

“So a dairy cow is

The cows pictured with the various apparatus to assist research.

equivalent to a family motor car in its greenhouse emissions and effect.

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that if in future Australian dairyfarmers are asked to reduce methane emissions from cows, they will have real options to do that.

“And our research is

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“If you save energy

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Experiments at Ellinbank on 70% forage-fed cows showed methane emissions were 21.1g/ kgDM intake.

“I’ve measured the methane intensity of Australian milk by measuring the cows’ burps and calculating that against milk production,” Moate said. “In 1980, it was 33.6g methane/ kg milk produced. Thirty years later, as the milk production of the cows has increased, it decreased to 19.9g methane/kg milk.”

Moate said better genetics, feeding and pastures caused the reduced measures. “So farmers are to be congratulated for their efforts, being efficient and using the benefits of scientific research.

“What can Australian farmers do to further reduce methane emissions? Well, obviously feed additive, 3-nitrooxypropanol (NOP) is one option when it becomes available.

“Several others we’ve researched include fatty feed supplements – cotton seed meal, cold pressed canola, brewers grains, homily meal, grape marc.

These contain a high amount of fat; feeding those to cows you are able to decrease methane emissions by 10-25%. But it has to be economical; we’re not advocating farmers

use these unless it’s economical for them.”

Moate said summer, when pastures were dry, with reduced protein and fat, was an ideal time to provide these supplements.

Feeding high amounts of wheat to dairy cows can substantially reduce methane emissions. In one experiment, feeding 10kg of wheat/cow/day reduced methane emissions by 50%.

In another experiment, cows fed on a basal diet of pasture and 9kg wheat had methane emissions lower by 35%.

“Wheat feeding is a standard on many Australian dairy farms and it’s likely the amount of methane being produced by those cows is less than we previously thought,” Moate said.

Further research about wheat’s anti-methane effect is being done.

The sulphur-hexafluoride (SF6) technique developed by Ellinbank scientists, to measure methane/kg/DM eaten by pasture-fed cows, has been adopted in other research. A brass capsule is swallowed by the cow, where it lodges in the rumen. The SF6 is diffused as a gas through a teflon membrane on the capsule’s end, at a constant

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DAIRY NEWS OCTOBER 13, 2015

ANIMAL HEALTH // 29

n in dairy cows rate of 5mg/day, mixed with the methane in the cows’ rumen and expelled as burps.

Burps were measured using a tube suspended over the animal’s nose which sucked the air through and into a saddle apparatus around its body.

“It turns out the cows produce about 21g methane/kgDM eaten; it applies to all diets of more than 70% forage,” Moate said.

An international team of scientists from Ellinbank and Penn State University, USA, discovered a feed additive included in the diet of 48 barn-stalled dairy cows reduced their methane emissions by 30%.

One gram of the feed additive, 3-nitrooxypropanol (NOP), was added to the daily grain feed ration for each cow for 12 weeks.

Methane emissions were measured using the SF6 technique.

“Adding NOP into the daily feed reduced the cows’ emissions of methane gas by 30%,” said Moate.

“About 6% of the food the cow eats is converted to methane gas, which is wasted food and energy.

Considering cows burp about 600 litres of

methane daily, if you save the energy it has to go somewhere – we expected it to go into milk or milk fat.

“The cows given NOP captured the energy and converted it into increased body weight by 1kg/week, indicating more energy was available for the cow when methane production is reduced. Importantly, there was no reduction in milk production or com-

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Moate has applied for approval to conduct the NOP research on Australian dairy cows grazing pasture, to determine whether the methane inhibiting effect was similar.

“No other feed additive has had such a big effect on methane, using such a small amount. So there is a possibility to add that to feed of cows,” he said.

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that can develop breeding values and feed conversion figures for the Breeding Value Index.

This work is led by a geneticist, associate professor Ben Hayes (AgriBio Centre, Latrobe University) with Ellinbank scientists Dr Joe Jacob and Josie Thornhill.

