Dairy News 26 July 2016

EU milk growth slowing. PAGE 3

SIX OF THE BEST SDF unveils 6 Series PAGE 31

PASTURE COVER Get it right before calving PAGE 28 JULY 26, 2016 ISSUE 361 // www.dairynews.co.nz

CHEESE GALORE! Growing stockpiles in the US, EU send prices down . PAGE 5

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DAIRY NEWS JULY 26, 2016

NEWS // 3

European milk worm turning PAM TIPA pamelat@ruralnews.co.nz

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interesting than the lacklustre Global Dairy Trade auction last week, says Rabobank dairy analyst Emma Higgins.

Signs of a slowdown in milk production in Europe are strengthening.

“EU’s milk worm continues to turn with official Eurostat data indicating EU-28 milk production increased just 0.8% year-on-year in May 2016, down from a 1.7% growth in April 2016,” Higgins told Dairy News.

“Interim data shows German and French production was down 3.3% and 3.5% in the last week of June respectively. These are the two largest milk producing states.

“Culling is also on the increase.

May 2016 cow slaughtering data show increased culling among the major EU milk producing states.

In the three months to May 2016, German cow slaughtering was up 14% versus the same period last year, and UK slaughtering was also up by 18% during the period.

“Cow culling is up in France and Ireland as well, by 7% and 4% respectively.”

Fonterra says in its July Global Update that the April EU production increase of 1% vs the same month last year was the lowest rate of increase since early 2015. Half of the top eight producers decreased production vs the same month the previous year.

Emma Higgins, Rabobank.

GDT results ■■

AMF index up 0.2%, average price US$3,628/MT

■■

Butter index down 5.0%, average price US$2,687/MT

■■

BMP index down 0.5%, average price US$1,565/MT

■■

Ched index down 1.1%, average price US$2,886/MT

■■

LAC index down 4.0%, average price US$721/MT

■■

RenCas index up 0.4%, average price US$5,286/MT

■■

SMP index down 1.1%, average price US$1,927/MT

■■

WMP index up 1.9%, average price US$2,079/MT

The overall price index remained unchanged at last week’s Global Dairy Trade auction. The whole milk powder (WMP) index up was up 1.9% to an average US$2079/MT. Butter prices dipped 5%, while skim milk powder and cheddar also fell circa 1%. In contrast, anhydrous milk fat

and casein prices were up slightly.

ASB’s Nathan Penny says dairy markets have largely shrugged off effects of Brexit and the focus is now on the big picture – supply and demand.

“On that front we will be looking to see what happens with European

supply, New Zealand supply and the others and see how that plays out and how it translates into prices from here.”

Some longer term contacts for WMP showed a little promise, up by 3-4%.

“It’s not much at this stage but it’s a hint that buyers are thinking prices are going to lift at some stage,” says Penny.

ASB is maintaining its $6/kgMS forecast. “We are continuing to look at that supply picture – for example while it’s early days, Fonterra’s June collections were down 10% on last year. We will see how that plays out but we think we might get a fall of up to 5% this season. If we start to get something like that as we get into the spring, prices will move quickly.”

DAIRY NEWS JULY 26, 2016

4 // NEWS

Farming groups cooperate as new bobby calf rules take affect PETER BURKE peterb@ruralnews.co.nz

IN A matter of days – on August 1 – new regulations on bobby calves come into force.

The regulations require bobby calves to be four days old before trucking, truck journeys must not exceed 12 hours, young calves may not be shipped across Cook Strait, and ‘blunt force’ killing (blow to the head) is banned except in an emergency.

A major development in the quest to improve the welfare of bobby calves has been the setting up of the Bobby Calf Action Group (BCAG), comprising DairyNZ, Dairy Companies Association of NZ, Meat Industry Association, Federated Farmers, NZ Petfood Manufacturers Association,

Road Transport Forum, NZ Veterinary Association and the Ministry for Primary Industries.

All eight organisations have worked separately and collectively to educate their members about the new rules and their implementation.

DairyNZ and NZVA have run 60 training workshops for dairy farmers nationwide, and DCANZ has reviewed farmers’ individual terms and conditions of supply in respect of animal welfare and worked with other organisations to keep farmers informed.

The Petfood Manufacturers Association has updated its code of practice for managing bobby calves, and the MIA and the Road Transport Forum have run education programmes for members and suppliers to ensure compliance.

MPI’s director-general Scott Gallacher says from what he sees day-

to-day the vast majority of NZ farmers do the right thing in animal welfare and MPI is confident the message has got out to farmers.

“That’s why we are working with all players in the industry and have run a media campaign direct to consumers, the public and farmers to ensure all know that if they see anything giving cause for concern they should contact MPI and we’ll get to the bottom of it.”

MPI’s campaign about the new regulations was to alert anyone with an interest in animal welfare to be empowered to call them.

“It might well be an education programme all round because we are aware that often people see something that concerns them. I don’t want them to be left in the dark and have no-one to talk to. It is quite powerful for us when we get back to them and say ‘we have

investigated that and it wasn’t what you thought. It was actually this situation and there was no breach of the animal welfare rules’. From our perspective it is part of an education process because we have had a conversation with them,” he says.

Gallacher says this is all part of the process of reassuring the public that MPI will investigate any complaint and if there is a breach of the regulations it will prosecute. MPI is trying to sort out the minority who don’t look at the rules, or ignore them.

Bumbling prices need CPR shock FEDS DAIRY chairman Andrew Hoggard says the Global Dairy Trade (GDT) auction needs some CPR to shock it back into life.

“If you look more into the future, forward contracts were still pretty flat. Six months out it was still US$2200/t. We want to see prices get close to that US$3000/t mark so we can get things back to a nice level,” he says.

“While everyone has brought their cost of production down, it is still very much hand to mouth at the moment.”

He thinks many farmers are getting their costs down to the $3.50-$4/kgMS range.

“The challenge is if you’ve got $1/kgMS debt, then you are in a hard place,” he says.

“There are people with more than $1/kgMS debt so that makes the proposition for them extremely tough.

“It didn’t fill me with confidence but it’s not yet time to hit the gloom and doom panic button.

“It’s bumbling along there and I think a lot of people would feel a lot more comfortable if we saw a couple

of decent rises to give us more confidence, but at the moment it is not inspiring a great deal of confidence.”

DCANZ information showed the North Island was down 5% and the South Island down 22% in June. But it is not an indication of a trend because of the small amount of production in that month anyway.

“Just a few people deciding winter milk wasn’t worth it can alter that quite dramatically,” he says. @dairy_news facebook.com/dairynews

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DAIRY NEWS JULY 26, 2016

NEWS // 5

Global cheese yield up, prices tumble SUDESH KISSUN sudeshk@ruralnews.co.nz

CHEESE PRICES are

falling worldwide and it’s all to do with the milk glut.

In New Zealand, retail cheese prices have fallen to the lowest level in nine years; in the US, at the end of April, a record 540 million tonnes of cheese was in storage, up 11% from last year.

Lower prices impact returns for major cheese exporters like Fonterra and Open Country Cheese, adding further downward pressure on

payouts.

More milk, especially out of the US and the European Union, has seen prices drop; with lower input costs cheese makers are finding it cheaper to churn out more products.

On Global Dairy Trade (GDT), the cheddar price peaked on October 6 last year at US$3234/tonne;

by March 15 this year it had tumbled to US$2441/ tonne. It has since risen slightly and at last week’s auction the cheddar price reached $US2886/tonne.

But Rabobank dairy analyst Emma Higgins says while cheese prices appear

to have dropped in the last GDT event, throughout this negative price cycle the dairy fat complex, including cheese, has largely been getting prices at a premium to powders. This reflects strong demand from consumers in the northern hemisphere, particularly the US, and in Asia for pizza.

Higgins told Dairy News that cheese stocks are higher, and growing, in the US than in Europe.

This comes down to US milk production running quite strong for the past two years.

“Also, US processors

no longer have the easy option of just producing SMP/butter and selling it to the government through an intervention system in times of weak markets so they need to make commercial production scheduling decisions,” Higgins says.

“Exports of cheese have stalled for the US due to the higher US dollar and more EU cheese in markets such as Japan and Korea.

“Given the strength of US demand, inventories at this stage are largely manageable and not a cause for significant

More cheese being produced around the world sends prices tumbling.

concern at this time.”

Christchurch boutique cheese maker Barrys Bay Cheese says smaller producers are immune from the global price drop.

“The big exporters Fonterra and Open Country who are selling cheese on the global market will be affected by the falling cheese prices and this reduction in revenue will

Retail price at nine-year low IN THE local market, cheese prices have fallen to their lowest level in almost nine years, with overall food prices dragged down by cheaper dairy products.

The food price index from Statistics New Zealand shows that in the 12 months to June 30 food prices fell by 0.5%, with the average price of cheddar cheese down 9.5%.

“The average price of a kilo of cheddar cheese was $7.68 in June 2016, down from $9.12 in June 2015. This was the lowest price since September 2007,” consumer prices manager Matt Haigh says.

The fall in the price of dairy products in supermarkets comes as global dairy prices

remain well down on the levels seen two years ago, which has caused global dairy giant Fonterra to slash its payout to farmers.

A Fonterra spokesman told Dairy News that we are seeing commodity prices globally coming down.

“We’ve passed on this drop and retailers in NZ have done the same.

“Supply and demand factors impact global prices which in turn flow through to our domestic market. We do our best to make sure our products remain accessible by protecting consumers as much as possible from the volatility we see in the commodity cycle.”

