Dairy News 23 February 2016

Price rise not likely soon. PAGE 3

LITTLE TRACTOR, BIG ROLE Iseki does the job PAGE 31

FEBRUARY 23, 2016 ISSUE 351 // www.dairynews.co.nz

TOUGH TIMES Farmers share ideas PAGE 24

Price rise not likely soon. PAGE 3

LITTLE TRACTOR, BIG ROLE Iseki does the job PAGE 31

TOUGH TIMES Farmers share ideas PAGE 24

FEBRUARY 23, 2016 ISSUE 351 // www.dairynews.co.nz

KIWI MILKING PLATFORM ON THE MOVE

Demand soars for New Zealand milking rotaries overseas. PAGE 4

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DAIRY NEWS FEBRUARY 23, 2016

NEWS // 3

Price rise not likely soon – Wilson PAM TIPA pamelat@ruralnews.co.nz

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GLOBAL DAIRY prices are unlikely to start rising until later this year, weighed down by European production and global economic uncertainty, says Fonterra chairman John Wilson.

“The general view is that while we had thought prices would be moving north over the next three or four months, as you heard us say in January, unfortunately we think that will be later in 2016,” Wilson told the Northland Dairy Development Trust annual meeting last week.

“It is impossible to put a day on it, let alone a month so the reality is we will continue to update you.”

But he says Fonterra and its global peers believe future prices will show the market is not as imbalanced as current prices indicate.

“Obviously these are very, very challenging times for everyone,” he told the big turnout of farmers. “What we are seeing on farms is difficult for us, as farmers, and of course particularly those sharemilkers, the lower order sharemilkers.

“We have talked a lot in the past about how volatile our industry is and unfortunately we are seeing the bottom end of it at the moment.”

Referring to the global situation he said there was, frankly, no certainty. “But we will continue to give you the best information we can,” he told the meeting of about 160 farmers.

World milk production is responding to the price signals everywhere but Europe, he said. “Virtually all farmers in Europe are not making money on a cash basis but they have invested significantly in facilities and are using them.”

The view is that European production will decline. “We are just not sure when and frankly I think it will require a weather event to give a sharp signal to the market.”

Fonterra sees strong demand globally but is concerned about world economies. The current low milk prices have been created by an excess amount of supply in the market, the customers are aware of that and therefore the price point is dropping.

“We don’t believe, and neither do our peers globally, that the market is as imbalanced as the

price is indicating right now. The prices are also an indication of global financial fragility generally… also reflected in oil.”

An influence on the market is New Zealand milk supply. Fonterra had previously forecast supply would be 5-6% down following work done over spring in conjunction with DairyNZ, looking at the significant culling that had occurred, and the possibility of drought on the North Island East Coast.

“We have seen farmers producing a lot of milk even with a lower stocking rate which is good because it has been relatively low cost milk and in reasonable weather conditions,” Wilson said.

“There have been pockets of dryness around the country but general speaking we’ve seen relatively favourable conditions over the last threefour months.

“My personal view is that we will see quite different autumn production this year. There are clearly lower stocking rates and there will most likely be a lot less supplement fed so it is likely we will see an autumn that will drop down lower than it has historically. But much will depend on the weather.”

Currently Fonterra is forecasting 4-6% down; it is now tracking at 4% down. “For the last three weeks – for the first time this year – we have been ahead of last year day-on-day: just three weeks,” he said.

John Wilson at the Northland Dairy Development Trust Conference last week.

“But already in the last week we have started to tip the other way again.”

Commenting on last week’s GDT in which the price index fell 2.8% and whole milk powder fell about 3.7%, he said “because of what I’ve talked about we had expected it to bounce around at these levels. It is clearly near a floor or at a floor because of where intervention pricing is in Europe.

“However we can’t be 100% sure when the market is going to get the very clear understanding and signal that over the coming six months it will be demand driven rather than supply driven.”

ECONOMY STEADY DESPITE DAIRY MORE DIVERSIFICATION in the New Zealand economy is sustaining the currency despite low dairy prices, says John Wilson.

Fonterra updated its farmgate milk price to $4.15/kgMS in January versus $4.40/kgMS last year, Wilson told the Northland Dairy Development Trust.

“So it’s our second year of very low prices onfarm,” he said.

“One thing not being talked about… and which we need to adapt to, is that we clearly have an economy which is being supported, which is good, and more diversity than the influence of dairy in the

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past.”

Historically if global whole milk and skim milk powder prices dropped to current levels the NZ dollar would have dropped to the low fives; giving a 50-55c (versus $US) exchange rate.

Net migration, the Canterbury rebuild and a strong tourism sector were causing the NZ dollar to be valued.

“So we’ve got a dollar which is strong relative to where we would normally be at these sorts of global commodity prices,” he said.

“All these factors are clearly making it very difficult on farm.”

DAIRY NEWS FEBRUARY 23, 2016

4 // NEWS

Overseas rotary sales buffer firm against slowdown SUDESH KISSUN sudeshkt@ruralnews.co.nz

AN AWARD winning

rotary milking technology is helping a New Zealand company make inroads into overseas markets.

With the low payout slowing dairy conversions and upgrades on NZ farms, Waikato Milking Systems’ (WMS) international business is booming.

Leading the charge is the Centrus rotary platform, 80% lighter and stronger than concrete platforms; formed in a multi-layer process that includes Kevlar more commonly associated with the manufacture of aircraft and police bulletproof vests.

Marketed as heavy duty equipment, Centrus platforms are in demand by large herd farmers and farms milking more often than twice a day; this

appeals to overseas farmers for whom 24 hour milking is not uncommon.

WMS chief executive Dean Bell says three Centrus were sold even before it was developed and one is milking 3600

projects signed in NZ is one third down on last year.

Bell told Dairy News that a lot of energy has gone into growing the company’s international business. “Fortunately it

Dean Bell

cows three times a day in Michigan, US. Another is being installed in South Africa and one is en route to China.

The number of new

is a natural hedge that has offset the slowdown in the local market,” he says.

Bell says the international business has grown five times over the four

years; from around 20% of its total business to more than half this year.

He says the Centrus is the cornerstone product in its overseas drive. “It’s getting a huge amount of interest overseas. We won the National Fieldays international innovation award and that has helped a lot.”

The Centrus is designed for large farms and isn’t viable for NZ farmers; Waikato Milking is looking at marketing it under a new name overseas.

Bell says in overseas markets, NZ-based companies are viewed as making equipment for light cows and where milking is done for three hours each morning and afternoon.

“The demand on the equipment is not great and it’s very different on a 24-hour system.”

WMS markets its rota-

WMS heavy duty rotaries are designed for large 24-hour farms overseas.

ries overseas as heavy duty versions.

Bell says in its first four months of use, the new 84-bail Centrus in Michigan achieved two years of New Zealand use; the Centrus is running without any major problems.

Demand for WMS rotaries is also soaring in China; it has led the way in new orders this year.

While there are cheaper rotaries being sold in China, Bell says WMS high quality technology is winning.

One large Chinese corporate farmer visited WMS and ordered the first Centrus for the country. He has 7000 cows and needed two 84-bail rotaries. Due to milking shed design problems, only one Centrus can be installed; WMS installed a 84-bail

concrete rotary with all the features of a Centrus next to it.

“They look like brothers but they are not twins,” says Bell.

WMS has an 84-bail

and a 64-bail Centrus on the market. It plans to add a 50-bail and a 40-bail this year; the 60-bail Centrus will be withdrawn once its design moulds reach their use-by date.

Fonterra forecasts bigger dividends PAM TIPA pamelat@ruralnews.co.nz

FONTERRA’S EARNINGS per share dividend fore-

cast was lifted from 45c to 55c in January and will be updated in March in the half year results, says chairman John Wilson.

“I can assure you that your business is incredibly focused on the challenges that you as farmers have in your own businesses right now. We are doing everything we possibly can to get some money out of the business both in working capital… and certainly in sustainable earnings,” he said.

Gross margins have significantly improved, so has profitability above base prices, and capital spending has significantly reduced.

The consumer and food service business is generating good returns.

In Asia the improvement in this business has been 33% of gross margin, 4% volume growth; Latin America 35% increase in gross margin, 1% volume growth; and an increasing growth margin in Oceania. In China the volume in consumer and food service is still increasing – a 19% volume increase.

It was off a low base but they were getting significant growth and a good growth margin at about 27%, Wilson said, Most farms in New Zealand will earn between 50c to $1 under their cost base. Fonterra was able to do something to assist, he said, referring to the Fonterra cooperative support loan.

Fonterra must have a robust and transparent milk price, currently forecast at $4.15/kgMS for this season.

The earnings per share forecast rose from 45 to 55c in January. The co-op has a dividend policy of paying 65-75% of operating profit over time.

He said the earnings per share will be reviewed in March and they will try to give a clearer signal as to the likely position at the end of year for farmers’ budgeting purposes.

The only option for price smoothing was the interest free loan to farmers.

“It was good thinking by the management team.

It clearly supports our view that the fundamentals in dairy are very strong,” he said. “We are in a very difficult period right now.

“Being able to provide a loan which will work out at about $45,000 per average farmer doesn’t solve the challenge for farmers but hopefully it assists cashflow in some way this autumn.”

It comes from working capital being pulled out of the business as will be shown in the half year result.

DAIRY NEWS FEBRUARY 23, 2016

NEWS // 5

DairyNZ plans refocus on pasture PAM TIPA pamelat@ruralnews.co.nz

THE NEW Zealand dairy indus-

try has lost its way on growing and utilising pasture, says DairyNZ chief executive, Tim Mackle.

It needs to refocus on pasture as a priority to manage volatility and reset the industry’s competitiveness for the next 20 years.

DairyNZ plans to launch a campaign next month on putting pasture first, he told the Northland Dairy Development Trust annual meeting in Whangarei last week, attended by 160 farmers.

It is obvious there has been a big move towards greater feed inputs and in feed costs over the last 10 years, he said. Other costs, including labour per kilo of milk solids, have been relatively flat.

The big change started in the 2007-08 dry period over much of the North Island. There was a high milk price at that time and huge onfarm inflation of 11.5%.

“I am not criticising supplements or feed related costs…. I am not saying we haven’t made money with high milk prices which we’ve had in the last 10 years – off and on – with feeding inputs. But as an industry we have lost our way a bit in growing and utilising as much pasture first.”

DairyNZ’s campaign launch next month will start with a challenge for farmers, creating debate and asking farmers to truly ask themselves ‘do we put pasture first?’.

“This is not a criticism – we as farmers all feel we are doing the right thing – but it doesn’t matter

what you are doing in life, you have to go back and analyse and check.

“We have done quite a bit of analysis… we have had people out on farms doing pre and post checks saying ‘the farmer thinks it is this, but this is what the plate tells us’.

“There has been quite a bit of variation in what farmers think they are offering and what they think they are leaving behind.

There is a lot of juice to get out of the orange here. We think there is huge potential here to drive this harder.”

The campaign will be backed up by evidence, facts and figures and tools.

“None of this is new; it is stuff we’ve known for a long time but we’ve got to bring it back and bring it back hard to the forefront to help get us through,” said Mackle.

But it will also reset our competitiveness as an industry for the next 20 years ahead, he said.

“It is not all about getting us through the patch now. It is about learning about what we’ve just been through and putting some principals in place on how to deal with volatility.”

DairyNZ wants to change the focus away from how much feed the farmer is bringing in.

“I am not criticising the systems approach because it gives you a feel for how much feed you are bringing in but that does not give you a recipe for how to farm well. It just says ‘well, I’m bringing in 30% of my feed’.

“We will change the focus back to strategies on how much feed can you home-grow on your farm, and how much can you utilise, maximising that, working out what your

IN BRIEF OWI farm update HOW WILL changing health and safety legislation affect your farm? Are empty rates higher than normal this season on dairy farms? And what alternatives are there to chicory for summer cropping? These key dairy industry topics and more will be discussed on March 2 at Owl Farm’s first farm focus day for 2016.

Owl Farm, the St Peter’s School and Lincoln University Demonstration Dairy Farm, will host guest speakers from Fegan & Co, LIC and PGG Wrightson Seeds. Owl Farm Manager Tom Buckley will give an update on the season.