Thornhill said preliminary observations indicated obvious visual adaptive responses. “Heifers identified as more heat tolerant are mimicking their maternal forebears, keeping their core temperatures more stable,” Thornhill said.

She said preliminary data indicated the maternal milk production figures would also be replicated.

Jacobs said identifying genetic markers for different production aspects could help identify cows that maintained milk production or body weight during hot weather.

“This research should be able to standardise a temperature and humidity index, to be applied to other animals,” he said.

While initially the genetic markers research is being related to bulls’ estimated breeding values (EBVs), ultimately it would be extrapolated to maternal EBVs, according to Jacob.

.n

TEMPERATURE AND humidity controlled chambers (calorimeters --pictured) are being used to replicate the effects on cows of a mild to moderate heat wave.

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Six cows spend four days in the calorimeter, where oxygen intake, methane and carbon dioxide emissions and heat production are measured.

The cows are fed crushed corn, crushed wheat, crushed barley and rolled barley, to identify any differences in methane emissions.

Blood tests taken one week prior to entering the chamber and at day three in the chamber identified genetic changes in milk production, insulin, glucose and non-steroidal fatty acids.

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DAIRY NEWS OCTOBER 13, 2015

30 // ANIMAL HEALTH

NZ fodder beet specialist Jim Gibbs (centre) with Australian dairy farmers Darryl and Leanne Priebbenow. PHOTO: GORDON COLLIE

Fodder, sugar beets dream feed if grown right GORDON COLLIE

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Australian conditions up north lend themselves to even higher yields than those seen in NZ. As the next lowest-cost option to pasture, beets have become hugely popular in NZ over the last 10 years, underpinned by extensive research led by Dr Jim Gibbs at Lincoln

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Gibbs, a former

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IT MAY be low cost and high yield, but the fodder beets are not without their challenges in getting established.

Speaking at the Gatton field day, Jim Gibbs highlighted the agronomic practices necessary for establishing the vegetable crop and getting it through the first 60 days.

He says precision planting to achieve the right depth and seed spacing was critical and bed preparation was important to successful establishment.

Beet is not a strong germinator. Soil moisture is important and seedlings are prone to wind damage. He said the crop lent itself to irrigation with dairy effluent.

Achieving a good early canopy cover was the key to smothering competing weeds.

“Once you get through the establishment phase it’s bulletproof,” he says.

As a bulb crop it does not respond much to nitrogen. Key

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nutrient requirements are sodium and particularly potassium.

Boron is a key trace element.

Yield expectations from trials at Gatton are that at least 30 tonnes DM/ha could be achieved. This would be an advantage of 30% over yields typical in NZ. The leaf typically contains about 30% of the dry matter and protein level is about 25%.

The bulb has a protein level

Queenslander, has followed trials, now in their second year, at the University of Queensland dairy research facility at Gatton campus.

A large crowd of farmers keen to learn more from Gibbs attended a subtropical dairy field day TO PAGE 45

around 10% or less and is low in fibre, but it has high sugar content which need good cow rumen function to digest.

The Gatton trial crop of fodder beet was planted into a fine seedbed in April at a 50cm row spacing and a density of 77,500 plants/ha. When feeding out began in September the crop was yielding about 24 tonnes DM/ha with 120 cows being transitioned onto strip grazing.

DAIRY NEWS OCTOBER 13, 2015

ANIMAL HEALTH/FEED // 31

Soil tests lower fertiliser bill WHOLE-FARM SOIL

testing saves Taranaki farmer Hayden Lawrence about $15,000 on fertiliser each year, according to fertiliser co-op Ravensdown.

Lawrence, who farms in equity partnership with his wife Alecia and parents, began whole-farm soil testing seven years ago. To date, he has saved about $90,000 and has increased pasture production from 14.5 tonnes/ha to 18.6T/ha on the 97ha property, says Ravensdown.