Fonterra’s monitoring shows the average

price per unit of a block of natural cheese has decreased by 2.4%.

Christchurch boutique cheese maker Barrys Bay Cheese says it buys milk under the DIRA. “Our input cost of raw milk is governed by the overall basket of products Fonterra sells,” says Mike Carey, Barrys Bay Cheese.

“There are effectively two parts to the local market in NZ for cheese. The 1kg block business in the supermarket is driven by the sale price of 20kg blocks from Fonterra and the other part of the market is the small boutique producers like ourselves who buy milk under the DIRA, hence the milk price is our input cost,” Carey says.

no doubt impact on the make-up of the payout to their suppliers,” Mike Carey, Barrys Bay Cheese told Dairy News.

US dairy farmers are expected to produce 96 billion kg of milk this year, a record. Much of it is being sold to cheesemakers who are socking away their output, waiting for demand and prices to rise.

The US has so big a cheese glut that every citizen there would need to eat an extra 1.3kg this year to work it off.

According to the US Department of Agriculture, at least half this stockpiled cheese is American, 2% is Swiss and the

rest is “other.”

The reason lies across the Atlantic Ocean.

Dairy product exports from Europe have been increasing for two years and cheese prices have been steadily falling. The result is a global oversupply in milk and dairy products.

That means the US has taken advantage of falling prices and the weakening euro to buy up more European-made cheese; imports of EU cheese rose 17% last year and combined with an overproduction of milk by America farmers to combat similarly low prices, has resulted in extra cheese.

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DAIRY NEWS JULY 26, 2016

6 // NEWS

Westland’s interim chief takes charge WESTLAND MILK has appointed

an interim chief executive.

Former Fonterra operations manager Brent Taylor takes over from Rod Quin, who resigned after seven years on the job.

Westland is New Zealand’s second-biggest dairy cooperative.

Chairman Matt O’Regan says because the process of recruiting a new chief executive won’t be completed before Quin’s final day on July 31, the board has agreed to an interim manager taking charge to ensure effective management continuity until the new chief executive starts work.

“The board has agreed to appoint Brent Taylor, currently an independent director, as interim managing director. Brent’s skills will ensure continuity of our business strategy and that any potential disruption between chief executives is kept to a minimum.”

O’Regan says finding a new chief executive, given Westland’s size and

Rod Quin leaves Westland Milk on July 31.

international profile, should not be rushed so advertising is being done globally.

“This takes a bit of time but the board is confident Brent’s role as interim managing director will ensure Westland’s business strategies will continue without disruption.”

Taylor was elected a Westland independent director in 2014. He has worked 40 years in the New Zealand dairy industry with compa-

nies including NZ Cooperative Dairy Company, East Tamaki Dairy Cooperative, NZ Dairy Board and Fonterra.

His roles have included operations management, country manager, and chief executive.

Since retiring from Fonterra in 2013 Taylor has been a professional director, provided consultancy services and is involved in private equity investment in NZ industrial companies.

Much loved Two Toes being released completely free of his monitoring and tracking device into the Tanekaha predator controlled area.

Champion kiwi breeder and ‘wife’ retire STUD BREEDING kiwi Two Toes and

his wife Binky have retired in peace, thanks to a partnership between Fonterra and the Department of Conservation.

Two Toes will retire with his ‘kiwi wife’ Binky into Tanekaha’s 800ha of predator controlled farmland, native bush and pine forest on the edge of the Hikurangi swamp in Northland.

Two Toes is now free of his tracking device after ten years of full time monitoring and huge breeding success.

The Tanekaha community pest controlled area (CPCA) is part of the Hikurangi Living Water catchment.

Living Water, a ten year partnership between Fonterra and DOC, works with farmers, iwi, hapu, community groups and others to improve native wildlife and water quality in five catchments in important dairying regions.

In May Living Water supported the release of 12 kiwi into the Tanekaha CPCA. The kiwi were moved from predatorfree Motuora Island, a kiwi crèche in the Hauraki Gulf.

“Two Toes and Binky have done a wonderful job,” says Tanekaha CPCA coordinator Edwin Smith.

“This lovely pair have bolstered the local kiwi population. They’ve produced hatchlings three times each year since we took over monitoring from DOC five years ago.”

Two Toes was first found injured and caught in a predator trap, then rehabilitated at the Whangarei Bird Recovery Centre before his release into Tanekaha

ten years ago. His injury cost him one of his toes, hence his name.

“Now that we have nine new monitored breeding males it’s time for Two Toes to retire from monitored breeding, and for him and linky to live freely and safely in the area.”

In the last five years Two Toes and Binky have produced many viable eggs at Tanekaha, which have been moved for hatching at Auckland Zoo before being released on Motuora and predator-free Matakohe/Limestone Island in Whangarei Harbour. Another three kiwi chicks have been raised from the Tanekaha pair’s hatchlings, to a less predator prone weight of 1.2kg, before returning to their natural habitat.

Tanekaha CPCA was launched by 12 Fonterra farmers who agreed with Northland Regional Council in 2012 to set up the pest control scheme.

“In the wild only 5% of kiwi chicks survive because of predators, particularly stoats and feral cats. We’re hoping for at least 60% survival and these new males will attract other females so we can increase the population further,” says Smith.

“It shows what you can achieve with our kiwi population by tackling predators.”

Fonterra Living Water project manager Tim Brandenburg says, “It’s been great to work with the Tanekaha CPCA group who share the same values as Living Water. The work we’re doing and the work these farmers and their community are doing shows that sustainable dairying and healthy ecosystems can co-exist.”

FIVE CATCHMENTS LIVING WATER is working to improve water quality and increase the abundance and variety of native wildlife in five catchments nationwide.

In Northland, Living Water works in the Hikurangi catchment that feeds into the Kaipara Harbour.

The other catchments are Pukorokoro / Miranda on the Firth of Thames/ Takapa Moana; Waikato peat lakes focusing on lakes Areare, Ruatuna and Rotomanuka; Te Waihora/Lake Ellesmere in Canterbury focusing on the Ararira/LII catchment; and Awarua-Waituna in Southland focusing on Waituna catchment.

DAIRY NEWS JULY 26, 2016

NEWS // 7

China trade dispute reports ‘overblown’ PAM TIPA pamelat@ruralnews.co.nz

REPORTS THAT China

has threatened action against key exports such as dairy and kiwifruit if New Zealand investigated a complaint about Chinese steel imports are “completely overblown”, says Stephen Jacobi, executive director, NZ International Business Forum.

Everyone should take a “deep breath”, he says.

However if there was a real threat to our dairy industry we should challenge it head-on through due process – the Free Trade Agreement and World Trade Organisation procedures.

that protect us and that’s why we need these sorts of protocols and agreements that enable us to work through things.

“We just have to take a deep breath and meet whatever challenges arise but continue to maintain our own policies.”

Jacobi says the fact of the matter is NZ manufacturers are able to apply for assistance in the form of anti-dumping duties if they feel aggrieved. But there are tight guidelines for this; it is not a simple thing to prove.

“Also we are entitled to say, if we take action in [one] area, that it shouldn’t overflow to others. I think we have to take a deep breath and

Everyone should take a “deep breath”.

“One would always want to be concerned if there were genuine threats of some kind,” Jacobi told Dairy News.“But in this case I think the fact that an official might have said something to someone and that has been reported back doesn’t really constitute a major threat to our interests.

“What we have to do is rely on the processes and relationships we have both in relation to the anti-dumping issues presented and in relation to any threat that might be raised.

“I see now the Chinese Government through the embassy in Wellington is basically saying there is no threat. I personally think the whole thing has been completely overblown which is unfortunate,” says Jacobi, who also heads the APEC Business Advisory Council (NZ) and is acting executive director of the NZ China Council.

Inevitably with a big country like China – and the same thing with the US – we as a smaller party feel particularly aggrieved at any notion that we are being bullied, he says.

“Big countries do things to small countries,” he says. “That’s why we have trade agreements

006-007.indd 7

follow due process.”

However Jacobi says if there was some sort of threat to our dairy industry then we would have to meet that challenge headon using all the means at our disposal, particularly through the Free Trade Agreement and World Trade Organisation process.

“I don’t think we are anywhere near that and I would be surprised if that was what China was really wanting to do.”

Jacobi’s comments follow daily media reporting last week that Fonterra and Zespri representatives had been warned by Chinese business people and commerce authorities of retaliatory measures if NZ were to put in place penalties against Chinese steel.

Last week Trade Minister Todd McClay confirmed he had been advised of an approach by China to one NZ exporter.

Reports suggested China would ‘heavy’ NZ on key exports such as dairy, wool and kiwifruit if MBIE found that Chinese steel was being sold at below cost price and imposed tariffs.

Zespri was reported to have said that local staff had received unsubstantiated information from an

industry body in China on purported industry consultations related to the importation of NZ agricultural products.

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penalities.

Zespri says this information was passed to NZ embassy officials in China as part of normal business.

Fonterra has not commented on the issue.

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DAIRY NEWS JULY 26, 2016

8 // NEWS

Need a hand?

Call the Handy Landys near you NIGEL MALTHUS

FARMERS NEEDING

extra hands to herd heifers, plant trees, build fences or clean up under woolsheds are offered help by a new and unusual bunch of workers -Handy Landys.

This group of mostly

Lincoln University agriculture students offers skills and labour to the agriculture sector.