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Tim Mackle at the Northland Dairy Development Trust conference.

stock rate should be….

“It’s working out whether you have a 12 month strategy – whether you will use all you grow for 12 months, or whether you use a six month strategy – ‘I will go from balance date for six months and for the rest of the gaps I will use other strategies, I’ll destock, I’ll send the cows off the farm, I’ll buy in supplements at the right price’.

“For those who want to go really hard, maybe a three month strategy where I’ll feed all I can for three months on the home grow farm and maybe for nine months I’ll do other stuff.

“So that’s changing the focus for us from how much feed are

you bringing in to how much can you grow and utilise, what should your stocking rate be and what your strategy will be for filling gaps if you do need to fill gaps.”

Mackle says it isn’t rocket science; this has been around a long time.

“But it is acknowledging that pasture is our competitive advantage as a nation; you know this yourselves.

“Yes there is climatic variability across the country, but essentially as a country we are blessed with a great climate, soil, rainfall and sunshine to help us grow. There aren’t many places in the world that can grow more tonnage than we can.”

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DAIRY NEWS FEBRUARY 23, 2016

6 // NEWS

Ahuwhenua finalists PETER BURKE peterb@ruralnews.co.nz

TWO SOUTH Island Maori dairy farms and one in South Waikato are finalists in the Ahuwhenua Trophy competition for the top Maori dairy farm.

It’s the first time in the history of the competition that two South Island finalists have emerged.

The three are Ngai Tahu Farming Ltd, whose farms are located near Oxford, in Canterbury; Tewi Trust, located at Okoroire, near Tirau, South Waikato; and Rakaia Incorporation’s Tahu a Tao farm near Ashburton.

The three finalists were announced by the Minister for Maori Development Te Ururoa Flavell at a function attended by 100 people at parliament last week.

Flavell says the three dairy farms are outstanding examples of excellence in agribusiness and demonstrate commitment to sustainably developing farm land for future generations.

Meanwhile the Minister for Pri-

Applauding farming excellence (from left): James Russell, chairman of Rakaia Incorporation; Te Ururoa Flavell; Nathan Guy; Tuhi Watkinson, chair, Tewi Trust; and Andrew Priest, chief executive Ngai Tahu Farming at the presentation of medals for the three finalists at parliament.

mary Industries, Nathan Guy, said at the function this was a nice bit of positive news for the dairy sector.

He says it’s exciting to see businesses such as the three finalists performing well at a time when global dairy prices are putting pressure on farmers.

“This dairy downturn has refocused our farmers on growing grass, harvesting grass efficiently and working on the bottom line.

• • • •

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We have to focus on the basics. In my view we will get through this period of volatility.”

Guy says it great to see Maori agribusiness performing so well and growing its asset base. He says a lot of work is being done by MPI to get Maori trusts to work together for economies of scale.

Meanwhile Kingi Smiler, the chairman of the Ahuwhenua Trophy management commit-

tee, applauds the three farms’ big brave call to showcase their operations in challenging times, their leaders emerging and showing the way for others.

Smiler says there is no denying that the dairy industry is going through difficult times, with international factors beyond its control.

“But this is not a time to retreat until the better times return.”

• Finalist profiles- page 12-13

Southern hub site found A SOUTHERN dairy research and development centre is a step closer to fruition.

Southern Dairy Hub (SDH) chair Maurice Hardie says conditional agreement on two properties has been reached pending the satisfaction of minimum requirements for both parties.

“This is an important milestone in our plan to build a facility that is a partnership between local farmers, DairyNZ and AgResearch; the new farm will enable local dairy farming issues to be researched on southern soils in southern conditions,” he says.

“During late December 2015 and early January 2016 we completed conditional sales and purchase agreements for two adjoining properties. The agreements are however subject to considerable due diligence by ourselves and one of the vendors,” says Hardie.

Due diligence may take up to 180 days allowing time to complete resource consenting, design, planning and business case models to be approved by all the investors.

“Our aim is to develop the properties from the beginning of October 2016, build infrastructure late October and complete the facility by June 1 2017.”

The Southern Dairy Hub is a joint project of AgResearch, DairyNZ and the Southern Dairy Development Trust. Proposed cost is $26.5 million. At least $1.3 million has been pledged by southern farmers. The aim is dairy farmer-led research.

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DAIRY NEWS FEBRUARY 23, 2016

NEWS // 7

Kiwi volunteers help lift farmers overseas FOUR FONTERRA

farmers will travel to Sri Lanka this year as part of a new farmer volunteer scheme to work with their Sri Lankan counterparts.

Troy Doherty, Bay of Plenty; Tim Phillips, Waikato; Murray Douglas, Northland; and Marloes Levelink, West Otago

will spend a month at Fonterra’s new demonstration and training farm in Pannala, near Colombo. They will work with local farmers and Fonterra supplier relationship officers on animal nutrition, prevention and treatment of mastitis and how to run a farm as a business.

The new farm and scheme are part of the cooperative’s dairy development scheme for supporting the growth of sustainable dairy industries in key markets including Sri Lanka, Indonesia and China. Experts share expertise and work with local farmers, govern-

NEW APPOINTMENT FONTERRA HAS appointed Sunil Sethi as Fonterra Brands Sri Lanka and Indian subcontinent managing director.

Sethi replaces Leon Clement, who was recently appointed managing director Fonterra Brands New Zealand.

Sethi joins Fonterra from Kellogg’s where he was vice president of sales, Asia Pacific and Sub Sa-

hara Africa.

He has 28 years of fast moving consumer goods experience, working in Asia Pacific and Africa including leadership roles where Sri Lanka was a priority market.

Fonterra has a strong business in Sri Lanka and the India subcontinent; it has 750 local employees, thousands of farmer suppliers and two factories.

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ments and industry players.

The new farm, due to be opened at the end of this month, will help Fonterra and its partners to increase local milk collection, improve milk quality and lift farmer incomes.

Managing director of Fonterra Brands Sri Lanka Sunil Sethi says the co-op has operated in Sri Lanka for 38 years and seeks to develop stronger farmer families.

“Fonterra has over 100 years of dairy farming experience and our cooperative structure is built on innovation, an attitude of working together and a willingness to try new things.

“This has allowed New Zealand farmers to develop practices and

processes that work in NZ’s unique environment and climate. This is what we’re looking to bring to Sri Lanka, working with partners and farming families to find the best farming system that complements the country’s climate and terrain.

“Ultimately, through training and education we believe we can support local farmers to produce higher quality milk which will create a more economically viable and sustainable local dairy industry to help us meet growing demand for fresh dairy products,” says Sethi.

Sri Lankan farmers aren’t the only ones getting opportunity to learn from Fonterra. Twelve Indonesian farmers trav-

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Sri Lanka remains one of the largest markets overseas for Fonterra’s brands business.

elled to NZ last year under the co-op’s annual scholarship scheme that helps develop local dairy farming capability by hands-on training.

Almost 90% of the farmers have improved milk quality and half are now producing more milk as a result of new milk hygiene, animal care and farm management practices.

Scholarship participant Adieb Iryanto says he has

introduced new farming practices as a result of the scholarship.

“I now keep records of my herd and financials, making it easier to track the performance and health of individual cows, and the overall profitability and operating costs of my farm. This has allowed me to look at my farming business and see where I can make changes to become more efficient and productive.”

DAIRY NEWS FEBRUARY 23, 2016

8 // NEWS

Happy being small herd farmers RICHARD COSGROVE

AS THE cows cram into Randal Inch’s

milking shed you realise space is at a premium on this small North Canterbury dairy farm on the outskirts of Rangiora.

But still it’s all smiles: the small herd farmer was sharing jokes with his farm worker Mark when Dairy News visited to discuss the results of a recent Lincoln University survey of 330 small herd dairy farmers.

One key finding was that small herd dairy farmers appear more content with their lot than bigger dairy farmers.

Inch said it all had to do with scale: smaller farms wouldn’t want the debt of larger farms but wouldn’t get the economies of scale the larger farms get; smaller farms tended to be more traditional and labour intensive and not as cost efficient.

Inch said despite this they had looked hard at the bottom line and were doing well. Carrying 10% fewer stock than a year ago they were producing more milk than back then and even though the overnight Global Dairy Trade auction was down again they were tracking well.

Inch’s family has farmed at Bellgrove for 96 years and the 230 cows they now have are grazed on the 94ha they own or lease.

Because the farm is close to Rangiora, Inch has had do big farm things like installing an underpass under a main road for easy access to 34ha on the other side of the road. Before the underpass they needed four people to manage traffic.

Citing the benefits of a small herd operation, Inch said you get a taste of everything: one day fencing, the next day digging up thistles, and everything in between.

However on a bigger farm team there could be a downside: you could be on the irrigation roster or the herd roundup for a month, not giving you the variety of work you experience on his farm.

There’s a flipside though: Inch said he’d only had four days off so far this year and wasn’t banking on getting anymore time off until June. With a larger team you can allow staff to have time off.

The survey also highlighted the preference of small herd farmers for getting information in face-to-face meetings or at field days. Inch agreed, saying, “farming is forever changing: if you stand still you’re going backwards” and “there is wonderful technology out there for farming: it’s the cost of it that’s a concern”.

The survey also showed there was little interest in succession planning, which Inch disagreed with, saying, “they’re fools: it’s much better to deal

Randal Inch, North Canterbury, enjoys milking a small herd.

with that when people are alive and can voice their opinions than trying to sort it after they have died”.

Describing his style of farming as a bit old-school, he and Mark agreed that

compared to a big farm it was easier to control things, more hands on. They felt like they were getting somewhere and the work was more personal, hence they seemed genuinely happy in their work.

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She says small farmers were BIGGER ISN’T necessarily better in dairy herds; small herd dairy shown to be more family-andfarmers appear more content with friends oriented than their larger their lot than their large herd broth- farm colleagues and to have a laid back attitude. They were getting on ers and sisters.

New research from Lincoln with enjoying life even if short of University’s faculty of agribusiness and commerce’s Dr Victoria Westbrooke and Dr Peter Nuthall has shed a light on how happy small herd farmers are. They ran a confidential random survey of 330 members of SMASH (Smaller Milk Victoria Westbrooke And Supply Herds) in Decem- Peter Nuthall ber 2015.

The full 50 page report will be spare cash, she says, and they take available online via Lincoln Uni- a balanced view.

While they scored ‘making maxiversity’s website shortly but some of the key findings were released mum sustainable cash returns’ at 4.4 out of a maximum 5 they also scored recently.

Westbrooke said “It was clear ‘having reasonable time off and holifrom this research, and similar pre- days’ at 4.3 out of 5. They also scored vious work, that the farmers were ‘I don’t lose sleep at night worrying content to simply carry on working about decisions’ a low 2.1 out of 5 as the truth of the assertion. their current farm,” Westbrooke concludes, “Clearly “They did not want to buy more land or sell and buy bigger or use life has other objectives than just profit for these farmers”. other expansion possibilities.”

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Other key findings from the survey highlighted that; Farmers were focussed on reducing debt as much as possible and as soon as possible, allowing more resilience if economic conditions changed and this would also allow more money for retirement.

Farmers were still aiming to increase production by up to 10% in their 10 year plans.

Almost 30% of the farmers had increased their herd size by at least a third, achieved mainly via their average equity of 71% relative to the ‘non expanders’ of 65%.

All farmers sought knowledge about how to handle environmental issues, labour management, and finding suitable staff as they saw these as growing problems.

But they indicated a preference for workshops and field days, getting the information face-to-face rather than online.

This contrasted with younger farmers who were relatively keener on using a computer to access information. – Richard Cosgrove

DAIRY NEWS FEBRUARY 23, 2016

NEWS // 9

Northland dairy farms set record for compliance A RECORD number of Northland dairy farms achieved full environmental compliance last season.

Joe Carr, chairman of the Northland Regional Council’s environmental management committee, says 65% of the 900-odd farms inspected over four months from mid August last year were fully compliant – a record.

Carr, an Okaihau beef farmer and forest owner who represents the Hokianga-Kaikohe constituency, says 944 farms were visited by the council or its contractor last season.