The Lawrences milk a maximum of 240 cows on an 85ha milking platform, using their hill country block to graze heifers. They also follow an 18-month cropping rotation: paddocks are planted with silage, oats, chicory and then pasture.

They are trialling threeyear calving, where cows will be milked for 450 days and calved twice. Research from DairyNZ shows the additional days of milking

could increase milk yield and decrease animal health issues by reducing calving.

As part of the trial, they are also growing fodder beet and maize.

Hayden says whole-farm testing is a ‘no brainer’ for the business. On average, it saves $162/ha from a blanket fertiliser application approach.

“For us to whole-farm soil test 50 paddocks costs $2500.

“We had been spending about $40,000 a year but that’s down to about $13,000 a year.

“When we started, Dr Ants Roberts (Ravensdown’s chief scientific officer) came down and did us a plan which we still use.

We have seven fertiliser mixes and one of those is no application.”

Analytical Research Laboratories (ARL) analyses the annual soil samples, taken from GPS transects for accuracy, and uploads the results to My Ravens-

Fodder, sugar beets dream feed FROM PAGE 30

at Gatton last month to inspect a trial crop used in break-feeding and to hear about the latest developments.

He said beets had been cultivated at least 500 years but had long been thought toxic to livestock.

Gibbs referred to tremendous improvement in agronomy over the last five years, resulting in more consistent, heavier crop yields. He has developed a way to safely transition cattle to consuming large quantities of beets.

NZ farmers in large numbers are now using beets as winter feed and as a lactation supplement.

Gibbs says the initial focus had been on strip grazing fodder beets, but a big future is emerging for harvested sugar beets with a higher percentage of dry matter. The beets were dug out, had their tops cut off and were pushed into windrows and successfully stored in the open for several months. With big herds up to 3000 cows,

walking distance to grazing is a good reason to harvest beets and bring them to the stock.

The extensive NZ experience in growing and feeding beets will be made available to current and prospective users who subscribe to a new internet database being set up -- the Fodder Beet Club.

Gibbs says it is crucial that cattle be transitioned to a high beet diet of up to 12kgDM/day to avoid the risk of acidosis. The rate of beet feeding should not increase by more than 1kgDM every second day and all changes to existing supplements made slowly.

After 14 days, cows needed to be held steady for a week at the beet allocation and supplement levels reached, then have their beet allocation lifted steadily until they are leaving bulbs behind -- an indication they are eating to an ad lib level.

“With a successful transition, the classic NZ dairy diet is beet and pasture – nothing else,” Gibbs says.

down, a secure online tool that allows farmers to view their farming information. Based on the results, Hayden orders fertiliser and plans spreading with Ravensdown joint venture Spreading Sandford, which collects and spreads the various mixes.

The whole-farm testing results haven’t been hugely

surprising, but Hayden says he has noticed how various crops and management regimes affect nutrient levels. It’s also helped to know when they can mine nutrients and when they need to top them up.

“We were advised that on our Taranaki ash soils, the farm probably wouldn’t need large quantities of

superphosphate. But after two years we saw sulphur levels start to bottom out.

We’ve easily addressed this by using sulphur mixes combined into our last nitrogen application in autumn and our first nitrogen application in spring,” Hayden says.

ARL technical director Dr Hendrik Venter says the

analysis of soil test results for samples submitted during 2014 showed that for pH, Olsen P, potassium, magnesium and sulphatesulphur there was a significant number testing above and below recommended science-based optimum ranges.

“A soil test will help ensure the application of

enough fertiliser to meet the requirements of the crop, while taking advantage of the nutrients already present in the soil.

Soil testing is one of the best management practices to achieve maximum production and fertiliser is one of the largest input costs for farms. Flying blind is never advisable,” Hendrik says.

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DAIRY NEWS OCTOBER 13, 2015

32 // HAY & SILAGE

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MOST LOSSES that

occur when you make silage are invisible – as high as 40% of the original cut pasture, says DairyNZ. Losses occur as sugars and proteins in the grass are broken down by enzymes and bacteria, starting as soon as the grass is cut. Losses decrease quality and quantity, because the highly digestible components are the most rapidly broken down.