With support from the Rural Support Trust, the service is free to farmers; all the students ask in return is the experience and opportunity to network as they begin their careers in the sector.

Their website says the idea came -- as all good ideas do -- during a session at the pub. Now about 100 strong, they will muck in wherever they’re needed, in the spirit of the Student Volunteer Army which mobilised after the Canterbury earthquakes.

Farmers can go to the

website and register their task; a Handy Landys co-ordinator will assess the requirements, then schedule an appropriately skilled group of volunteers.

Recently, four Handy Landys – second-year Lincoln students Sophie Gualter, Tessa Schmidt and Oscar Beattie, and

Handy Landys (from left), Sophie Gualter, Tessa Schmidt, Oscar Beattie and team leader Matty Rissi ready for work.

Handy Landy member Oscar Beattie herds a heifer into the milking shed on a Canterbury farm.

a team leader, fourthyear student Matty Risi -- turned out to help familiarise first-time heifers with the milking platform on Peter and Adele King’s dairy farm near Burnham.

The Kings had about 135 in-calf heifers returning to the farm that day for the first time since weaning. As each truckload arrived they were introduced immediately to the milking platform before going out to pasture.

Adele King says they were impressed and grateful for the help; the Handy Landys team put their backs into urging the heifers into the rotary stalls. The animals are reluctant the first time

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through, and the Kings aim to introduce them to the milking platform three times before calving.

Now the Handy Landys look forward to native tree-planting, sorting a hazelnut harvest, fencing,

painting, and general tidying. Completed jobs include helping a Selwyn District farmer with a “40 years overdue” cleanup under his woolshed. www.handylandys.co.nz @dairy_news facebook.com/dairynews

Going deeper in nutrition budgeting, farm plans BALLANCE AGRI-NUTRIENTS has formed a farm

sustainability services team to help farmers in their nutrient budgeting and farm environment planning.

Team leader Alastair Taylor says the move builds on Ballance’s nutrient budgeting services initiated in 2013 to support Canterbury farmers in meeting the compliance rules of the Canterbury Regional Land and Water Plan.

Farm sustainability services fold in the contractual work Ballance does for dairy companies, irrigation schemes, levy boards and commercial partners to analyse and interpret nutrient loss data.

It will also draw on products and technology developed through Ballance’s $19.5 million Clearview Innovations Primary Growth Partnership programme with the Ministry for Primary Industries. This includes N-Guru, a model that more accurately predicts pasture responses to nitrogen, and MitAgator, which takes data from Overseer files and links them with farm mapping data to identify the areas onfarm at risk of losing nitrogen, phosphorus, sediment and bacteria and determine which mitigation techniques will be most effective.

“We’re aiming to stay one step ahead of what our farmers need and last year we identified environmental constraints as likely to be one of the largest impacts on their businesses. When we talked to our farmers they identified sustainability as being at the heart of this, with its environmental, economic and social aspects,” says Taylor.

The team will analyse year-end farm nutrient data for dairy companies and year-end nutrient budget reports for irrigation schemes, regional councils and resource consents. It also expects to work with farmers building databases of their nutrient performance ahead of moves by their regional councils to impose nutrient limits.

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DAIRY NEWS JULY 26, 2016

10 // NEWS

Farmers liken fees hike to cash-grab

Kiwirail plans to hike charges and farmers are unhappy.

IT SEEMS like a desperate cash-grab by Kiwirail; that’s how Federated Farmers vice president Anders Crofoot describes the rail company’s proposal to charge farmers for stock and services access across train tracks.

The new charges are proposed under the guise of the recent health and safety reforms, he says, although Feds understands the plans to increase charges pre-date the reforms.

“Many farmers are

stunned by the proposals they have received for new access charges. On top of recent hikes in rentals ranging from 200% to more than 400% this is extraordinary. Individual farmers [have copped]... massive increases in rent; [now] many farmers are seeing new charges coming in on top of that.”

Crofoot says the big issue is Kiwirail’s approach to the negotiation -- take it or leave it.

“This isn’t going down particularly well and farmers feel they are being held to ransom.”

Each situation is different for most farmers: some run waterpipes under train tracks, others have stock access to paddocks via an underpass -- a benefit for Kiwirail because it reduces the risk of wandering stock.

“Yes, the farmers are making use of someone else’s land but in many instances it’s not like they have a lot of choice. Many in the farming community are under economic pressure. Early on we were

trying to take a conciliatory line but we were not getting anywhere so we’ve upped the anti.”

Crofoot says charges to farmers in the past were based on easements over land. Now Kiwirail appears to be trying to tidy the situation, but Federated Farmers can see no justification for the costs the company is planning to charge.

“The whole things seems a desperate cashgrab which doesn’t seem justified. They are probably struggling for cashflow like a lot of other businesses so here is nice soft target.”

Crofoot says Feds is now supporting farmers, representing them as safe, vigilant custodians of stock crossings across train tracks.

“We’re attempting to provide advice on commercial resolutions, however Kiwirail’s approach means we’re not optimistic. We’re pursuing ways and means to reduce the impact of this new and additional expense.”

Volatility rules VOLATILITY IN the world dairy market is making it difficult to predict dairy farm sales in New Zealand.

Real Estate Institute NZ rural spokesman Brian Peacocke says prices paid for dairy farms dropped by as much as 18% in the past year. But dairy farm sales were only 12% of all farms sold in the past twelve months.

The dairy farms sold were good properties; very few second- and third-tier farms were coming on the market, he says.

“As a rule the good properties have held their value reasonably well and the price drop may be in the order of 8% to 12%. The guys in Southland say the prices have dropped back by 15%, so there is a bit of variation around the countryside,” he says.

Peacock is aware of speculation and is doing appraisals, trying to work out how things might go in the spring.

“But we detect a feeling in the marketplace of a positivity -- people feeling they might have come through the bottom of the trough. Since the Fieldays there appears to be a slight change in the atmosphere out there,” he says.

The lower milk payout is a major factor in the lower prices being paid for dairy farms. But buyers optimistic about the future of the industry are buying farms.

Peacock has noticed farmers cutting their expenses dramatically, working to break even or make a small profit this season. Low interest rates are a big help and he has seen few mortgagee sales. “The banks are careful to portray a picture of support.”

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DAIRY NEWS JULY 26, 2016

12 // NEWS

Indonesia a priority market for co-op INDONESIA IS one of

Fonterra’s priority markets where it sees huge potential for growth.

The co-op opened a $36 million plant at Cikarang last year; up to 87,000 packs of the coop’s Anlene, Anmum and Anchor Boneeto dairy brands are packed there each day.

Prime Minister John Key visited the plant last week during an official

tour of Indonesia. With him were Indonesia’s Deputy Minister of National Development Planning, Gellwynn Daniel Hamzah Jusuf; New Zealand Minister of Trade, Todd McClay; Fonterra’s chief operating officer of farm source, Miles Hurrell; and the president director of Fonterra Brands Indonesia, Achyut Kasireddy.

Kasireddy says NZ and

Indonesia have shared a positive relationship for 65 years and Fonterra has flown the NZ flag in Indonesia for at least 30 years.

“Our investment in this site allows us to produce more high quality dairy nutrition to meet Indonesians’ increasing demand for dairy.

“At the same time, as a dairy cooperative owned by farmers, we are looking to help grow the Indo-

nesian dairy industry by working with local dairying communities to help up-skill farmers through our Fonterra Dairy Scholarship programme, now in its fourth year,” says Kasireddy.

Several farmer alumni from the Fonterra Dairy Scholarship programme told the delegation of their experiences during the 12 month courses, run with the Indonesian direc-

Prime Minister John Key meets Indonesian dairy farmers taking part in Fonterra’s scholarship programme.

torate-general of livestock farming. They learn best-practice farming techniques during farm

training in Indonesia and during a 12-week visit to NZ. The delegation toured

the factory, tasted dishes created by a Fonterra chef and learned about the coop’s consumer brands.

Hurunui water group tapping its shareholders THE HURUNUI Water Project (HWP) is seeking more cash from shareholders to carry the project through to farmer sign-up and construction.

“We’ve got all our water and land use consents in place and the appeals process is behind us,” chief executive Alex Adams says. “We now need to fund feasibility investigations to then confidently start construction.”

Shareholders are called

Hurunui Water Project director, Mike Hodgen, front, discusses the plan with advisors on a site visit to the upper Waitohi catchment.

PHOTO: HURUNUI WATER PROJECT

to a crucial meeting on July 27 to vote on whether to proceed. They will be asked for $900,000 in loans to fund the next phase.

“These loans will accumulate interest at competitive rates and are intended to be repaid when the water user agreements are concluded with the shareholders fortunate enough to be in the initial part of the distribution area,” Adams says.

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If the shareholders and other backers produce the required funds, the Government will release $3.3 million ring-fenced by Crown Irrigation Investments Ltd for the project.

“The board believes shareholder debt funding of the next stage is the most efficient way of proceeding,” Adams says.

“It is more cost-effective, sources money from people already invested in the success of the scheme, and will assure contractors and government that we are determined to see the scheme completed.”

HWP is a $180m project to develop sustainable irrigation to droughtproof the Hurunui District’s farming businesses, boost regional production, increase farm incomes and jobs, all within environmental protection rules.

Hurunui, in the heart of North Canterbury, remains gripped by a drought recently declared New Zealand’s longestlasting; this classification will run to the end of this year.

HWP says it is the first irrigation scheme in NZ to achieve its consents under the nationally agreed Water Accord and the “heightened regional council sensitivity to

downstream environmental issues”.