Of the 697 farms with resource consent to discharge farm dairy effluent (FDE), 419 (60%) fully complied, 188 (27%) had minor compliance issues and 90 (13%) were significantly noncompliant.

However, Carr says the 13% non-compliance rate was the lowest ever for consented farms. Last

“However, it’s pleasing to see the industry collectively lifting its game and making gains in overall compliance and subsequent improvements in water quality.”

Northland’s lagging behind other regions in compliance can be explained, Carr says: All Northland farms are monitored every year from mid-August to early December when effluent loadings are highest and farm systems are under most stress. In contrast other regions spread their monitoring throughout the dairy season.

Visits are not prenotified in Northland, unlike some other regions.

All discharges to water in Northland are sampled, unlike some other regions.

The council monitors all aspects of the farming operation covered by the relevant resource consent or rules, including stand-

“It’s pleasing to see the industry collectively lifting its game.” year, 139 farms (20%) had been significantly noncompliant.

Similarly, of the 247 non-consented farms visited, 190 (77%) had been fully compliant, 13 (5%) had minor compliance issues and 44 (18%) were significantly non-compliant.

Again, there had been a marked improvement in the significant noncompliance rate. Last year 26% (67 nonconsented farms) had been significantly noncompliant.

“The overall rate for significant noncompliance for the year is 14% compared with 21% last year,” Carr says.

“This is the first time the overall significant noncompliance rates have been below 20%.

Carr says while all stakeholders are striving, there’s still room for improvement.

off pads away from the dairy, dead stock disposal and discharges from silage storage.

“Our overall monitoring is very robust and identifies actual problems. We are then able to work with our farmers to address and improve issues. To that end, significant noncompliance in Northland is typically followed up with an advisory visit,” Carr says.

“If other regions applied the same rigour to their monitoring regimes, I believe their results would be at best similar and probably much worse.”

Meanwhile, Carr says the council offers free, no-obligation advice to help develop tailormade farm water quality improvement plans for individual properties.

He says freshwater on dairy farms forms part

of a greater catchment system, which carries any accumulated sediment, bacteria or nutrients all the way to the coast, harbours and estuaries.

“Our plans [help]

farmers improve water quality on their properties. Typically these plans include an aerial map of the property describing its soil resources and a short

report (with photos) identifying suggested actions, prioritised for greatest water quality benefits.” @dairy_news facebook.com/dairynews

Joe Carr, Northland councillor.

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10 // NEWS

High court appeal looms over water RICHARD COSGROVE

AN APPEAL to the High Court is looking likely as Mid Canterbury irrigators BCI digest the implications of the Environment Canterbury (ECan) Plan Change 2 announcement two weeks ago.

BCI general manager John Wright met with ECan staff a week ago to try to clarify the decision.

BCI is a joint venture between the Barrhill Chertsey Irrigation Board and Electricity Ashburton; it supplies water to farms in the Hinds/Hekeao Plains south and west of Ashburton.

The area is over-allocated for water use and ECan is trying to bring nutrient leaching under control in this productive area.

One of the Plan Change 2 decisions

by ECan commissioners Peter Skel-

ton and David Caygill was to prevent BCI from being granted a replacement scheme discharge permit when its current permit expires in 2018 for any land in the Hinds/Hekeao area not irrigated before February 15 2016.

However farmers are still able to develop irrigation under the Rangitata Diversion Race Management Ltd (RDR) discharge permit.

The Hinds/Hekeao area is one of few places in the country where farmers can choose between competing irrigation schemes.

Wright said following the meeting that BCI and ECan were trying to understand the commissioners’ decision. At face value it appears a massively unfair and an anti-competitive move by the commissioners.

Water is Canterbury’s lifeblood but BCI’s water take from this canal may soon be scrutinised. Inset: Barrhill Chertsey Irrigation board chair Rab McDowell.

A 50% shareholder, Barrhill Chertsey Irrigation Board chairman Rab McDowell, said under the decision their expansion into the Hinds/Hekeao area would be impossible. “Why would a farmer sign up with BCI when he would face extra costs of trying to obtain discharge consents from ECan, whereas if he signed up with the RDR he could operate under the RDR consent?”

An irrigation scheme like RDR is able to average its nutrient discharge across the whole of the scheme whereas indi-

vidual farmers would not have that luxury. Under the plan, applying for new water is prohibited once the plan change becomes operative, and all farming is required to be using good management practice by 2017.

BCI has spent hundreds of thousands of dollars improving its infrastructure in the area with the goal of expanding but that excess capacity will go unused if the decision is allowed to stand.

About 40% of the farms in the area are dairy farmers, and cropping and sheep farmers make up most of the

remaining agricultural activity.

At the decision announcement Commissioner Skelton was unsure if there would be any appeals but it appears obvious that BCI would have no option but to look at appealing.

Appeals are limited to points of law and Wright said that unfortunately being unfair is not a point of law but they are examining the decision in detail and looking for a strong point of law to appeal on.

But Wright said it was BCI’s job to stick up for the shareholders’ rights and that’s what they would be doing.

Check out our websites BREAKING NEWS MANAGEMENT STORIES MARKETS & TRENDS MACHINERY REVIEWS COMPETITIONS AND MUCH MORE...

www.dairynews.co.nz

DAIRY NEWS FEBRUARY 23, 2016

NEWS // 11

Award entrants make play for power THE NEW Zealand Dairy

Awards is taking a leaf out of cricket’s book to make the competition more interesting.

A ‘power play’ concept now features in the 2016 awards scheme. It enables an entrant in the awards’ Dairy Manager of the Year (formerly Farm Manager of the Year) competition to choose one topic from five options to present to judges.

In cricket power play is used in limited overs games and includes mandatory field restrictions.

NZ Dairy Awards general manager Chris Keeping says judging is now underway in the awards, and feedback on how the power play concept is working for entrants and judges is positive.

“The power play lets an entrant draw on their strengths and gives each presentation an individual flair.”

Keeping says the component is worth 20% of total marks and is aimed at appealing to entrants of all ages.

All the competitions are revamped for 2016 to enable more people to enter and to make the competitions more even.

“The upshot is that the dairy manager competition caters for a wide range of age, abilities and experience in the industry. Power play assists all entrants to focus on one area they know well, and are trained and confident in.”

The five options to choose from are farm financial, health and safety, technology and innovation, team management, and farm environment.

Industry training organisation Primary ITO sponsors a merit award for the entrant who scores highest in the power play.

“Primary ITO is proud to support the new power play category in this year’s NZDIA competition. The Power Play merit award encourages entrants to play to their strengths, and we believe this kind of adaptability is vital to dairying success,” explains Primary ITO chief executive Mark Jeffries.

“The industry needs people who are flexible, technically capable and innovative problem solvers with critical thinking skills. We have embraced this holistic approach in our new agricultural training programmes that aim to ‘work the way you work’ – designed to ensure our trainees leave with

Manager of the Year competition are also judged on their farming abilities, stock management, feed management, and personal attributes such as community involvement, training, goal setting and presentation skills.

The awards are supported by Westpac, DairyNZ, DeLaval, Ecolab,

the skills and knowledge required to consistently perform in the workplace.

“We must create lifelong learners and the Power Play award, encouraging initiative and flexibility, helps develop the skills required to negotiate the peaks and troughs of the dairy sector.”

Entrants in the Dairy

Federated Farmers, Fonterra Farm Source, Honda Motorcycles, LIC, Meridian Energy, Ravensdown and Primary ITO. The first 2016 New Zealand Dairy Industry Awards regional winners will be announced in Taranaki on March 4. www.dairyindustryawards. co.nz

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Fonterra managing director global operations Robert Spurway says P1 is near the end of its life.

“P1 was a flagship dryer when it was opened in 1973, and has been an important asset mix ever since,” says Spurway.

“Over its 43 years, it has produced half a million metric tonnes of milk and protein powder. However, as technology advances and markets evolve… Rob Spurway we are improving our asset base… to achieve greater efficiencies and deliver on our value add strategy.”

The P1 building will remain, giving the option to reopen the plant to help meet milk growth in the central North Island. Staff from the plant and its machinery and technology will get new roles on the site’s nine other plants.

This closure is part of a business-wide review to identify efficiencies and ensure the cooperative can respond in an increasingly volatile and competitive environment, says Spurway.

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12 // NEWS

Three finalists contesting Maori f THE THREE finalists for the 2016 Ahuwhenua Trophy BNZ Maori Excellence in Farming Award for Dairy were announced last week. Two are South Island farms, the other is in South Waikato. Here are profiles of each finalist.

Ngai Tahu Farming Ltd NGAI TAHU’S dairy farming operation consists of seven units, of which Te Ahu Patiki and Maukatere are located side by side near Oxford, Canterbury. The area is known as Te Whenua Hou and was originally a New Zealand Forest Service radiata pine plantation commonly known as Eyrewell Forest.

Ngai Tahu decided to convert forestry to dairying to get the best economic return and to develop wider opportunities for whanau.

The first farm came on line in the 2012-13 season.

Full development of Te Whenua Hou will see 13 dairy farms and seven dairy support farms across the property. All the land is flat and most

of the milking platforms of both farms are irrigated by water from the Waimakariri River.

The milking platform at Te Ahu Patiki is 355ha and runs 1251 Kiwi cross high BW cows that last season produced 468,747kgMS. The slightly smaller farm Maukatere has a 290ha milking platform on which 979 Kiwi cross high BW cows

Ngai Tahu’s farms consist of seven units.

Tewi Trust has 53 shareholders.

produced 413,058kgMS last season. There are also a number of dairy support blocks owned by Ngai Tahu where stock from the farms are sent in the autumn.

Being new farms, the soil is still quite sterile and there is a focus on increasing the organic matter in the ground to build up fertility.

Both farms have 64 bail rotary sheds with a lot of modern technology and inside automation to improve the efficiency and minimise the environmental footprint.

The pivot irrigation systems on both farms have a variable rate feature – precision

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agriculture that allows water to be used efficiently and in an environmentally friendly way. The system can be calibrated to only apply water to areas that need it and to avoid applying it to already wet or sensitive areas.

The Ngai Tahu operation is careful to keep a small environmental footprint by, for example, reducing the amount of supplementary feed used and better using pasture. This will help improve profitability, especially during the dairying downturn. The farm is not only trying to meet consent conditions but get ahead of that in a genuine commitment to kaitiakitanga and iwi values.

Ngai Tahu is also looking at how best to utilise the bobby calves produced on the farms.

Five staff are employed on each of the two dairy farms, but in its overall dairying operation Ngai Tahu employs about 70 staff. It also helps run a training programme called Whenua Kura designed to give young Maori from Ngai Tahu and other iwi the skills to make a career working on their farms and in the wider agri sector.

Tewi Trust Tewi Trust is situated near Okoroire (near Tirau) in South Waikato.

The area is famous for hot springs and a beautiful hotel.

Tewi Trust is named after an original owner, Tewi Hoera, who passed the land on to his daughters who leased it to a local farmer. When the lease came up for

renewal in 1941 the men of the trust were serving overseas in the NZ Army Maori battalion so the land was leased out again for 30 years.

When this expired the trust took back one parcel of land and a year later a second parcel to form the farm but these were separated by a privately owned farm.

At that time a new shed was built and general improvements made to the farm. But the trust faced further challenges and decided to employ a 50/50 sharemilker. In 1991 a small parcel of land was exchanged to physically connect the run-off to the main farm. In 2000 the trust bought the land the two blocks surrounded.

Tewi Trust has 53 shareholders, some of which are individual trusts which are part of Tewi. Some of their land is part of the entity by way of lease. There are two waahi tapu sites on the property – one is Tohu and the other is in a paddock where ancient bones are buried.

Today the farm is still run by a 50/50 sharemilker and consists of a 138ha effective milking platform on which 430 Friesians produce 174,405kgMS. The cows are milked in a 40-aside herringbone shed.

The land is flat-rolling with some steeper slopes.

The soil is Tirau ash and is very good dairy land.

The farm runs on system 2 which means the cows are fed mainly grass and receive supplements such as PKE on the shoulders of the season and to cover adverse events.