Losses depend firstly on the dry matter content of the pasture you ensile Field losses: As cut pasture waits to be picked up, sugars are lost through a process of respiration.

Drier pasture is more

likely to be lost while being picked up, because it is more likely to break up or blow away. As the DM% of the pasture increases, so do field losses.

Fermentation losses: Plant sugars are used up during fermentation to make acid. In poorly preserved silage, protein and organic matter can also be lost because of air in the stack, or a high pH. Fermentation losses are lowest in pasture which is above 25% DM. Effluent losses: Silage effluent is surplus water from the silage, carrying soluble sugars and proteins with it as it flows out.

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DM pasture. Above 30% DM, no effluent losses will occur.

Heating: In dry grass silage it is a challenge to achieve good compaction.

Poor compaction causes air to penetrate the stack once it is opened. When air is present, yeasts are able to generate heat from sugars and even from lactic acid and cause losses by converting these nutrients into heat.

Optimum DM for silage is 25-30% because total DM loss is minimised and effluent losses will be minor. To achieve this: ■■ Cut in the morning of a sunny day, for rapid wilting. Cutting after 1-2 days sunny weather will result in good sugar levels in the pasture, even when cut in the morning.

■■ Avoid wilting for any more than 24 hours.

■■ Compact the silage well. In a stack or pit, use the heaviest wheeled vehicle available. Tractor wheels should not sink into the pile of pasture any further than the depth of rubber. For baled silage make sure a high density baler is used.

■■ Seal the stack completely with a weighted, airtight cover. Wash old polythene before use to avoid contamination with the wrong bacteria.

■■ Don’t re-open a covered stack to add more pas-

Losses occur as sugars and proteins in the grass are broken down.

■■

■■

■■

■■

■■

ture on another day.

Where concrete-lined pits are not full, make a concave [ ) ] and not convex [ ( ] top, to avoid water seeping down the side of the pit.

Once the silage is sealed, nothing can be done to change the fermentation process.

A good fermentation relies on no air being in the silage, and having plenty of sugar available to turn into lactic acid.

Poor fermentation leads to big losses of protein quality. In poorly preserved silage protein is broken down into ammonia, which decreases the feed value of the silage.

Getting things right while the grass is being harvested will maximise the chance of having a good fermentation: A fast wilt to 25-30% DM will leave good sugar concentration in the pasture.

Quick compaction

and effective sealing will keep out oxygen, making conditions more suitable for bacteria to convert sugars into lactic acid.

■■ Fast production of lactic acid will quickly reduce the pH, to prevent protein losses.

Silage begins to break down once exposed to air, and will begin to heat up as micro-organisms turn the remaining sugars and protein into heat and energy.

When feeding out, aim for as little time as possible between exposing the silage to air and the cows eating it.

High DM% silages are particularly prone to deteriorating when exposed to air. Deterioration increases as air temperature increases, so silage fed over summer will have higher losses than that fed in winter. Yeasts and moulds containing toxins may grow on deteriorating silage.

DAIRY NEWS OCTOBER 13, 2015

HAY & SILAGE // 33

Silage: quality in equals quality out QUALITY SILAGE is

a stable feed made from quality pasture preserved in the absence of oxygen by quality fermentation to minimise any loss of feeding value, says DairyNZ. It is impossible to produce quality silage from poor quality pasture, no matter how good the fermentation is. Both the quality of the ensiled pasture and the quality of the fermentation must be considered. These can be measured by having a feed analysis done on your silage.

With well preserved silage, losses in feeding

value during fermentation will be small, and the final silage will be only slightly lower in feeding value than the original pasture.

The quality of the fermentation tells us how well the quality of the original pasture has been preserved in the silage: pH: The lactic acid produced during fermentation causes a decrease in pH. A low pH will prevent an unwanted butyric fermentation, which reduces the feeding value and palatibility of the silage.