The project envisages four storage dams in the upper Waitohi River, and has consents covering 58,000ha of irrigable land in the Hawarden, Waikari, Scargill and Omihi districts with further potential in the Greta Valley, Ethelton, Glasnevin, and Amberley-Kowhai areas HWP says that as a piped scheme, it will encourage economic use of water and minimise the environmental impact.

Adams says a recent survey of shareholders showed that almost all of them were planning to stay with similar land use, about 50% sheep and beef and a further 30% in arable, and some deer farming.

“Most survey respondents said they intend to irrigate only a proportion of the farm,” Adams says, “adding value by doing more of their own finishing of stock rather than sending them away, and taking options in specialised crops and the like.

“It is clear that for our shareholders the most important aspect of the scheme is that it will drought-proof their farms, a crucial consideration in North Canterbury.”

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DAIRY NEWS JULY 26, 2016

NEWS // 13

Some bright spots in soggy tractor market TRACTOR SALES are holding despite the dairy downturn, says NZ Tractor and Machinery Association president Mark Hamilton-Manns.

Second quarter tractor sales declined by 8.5% versus the same quarter last year.

Several segments increased however. The consumer segment grew 15%, as more Kiwis bought 20–60hp compact tractors for lifestyle blocks, hire fleets and some commercial applications.

The 121–140hp, 141– 180hp and 181–250hp segments also grew by 39%, 116% and 125% respectively. These tractors are mostly used in arable and dry stock farming and by contractors.

Sales in Northland, Auckland, Bay of Plenty, Wairarapa and Nelson grew because of strong growth in horticulture and viticulture.

Sales in the dairy segment (100–120hp) declined by 15%.

“Dairy farmers are still buying,” Hamilton-Manns says. “Our members have noticed they’re taking longer to make deci-

sions, and often choosing a machine with lower specifications. In some cases, cabs are considered a luxury and are gone from shopping lists.

“Dairy farmers are still prepared to purchase if there is a strong return on investment. Often replacing a tractor or machine will reduce annual expenditure as repairs and maintenance costs are generally less on a new machine and often covered by warranty.

Newer tractors are also more fuel efficient.”

“The consumer market is also competitive now, with great deals. But inexperienced consumers… buying machinery often underestimate the importance of the availability of parts, service and warranty support.

“A great deal upfront may be expensive later.

Our advice is to buy from a recognised NZ dealer for sure access to parts and service.”

The tightening dairy market is prompting tractor makers and retailers to provide training, aftermarket support and parts supply to help keep customers’ machines operat-

ing, Hamilton-Manns says.

“And our manufacturers are investing heavily in R&D to meet off-road

Large tractor sales down, Kiwis are buying more compact tractors.

emissions regulations, integrate technology into machines and reduce operating costs.”

Our automatic feeders take the physical work out of rearing calves.

Synlait man heading for Singapore QUALITY REPLACEMENTS, WITHOUT THE EFFORT.

SYNLAIT’S GENERAL manager quality and reg-

ulatory, Michael Stein, is to become quality and food safety director, Asia Pacific, at Danone Nutricia Early Life Nutrition, Singapore, effective September.

“This is a great personal and professional opportunity for Michael and a clear milestone in his international career,” says John Penno, Synlait’s chief executive. “I wish Michael all the best in his next role.”

Stein joined Synlait in 2013, working in the quality and regulatory area.

“He has put a strong team in place and played a key role in establishing our onsite quality testing laboratory, which is on track to full accreditation,” says Penno.

Stein says his decision was not easy “but it’s the right one for me at this point in my career. I am honoured to have played a part in Synlait’s growth and success during my tenure, and thank the team for their support.”

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DAIRY NEWS JULY 26, 2016

14 // NEWS

You might impress the judges and yourself!

BRAD MARKHAM

IT’S A chilly wet afternoon in Taranaki and we’ve just sat down in front of a roaring fire after standing-off 370 dries for the night.

We don’t start calving until late July. The winter downtime gives opportunity to fine-tune our targets and plans for the 2016-17 season.

If you’re considering entering the Dairy Industry Awards later this year, it’s also a perfect time to write some goals and identify key performance indicators you want hit.

A bit of planning before calving and mating will make it a lot easier to wow the judges early next year.

KPIs must be measurable; they help you monitor and steer your agribusiness, or the one you manage, in the right direction. Most importantly, they don’t all have to be financial.

You might want to tighten your calving spread, improve your herd’s six-week in-calf rate, slash your bulk somatic cell count, achieve more days in milk, lift production per hectare or attend more training seminars.

Improving your livestock, people and product KPIs often flows through to better financial KPIs, such as higher profit margins and lower farm working expenses per kilogram of milksolids.

We entered the Share Farmer of the Year

Brad Markham

category in the Auckland/ Hauraki Dairy Industry Awards for the first time last season.

It can be daunting when you first sit down in October and ask yourself ‘what am I going to talk to the judges about?’ We’d set some goals, targets and KPIs earlier in the season, which gave us a starting point.

We printed bank

statements to prove we’d exceeded our savings targets. We used photos taken over a series of months, plus data from regular farm walks to help explain how we managed pasture.

We had a feed wedge to show that our average pasture coverage (APC) was where we wanted it to be at the start of spring calving.

At the time of judging we were using free templates from DairyNZ to do our annual budgets and monthly cashflows, but we’d modified them so they were more relevant to contract milkers.

Each month we’d compile a variance report, comparing actual spending to the figures in our budget. We used that information to explain

Regular farm walks are a key pasture management tool for Matthew Herbert.

to the judges how we’d slashed our electricity bills.

If you’re on a new farm it’s also a good time to update your health and safety policy, emergency plan and hazards register.

Templates detailing regular maintenance and safety checks on machinery and staff training are useful to show the awards judges.

The judges give entrants several pages of constructive feedback for each round of judging.

We’ve used that free advice to tweak the way we run our business.

The awards are a great way to meet other like-minded, progressive dairy farmers. It costs nothing to enter and is an opportunity to make friends for life.

If you’re keen to have a chat about the Dairy Industry Awards, contact us on Facebook or Twitter.

Our Twitter handles are @ BradMarkham81 and @m_ herbert.

• Brad Markham and partner Matthew Herbert are the 2016 Auckland/ Hauraki Share Farmers of the Year. @dairy_news facebook.com/dairynews

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DAIRY NEWS JULY 26, 2016

16 // WORLD

Embattled Oz co-op bleeds milk EMBATTLED AUSTRALIAN co-op Murray

Goulburn says it has lost about 3.6% of its milk supply as a result of farmer suppliers leaving.

Suppliers have either moved to other processors or retired; the loss is within an expected range.

Answering questions from aggrieved suppliers during a round of farmer meetings, the co-op admitted milk loss in recent weeks.

“We will continue to monitor the supply situation over the coming weeks,” Murray Gouburn says. “While it is always sad to see suppliers leave the co-op, it is ultimately a matter for those suppliers and we understand and respect that.”

In April, MG issued a profit warning after being caught out by a global decline in milk prices over the previous year and was

unable to meet the dividend payouts it had promised to its investors.

To try to shore up profits it made a retrospective cut in payments to its suppliers from A$5.60/ kgMS to below A$5. This applied to the previous 10 months payments and will be clawed back over three years. Suppliers have been left with a large hole in their finances which many are unable to fill.

The co-op denies offering incentives for farmers

to leave the co-op, saying media reports were false.

The same applies to any suppliers wishing to join the cooperative, it says.

“Only standard terms and conditions are being offered. For example, some suppliers have joined MG in recent months. These suppliers were required to join for a term of supply but otherwise joined the coop on standard arrangements.”

It also denied offering preferential deals to larger

suppliers. MG says its standard payment system applies to all suppliers.

“MG is regularly required to consider applications under these terms or variations for suppliers including our very smallest to largest volume suppliers,” it says.

“We do this in accordance with internal procedures and always aim to support the supplier and add benefit to the overall cooperative.”

Murray Goulburn says it has lost some milk suppliers since the shock downgrade to its milk price.

CALL FOR A SQUARE-OFF SOME MURRAY Goulburn shareholders want an extraordinary meeting to discuss the co-op’s plight.

MG says it knows this but “to date we have not had any notice requesting this on behalf of suppliers”.

“Calling a general meeting

is a fundamental right of all shareholders. Under MG’s constitution and in line with the Corporations Act, shareholders with at least 5% of the votes that may be cast at the general meeting may request the company to hold a general meeting.”

Lino Saputo Junior, WCB chairman.

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and Butter Company, Victoria, saw its net profit slump 88% last year.

The company, owned by Saputo, blames the profit decline on lower global dairy prices and a high raw milk cost relative to market returns.

For year ending March 31 2016, WCB’s net profit after tax was A$4.2 million, compared to A$35m for the nine months ending March 31, 2015.

Saputo bought WCB in 2014.

WCB’s revenue for the 12 months reached A$653m, up A$200m over the previous year. But earnings before interest, tax, depreciation and amortisation (EBITDA) decreased by A$32.3m (56.6%) to A$24.8m.

On May 25, 2015 WCB completed its takeover of the everyday cheese business of LionDairy & Drinks Ltd. WCB chairman Lino Saputo Junior says the business is now fully integrated and has allowed WCB to get more of the consumer branded everyday cheese products segment in Australia and

reduce its exposure to international market fluctuations.

Saputo Junior says the company intends to keep raising efficiencies.