Up to 6ha of turnips and 4ha of chicory are

DAIRY NEWS FEBRUARY 23, 2016

NEWS // 13

i farming awards grown to protect against the summer dry. Each year about 90 tonnes of grass silage is produced – about half on the main farm and the other half on the leased block. About two thirds of the maize used on the farm is grown on the lease block and the rest on farm.

Tewi Trust is a great example of how a small and determined group of whanau have, over many years of adversity and challenges, achieved their dream of farming their own land successfully and profitably, keeping a strong focus on Maori values.

to renew pasture with the latest seed cultivars as a key means to boost production.

With the conversion came new fences, stock water and irrigation and a 50 bail rotary dairy shed.

Two bores supply the four irrigators that run on the property. Irrigation is at the foundation of the overall dairy farm system.

It is tightly managed using soil and water measuring technologies. Water metering and moisture monitoring technologies help identify the optimal time to irrigate.

About 200 replacement calves are

then recycled.

The dairy shed effluent handling system has a pond that stores 15 days’ capacity. The storage provides flexibility in the application of effluent to the land, averting nitrogen leaching. The management committee takes seriously its role in

giving value to the 300 shareholders.

Shareholders may visit the Rakaia farms annually to see their investment, meet fellow owners and understand the life and style of a working dairying farm. @dairy_news facebook.com/dairynews

The Tahu a Tao farm has long history dating back to 1886.

Tewi Trust is a great example of how a small and determined group of whanau have, over many years of adversity and challenges, achieved their dream of farming their own land successfully and profitably, keeping a strong focus on Maori values.

Tahu a Tao Farm The proprietors of Rakaia Incorporation’s Tahu a Tao farm have a long and proud history dating back to 1886. The present 216ha property near Ashburton, 8km from the Rakaia River mouth, runs around 830 Kiwi cross cows that produced 371,294kgMS last season.

In the early days this area challenged travellers, particularly the river crossings. Tahu a Tao is the Maori name for the Kyle district where the farm is located. It is also known for being a resting place for travellers where there was mahika kai – where food was gathered.

Tahu a Tao was converted to dairying in 1996 with a highly reputable dairy consultant, John Donkers, playing a major role in developing the property which has always operated with 50/50 sharemilkers. The current sharemilkers Mark and Julie Cressey are in their ninth season.

When the farm was first converted old pastures were sprayed out and new ones planted and since then the incorporation has made concerted efforts

reared each year. There is a strong farm culture with particular emphasis on animal welfare especially with the treatment of bobby calves which are fed good quality colostrum milk for four days before being sold.

Health and safety also gets high priority status on Tahu a Tao. Since the conversion capital works have continued, the most notable being extra staff accommodation designed

by Julie Cressey.

Being close to the Rakaia River, the soils on the farm are free draining and ideal for dairying.

Soil tests are taken annually and close attention is paid to recording data on the property. Weekly farm walks and feed budgeting are critical aspects of management.

Not surprisingly matters relating to the environment, kaitiakitanga and iwi values are important, for example the implementation of a recycling system. This includes all farm and household waste which is stored in special containers. Silage wrap, bale string and plastics are stored out of the wind

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14 // NEWS

Banks will hold off drawing their guns PETER BURKE peterb@ruralnews.co.nz

IT DEPENDS how bad David Tripe, Massey University.

it gets before banks take drastic action against deeply indebted dairy

farmers.

That’s the view of Dr David Tripe, a senior lecturer in banking studies at Massey University, who says banks are probably developing a set of scenarios to set a policy for what

they may do as debt in the dairy industry continues to rise.

He says the banks may say that if somebody is in negative equity and negative debt servicing they might have a procedure for

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selling up depending on how much cash they could recover by doing this. If a bank sells someone up the chances are it will lose money, he says. The sooner it moves the lower the loss.

Tripe says while the banks will weigh up any negative public opinion from foreclosing, ultimately in certain cases they may still go ahead.

“If someone is in a hopeless position and would be better off moving off the land, it doesn’t mean [the banks] will be put off doing that. I think they will say ‘it’s better to get these people off the land and if there is to be a shortfall we’ll worry about that when we sell the property’. So they would sell it now and the shortfall might be $50,000, but if they muck around the shortfall might be $200,000.”

By getting a new operator onto the farm quickly, banks will get some money back as opposed to losing more, Tripe says. But the banks don’t want to own dairy farms and they won’t go in with guns blazing to remove people from the land.

One problem banks face in dealing with the present downturn is their lack of ‘institutional memory’ because most of their people who have dealt with such a crisis have retired.

“The further you get from a crunch, the fewer people will remember it, and the less impact it will have on current behaviour.”

Tripe says the present dairy crisis reminds him of the problems the kiwifruit industry went through about 30 years ago when prices fell dramatically.

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More farmers under mortgage pressure A MEMBER poll by Federated Farmers shows 11.1% of dairy farmers are now under pressure by banks over their mortgages. That’s up from 6.6% in August and 7.6% in November.

“So far we’ve been pleased with the support of banks and their long-term view of the dairy industry, but one in 10 farmers feeling the squeeze is a worrying statistic,” says Federated Farmers Dairy chair Andrew Hoggard.

“With prices not expected to recover until next year this increase in pressure from banks means farmers need to be even more proactive in budgeting and planning, and making the most of support available from DairyNZ, accountants and farm advisors.”

Hoggard is also calling for action to address the global market conditions affecting NZ dairy farmers.

“Softer demand from China and displaced product [not going to] Russia isn’t helping the situation, but the real issue is increased production from Europe driven by the retention of subsidies,” he says.

“It’s concerning that some European countries want to move backwards to more regulation. Instead they need to keep moving forward to more market orientated structures. The more farmers around the world live with the economic realities of the decisions they make, the more stable a market we will get for all farmers.

“This is something our government needs to take up via direct diplomatic channels and the World Trade Organisation, and if next season is going to be any different from this one they’re going to have to move quickly.”

The Feds poll was taken early February, sampling 1225 members in all 24 provinces and seven industry groups. It asked a question about mortgage pressure also used in Feds August and November banking surveys with a similar sample size.

DAIRY NEWS FEBRUARY 23, 2016

16 // NEWS

Crunch time looms for sales decisions PAM TIPA pamelat@ruralnews.co.nz

THE NEXT couple of months could be a telling time for decisions on dairy farm sales, says Real Estate Institute of NZ rural spokesman Brian Peacocke.

There is almost a lull at present with dairy farm sales just 16% of all farm

There is almost a lull in dairy farm sales but things could change in the coming months.

sales in January – at the lower end of the normal 16-20% percentage of sales.

“I think a lot of people are having discussions with their banks currently and right now I’m sure a lot of decisions are being made,” he told Dairy News.

“The best decision may be to sell. Then the next question is ‘when is

the best time?’ Do they do it in autumn or do they wait for spring? The payout levels currently will influence that thinking and the longer term projections for the payout will probably have a bearing on it as well.”

People are assessing where they are right now.

“While there has been a lot of talk of more properties coming on the market, it has yet to show up in reality. People are watching things quite carefully and I’m sure the mix of climate and financial institutions will determine a lot of what happens over the next couple of months.

But the only farm sales in Southland in January were a collection of five farms approved by the Overseas Investment Office for purchase.

No other dairy farm sales were recorded in Southland for January.

After a cold hard winter and early spring they are in good shape and producing well.

Southland’s sales pattern is later than Waikato’s, for example, so there is a good chance more sales will occur in the next couple of months.

“Quite a lot of those properties will already be on the market, as opposed

“I think a lot of people are having discussions with their banks currently.”

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“The next couple of months will be crucial.

I would have thought if people were going to put their properties on the market to sell, if they are dairy farmers for this current season they would have put them on the market by now because in many cases there is a five-six week period of marketing.

“That puts us through to later March before there is a result, leaving only two and a half months as a general takeover time. If they were going to do it they would need to be getting into gear and doing it now.

“I suspect a lot of dairy farms had their structures put in place for the season and maybe those decisions may be implemented later in the season and we may see more properties coming out in the spring.”

With farmers being resilient they will always take the option to tough it out given the opportunity, Peacocke says.

“Generally, unless [selling] is for age or health purposes, I’m sure they will hang on as hard as they can until their options are pretty much reduced.”

He understands there are quite a few Southland farms on the market.

to Waikato where there are not many dairy farms on the market at the moment.”

Peacocke says on the demand side there is still solid interest or inquiry for really good properties, but there doesn’t appear to be much appetite for the lower quality properties.

“Some sales throughout the country for really good properties suggest at this stage that the values for those types of properties are holding quite steadily. If there is going to be a price decline we will probably start to see it as we go into autumn. We won’t be able to see it at this stage.”

Some areas are distinctly different from others. For instance Taranaki seems to be stronger in some respects, particularly if a neighbouring property comes to light or if there is land that has better cropping qualities and dairying capacity.

So there is quite solid demand in Taranaki but variable demand around the whole country.

“In the lower part of the South Island from mid Canterbury right through to the bottom of the island things have been distinctly slower in recent times than further north.”

DAIRY NEWS FEBRUARY 23, 2016

NEWS // 17

Get the most from your maize silage brand 1174 or 1132 deliver a good return. focused on extracting as Doing a good job on the much milk as possible stack from home-grown feed.

Compact it well, put The good news is there are the cover on straight away, some outstanding maize tape the joins, seal the crops in many regions edges and weigh it down which will be ready for with tyres that are touchsilage harvest in just a few ing. Don’t forget to put rat weeks. Harvested and baits in stations around ensiled correctly, these the stack. crops will provide a subIntroducing maize silage are >38% drymatter are stantial volume of high slowly more difficult to comquality feed.

This is particularly Maize silage is the best pact, resulting in a slower important if you haven’t fermentation and higher autumn feed for dairy been feeding a grain losses at feed-out time. cows. It is cost effective, source, as it will allow the Using a plant processor highly palatable and can rumen microbes time to The aim is to ensure be fed in large amounts that 99% (target minimum adapt to higher dietary when required. Feeding starch levels. Feeding maize silage in the autumn 80%) of the kernels are too much maize allows farmsilage too soon ers to build Under tight payout can result in a pasture levels conditions, farmers can get lot of grain in while at the the manure and/ same time the most or animal health milking on from their maize silage by Start with for longer and paying even more attention issues. no more than lifting cow to the usual good 1–3kg of DM condition per cow per day score. management guidelines. (approx. 3-9kg Under the fresh weight of maize broken into at least four tight payout conditions, silage) for the first week pieces. This will allow the farmers can get the most and then lift the feeding rumen microbes better from their maize silage by rate to the desired level. access to high energy paying even more attenMinimising feed-out maize starch. tion to the usual good Applying a quality silage losses management guidelines.

This can be done by inoculant These include: Don’t be tempted to cut applying an aerobic stabilHarvesting at the correct ity inoculant (e.g. Pioneer this out of your system. maturity brand 11C33) and removResearch shows that even The ideal maize silage ing maize silage from the at a $4.00 payout, proven harvest drymatter is stack or bunker carefully products like Pioneer 30-38%. Crops which

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Maize silage can be the best autumn feed for cows.

so the face remains tight.

Once maize paddocks have been harvested, the next big decision is what to do with the paddocks. If you do not have additional pastures which urgently need renewing, consider planting annual ryegrass or a winter crop in your maize paddocks and putting them back into maize in the spring.

We know maize can be grown twice in

high fertility paddocks (including those with a history of effluent application) without the need for additional fertiliser*. Establishing an annual or a winter crop will reduce costs and allow you to get more feed over the winter when compared to planting new perennial pasture.

If you would like to discuss the options for your maize paddocks, or

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DAIRY NEWS FEBRUARY 23, 2016

18 // NEWS

European co-op restructure to shed 500 jobs EUROPEAN DAIRY cooperative Arla Foods will shed 500 jobs worldwide as part of a restructure.

It has also announced a new executive management team and greater commercial and consumer focus.

Arla says it will adopt more globalised supporting functions such as supply chain, finance and HR, reducing duplication across countries.