Low DM silage needs a lower pH than high DM silage.

IF YOU don’t have a feed analysis for your silage you can estimate quality from its appearance.

Feed quality: High quality silage contains lots of leaf and very little stem. The more stem in silage the poorer its quality.

Colour: Well-preserved silages are green, yellow or pale brown. Dark brown silage is generally poorly preserved. Smell: Well preserved silage has a sweet, tobacco smell. Foul, rancid smells indicate the presence of butyric acid from poor preservation.

Moulds: These grow where silage has been exposed to air. Some fungi can produce toxins.

Quality silage can support high milk production. In England, 560kg Friesian cows have eaten 16kg DM/day as pasture silage (approx 11 MJ ME/ kg DM, 7% Ammonia-N) and produced 1.6kgMS/ day for 14 weeks without losing body condition.

When silage is fed to cows as a sole diet, intake is generally lower than that of fresh pasture. Increasing the ammonia-N from 5% to 10% can result in a 5-10% drop in DM intake. A 5% decrease in digestibility (from 70% to 65%) can cause a 2kgDM/day drop in DM intake. Feeds of lower digestibility provide the cow with less nutrients for milk production. A 5% drop in silage digestibility for a 200 tonne silage stack (50 tonne DM) could result in 300kg less milksolids produced, and 450kg liveweight loss, if fed to milking cows. Low quality silage (made from low quality pasture, or ensiled with low quality fermentation, or both) will not support high milk yields. In fact many silages made on dairy farms in New Zealand are only suitable for maintaining cows.

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DAIRY NEWS OCTOBER 13, 2015

34 // MACHINERY & PRODUCTS

Kubota boosts power MARK DANIEL markd@ruralnews.co.nz

KUBOTA, WELL known for its

smaller lifestyle tractors and farm units to 100hp, about a year ago announced it would build a range of higher powered models.

Following up on this promise the company recently celebrated opening its new 115,000 sq m European factory at Dunkerque, not far from the infamous Channel Tunnel.

This location puts it near the ports of Calais and Dunkerque, and gets it a welcome from the local council keen to see more jobs.

The factory will produce the new M7 series tractors from 130170hp with 4-cyl cylinder engines and ZF-sourced transmissions. Early production will be

for the European and North American markets, and further destinations as production ramps up.

Small scale production has been underway since April, and volumes will rise to around 3000 units per annum by 2017.

Though considered a small player in the over 60hp market, Kubota’s annual turnover of Euro 11 billion surpasses that of the US machinery giant Agco.

Around 45% of sales are in the home market in Japan, but this percentage is falling as development plans in Europe and North America come to fruition. www.kubota. co.nz

Ken Wilson

Sticking with orange KEN WILSON started out on the family

farm, but a love of machinery drew him to contracting, initially with a bulldozer on the slopes above Colyton, Manawatu.

In the late 1970’s he bought his first wheeled tractor, a Kubota 7500, which over the years led to a number of the Japanese brand entering the business.

Wilson’s latest acquisition from the marque is a M135GX which has earned its keep with implements such as a semimounted five-furrow plough and a 3m power harrow; it has racked up around 700

hours in five months.

Asked what he thought of his latest charge, Wilson said “the four cylinder engine just keeps hanging on and shows plenty of punch; the cab is roomy and quiet, has great visibility and the layout of the controls is well thought out.”

He was also complimentary about the unique front suspension that irons out the bumps, and the Bi-Speed steering system that allows tight turns on headlands during row crop work. www.kubota.co.nz

DAIRY NEWS OCTOBER 13, 2015

MACHINERY & PRODUCTS // 35

Getting more from chopped maize MARK DANIEL markd@ruralnews.co.nz

MAIZE SILAGE has

long been critical to livestock farmers’ conservation choice for winter feed, so it’s no surprise to see harvester manufacturers looking at new ways to make the crop more productive.