It wants to grow, investing in capital projects to increase manufacturing capacity, grow milk intake and create new opportunities.

“As for the marketplace at the end of May, we had highlighted for fiscal 2017 that international dairy prices were expected to remain weak with global milk production remaining high and a limited change in demand.

“Raw milk cost is expected to align more closely with market conditions for the 2016-17 milk season. In line with our expectations the price paid to our suppliers was reduced by 14% on July 1. Dairy prices remain weak with no change in demand. The Australian dollar remains volatile.”

WCB recently raised A$141m by issuing new shares, bought by about 30% of shareholders. This was used to pay off debt and strengthen the balance sheet.

DAIRY NEWS JULY 26, 2016

WORLD // 17

Struggling EU farmers score another handout EMBATTLED EUROPEAN dairy farmers are

to get another $780 million to help them weather the downturn.

About $235m will be set aside for EU-wide incentives to persuade farmers to cut milk production.

EU’s commissioner for agriculture and rural development, Phil Hogan, says in light of budgetary pressures the money is a ‘robust response’, raising to at least $1.5 billion the EU has assigned to farmers.

“Our ultimate goal is to see the much needed recovery of prices paid to farmers, so they make a living from their work and continue to provide safe, high quality food, and contribute to rural areas and rural jobs and the provision of public goods.”

The UK will get $46m, the third-largest share in the EU. NFU dairy board chairman Michael Oakes says the commission has once again shown support for the farmers.

However, UK farmers have already voluntarily

reacted to market conditions by pulling back on production: daily deliveries for the last two weeks of June were 9% lower than the same period last year.

This is without financial incentive, he adds.

“While grateful to the commission, we all want to see a sector that is competitive and market-orientated.

“It’s also essential the commission as soon as possible tells the details of the conditions for the financial support. The UK government must be given flexibility to decide how this money is used and should consult with industry to utilise this money as soon as possible.”

Meanwhile members of the European Committee of the Regions (CoR) want urgent measures to limit milk production. A report to the CoR last year shows that regulation of milk production volumes would have a rapid and positive impact on the incomes of all producers.

The study shows that European regulation

of production volumes would have a rapid and positive impact on farmgate milk prices.

This conclusion calls into question the theory that a decrease in production volumes at the EU

level alone might not have an impact on European prices.

Temporarily capping production volumes would boost the incomes of all European producers. The baseline scenario

-- a 6% cut in milk volumes over a year -- would see an increase in producers’ gross margin of around $7.8b as a result of a 14.6% increase in the milk price and a 38% increase in the gross margin.

EU Agricultural Commissioner, Phil Hogan.

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Weathering the mastitis storm

Co-op steps into Pakistan EUROPEAN DAIRY co-op FrieslandCampina is entering the Pakistan market, signing to buy a 51% stake in Engro Foods, the second-largest dairy company in Pakistan.

The World Bank Group’s International Finance Corporation (IFC) and the Dutch development bank FMO will also own a stake.

Pakistan is the third-largest milk producing country in the world -- 38 billion litres of milk annually.

FrieslandCampina says it expects to benefit from the conversion of the Pakistani milk market from loose to packaged dairy products that will drive the volume growth of the latter.

At present no more than 10% of tradable milk consumed in Pakistan is processed and offered in packages. The conversion is expected to accelerate as the middle-income class grows, plus a desire for higher quality milk and increasing urbanisation.

Roelof Joosten, chief executive of Royal FrieslandCampina, says the deal will accelerate the co-op’s route 2020 strategy.

“Through this organised and successful company we will obtain a significant presence in the Pakistani dairy market in which a growing middle class is switching to buying more processed and packaged milk.

“Engro Foods offers us a basis to build further, creating value for our member farmers. We will also contribute to Pakistan’s agricultural sector through knowledge transfer of dairy production.”

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DAIRY NEWS JULY 26, 2016

18 // OPINION RUMINATING

EDITORIAL

All in together for bobby calves

MILKING IT...

Beware scammers wearing kilts

HAVE YOU received an email from Scotland offering a farm manager job? The too-good-to-betrue role also offers money upfront.

Chances are it’s a hoax.

On its Farm Source jobs pages Fonterra is seeing more scam/hoax activity.

The co-op advises all users to beware of hoax emails from would-be employers or applicants, especially when they are asking for details of bank account, credit card or photo ID; often these are used for identity fraud and money laundering.

And if it asks you to send or receive funds directly from your account, hit the delete button.

If you have any questions or want to report a suspicious ad or any other scamming, contact Fonterra on 0800 65 65 68.

Not raining whipped cream

THE GIANT dairy whip silo outside Tatua Co-op Dairy Company has been stopping traffic for all the right reasons since getting new signage in 2013, heralding a co-op marketing ploy.

But had this giant silo exploded instead of collapsing as it did recently, it would have showered whipped cream over Tatuanui, taking that marketing to a new level.

The crumpled can has been a hot topic in the Piako district since motorists driving from Te Aroha to Morrinsville noticed the damage. Some assume the cause was wild weather that hit the area recently but experts reckon it was a faulty air valve.

Calcium booster

WE DRINK milk for the calcium: the mineral makes your bones stronger, muscles healthier (including in your heart) and helps blood to clot.

Now, researchers at the University of Wisconsin-Madison have discovered they can boost calcium levels in milk by giving cows regular injections of the hormone serotonin, a chemical messenger that among other things is linked to feelings of happiness.

If you think the life of a modern milk cow is already pretty happy— lounging in green fields under clear blue skies— think again. With the rise of factory farming, most overseas cows don’t get to see a lot of green pastures.

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Chill out with milk

WITHIN SECONDS of eating a hot chili pepper your tongue starts to tingle, your cheeks redden and beads of sweat form on your forehead.

Although this torturous experience is fleeting, researchers at New Mexico State University’s Chile Pepper Institute have discovered a fix that quickly extinguishes the fire – milk.

They found a protein in this dairy product which replaces the chemical compound that makes chili peppers taste hot and gives you instant relief.

Capsaicin is the chemical compound in chili peppers that makes them taste hot; milk has a protein in it that replaces the capsaicin on the receptors on your tongue.

It’s the quickest way to alleviate the burning sensation.

IT IS great to see all those involved with bobby calves working cooperatively and positively to forestall a repeat of the terrible incident that aired on television showing mistreatment of these helpless animals.

MPI and many heavyweight industry groups joined forces to educate their members and the public on what they are doing to protect these creatures.

The workshops run by DairyNZ with the NZ Veterinary Association were excellent and no farmer can any longer offer the excuse ‘we didn’t know’ what was expected. Also, MPI has done an equally good job of getting the message out to all stakeholders.

The setting up of the bobby calf action group was a sign of true leadership in the primary sector and the public needs to recognise that farmers and others in the sector care as much about the welfare of animals as the so-called animal rights groups.

Still it must be said that the animal rights people did a good job in ‘outing’ those who treated bobby calves cruelly. Animal rights group will by and large cease to exist when there is nothing for them to complain about. But maybe that is asking too much.

One has to admire the transparency of MPI which is saying to the public ‘tell us if you see something you think is wrong’. This shows MPI is committed to getting the public to understand it will take seriously any mistreatment of animals and that it will crack down on people who break the law.

As MPI’s Scott Gallacher points out, there is also an opportunity for the rural sector to educate the wider public on normal good farm management practices which can sometimes appear as cruel when it is not. An obvious example is the docking of sheep.

This whole saga has shown that farmers and everyone in the supply chain have no place to hide. Most Kiwis have a cellphone with a camera and within minutes any hint of malpractice can be widely circulated on social media.

The new rules taking effect on August 1 are the first of many coming in during the next year. It would be great if farmers and others saw fit to implement these changes ahead of time and show the public they don’t just follow rules but lead the charge -- farming in ways that anticipate the expectations of consumers and the public.

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DAIRY NEWS JULY 26, 2016

OPINION // 19

Lessons from Brexit Federated Farmers president Dr William Rolleston commented on Brexit while speaking at Federated Farmers’ recent annual conference.

Here are excerpts from his speech: IF THE Brexit vote in the United Kingdom has taught us anything it is that life is full of the unexpected; that no matter how carefully we plan, circumstances can change in an instant; it has taught us that discontentment and powerlessness can translate into seemingly irrational decisions, even for the decision makers.

Britain’s vote to leave the European Union has sent shock waves around the world. Both Britain and the European Union are less powerful players today than they were a week ago.

Some commentators have unkindly said the UK has gone from Great Britain to Little Britain.

The European Parliament also has a dilemma on its hands: they want a quick exit, but if it punishes Britain too hard it risks a recession for both parties; let them off too lightly and it may encourage others to follow suit.

Frexit (France) and Swexit (Sweden) are already being talked about.

Will Britain turn her head to New Zealand?

Only time will tell, but we must give her every chance.

Brexit, in my view has taken us one step further away from the biggest trading block in the world -- the European Union.

Britain’s membership of the EU over the past four decades has given us increased access to a continent which can be difficult to penetrate; it has given us the opportunity

to build relationships. The strength of those relationships will now be put to the test.

We have lost an Anglo-centric, rational, free market voice in the European Parliament just as we are starting our trade talks. We know that to trade with Europe, Norway has adopted 5000 EU laws and 70% of the EU directives -rules which they, as a non-member, have no democratic ability to influence.

Is this what the new Europeans will be pushing for in our negotiations?