Chief executive Peder Tuborgh says it has grown its business significantly in recent years, organically and via

mergers. However, more milk is being produced globally and Europe is experiencing pressure on prices and very little growth, which makes competition is fierce.

“In addition, consumer needs are becoming more diverse and our customers expect increasing levels of service. So we need to be more agile and cost efficient to remain competitive. In order to remain at the top of their preferred partners list we must change the ways we work.”

NO SLACKENING THE PACE WITH THE new structure, Arla can more effectively allocate its global pool of raw milk to pursue strategic opportunities that will deliver the greatest returns for farmer-owners’ milk, says chief executive Peder Tuborgh.

“Also, it can more effectively develop its global categories, build its global brands and launch new products across the regions.

“As we have a huge task in 2016 to create profitable positions for extra 600 million kgMS and protect Arla’s performance, I expect we will have our full organisation in place without losing speed in the process.”

Arla’s directors support the proposed changes.

Arla Foods says it must change the way it works to remain globally competitive.

Inset: Peder Turborgh

The co-op has a new executive management team (EMT) of seven – down from nine. Marketing and innovation have more emphasis, to achieve global brand growth and category leadership.

Two commercial areas are formed in the EMT – Europe and international – leaving country managements to get busy with customers, consumers and categories.

Arla will now have one global

supply chain and one global milk pool; 500 of 7000 monthly-salary roles will be discontinued. In-market teams will go for a “more commercial approach” with strong marketing support driven from a global category perspective, says Tuborgh.

One global supply chain organisation will be created, and functions like finance and hr will be centralised.

Arla aims to increase organic revenue growth from 2% to at least 4% by 2020 – “a fundamental change for the

company,” Tuborgh says. “For many years Arla has grown mainly by cooperative mergers where the new milk already had a position in the market. Our continued success depends on increasing the value and developing profitable positions for the growing milk volumes coming in now from our existing farmer-owners. We need to act local and think global and the new organisation reflects this.” @dairy_news facebook.com/dairynews

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DAIRY NEWS FEBRUARY 23, 2016

WORLD // 19

dairy prices, dry conditions and high input costs are tightening the margins for Australia’s dairy farmers and reducing national milk production.

According to Dairy Australia’s latest Situation and Outlook report, released this month, supply and demand on the international front remains out of balance.

Increased northern hemisphere production is outweighing any recovery in global demand, forcing international commodity prices lower.

Dairy Australia Industry analyst John Droppert says the stable domestic market and a more favourable exchange rate were helping to buffer the impact of declining world prices, high input costs and the dry season.

“The Australian market has remained a steady outlet for well over half of the industry’s milk,” Droppert says.

“Supermarket sales of dairy spreads continue to grow strongly, while milk, cheese and yoghurt sales are steadier.”

However, Dairy Australia is expecting an overall drop in milk production for 2015-16 after a slow spring and summer. The national volume was down 0.2% for the season at the end of

December.

“Elevated prices for grain and hay, combined with lower milk prices, have reduced the incentive for farmers to draw on alternative feed sources to maintain or grow production,” says Droppert.

“An average autumn John Droppert, Dairy Australia. could northern hemisphere and see volumes prove ongoing sluggish demand more resilient later in from key markets. the season, but even a “Continuing supply recovery through this growth is the key factor period would be too late keeping the market to offset low production depressed, but prices volumes in spring and are ultimately a function summer. of the supply/demand “However, lower balance and dairy demand milk flows have given hasn’t kept pace,” Australian processors Droppert says. room to move in “In recent months, adjusting their product growth in global demand mix to optimise returns has been relatively small in response to lower and trending slower as commodity prices.” inventories have built While southern up. Exports to the Middle hemisphere exporters are East and China have seeing milk production eased. However, many slow, growth in the Southeast Asian northern hemisphere is countries continue to persisting, particularly in stock up on relatively Europe.

Droppert says recovery affordable products and global exports to on the global front was Japan have shown their unlikely in the near strongest growth in future with the upcoming years.” spring production in the

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Dan Knee, who milks 400 cows at Toora, priorities.

Drawing on a database of local Vic was one of the test users in the app and international dairy bulls, the development.

Good Bulls app allows bulls to be “The app is great,” he says. “It sorted on Australia’s three breeding makes it quicker and easier to identify indices: balanced performance index bulls with the traits that are important (BPI), health weighted index (HWI) to me. It has turned a job that once and type weighted index (TWI). took hours into a simple, fun task.”

Up to 50 filters can be used to find bulls Sarah Saxton, from the Australian Dairy that match a farmers breeding objectives. Herd Improvement Scheme (ADHIS), Bulls can be filtered by any trait (e.g. says the app would be updated twice a protein, cell count, fertility or mammary year with the April and August release of system) or by semen company, pedigree, Australian breeding values (ABVs).

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DAIRY NEWS FEBRUARY 23, 2016

20 // OPINION RUMINATING

EDITORIAL

No longer a sideline player

MILKING IT...

Time to stump up?

FONTERRA’S MILK for Schools scheme is growing stronger by the year: at least 50 million packs of milk have gone to schools since 2013, costing the coop millions annually.

Now, with farmers struggling to stay afloat after three straight years of low payouts, some may ask whether it’s time for the Government to step in and take over the scheme.

After all, feeding children a proper breakfast is everyone’s responsibility, not just farmers who milk cows.

Out with bugs

TRIPLE LAYER lightproof milk bottles move over.

Fonterra has launched a filtered fresh milk in Australia under its flagship Anchor brand, offering up to 40% longer refrigeration life, thanks to new microfiltration technology.

Microfiltration reduces the naturally occurring bacteria in pasteurised milk which cause spoilage.

The ceramic filters extend the shelf life of normal pasteurised milk from 15 to 21 days.

Anchor’s filtered whole milk was launched in Victoria last week.

Fonterra will collect A5c from the sale of every bottle of Anchor milk and cream and give it to sustainable dairy farming initiatives via its Anchor Dairy Fund. The donation will be capped at A$250,000 a year.

Organic milk benefits

ORGANIC MILK could offer health benefits, a study suggests, after two reviews of evidence of the potential benefits of organic milk versus conventionally farmed milk.

The study found some differences in nutrient levels: while organic milk had more omega-3 fatty acids, linked to improved heart health, and was slightly higher in iron and vitamin E, it had lower levels of iodine and selenium. Iodine is needed by the body to produce the thyroid hormone, and selenium helps protect against cell damage.

Overall levels of saturated fat did not differ between the two production methods.

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GM cows have their uses

GENETICALLY MODIFIED cows aren’t so bad after all.

Some 600 people have died from complications of Middle East Respiratory Syndrome (MERS). Three years since the disease surfaced scientists still cannot find a treatment or prevention. (Infected camels are thought to be the initial source of MERS.) But now international researchers using genetically modified cows have created antibodies that combat the disease, perhaps pointing towards a vaccine.

The scientists have used cows to better understand human immunity, in this experiment tweaking the cows’ genomes so that they carry a human chromosome.

THE RESILIENCE of Maori agribusiness is back in with the announcement of the finalists in this year’s Ahuwhenua trophy competition to find New Zealand’s top Maori dairy farm.

The competition was inaugurated 83 years ago and the fact that every year top Maori farms step up shows clearly the determination and desire in Maoridom to showcase their success and build capability.

During this bad patch for the dairy sector it is interesting to see excellent Maori farms unafraid to put themselves forward and show what they are doing well.

They are displaying great leadership to the whole dairy sector and demonstrating that this is not a time to retreat and hunker down; rather it’s a time to showcase the Maori agribusiness model – a long term vision of providing benefits for future, not just the present, generation. Maori have a history of managing adversity and coming back stronger and better.

Not widely known is that entering the contest and making the finals requires a lot of time to provide complex data to two judging panels and run a large field day. The farms are required not only to prove they are financially successful but also that they are leaders in the kaitiakitanga (guardianship of the land) and their whanau.

Few NZer’s have much idea about farming, and even fewer have any idea of the scale and efficiency of many Maori farms. Maybe that’s because they are tucked away in heartland NZ and not on SH1, or perhaps people just don’t believe Maori are capable of success.

This year the Ahuwhenua competition has two finalists from the South Island – Ngai Tahu and Rakaia. This is perhaps a further sign that Maori are starting to rise their profile, showing just how big and good is their vision and ability.

Maori agribusiness, including forestry contributes $3.5 billion to the New Zealand economy. Maori agribusiness is doing extremely well and Miraka Dairy Company won the Maori Excellence in Export Award at the 2015 New Zealand International Business Awards.

The Awuwhenua Trophy competition is hugely important not only for Maori but also for the primary sector as whole.

If they don’t celebrate success in the primary sector, no one else is going to do it for them.

Maori agribusiness is no longer an adjunct to the NZ economy; it is now an integral part of it and over time its contribution will grow to new heights – not just in dairying, but in all primary production.

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DAIRY NEWS FEBRUARY 23, 2016

OPINION // 21

Taranaki must stop hiding its light BRONWYN MUIR

abattoir facilities to process local meat to serve up in our fantastic provincial restaurants, but you can get a good rack of Hawkes Bay lamb.

Recently I addressed Food Futures Taranaki 2016 on behalf of Taranaki Federated Farmers and Taranaki primary producers.

Massey University, Food HQ, and Venture Taranaki hosted a well-

AS A dairy farmer I’m looking for a reason at the moment to help me focus on the positive points of farming in Taranaki.

Cashflow is tight and in the immediate future it doesn’t look like there is going to be any dramatic improvement on that front.

When I chat with our sheep and beef neighbours the conversation seems to follow a similar theme. Farming profitably and sustainably is proving more and more challenging and Taranaki farmer morale isn’t high.

The flipside is we live in a great farming region with many good things going for us that other regions are challenged by.

We are Bronwyn Muir naturally green most of the year and we don’t have organised event with some excellent, inspiring to turn on machines to speakers. They included make it rain, although it Massey University would be handy now and vice-chancellor Steve then.

Maharey, Massey We have high calibre University director of farmer business owners business engagement and and management and establisher of Food HQ supportive organisations and businesses all striving Mark Ward and Maori trustee and Te Tumu for the same thing – a Paeroa chief executive successful, sustainable Jamie Tuuta, research business in this great students and farm province. business owners.

Taranaki literally is It’s a shame more local still the land of milk and farmers didn’t hear these honey, with a 60% lift in leaders speak. apiculture in the last four Everyone attending the years.

Food Futures event saw Tasty beef, lamb, pork the opportunity to work and chicken are also together as a province and grown here. So why is it if look at how we could do I go shopping for locally Taranaki Food Inc better. grown produce, I struggle Yes, it needs to find the Taranaki origin investment, brand on our food. infrastructure, scale and We are literally commitment. As ever, transporting our entire I am an optimist and I raw product out of the know with the right heads province by tanker, truck, around the table it can be container and barrel. done.

Someone else clips the ticket and gets rich off our • Bronwyn Muir is Federated Farmers Taranaki hard work. provincial president.

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DAIRY NEWS FEBRUARY 23, 2016

22 // AGRIBUSINESS

Effluent reduction model could be game-changer A NORTHLAND farmer’s determination to secure the resource consent compliance that had been eluding him has seen him play a key role in a potentially ‘game-changing’ effluent reduction model for the dairy industry.

Mayflower Farms Ltd, Maungaturoto, is owned and run by father and son Ken and Richard Westlake, milking 400 cows 365 days a year to supply a local milk marketing company.

However, despite the Westlakes’ best efforts to bring the 369ha farm’s effluent treatment system up to scratch, their more intensive milking and cleaning regime kept full consent compliance frustratingly out of reach.

Ken Westlake estimates they spent $80,000 over several years trying to achieve compliance before a Northland Regional Council offer for them to take part in a water use and effluent reduction trial.

The trial, the brainchild of council farm monitoring manager Dennis Wright, suggested a solution and Westlake went for it, he says.

“Before this programme started we failed compliance every year despite substantial changes to the systems we inherited. We probably spent close to $80,000 over that time. We fixed things and upgraded but… we still didn’t comply because too much water was going into our effluent ponds and treated effluent was then discharging into the stream.”

Two years after starting the trial the council now thinks the revamped system will comply.