In the early days the crop needed to be cut extremely short to ensure all the kernels were cracked and digestible, then the corn cracker systems of the late 1980s allowed an increase in crop length,

while achieving the same result.

A silver medal will go to Claas at Agritechnica in Germany in mid November for its recently launched MCC Max maize silage conditioning system for its Jaguar range of selfpropelled forage harvesters.

Using a pair of rollers with a saw tooth profile and 30 angular segments, the system combines friction, cutting and shearing to intensively condition the grains and release the maximum amount of digestible starches (which increase energy levels), as well as shredding the stalk

Crop handler suits choppers, wagons, balers BELT MERGERS are recognised as useful for

bringing large volumes of crop into a single windrow to feed the enormous appetites of self-propelled foragers, loader wagons or large square balers.

The Kuhn Merge Maxx 902 has a high capacity belt conveyor system particularly useful for handling fragile crops such as lucerne or clover, or bringing together large grass crops into square sectioned, flat topped swaths with the potential to help increase harvester outputs.

With a working width of 9.1m, and able to clear up to 21m in an out-and-return pass into a 1.4-1.8m swath, the unit has improved suspension allowing high forward speeds, and reduced wear on the support skids and gathering tines.

A control terminal allows easy selection of left, right or centre delivery, with the option to lift belt sections individually or simultaneously dependent on field shape.

Minimum requirement is a 140hp tractor with two double acting hydraulic outlets. www.kuhn.co.nz

material at chop lengths up to 22mm.

This can increase feed value, and there advantages in the ensiling process, not least by achieving better levels of consolidation at longer chop

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Surplus maize silage could find buyers in the burgeoning AD gas production industry from a common silage clamp. www.claasharvestcentre.co.nz

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DAIRY NEWS OCTOBER 13, 2015

36 // MACHINERY & PRODUCTS

Who’s the boss? Callies learn the hard way THE BATTLE to beat

Californian thistles lasted decades for Waikato dairy farmer Justin Downing family, comments Dow AgroSciences, whose product Tordon PastureBoss finally won out.

Downing and his wife Liesl are equity partners, managing a farm near Morrinsville with his parents Lloyd and Olwyn, and they own another farm which employs a contract milker. (Lloyd is a well-known, outspoken Waikato dairy farmer who has held prominent roles in the farming community including Federated Farmers’ Waikato president.

He is also ending 30 years in the National Fieldays Society, including terms as chairman and president.)

Milking 500 cows on 200ha, Justin says rag-

Lloyd Downing

wort and Scotch thistles were the first priority.

Once these were killed off, attention turned to Californian thistles.

“Apart from looking terrible the patches get bigger and thicker every year if you don’t do anything. Cows end up grazing amongst the thistles, reducing the area of productive pasture.”

Frustrated with chemical spraying annually for about 10 years, only for Californian thistles to

next year. With Tordon PastureBoss, we sprayed it once and 90% of callies were gone.”

About 10ha was sprayed last summer, boom spraying the big patches and spot spraying areas inaccessible to the tractor.

Though the Tordon costs more, applied at 2L/ ha it is worth it because it works, Downing says. The previous chemical, which cost $40/ha, didn’t work.

“We now spray all weeds with PastureBoss.

We go around with knapsacks, so if we see ragwort or a Scotch thistle, it gets spot sprayed.”

The product also kills oxeye daisy, a problem weed on his other farm.

“Like Californian thistles, it is now at the stage we can just spot spray.”

regrow, Downing then tried Tordon PastureBoss.

It costs more but contains a new generation herbicide effective at killing weeds with large root systems, such as Californian thistle.

“We found in the past, using another chemical, 24-D, we were spraying the same patches of callies year after year,” Downing says. “The thistles would die, but because of their huge root system would just grow back again the

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Converting poo into resources MARK DANIEL markd@ruralnews.co.nz

SLURRY TANKERS, once just a

means of dealing with smelly waste, are getting more sophisticated.