Earlier this year, and contrary to scientific advice, the European States declined to approve the ongoing use of glyphosate in agriculture. In the regulation of agricultural science is Europe sinking into an abyss? Will glyphosate be a sacrificial lamb on the table of a trade deal?

While anti-TPP protesters fret about a deal which they say restricts law making, we have to be careful a European trade deal doesn’t do the opposite.

Will the European parliament learn from Brexit that good decisions must have their base in science, not in the opinion of the lobby group?

I had the opportunity to speak with Tony Blair when he visited NZ as British prime minister. He revealed to me his frustration at the stranglehold NGOs -- particularly those environmental groups

who ignored science when it suited them -- had on the European Parliament.

Britain voted Brexit in part because of rules they saw as interfering and irrational; single issue lobby

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groups should take some responsibility.

Many voters chose Brexit because, rightly or wrongly, they felt disenfranchised and powerless against big business and a

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DAIRY NEWS JULY 26, 2016

20 // AGRIBUSINESS

Wool provides lifesaving calf covers NIGEL MALTHUS

WITH FIVE million calves expected

in the next eight weeks, it is a busy season for Christchurch firm Woolover, which makes wool covers for calves, lambs and kids, and for adult animals.

Woolover, now exporting to 15 countries, was founded by South Canterbury ex-farmer David Brown in response to the widespread livestock deaths in the big snow of spring 1992.

Dairy News caught up with Brown at his home in suburban Christchurch where he had spent the morning taking and making up orders of covers, mostly for North Canterbury customers.

Usually orders are despatched from the factory where the covers are assembled. Woolover contracts to Christchurch companies Terra Lana, which makes the felt-like woollen fabric, Deane Apparel, which cuts the covers and Mi Woollies, which sews the final product.

Brown says his biggest market for calf covers is North America, where most dairy farmers geared for town supply, so they must calve yearround to maintain constant fresh milk supply.

He says calves might survive cold weather without covers but research by North Dakota State University showed them doing better when protected, putting on weight faster when wearing covers than control groups which did not.

The US winter can be a challenge. Some farmers raise calves in heated barns but the buildup of ammonia needs careful management, says Brown.

“You can have calves in heated barns but there is a respiratory problem with David Brown that. Unless it’s monitored Compared with other animal and very accurate it can result in calves dying. Certainly they won’t covers, the advantage of his design is grow as fast, nor will they ever reach the way it wraps under the animal’s chest, with a Velcro fastening, to keep their full potential.

“We found in our trials that you the heart and lungs warm.

The latest Woolover covers have can put more weight on outside, with a jacket on, than inside in a a waterproof Teflon-based outer heated barn. And the result is lower layer. The woollen construction mortality, better calf health and faster enables them to breathe and keep the animal warm overnight but not growth rates.”

One big customer is a specialist too hot during the day. The covers calf-rearer in Wisconsin which uses are durable and may be re-used for Woolover covers and small wind- several seasons. shelters rather than barns; very cost@dairy_news effective, says Brown. facebook.com/dairynews

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Calves wearing the wool cover on a Wisconsin farm.

Breeding, a forgotten topic WHEN MANAWATU dairy farmer fronting for the company that has a Kelly Powell talks about Holstein-Frie- 35-year record in NZ. She likes to get farmers talking and sian cows you can sense her passion for thinking about breeding, a somewhat forthe breed.

This passion, conceived in her child- gotten topic, she says.

“WWS does nice, well-bred cows.... hood on her aunt’s farm in Shannon, is We bring the rest of the now realised: she runs a 500world to the table and cow herd with husband Brad we bring an animal of at their Ridgeline Farm in good size for farming Manawatu. systems.

The Powells were recog“I love looking at nised by the Holstein Friesian good quality cows.

Society for having the highFarmers don’t like est earning herd in 2014-15 for change but the low Manawatu and Hawkes Bay/ payout has got people Wairarapa and second in New questioning productivZealand. ity and the quality of the Powell, also a World Wide Kelly Powell bulls being used. You Sires breeding consultant, says want to know with the selective breeding contributed heavily to this result; about 90% of the bulls you select you are going to improve herd are descended from international your herd and not go backwards.”

The company’s World Wide Mating sires through WWS. “I artificially inseminate all our cows Service is a scientific programme which and like to know they’re going to hold and uses computer technology to improve get in calf. Otherwise it’s going to end up each cow and take the guesswork out of mating. The company says the procosting a lot of money,” Powell says.

“Ten per cent of our herd isn’t from gramme is the world’s largest and most WWS. It’s great to have a comparison and successful mating programme; last year 6.1 million cows in 50 countries were to have a benchmark.”

Powell is one of a nationwide team mated with WMS.

DAIRY NEWS JULY 26, 2016

AGRIBUSINESS // 21

Agribusiness needs to budget for volatility WHILE VOLATILITY in business is to be expected, many of New Zealand’s primary producers have had a bumpy ride in recent years.

Increased volatility driven by swings in international commodity prices and the value of the NZ dollar is now the new normal, says Crowe Horwath, accountants and business advisors.

It advises agribusinesses to spend time and effort on careful budgeting and cashflow planning to weather unexpected difficult times.

“The dairy sector saw the heady payout levels of 2013-14 rapidly give way to the current trough and associated uncertainty....

This has created real pressure for many,” says Larry Mitchell, agribusiness advisor. “It shows that in globally traded commodities any agribusiness faces volatility risks where markets can and do change regularly.”

Best to optimise cashflow by careful planning and preparation. “Getting a clear handle on budgets and cashflows is good business practice in good times and bad. Planning gives a business the resilience to ride the lows – even though you may have little-to-no idea when they might come,” Mitchell says.

Putting together cashflow and budgets starts with taking the time to

honestly evaluate spending patterns for the business. “Once budgets are established, stick to them. Avoid the temptation to spend a bit extra here and there; the extras quickly add up and soon you could be looking at a lot of unplanned expenditure over the year,” Mitchell says.

The temptation is likely to be stronger in good times; don’t fall into the trap of spending money just because it is available.

“That’s a dangerous mindset which can be difficult to break out of.

When the market shifts downwards it will be harder to cut spending.

Tough times call for tough measures and there can be a lot of negative impacts if you don’t plan ahead,” says Mitchell.

Budgets and cashflow analyses should be routinely adjusted as situations change throughout the year. Planning in real time means taking into account the inevitability of change -- responding as it happens rather than well after the fact.

“Using good accounting software and working with your advisor provides for adjusting budgets and forecast cashflows based on the most current information available on your revenue and associated costs,” Mitchell says.

For example, Fonterra seven times during the 2015-16 season forecast its

IN BRIEF Computer and farming LINCOLN UNIVERSITY’S role in making the computer an essential tool on farms is reviewed in a new book by Dr Peter Nuthall, an honorary associate professor in Lincoln’s Department of Land Management and Systems.

Dare to Compute: the early years in the development and uptake of farm computer systems is written about the Kellogg Farm Management Unit (KFMU) at Lincoln, which Nuthall founded and led for all but two years of its existence, from 1980 to 1995.

The unit was first funded by the Kellogg Foundation in the US, a philanthropic fund. KFMU aimed to develop computer software for farm and horticultural property managers, and train them in its use.

Nuthall says the history of the unit needs to be told as it had a key role in bringing computer technology and software to primary producers in New Zealand and Australia.

milk price for that season; four times it advised of a price change.

“Good practice would be that at a minimum Fonterra’s suppliers should have altered their original budget four times during

the season to account for these changes, then reforecast their position.”

Farmers can benefit from the advice of budget and forecasting specialists, saysMitchell.

“A suitably qualified

and experienced rural professional will ensure regular reviews take place, and provide insight, advice and support on strategies and financial management to help deal effectively with volatility”.

Agribusiness advisor, Larry Mitchell.

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DAIRY NEWS JULY 26, 2016

22 // MANAGEMENT

University farm proves profits still possible NIGEL MALTHUS

THE LINCOLN University Dairy Farm

(LUDF) is showing the way to make a profit even with the depressed world prices for milk solids.

About 320 dairy farmers at a focus days heard how LUDF has produced milk solids for $3.50/kg farm working expenses (FWE) or less -- down from $4.28 and $3.87 in the two previous seasons.

The farm also boasts yields better than 1800kgMS/ha and 520kgMS/cow on imported dry matter feed of only 126kg/cow.

The focus day, examining LUDF’s end-of-season financial performance, is one of four the farm holds each year in nearby regions Duntroon, Temuka, Ashburton and Culverden. All other focus days are held at the LUDF farm.

While the figures are not necessarily better than those of other farms, Ron Pellow, executive director of Lincoln University’s South Island Dairying Development Centre (SIDDC), says there were “gains and opportunities” farmers could adopt.

LUDF was grateful for the co-operation of seven Canterbury farms whose production statistics were a benchmark for LUDF comparison and “to see if we really are as profitable as we think”.

middle of that group of farms but the two standout farms have nearly double or double our profitability. So they’ve done a combination of things that have significantly improved their profitability relative to the rest of our group including ourselves,” says Pellow.

“We are getting better all the time at growing more grass with less input, and feeding that grass more efficiently to our herd, to maximise milk produced and sold, and minimise the amount of

Ron Pellow, executive director of Lincoln University’s South Island Dairying Development Centre (SIDDC), presenting LUDF’s production figures to farmers at a focus day at Ashburton.

feed required for other requirements that don’t actually generate milk.”

Pellow says a major focus for LUDF is nitrate control. “We are probably ahead of the game well and truly, compared with our benchmark farms, but we made a deliberate choice to operate in that space.