The farm, which runs about 540 mixed-breed cows, has cut water use by 58% (22,000L/day), equiva-

ance in a split calving environment with increased herd numbers has also been value-based rather than cost-based.”

He says six projects brought about the improvements: install-

Ken Westlake shows water efficient nozzles helping to halve water use and effluent volumes on his Maungaturoto dairy farm.

lent to annual savings of eight million litres.

It has cut effluent volumes going to the farm treatment/storage ponds by 51% and has reduced the discharge of treated effluent to water.

The farm bought a slurry wagon and now injects much of its effluent directly into the soil, better using nutrients, reducing odour, improving pasture palatability and allowing more targeted placement of waste.

Westlake says sustainability, rather than finances, has been the motivator.

“Our desire to achieve compli-

ing seven water meters to measure actual use at different points; changing from water to electricdriven yard backing gates; using recycled effluent from a fourth treatment pond to clean the dairy yard; installing more water-efficient cleaning nozzles that wash down; diverting clean stormwater away from the treatment ponds; and buying the effluent spreader.

“As of late January we have not discharged any treated effluent to water at all since mid October.”

Richard Westlake says over that time effluent had been used to fertilise maize crops (saving $18,000 in fertiliser costs) and pasture.

“We’ve probably also saved another $40,000 in operating costs because we’ve cut 800 slurry wagon loads that would have been generated under the old regime.”

Says Dennis Wright, “The results of this project have proved that its key objectives of improving water use efficiency and reducing effluent volumes can be substantially met over a short time.

“Industry-wide there’s potential to implement measures – especially in new dairies during construction – which will enhance environmental performance and improve financial results by reducing capital, energy and labour costs.”

Wright says the idea for the effluent reduction project arose from his frustration that cooperative and willing farmers like Westlake could still find consent compliance difficult.

“Ultimately, that’s what everybody involved is aiming for and it’s what the dairy industry needs to embrace to achieve its stated sustainability goals.”

Wright says Myles Stenner, of the water meter supplier Klasse and Hydrofan NZ Ltd, donated expertise and time.

Council chairman Bill Shepherd says the council will fund extension of the trial to several more farms.

Information on effluent volume reduction will feature at the council’s display at the Northland Field Days in Dargaville next month.

Upcoming dairy talent drawn by scholarships FIFTY-FIVE DAIRYNZ scholarships have been awarded this year to Lincoln, Massey and Waikato university students as part of a wider drive to attract more motivated young talent into the dairy industry.

DairyNZ has awarded the annual scholarships to successful students in degree courses in agriculture or related fields, with a particular interest in the dairy industry.

DairyNZ industry education facilitator Susan Stokes says the quality of applications this year was high and bodes well for talent coming into the industry.

“This support for outstanding young scholars is part of the industry’s drive to encourage talented, motivated people as future research scientists, farm advisors, farm managers, farm owners and rural professionals,” says Stokes.

Thirty-one students at Lincoln University, 22 at Massey University and two at the University of Waikato will receive a DairyNZ scholarship, funded by the levy DairyNZ collects from dairy farmers.

“We received applications from 168 students from 135 schools and the high standard made our selection process challenging – a good problem to have.”

The scholarship helps pay for university study (up to $6325 per year) and continues until course completion, as long as grades are acceptable. Students are mentored and supported through their university years, often continuing into employment onfarm or in a role supporting the dairy industry.

In the last three years, 80 scholarship recipients have graduated from the scheme. Twenty four percent of these graduates are employed on farm, 40% are employed as rural professionals and 13% work in science.

The closing date for 2017 scholarship applications is December 7, 2016. Information on DairyNZ scholarships, the application process and criteria to qualify can be found at www.dairynz.co.nz/scholarships.

Tony & Shona Pedersen,

Farm Owners.

Savvy operators.

Training advocates.

DAIRY NEWS FEBRUARY 23, 2016

AGRIBUSINESS // 23

Landcorp to end farm deal with Chinese company LANDCORP WILL conclude

Milk for Schools reaches big milestone FONTERRA HAS deliv-

Shanghai Pengxin manages 18,000 cows in New Zealand.

of Pengxin NZ Farm Group, says, “Our acquisition of the farms dates back to November 2012 when we entered into a 50:50 joint venture with Landcorp, as 100% sharemilker, charged with developing and managing our farms.

“Over the last three years the joint venture board approved more than $20 million of capital expenditure. This includes the dairy training academy, two dairy sheds, the building of six houses and renovation of a further 60, six effluent ponds, 300km of stock and riparian fencing, 800ha of regrassing and 900 extra water

troughs.

“There has been a strong focus on health and safety, animal welfare, compliance and farming sustainability and it has been a beneficial relationship for both organisations.

“We respect and understand Landcorp’s decision. We have enjoyed the close relationship with Landcorp and the valuable insights, expertise and experience they have provided.

“Pengxin’s NZ-based management has grown significantly since 2012. Within our NZ Farm Group we already manage 18,000 cows and look forward to care-

fully, sensitively and sustainably managing the transition of staff and animals of the North Island farms in 2017,” Macleod says.

Greg Gent, chair of Pengxin NZ Farm Management Ltd, which governs the partnership, says, “The partnership has been a good example of what the investment of capital with local expertise can achieve. They have transformed what were previously distressed assets into well performing farming operations.

Amidst some scepticism at the outset, SPG and Landcorp have worked hard to make this partnership a success.”

ered 50 million packs of milk to schools since its Milk for Schools scheme began.

A total of 1480 primary schools including the Chatham, Great Barrier and Stewart Islands are included.

Fonterra director of social responsibility Carolyn Mortland says it’s a great way to mark the start of the new school year.

“Delivering 50 million packs is a milestone and a lot of work has gone into making this happen,” she says.

“The biggest thanks must go to our 10,500 farmers who provide the milk. And they host school farm visits or visit schools to talk about

being a Fonterra farmer.

“Thanks also goes to our partners in the programme – the schools. The teachers and milk monitors do a great job in making sure the kids get their milk every day.”

Mortland says the scheme teaches kids about leadership and recycling.

Over the years the 50 million packs have been folded flat and sent to Thailand and Malaysia to be recycled into roof tiles and school exercise books.

Fonterra Milk for Schools is New Zealand’s largest corporate social responsibility scheme, offered to all primary schools in 2013. Seventy per cent of schools now take part.

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its sharemilking contract with Shanghai Pengxin Group at the end of May 2017.

Landcorp will operate the farms over the next 18 months and will ensure a smooth transition of the properties including stock and staff when this contract ends, says Landcorp chief executive Steve Carden.

“Landcorp has worked hard with Shanghai Pengxin and is proud of what the partnership has achieved, turning around 16 poorly performing farms. The Landcorp team have done a terrific job,” says Carden.

“We’re also pleased to have been involved in the implementation of the Central North Island Dairy Academy, which will be launched later this month.

Our job here is now done, and we’re happy to move on to other opportunities more in line with our new strategy.”

Carden says the company is focusing on other areas of growth – principally the value-add strategy under its Pamu brand. Recent examples include our investment in our sheep milk JV and a wool supply contract to Danish shoe manufacturer Gleryps.

Andy Macleod, chief executive

Milk for Schools now includes 1480 primary schools.

DAIRY NEWS FEBRUARY 23, 2016

24 // MANAGEMENT

Taking a breather to share t With the GDT auction index continuing soggy or worse, unusual weather patterns and debt troubling many farmers, how are they coping at farm level? Reporter Peter Burke went to a DairyNZ discussion group near Otaki recently to find out.

ABOUT 30 dairy farm-

ers attended the discussion group, held in a

typical rural seminar room – the end of a dairy shed, shaded against another

hot day (28oC) in Horowhenua.

The aim of such a day,

says DairyNZ team leader for the lower North Island, James Muwunganirwa, is to find out where everyone is in respect of covers, production and the like, and to discuss ways of getting through the difficult times.

Next on the agenda is a talk by host farmer Mike Keeling, who contract milks on his parents’ farm, then a farm walk.

That allows the farmers to look at the property and suggest to Keeling ways of dealing with some of his

HANGING IN THERE THE FARMERS generally reported good covers – mostly in the 2200-2400 range.

Most reported milk production down about 4%, some were 14% down. But a few were up, the highest by 18%.

Most said they had reduced cow numbers, this by and large accounting for the drop in milk production.

The words ‘hanging in there’ best described the mood of the group as they talked about their positions and how best to cope with a situation beyond their control.

Troy Hobson, a director of Tahamata, a local Maori incorporation running a dairy farm near Keelings, says it’s been

a good growing season and there is still grass around. Normally there wouldn’t be any at this time of year and people would be irrigating and feeding out, he says.

“From that side it’s looking pretty good,” he says.

But the good news stops there, and Hobson with extensive experience in dairying, Troy Hobson says farmers need to look critically at their businesses and not dismiss any option out of hand.

“For example, you have to look seriously at the guar-

anteed milk price, at least hedging some of your risk. You have to look hard at how your capital is working, including who you’re supplying and whether the money tied up in shares is worth it. You also need to look at other noncore assets that are not generating a return.”

Malcolm Wallace, from Otaki, says there is a limit to how much a person can trim their budget. He also claims the taxation system works against farmers. Wallace says he’s just breaking

even on the present payout.

“But we’re not drawing wages; not many people work for free these days do they?

Farmers are getting pretty worried. The payout forecast went up a bit and that gave a bit of hope, but it’s come back again and it creates a lot of concern,” he says.

As the discussion draws to a close Muwunganirwa writes on a whiteboard the suggestions by farmers on how to cut costs. These include taking special care with machinery to reduce repairs and maintenance and looking at the best deals for electricity to run irrigation and the dairy shed.

challenges.

Muwunganirwa sets the scene with a general rundown on the state of farms in the lower North Island. He says most farms are in good physi-

Otaki farmer Malcolm Wallace says there is a limit to how much a person can trim the budget.

cal shape because the dry is not as severe as most thought it would be by now. Good rain fell in January, in some cases 100150ml, he says.

“On the East Coast things are looking reasonably good. Hawkes Bay has probably had a little more rain than we have on this side of the ranges. Nor-

mally some of those guys up there would have had restrictions that would have kicked in at this time of the year, but generally they haven’t had restrictions yet.”

He says most farmers have aggressively culled their herds because of the low milk price so there is more pasture available

DAIRY NEWS FEBRUARY 23, 2016

MANAGEMENT // 25

e thoughts and fewer supplements being used. Most farmers are cautiously optimistic that they have enough feed to see them through to autumn.

Muwunganirwa says he has noticed in his area this season that production is slightly behind what it was this time last year, but he points out that with fewer supplements being used, the milk being produced is ‘profitable’ milk.

Now the cows are looking in reasonable condition and crops look good with healthy yields.

Farmers seem focused on maintaining cow condition rather than squeezing every last drop of milk out of them at the expense of having them at peak condition for calving.

But while things are arguably ticking over ok

onfarm, morale is taking a hit, Muwunganirwa says.

Some farmers are now ‘under the pump’, pressured by the low milk price. Though it’s hard to generalise because debt and equity levels vary from farm to farm, it’s very tight for most people.

“The average owneroperator in the lower North Island will get $3.90 in cash income in this 12 month season.

“At a break-even milk price of, say, $5.40, most people will be about $1.50 out of pocket.”

He says lower order and 50/50 sharemilkers will find it challenging and he expects more financial pain. However, like many he’s hoping prices will pick up long term.

“There needs to be a focus on strategies for the

long term and the realisation that the volatility cycle is something we have to live with. We need to work out how we can make our dairy farm businesses resilient and cope with the highs and lows,” he says. @dairy_news facebook.com/dairynews

DairyNZ lower North Island team leader James Muwunganirwa.

ALL-ROUNDER LOVES HIS JOB MIKE KEELING is the third generation of Keelings to run the 132ha effective farm and 109ha support block. The 320 cows will hopefully produce around 105,000kgMS this season. The farm has moved to once-a-day milking to try to improve profitability in the long term and cope with predicted lower payouts.

There are many challenges facing Keeling, who was born on the farm, spent a year at Lincoln and then worked on dairy farms in Canterbury before heading to Australia.