Recently, driven undoubtedly by environmental issues, farmers have more keenly sought the right machine for their job, especially to realise the nutrient benefits of the waste.

The Fliegel VFW range, distributed by Claas Harvest Centres in New Zealand, stands out as embodying the latest manufacturing techniques, and comes in a big range from 7500-30000L capacity.

The mainstream market is taken care of by single-axle models of 7500-10,600L and tandem axle units from 10,60018,000L. Hot-dipped galvanised steel ensures corrosion resistance and a durable long life, and is used extensively for the tank and chassis components.

Standard features, included for fast turnaround, include high capacity vacuum pumps with outputs of 10,0014,000L/min, a 150mm quick coupler, liquid level indicators, on-board hose

storage and a 600mm access hatch for easy cleaning.

Further, customers can specify ‘performance’ options including suspended and hydraulically adjusted drawbars, and filling options such as auto-couplers, powered fill, and hydraulically driven agitators to improve flow and prevent blockages.

For transporting waste, an optional moveable axle -- manual or hydraulic – transfers weight to the tractor hitch when moved rearwards in difficult conditions, or the reverse when used for long distance transport. Hydraulic brakes are fitted as standard, and air variants are available as options.

At the business end, standard application is by a simple splash plate system; alternatively operators wanting to make best use of available nutrients can specify an option dribble bar or disc injector layout. The former is available in 9-18m spreading widths, and the injection rigs from 3-8m; both help alleviate odour in populated areas, and make best use of nutrients.

Flow meters can be specified to record volumes applied as evidence of spread. www.claasharvestcentre.co.nz

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DAIRY NEWS OCTOBER 13, 2015

MACHINERY & PRODUCTS // 37

Grass harvesters debut at ploughing event MARK DANIEL markd@ruralnews.co.nz

IRISH GRASSLAND

heavyweight McHale have given followers a sneak preview of some new introductions to its range at this week’s Irish Ploughing Match.

The Pro-Glide F3100 and R3100 front and rear mounted mower conditioners, in development for four seasons, though using a bought-in cutter-bar assembly take their design and remaining manufacturing input from McHale.

Both machines offer 3.1m cutting widths and have a full width conditioner that is gearbox driven and uses steel swinging tines.

Out front the F3100 has up to 500mm of ‘in-work’ movement and a newly designed suspension system with a cam-lock to maintain the required ground pressure through the travel range. A double pivot pin at the centre of the machine allows 17 degrees of lateral movement.

In operation the suspension is also

configured to make adjustments to the cutterbar angle as it moves over the ground, by tilting it up as it travels over a bump and tilting it down as it moves through a hollow, so maintaining uniform cutting height across the paddock.

Bringing up the rear, the R3100 rear mower-conditioner has a suspension system positioned above the central pivot point over the cutter-bed, to give a wide range of movement; this uses the Pro-Glide system springs to allow the mower to move back and up in an arc should obstacles be encountered.

A separate mechanical break-back unit allows for larger obstacles it might encounter.

In work, ground pressure is controlled hydraulically, and displayed on a headstock mounted indicator gauge.

For transport the rear unit folds vertically over centre to around 110 degrees to minimise transport width.

Graeme Leigh, general manager for importer Power Farming, refers to limited production during the remainder of 2015 and the first part of 2016, and

McHale grass harvesters/wrappers.

says they will look to carry out some evaluation before considering the release for the 201617 season.

WRAPPING AT DIFFERENT SIZES ALSO SHOWN for the first time at the Ploughing Match was the McHale Orbital twin dispenser, trailed wrapper.

Though it uses a film application system similar to the flagship Fusion machine, this machine has some interesting features for loading and accommodating differing bale sizes.

The loading arm swings through 90 degrees to hold the bale before lifting it onto the wrapping table, where a drop-down front roller reduces the required lift height to place the bale. Once loaded the lowered roller moves back into position to allow the wrap cycle to start.