“ECan requires, for example, farms in Selwyn/Waihora to make big changes by 2022. We’re largely achieving their requirements now. We’re showing farmers how they can achieve some of those future requirements and we’re maintaining profitability.

“We have a very high-yielding farm.

We get good sunshine hours, we’ve got good soils, good fertility, good pastures. We can put irrigation water on as required but the biggest constraint often is the amount of nitrogen in the system.

“So if we allowed ourselves to have more nitrogen we’d be able to produce more pasture and produce more milk.

We’d have higher income, higher profitability. But we need to balance that in respect of the total environmental outcome.”

Pellow says one factor impacting

LUDF’s profitability was its approach to Johne’s disease, compared with the two more profitable farms in the benchmark group. Testing the herd and culling the high carriers of Johne’s was having a short-term impact but over the next four to six years should result in fewer cow losses, he says.

“Johne’s is a common disease but we are trying to significantly reduce our exposure to it by identifying cows carrying it -- what we call high-shedders. So if we can reduce our high-shedders then we can reduce the risk of transmission of the disease to our young stock.”

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DAIRY NEWS JULY 26, 2016

MANAGEMENT // 23

The spotlight goes on potash potash was created by boiling water in a pot that had been passed through wood ashes (hence the name).

These days the process of getting hold of potassium (K) in water-soluble and plant-available form is on a totally different scale.

Large mines in far-off countries like Belarus produce millions of tonnes to fuel global food production. Much of the potash, also known as potassium chloride, imported into New Zealand comes from one of the world’s largest suppliers, Belaruskali. They bring in 70,000 tonnes of potassium chloride, also known as muriate of potash, to NZ each year and produce 12.8 million tonnes globally a year.

Why do plants need K in the first place? Potassium is involved in photosynthesis, boosting vegetative growth of plants, carbohydrate and nitrogen accumulation, facilitating the synthesis of proteins and sugars required for plant growth.

Potassium also regulates the transfer of water and organic substances throughout the plant organs, which is needed to obtain high yields.

Just like humans, animals need this essential nutrient too. K regulates the functioning of nervous and cardiovascular systems, making a positive impact on muscle development, improving digestion and decreasing animal mortality.

The K way Deficits of potassium can have alarming effects on animals, causing a loss of appetite, hyper-excitability, liver and kidney dysfunction and decreases of potassium levels in blood and milk. This is why optimal potash rates are advisable for highlyproductive dairy cows.

Hidden deficits of K impede plant growth and development, and cause decline in yields and deterioration of quality. However, in the NZ pasture context, the K requirement for optimal plant growth far exceeds the

undergoing an apparent increase in potassium (K) removal. However there are industry guidelines for optimum levels of K which are a good benchmark for making sure you’re in range to achieve high

yields.

If you want check your K levels, you can get in touch with your Ravensdown agri manager.

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requirement of K for the grazing animal.

Potassium deficits in pasture may not be immediately visible. Plants absorb K in much larger amounts than phosphorus, so annually soils may lose large amounts of K with application rates often not compensating for the losses caused by crop removal. The grazing animal recycles 70-90% of the K ingested in dung and urine usually back onto the pastures from whence it came.

Partial potash replacement is used particularly on sedimentary soils where K reserves can be large. This is because NZ’s young sedimentary soils have not yet been heavily weathered. Even on these soils, where large amounts of K is removed and not fed back on the same area, such as in hay or silage crops, then (depending on current fertility) an appropriate strategy would be to apply some replacement K. This would be in addition to the normal maintenance fertiliser.

For volcanic and pumice soils, which do not have the mineralogy associated with K reserves, a complete maintenance programme maintaining optimum soil test levels is appropriate.

To achieve high yields, optimum amounts of potash need to be applied at critical stages of growth and development. Many research papers indicate that K fertilisers can enhance crop yields and nitrogen use efficiency on average by 20%.

According to trials on sedimentary soils in North Canterbury, the application of 50kg K/ha on dairy pastures, where K reserves were considered high, resulted in the increase of dry matter during the milking season by 16%.

This is because during periods of rapid pasture growth, soil K reserves may not always match plant requirements in terms of supply of K from weathering of clay minerals.

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DAIRY NEWS JULY 26, 2016

24 // MANAGEMENT

Manuka sweetens land values THE HONEY bee is

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Honey from Manuka plant is helping push land prices up in some regions.

exporter by value after China and Argentina, despite being only the 16th on a volume basis.

This has boosted income for farms that recently were limited to sheep, beef and perhaps forestry. And for farmers

causing land values to shoot up in ‘manukafriendly’ regions.

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Properties with manuka stands are getting harder to find and more farmers are considering planting manuka specifically for honey production.

Comvita is looking for landowners with 40ha or more suitable for planting manuka. It plans to plant 2000ha of manuka per year.

Spokesman Colin Baskin says Comvita helps landowners develop manuka plantations on their land, using ‘highperformance’ seedlings, some developed with Manuka Research Partnership Ltd. Such plantations are populated with Comvita’s Kiwi Bee hives.

Properties with Manuka stands are getting harder to find.

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retiring or leaving the industry, manuka honey has helped lift equity levels by lifting farm values.

Bayleys rural agent Mark Monckton, Taranaki, says the manuka phenomenon has lifted interest in, for example, properties in Waitotara Valley and inland Stratford. “Large players in the industry, including Settlers Honey, Comvita, and Tweeddale, now hold a lot of country there.”

Desirable ‘manukafriendly’ properties are fetching premium prices.

Land prices have doubled for some properties, some from about $1500/ha to $3500/ha “only in the last couple of years”.

10/06/16 8:39 am

Industry investors are seeking manuka that is later flowering than up north.

“It means beekeepers can move hives in after being up north earlier in the summer; as a result they effectively get two harvests of manuka within the one season.”

Demand for land with manuka stands and able to grow more than usually has companies seeking properties that encompass an entire geographic area, such as a river valley.

The inability to control where bees go means a greater defined catchment for a set number of hives ensures a higher concentration of manuka in the catchment of the hives.

“It is always preferable to lock up the entire area, rather than have, for example, just half a valley with a neighbour opposite you. Once one block is secured, companies will seek to buy adjoining properties to grow their single catchment area.

Over 100ha is a relatively secure area worth looking at.”

And farmers not selling can have apiarists place hives on their farm. “Per hive and payment based on yield are options evolving.”

Beekeeper and Apiculture NZ board member John Hartnell confirms the rise in land values but urges “calm heads” rather than risk the sector falling prey to speculative overconfidence.

“There are risks in the sector. This includes overreliance upon a manuka monoculture. Manuka is not the first choice for bees; its pollen is too small for them to harvest, so they can only get nectar from it, but a hive requires 25kg a year of pollen to function.”

He points farmers to the Trees for Bees initiative, where varieties of plantings are recommended, including native trees and flaxes on properties alongside manuka.

Farmers not selling can consider shared income agreements, Hartnell says.

He had clients getting up to 30% of income generated from hives on their property.

“But you may carry 100% of the risk, including years when the manuka may not flower. You also have to meet health and safety regulations and access requirements; you don’t just get handed a cheque for doing nothing but provide the land.”

DAIRY NEWS JULY 26, 2016

MANAGEMENT // 25

Higher input systems can be profitable THE DAIRY Business

of the Year recognises leading farms with high achievement in financial performance, people productivity and environmental management.

The recently announced supreme winner for 2016 ( judged using farm data from the 2014-15 dairying season), was Landcorp’s Ruapehu Farm at Moutoa, near Foxton. This property also won the Best Manawatu Farm Performance, Lowest Environmental Impact and High Input Farm with the Best Financials Awards.

Waikato farmers Rex and Sharon Butterworth were named runner-up and they won the regional award for Best Waikato Farm Performance. See http://dboycomp.com/ file/pdf/2016/finalistresults-2016.pdf for the full competition results.

Landcorp’s Ruapehu farm manager Glenn Weitenberg says the decision to lock in guaranteed milk to Fonterra during that season paid off for

the farm, with a superior return on capital in comparison to the other eight finalists. Their pasture management and animal performance were extremely good and their supplementary feed costs very low.

Supplements, including Pioneer brand maize silage, comprised 27% of the feed on Landcorp Ruapehu and 36% of the feed on Butterworths’ farm.

The 2014-15 DairyNZ Economic Survey1 was released in May. It contains data on the average physical and financial performance of 296 randomly selected owner-operator herds during the 2014-15 season.

It was the start of the

tough times for most farmers. While weather was generally favourable and seasonal production was up 3.6%, the milk price was on its way down. The average cash payout was $5.76/kgMS supplied for 2014-15 (net of the industry-good levy, including advance, final payments and dividend). This was 25% lower than the average milk payout received in 2013-14.

Higher input farms (system 4 and 5) feeding at least 20% imported feed kept performing well despite the challenging times. They produced more milk per cow and per hectare, had higher operating profit and a better total return on assets than low (4 - 14% imported feed) or medium (10 - 20% imported feed) farms.

The ten year average data shows that across a range of seasons and payout conditions, higher input farms were the most profitable (Table 1) Events like Dairy Business of the Year show the industry what is possible

under good management conditions. The DairyNZ Economic Farm Survey shows there are huge variations in the profitability of all dairy farm systems. Every farmer must find the optimum balance between controlling costs and maximising milk production in their system.