He’s been back on this farm for just two years and is grappling with farm infrastructure which needs upgrading and succession planning; he has four sisters.

On the farm, the in-calf rate has been poor and he’s working on a strategy to fix that. He’s moving from split calving to OAD and possibly changing the breed of cow.

“We are definitely looking at changing the breed and finding something that can tolerate OAD. Definitely a Kiwi cross. There is room for improvement in the production.

“Probably going from a split herd to seasonal is going to lift production by 10% at least but going to an OAD herd will see this drop back a bit and we may possibly have to increase our cow numbers for that. The farm itself is quite challenging because no paddock is the same size and we have about 15 different soil types on the farm.”

Keeling hopes moving to OAD will help. He expects lower power bills and animal health costs and a better lifestyle with more time to devote to thinking up new strategies to improve the farm.

This year he has grown turnips and the yield is impressively high and admired by the discussion group members who toured the farm.

He says he’s working with his father to reduce costs and minimise buying in feed. His goal is to keep the farm a system 2 and be as self contained as possible.

Despite the challenges, Keeling says he loves dairy farming. “I’m a jack of all trades and like to do a lot of things; dairy farming caters for that.”

0025 OPS Disease_John-Dairy (280x187)_FAmm.indd 1

30/09/15 2:27 pm

DAIRY NEWS FEBRUARY 23, 2016

26 // ANIMAL HEALTH

Cow condition a worry in Northland A NORTHLAND farm consultant is concerned at the loss in cow condition over the last two months, and the harm this could have on milk production and in-calf rates for next season.

Tight cashflows from the lower payout are making farmers more cautious about buying more supplements to help bridge the gap in feed.

With spring a long way off, Neil Smith, a FarmWise consultant, is

encouraging farmers to take action now to get their cows back on track.

“I know December was particularly difficult in Northland, with very dry conditions reducing pasture supply and farmers using less supplementary feed.

Recent rainfall will have improved the feed situation for some, and relieved the immediate pressure on cow condition, but it still needs to be monitored closely over the coming months

to minimise negative impact on next season’s production and mating performance,” he said.

DairyNZ targets state a mature cow should be at body condition score (BCS) 5.0 at calving.

Heifers and rising threeyear-olds should be BCS 5.5.

“I’ve seen cows that are half a BCS lower than this time last year, with the average dropping below 4.0 and an increasing number of cows at BCS 3.5 or less,” Smith says.

“That’s too low, particularly 3.5 and below.

Those cows now need to be monitored closely.

These are the more at-risk cows and will require the greatest gain in condition before calving.”

To help farmers take action, and cow get their cows back on track, Smith offers the following tips and strategies: Condition score the cows – now. This will tell you the average condition of the herd, the range and percentage of the herd at various BCS. Do this thoroughly. The more cows scored, the more accurate the result.

If you are not good at condition scoring get someone in who is. Score at least 70-80 cows from each milking herd. This can now be recorded on a mobile phone and downloaded to Minda.

Select at least 15 cows (depending on herd size) to monitor leading up to calving and review how condition is changing through to calving, especially for the priority young cows. Make sure these cows range in age, BCS and calving date.

Assess the likely farm conditions through to calving.

What will be the likely pasture supply and quality through to calving? What are the resources available in supplements, crops, grazing off and staff?

Some supplement made need to be kept till after calving.

Develop a longer term plan and set strategies

Neil Smith, FarmWise consultant.

through to calving.

Make sure this is done in conjunction with a financial budget. Include the number of cows and young stock to be grazed, allocation of supplement and crops, the amount of grazing off available, milking frequency and drying off protocol.

Allocate enough time for cows to put

on poor quality pasture such as matted kikuyu.

Be realistic about putting on cow condition in these situations. Take this into consideration when drying off cows.

Continue to monitor cow condition through to calving on a regular basis. Cows should be condition scored every two months from mid-

“I’ve seen cows that are half a BCS lower than this time last year.” on condition. This can be a major reason why cows don’t reach target condition at calving. Take into account the dry-off period and the last month of pregnancy where there is no gain in condition.

The type of feed used in the dry-off period can have a major impact on gaining body condition.

Most winter grazing off for cows in Northland is

lactation (FebruaryMarch), at a minimum.

For herds calving in June and early July, regular condition scoring should start in February. Early calving heifers at BCS 3.5 or less will need to be dried off in February if only being fed on pasture in the dry period.

Make sure both the milking and dried off cows are scored. Often heifers

are dried off early in the summer months based on low body condition, but then not fed well enough to achieve target condition for calving.

At each condition scoring, record daily feed intake and key performance indicators such as milk production, available supplements and pasture cover. This information is helpful in deciding the immediate management options.

These options could be OAD milking heifers, increasing supplement levels or drying off low conditioned cows.

Rainfall is difficult to predict, but no rain for long periods can have a big impact on pasture supply.

In difficult conditions, when cow condition can change quickly, condition score weekly.

Keep reviewing and revising the plan, and be prepared to make changes as required.

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ANIMAL HEALTH // 27

Poor conception rates may mask BVD PETER BURKE peterb@ruralnews.co.nz

DAIRY FARMERS are

being encouraged to be vigilant about bovine viral diarrhoea (BVD) which DairyNZ says affects up to 60% of dairy cows and 90% of herds in New Zealand.

Horowhenua vet Keith Christensen told a DairyNZ discussion group in Otaki recently that BVD harms reproductive efficiency, causes cows to abort and causes many other problems.

“In cows it is responsible for the lower in-calf rate in affected herds, but unfortunately sometime the impact is hard to detect because there are other causes of lack of reproduction efficiency,” Christensen says. “There are lots of people who will struggle to get an adequate submission rate and perhaps their conception rate might not be all that good and that may mask the problem of BVD.”

90 and 120 days and at that stage of pregnancy the calves haven’t got an immune system so the BVD virus sits in them as an unwanted guest. Their immune system doesn’t do anything about it, so they are born and they are growing up producing lots of virus because they think it’s part of them.”

Christensen says as well as knowing the status of the animals on the farm, it’s equally important to know the status of those coming onto the farm – the obvious ones being bulls.

These must either be tested or presented with a record of a previous test to verify their status.

Knowing the BVD status of calves is also important, especially given that the virus can be passed on within ‘sniffing distance’. While there is a cost in testing, identifying infected calves allows the farmer to decide whether it’s economic to rear such animals. All calves should

companies wants to see an event that causes any drop in the value of milk because of the perceptions of clients,” he says.

Christensen says good

advances have been made in animal welfare and he is confident these will not drop away in the face of tight budgets. @rural_news facebook.com/ruralnews

Farmers are being urged to be vigilant about bovine viral diarrhoea (BVD).

PRODUCTIVITY PROTECTION IN A TUBE

“We have a falling payout and increasing awareness of animal welfare so things centred on welfare are crucial.”

– Keith Christensen

be treated as infected until their status is known, Christensen says.

Farmers with BVDfree herds should ensure their cows or calves are protected from any neighbouring herd with BVD. Double fencing a boundary will keep a herd out of sniffing range.

Despite the low payout Christensen believes farmers should continue with the milk test and the testing of bulls. He acknowledges testing calves may be too costly for some farmers.

“We have a falling payout and increasing awareness of animal welfare so things centred on welfare are crucial.

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He says the most readily available test for a whole herd is a milk test from the bulk vat.

This tests for the overall exposure of the herd to BVD and by counting the antibodies in the test it is possible to get a good idea of how many cows in the herd are infected with BVD. “The other test is a very sensitive one called PCR (preliminaries chain reaction) that will pick up if any of the cows milking are carrier animals – persistently infected (PI). These are born that way and that’s a crucial point of control.

They are made when the mother is exposed to the BVD virus between about

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DAIRY NEWS FEBRUARY 23, 2016

28 // FARM DAIRIES & EQUIPMENT

Plan well to save time, money THE DAIRY IS a signifi-

cant investment and can have a major impact on milking efficiency and the comfort of cows and milkers.

Building a new dairy can be a daunting task. In many situations it’s left up to the farmer to be the project manager, co-ordinating the dairy builder, plant installer, electrician, plumber etc.

It is difficult to make significant changes once concrete is poured so spending time up front ensuring you have the layout, design and timelines for each step right will likely save time and money later on Dairy infrastructure can have a major impact on milking efficiency and the comfort of cows and milkers. Upgrading an existing dairy or installing a new dairy are big projects that often require a large outlay.

Ask yourself - isn’t it time to upgrade the old shed?

A decision to change the dairy should be based

on a genuine need for improved infrastructure.

It should be financially viable and support the achievement of the farm’s goals.

Generally a change in the milk harvesting system cannot be assessed in isolation from the rest of the farm business. A major upgrade or a new dairy is not ‘just a shed’ but has implications for the whole farm system.

The motivation for undertaking a major change may come from a number of sources such as: ■■ Current system may be working well but may be too small to cope with future goals i.e. milking more cows, employing more or less labour.

■■ Current system may not be working well i.e. the milker is idle or flat out, dairy is too cramped, or it takes too long to milk. In this case it is possible that the extra capacity released by the increased efficiency of a new set up could

be used to help generate funds to pay for the investment.

Sometimes the motivation for change may be a combination of both - for example, milking may be taking too long and extra income may be needed to cover increasing expenses.

Other reasons for seeking changes include the desire to improve the working environment to get benefits like: ■■ Reduced OSH risks.

■■ Improved attitudes to the milking job and farming in general.

■■ More time to spend on management tasks or being able to attract (and keep) high calibre staff to take over the day-to-day operational tasks.

Upgrading goals It is important to be very clear about what is motivating the desire for a change and to have a focused picture of the farm goals.

If the primary goal is to increase disposable income there may be other ways to achieve this with-

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Not all of a farmer’s goals will be financially motivated but every decision made on the farm has a financial implication.

The implications of building a new dairy need to be analysed from many different angles so the risks of financial failure are kept to a minimum and financial targets are reached.

General considerations Will the change be an upgrade or a whole new dairy?

Will more cows be required to make an investment in a new dairy feasible?

If extra cows are required, what will the impact be on the herd, feed, management, labour, infrastructure and debt?

Make sure that all additional costs associated with a new dairy are taken into consideration when doing budgets and plans.

These costs can have a major impact on the financial viability of a project e.g. will the existing infrastructure meet require-

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around dairy infrastructure relating to milk quality and milk collection.

Before beginning any construction or changes, consult your milk company.

The ‘Infrastructure Checklist’ document is a spreadsheet checklist for making changes to milking infrastructure. The checklist may be used as a guide to work through during the design stage, helping you to determine infrastructure requirements for your farm business.

Space has been provided to indicate that each item has been considered.

It is a good idea to use ticks and crosses to indicate those items that are okay and those needing fixing or upgrading. Space is also provided for a brief description of the problem or upgrade required, and the anticipated cost or funds available to complete the upgrade.

Keep in mind that while the checklist attempts to address all aspects when planning changes, it is does not consider every detail.

• This article first appeared in Getting the Basics Right 2016 edition.

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ments of an expanded herd (effluent, fencing, laneways and water)?

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All dairy farmers should base their decisions on clearly defined personal and business goals. If you haven’t already defined goals for your farm business, make it a priority.

DairyNZ’s Mark and Measure courses are a way to upskill yourself in financial management and goal setting for your business.

When planning a new dairy it makes sense to draw up a wish list first. This initial planning is the first step in sorting out priorities. Once the ‘must

have’ priorities have emerged, financial analysis of the cost implications can begin.

■■

Decisions on upgrades need to be analysed in terms of the impact proposed changes will make to milker and cow comfort - some things may be worth paying more for.

■■

Building a new dairy is a big undertaking. Most farmers are not project engineers and have plenty of other work to do on the farm. A project manager is a valuable asset on many dairy construction

projects, however it is important to ensure yours is reputable and experienced in all aspects of dairy builds.

It is their responsibility to make sure that things happen on time and the desired result is achieved. Also make sure you employ a builder with experience in dairy construction.

■■

Visit other farmer’s dairies, preferably during milking, for ideas and feedback on the performance of different products.