The twin dispenser system can spin at up to 40rpm, and apply 4 or 6 layers of film in 20 or 30 seconds. Output is maximised further with the loading arm carrying a bale, then automatically transferring it to the table as it clears. Once wrapped, unloading is achieved by the rear table roller lowering to place the bale on the ground.

The machine’s ability to adjust the working height of the table rollers allows it to accept bales 1.0-1.45m diameter, while still applying film to the centre of the bale.

Expect to see this in NZ for the 2016-17 season. www.powerfarming.co.nz

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DAIRY NEWS OCTOBER 13, 2015

38 // MACHINERY & PRODUCTS

Keeping rivals intrigued MARK DANIEL markd@ruralnews.co.nz

THE MAN from Volvo

NZ said “would you like to review our XC 90?”, and after driving one for a week the review is pretty straightforward: I want one!

The original XC90 sold in large numbers for Volvo, no doubt for its safety features, true seven seat capability and its rugged macho looks. With the second generation XC 90 already creating a waiting list for the buyers, it’s interesting to see what’s changed -just about everything.

The main changes centre on Volvo’s ‘scalable chassis design’, an aspect of a $11 billion engineering investment that allows the company to modify all vehicle dimensions -- from wheelbase to front and rear overhangs -- being built around the same platform.

Two key points of the re-design are strength and stiffness which have an influence on handling, particularly on large boxy vehicles like this one.

Another big change is the repositioning of front and rear suspension elements; this creates much more internal space and

takes this vehicle fairly and squarely into the luxury SUV market against the likes of BMW, Audi, Mercedes and Range Rover.

Out on the road the XC 90 seems to mind its

manners well, and even a spirited drive on country roads with poor edges and adverse cambers did little to move the car off its intended line, with the body exhibiting very little

roll, and permanent 4WD appearing to straighten out corners.

Tweaking of adjustable features like steering weight, throttle response or changing to the

To celebrate the 153rd Canterbury A&P Show on Wednesday 11 to Friday 13 November 2015, Rural News and STIHL are giving away a STIHL MS 251 Chainsaw and safety pack valued at $1660. Answer the question below and you’ll be in the draw to win!

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dynamic driving mode are there if you want, but this driver just liked the way it seemed to eat up the miles in a relaxed manner and without drama.

This ride was fitted with the D5, 4-cyl diesel engine that pumps out 225hp and a lusty 470Nm of torque, which combines with a superbly engineered 8-speed auto transmission that returns around 8.6L/ 100km and keeps engines revs nice and low. In dynamic mode engine revs rise to portray a more sporty feel, but the calmness starts to disappear and things get a little noisier.

But it’s the cabin that makes this vehicle stand out from the rest of the crowd. Big doors with keyless entry make for easy access into seats that can be adjusted to accommodate all sizes.

Support is firm and extremely comfortable with high quality hide on the seats.

Electrically adjustable seat pads can be extended for those a little longer in the leg, and combines with lumbar support to get the position just right, not nearly right.

The start knob on the centre armrest console works as one would expect, and once everything lights up ahead of the

driver it is clear, concise and easy to understand. A nice touch on moving off sees the two main roundels moving away to their lateral extremities, and the navigation panel appears centre screen.

In the centre console, vehicle control and set-up is by means of the new Sensus Control panel; this uses a touch screen format to move through all key features from auto engine stop, hill descent, parking assist -- into and out of spaces -- and such creature comforts as that Volvo trademark seat heating, dual zone climate control and a host of other functions.

As part of the package, and synonymous with Volvo who, let’s remember, gave the world seatbelts as far back as 1959, there is a raft of safety features: Intellisafe gives road sign information on the driver’s screen, a lane departure warning shows on the screen and gently vibrates the steering wheel to warn the driver, and an adaptive cruise function sets speed, monitors inter vehicle distance and gives a warning if a collision is imminent. The crash warning was superbly demonstrated when a car cut us off, the Volvo braking automatically to avoid a collision.

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