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DAIRY NEWS FEBRUARY 23, 2016

MACHINERY & PRODUCTS // 29

Michelin technology could feed the US Nesting birds increase the risk of tractor fires.

MARK DANIEL markd@ruralnews.co.nz

Feathered fire starters MARK DANIEL markd@ruralnews.co.nz

EACH SPRING and summer farmers are at risk from tractor fires caused by nesting birds.

These pesky critters look for warm, dark and sheltered areas to build their nests, so the nooks and crannies around a tractor engine are an ideal place.

Typically the nest building materials made up of twigs and grass sit against a hot engine

and start to smoulder, prompting the driver to lift the hood to investigate, allowing an influx of oxygen which causes ignition or a big flare-up. The result is a burnt out tractor, and likely a burnt out implement if attached, and in worst cases a burnt shed if the vehicle is parked up for the night.

Rural Insurer FMG is promoting a ‘Stop and Pop’ campaign that recommends farmers follow three steps to minimise this ongoing risk Open the hood (stop

and pop) and check for any nests or debris-every time you use the tractor Fit the tractor with an appropriate fire extinguisher. If a fire is detected insert the extinguisher nozzle into the gap between the hood and the engine, resisting the temptation to lift the hood. In all instances your safety is the first consideration; then call 111.

Talk to your insurer about what cover you need, including hire costs, if a repair or

FMG is promoting a ‘Stop and Pop’ campaign.

replacement is not immediately available FMG also suggests employers make sure all employees are up to speed with the

need to be vigilant. The firm offers ‘Stop and Pop’ stickers to place on tractors as reminder. www.fmg.co.nz/tractor-fires

MANUFACTURERS’ CLAIMS of better perfor-

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Citing the planting, growing and harvest of a wheat crop, the company says that if all the vehicles in the world’s wheat growing areas used Ultraflex tyres, production would rise by about 23 million tonnes.

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The key benefit of Ultraflex technology is that it reduces tyre pressures from the norm, protecting the ground from rut formation and ground compaction. This encourages the permeation of air and water through the soil profile, improving plant uptake of nutrients.

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DAIRY NEWS FEBRUARY 23, 2016

30 // MACHINERY & PRODUCTS

Canny southerners stretch their wish lists MARK DANIEL markd@ruralnews.co.nz

in the on-site bar.

Despite the less-than-rosy outlook for the dairy sector, increasingly important part in Southland’s economy, farmers and contractors spoken to were reasonably optimistic, but careful,

MANY KIWI events are a success because of the time and enthusiasm of volunteers, and the biennial Southern Field Days at Waimumu, near Gore, is a shining example of this To keep the field days tradition. looking fresh, new events First held in 1982 at the Bowmar’s property, such as a Southern Man and attracting 60 Competition, Speed Shears exhibitors, this year’s and the Golden Pliers event – two years in the planning – saw 762 trade augmented the triedexhibitors and a 3ha and-tested classics. increase in the site area over the 2014 event.

About 42,000 people moved opportunistic passed through the turnstiles having over the three-day event, peaking purchases to the wish list, but happy at 20,000 on day two. They to take a close look at products or experienced hot, dry days looking at services with potential to reduce the latest technology and innovation costs or increase profits. This for the farming sector, or perhaps outlook was confirmed by exhibitors enjoying a quart of Dunedin’s finest who reported fewer sales ‘on the

day’ but saw good levels of enquiry for subsequent follow-up.

To keep the field days looking fresh, new events such as a Southern Man Competition, Speed Shears and the Golden Pliers augmented the tried-and-tested classics such as the Tractor Pull and the Young Farmers Fencing Competition.

The region’s affinity with the oval ball was also reinforced in the new Farmlands Cup – a pre-season rugby game between the Super 15 Champion Highlanders and the neighbouring Crusaders. This was held on the Thursday evening at the Booth family park adjacent to the showground, a hard fought game in which the Crusaders scored a last-minute try to tie the game 19:19. Bring on 2018 for a re-match?

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Call the friendly team 0800 487 853 or visit www.hustlerequipment.co.nz About 42,000 people attended the event.

DAIRY NEWS FEBRUARY 23, 2016

MACHINERY & PRODUCTS // 31

Little tractor plays big role to maintain reserve MARK DANIEL markd@ruralnews.co.nz

THE NGA Manu Trust runs a reserve of 13ha of protected land on the Kapiti Coast.

It is home to at least 700 species of native plants, 56 species of birds (including kiwi and blue duck), and other cool critters like tuatara, geckos and skinks. A visitors’ centre focuses on edu-

cation and conservation and prides itself on the reserve’s accessibility for wheelchairs and strollers.

Along with the native flora and fauna, the reserve is home to an Iseki 22hp TM3245 compact tractor that works on tracks and pedestrian bridges.

Fitted with lawn tyres so it doesn’t damage the tracks, the tractor has a hydrostatic transmission for stepless speed control,

and like it’s larger brother to the Iseki TM3245 – has front and rear hydraulics, a loader and uses the rear PTO to run a slasher mower.

Loaned by Goodmans Contracting who dug out the ponds when the reserve was first established in 1974, the tractor is owned by the contracting business which maintains it regularly, seeing this as a way to keep supporting the trust. The

Iseki 22hp compact tractor.

company also refurbished one of its old Iseki tractors for Nga Manu and has given them a tipping trailer and a shed. The trailer carts gravel for the tracks and supplies for building projects.

said “we have had the Iseki since August and it’s been used at least every second day. We have to clear away trees that fall on the tracks and trim trees near buildings. The Iseki is a great utility tractor, and fits

The tractor is ideal because it has to go over footbridges, and Nga Manu has a lot of peat and swampy areas where a larger tractor could get bogged.

The trust management

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Quinn Elstone, who has many years of experience in the industry working with Valley pivot systems, says “some users haven’t changed sprinkler packs in twenty years or more, and technology has moved on a lot since then”.

That technology has seen the rise in popularity of low pressure/wide footprint packs whereas the norm was once low pressure/small footprints or overhead sprinkler units running at a typical 30psi. Nowadays 10-15psi is more common which helps reduce ground impact by the water, improves droplet size and offers greater wind resistance.

Modern sprinkler packs are highly accurate and wider, achieving better absorption and helping avert run-off and leaching; most importantly they use less water to achieve optimum yields.

Elstone says farmers should be checking equipment monthly and annually, and while some might see this as an increased cost, over the long term they will save money on water and power costs.

Sprinkler packs should be changed as they approach 10,000 hours use, depending on type, to achieve the best results.

Elstone says the Kiwi ‘she’ll be right’ attitude is typical, and he sees mismatched sprinkler packs used to fix day-to-day problems, with little thought given to system compatibility or operating pressures, resulting in underor over-watering, the latter causing ponding or run-off for little or no benefit.

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Attending to sprinklers gives good payoff

+g

$5

XL TRAILER

the bill perfectly for Nga Manu. There will be a lot of operators, and with hydrostatic transmission anyone can hop onto it.”

Every tractor kicked off in 2016 promo comes with: NEW HOLLAND

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NEW HOLLAND PROTECTION PLAN 3 YEARS/3,000 HOURS1 PREMIUM PEACE OF MIND2

*0% finance based on 50% deposit over 36 months or 60% deposit over 48 months - GST paid back in the third month.

Subject to normal lending terms and conditions. Two tickets are for one Super Rugby round robin game of your choice (dependent on availability). One Super Rugby team jersey of your choice. Promotion ends 31st March 2016. 1Whichever occurs first. 2Offer only available on new New Holland tractors installed before 30th April 2016.

www.newholland.co.nz

DAIRY NEWS FEBRUARY 23, 2016

32 // MACHINERY & PRODUCTS

Giant grey wolf hunts alone MARK DANIEL markd@ruralnews.co.nz

UTES OR pick-ups, as

they are known in the northern hemisphere, don’t have the following they have in these southern climes, so it’s interesting to see a famous European badge appear in the NZ top ten sales league.

The VW Amarok has a following, probably on the state highways, but this reviewer believes it could certainly cut the mustard in the backblocks, as it is rather good and a testament to the VW design engineers who have thought outside the square.

First point of difference is the 2.0L, 4-cylinder engine that seems to lack in cubic capacity but uses common rail and twin turbos to bang out 132kW power and a very agreeable 420Nm torque, sups a light 7.4L of go-juice per 100km, so should be good for a 1000km on a tankful?

Keeping things German, the lusty lump mates with a ZF, 8-speed auto box as smooth as a block of Whittakers dark chocolate, and sliding imperceptibly between ratios without any fuss. Control extends to a choice of Eco Mode, Sport Mode or Tiptronic depending on which side or whose bed you got out of, whilst the fulltime 4WD – 4 Motion in VW

speak – uses a central Torsen mechanical diff to deliver power to back or front dependent on conditions.

Safety is always a consideration and the Amarok isn’t light in this area either. Electronic Stability Programme (ESP) keeps everything straight and level, Electronic Diff Lock (EDL) delivers power to where it’s needed, and a Trailer Stability Programme uses the vehicles ABS system to counter any sphincter worrying moments when a loaded trailer develops a mind of its own.

This is further supplemented by a Hill Hold Assist feature that

keeps the brakes on for around two seconds as the throttle is applied, and a hillside descent function that is driver selected, automatically applying the brakes to maintain constant downhill speed.

Out on the black stuff, the Amarok is very quiet compared to its contemporaries, no doubt aided by the 8-speed box, and the ride, although not quite car-like, is pretty close, bearing in mind that this is a one tonne lugger and a three tonne puller and definitely better than the pack. This is probably due to the leaf springs sitting ‘outside’ the chassis rails, lower deck height and longer springs giving a softer ride because of

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European VW Amarok is making a mark on New Zealand roads.

greater articulation. The spring arrangement also gives rise to the maker’s boast about the size of the load area in this double cab: between the inner rear wheel arches you can stow a 1.22m pallet.

In the cabin, it’s all very nice, with car like features and a hint that everything is screwed together properly and will withstand the rigours thrown at it. The Black Label as reviewed here featured Alcantera trimmed seats, smoke rear lenses and window tints, rather nice 18 inch alloys and useful running boards for vertically challenged drivers.

The move away from the norm also carries through in operation of the vehicle with 12 monthly or 20,000km service intervals, air and fuel filter replacement at 120km, cambelts at 220km and the transmission

and final drive fluids filled for life.

Negatives: the switch for cruise control on top of the indicator stalk, about a big as a pimple and activating a left turn indication every time it is switched on, and a tonneau cover that looks the bizz, but has locking

clamps that must have come from a Tonka toy.

In summary, a great vehicle, not least because of the designers’ fresh thinking and certainly carrying more kudos than some of the others in the market.

Visit www.volkswagen. co.nz

Holaras Hippo washer/slicer.

Hippo makes a splash MARK DANIEL markd@ruralnews.co.nz

TR AILED PL ANTER 8-ROW NX WINGFOLD • A folding, pull-type frame – The advantage of the pull-type frame is that it can be used with lower powered tractors.

• Four wheel units – This pull-type frame is equipped with 4 hydraulic wheel lifts.

• High capacity fertiliser attachment with FertiDriveVM – for easy and rapid adjustment.

• Easy adjustments and operating – All planter functions operate from the tractor cab using a function selector.

www.tulloch.co.nz

0800 88 55 624

DEALERSNATIONWIDE

WITH THE rapid growth of fodder beet in the Southland livestock diet a number of companies are offering crop-specific implements to achieve maximum utilisation.

The Holaras Hippo washer/slicer is designed for mounting on telehandlers, as it packs an unladen weight of two tonnes, and typically will handle a load of the same weight in each bucketful.

The design centres on a hydraulically driven drum with a tubular cleaning screen around the periphery.

With the outer screen open beet is scooped into the drum and the screen closed. The drum is rotated to clean away loose dirt or stones from the beets then the whole attachment is dropped into a water reservoir to clean the product.

Once cleaned the outer screen is rotated in the other direction to expose the crop to a knife system that slices the product to around 5cm in length.

The machine is fully reversible and can also be specified with an optional remote control system to aid ease of use.

For more information visit www.agritotal.co.nz

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