Finally, I want to

encourage farmers not to be tempted to make major systems changes as a response to low payout conditions. You run the risk of being worse off while you adjust your management to a new way of farming. A better option is to look at what you are already doing and see how you can do it better.

Higher input farms keep performing well.

Table 1: Ten year average profitability of owneroperator production systems (2005-06 to 2014-15)1.

Farm system Operating profit ($/ha) Total return on assets % Growth in equity2 % Closing term liability/ kg milksolids

1 & 2 (low)

3 (medium)

4 & 5 (high)

1,811

2,004

2,202

6.34

6.31

7.02

6.57

6.31

7.02

19.42

18.75

18.78

DairyNZ Economic Survey data.

Growth in equity figures are from 2006/7 to 2014/15.

1

2

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DAIRY NEWS JULY 26, 2016

26 // ANIMAL HEALTH

Worst performers rise highest in milk q PAM TIPA pamelat@ruralnews.co.nz

AVERAGE BULK milk

somatic cell count has substantially declined, as discovered in a study of milk supplied to Fonterra over five years, says Scott McDougall, from research provider Cognosco.

The study analysed data in 30 million records from 2009-10 to 2013-14.

The biggest improvement in the anonymous survey was among the worst performers – the bottom quartile. Their bulk milk somatic cell count (BMSCC) dropped on average 70,000 cell/ml.

This study was done

to quantify the changes in milk quality across New Zealand, McDougall told the milk quality section of the NZ Veterinary Association conference.

There were changes to the way milk quality was dealt with through that period, he says. Fonterra put much work into helping farmers with milk

quality and a number of processors brought in stratified payments systems.

DairyNZ did a major revamp of the SAMM plan, now SmartSAMM, the training industries revamped their courses and the veterinarians improved their skills particularly via the

Healthy Udder Service and Advanced Mastitis Training (see sidebar for details) “The fundamental question is, has all this effort made a difference?” he asked.

They analysed the milk data from Fonterra during every pick-up from all their suppliers over five

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years. The herds’ identities were unknown but they knew which day the milk supply went into Fonterra, the BMSCC and the volume.

The herds were categorised as year-round or seasonal, and according to regions, supply times and volumes over 12 months.

Herds were divided into four quartiles according to the average mean BMSCC in 2009-10: up to 150,000 cells/ml; 150,000-199,000; 200,000 to 250,000; and greater than 250,000.

The BMSCC in 52,000 herd years was a mean of 198,000 cells/ml over the five years. There was a statistical decline in BMSCC over the five years.

It wasn’t linear – it rose or fell each year - low in 09-10, significantly higher in 2010-11, then a big step down in 11-12, up in 12-13 and down in 13-14.

“I don’t quite understand it – whether it is farmer psychology, that they have a good year, they drop their SCC and they think ‘that’s fine, I’ll take my foot off the brake a little bit’,” says McDougall.

“Cell count goes up and they think ‘oh damn we’ve stuffed up’ and they step and then do another step down. I suspect that might be the case.”

In respect of the supply time, the seasonal calving herds had significantly lower SCC than all-yearround herds (less than 30 days break in the year).

McDougall says that makes biological sense: with the year-round calving herds there’s greater risk of cow-to-cow transmission. Risk of transmission lessens if a whole herd is dried off, particularly if using blanket dry cow therapy. “You stop transmission for a period of time…. It is easier to

manage containing pathogens in those systems.”

The best quartile herds in 2009-10 stayed significantly lower over the whole five year and conversely herds in the worst quartile in bulk SCC had a significantly higher BMSCC over the whole five years.

“One of the take-home messages is, if you have a well managed herd and you do things well, you tend to stay there. Whatever their farm systems are, whatever their policies are, they continue to work and they continue to have low cell-count herds.

“Conversely herds that have poor or high SCC tend to stay there for exactly the same reasons – they tend to presumably keep doing bad management practices, poor culling decision, poor diagnostics – whatever it is – and they don’t change.

“That’s not to say farmers can’t change. But the take home message is, if they continue doing ‘business as usual’ they will stay where they are; they aren’t miraculously going to go down [in cell count].

“Having said that, interestingly the herds that made the greatest change over the five years were those worst at the beginning.”

The herds in the best quartile basically stayed the same – flatlined. The herds in the worst quartile in 2010 significantly tracked down (in cell count) over the five years.

They were still on average the highest SCC but they have tracked down.

He says Mark Blackwell of DairyNZ’s SmartSAMM programme said at the beginning it would be the worst ones that gave them the biggest win. He was right.

DAIRY NEWS JULY 26, 2016

ANIMAL HEALTH // 27

k quality improvement

Bulk milk somatic cell count (BMSCC) has declined over the last five years.

the very best herds they were still improving over those years – as did the very worst herds.”

In the 2013-14 data the top 10% of herds are achieving an average of less than 100,000; the top 25% are less than 150,000 and the median herd at that time was doing 165,000.

“We are still talking about 150,000 being our target and that is a nice clear simple number. But top performing herds are achieving less than 100,000 which is a spectacularly good result, but it is achievable,” he says.

“BMSCC has declined over the last five years – that is consistent across region and supply types.

So whether they are autumn, spring or year-

round all of those groups of herds have come down “The greatest decline has occurred in herds that were worse at the beginning. The worst quarter have had the biggest drop – about 60-70,000 cells.

The number of non-compliant bulk tanks (grades) has declined.”

BMSCC is more variable in smaller herds and in herds running a higherthan-average BMSCC. “I am going to be a bit controversial and say maybe the biggest wins we can get are with the larger herds because if they are producing more milk they will have more impact on the total number of white cells going into supply.

“You could argue that if you could drop the BMSCC in the very large

herds that would have the greatest net benefit to the national BMSCC.” He says the worst quartile in 2009-10 had its average come down 70,000 but the distribution was uneven.

“There were herds that made 150,000 changes in cell count – there were others that went very little distance.”

Scott McDougall thanked Brendan Radford and the IT team at Fonterra for providing the data, the financial support of DairyNZ, and the contribution of Mark Blackwell and Jane LacyHulbert of DairyNZ in helping develop the project and Ian Potts of Anexa Animal Health who did database development work.

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EXPERTS JOIN FORCES OVER THE time during which the data analysed in this study were collected, a number of industry initiatives were undertaken to enhance milk quality.

The New Zealand mastitis management plan, the seasonal approach to managing mastitis (SAMM) plan, underwent substantial revision under DairyNZ, Mc Dougall says in his summary. This revision was heavily based on the Australian Countdown Downunder programme.

Detailed technical material aimed at veterinarians and other advisors, and material suitable for on-farm use, was developed and extended. These materials were provided via a web environment, free to all.

Industry training at farmer level (for example, Primary ITO courses) and at veterinary level (for example, the Advanced Mastitis Course and DairyNZ Healthy Udder Service training courses) were developed and deployed.

In parallel with these developments, the major milk proces-

sor in New Zealand (Fonterra) developed a process of escalating levels of intervention for farmers not complying with the requirement to supply milk with BMSCC <400,000 cells/ml.

Within this programme noncompliant farmers initially received a phone call, suggesting some simple actions. If this did not result in their sending compliant milk, a farm dairy assessor (AssureQuality or QCONZ) visited the farm.

If this visit did not cause milk quality to improve, and the milk remained non-compliant, an accredited veterinarian undertook a detailed evaluation of farm systems including the milking machine, milking procedures, diagnostics, treatment and culling of individual cows and so on.

“The current analysis is not able to apportion improvements in milk quality to the various activities undertaken in the last five years.

It is likely that all these activities have contributed to the observed improvement in milk quality,” McDougall says.

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“That makes sense: they’ve got the greatest room to move. They can institute presumably fairly easy management practices to get change. The guys doing really well… they’re fine, business as usual.”

An interesting result was that the variation in BMSCC depended on where the average of your herd sat. If you have a low BMSCC with an average under 100,000 per year the standard deviation is low. However if your average is sitting at 350,000 the variation is much larger. Their median standard deviation is 80,000 compared to about 30,000 for the lower end.

“The take home message is, if you want to run your herd at 250,000 that’s fine but the day-today variation is such that you will break – you will be non-compliant at times.”

The spring herds were less likely to have a BMSSC grade and that declined more across the period of the study. “So fewer and fewer herds were non-compliant.”

McDougall says interestingly with those under 100,000 there are still 2-3% of herds that are noncompliant at times. So if a herd owner chooses to run BMSCC at 200,000 and thinks that will stop them from being non-compliant, they are wrong, he says.

Seventy percent of herds averaging 200,000250,000 sent non-compliant milk at least once per season. If people really want to stop grades they have to run their bulk milk a lot lower than 200,000 – down to the 150,000 level.

The highest producing herds by volume had the lowest probability of sending non-compliant milk. In larger herds the BMSCC are less volatile because of the volume effect and potentially better systems.

Comparing 2009-10 to 2013-14, every category of herd improved, whether good or bad at the beginning. The high cell count herds had the biggest improvements.

But even the top 10% improved over the five years.

“So even though their averages didn’t shift very much in that top quartile, if you get right down into

DAIRY NEWS JULY 26, 2016

28 // CALVING

Plan pasture cover pre-calving THE LEVEL of pasture cover at calving is very important, says DairyNZ. Too much feed will waste pasture and may reduce growth.

If there is insufficient pasture the cows will be underfed and pasture growth reduced. If there is insufficient pasture the inter-grazing interval is reduced, resulting in pastures being grazed before the 2½ leaf stage. Pasture

growth will be reduced and pasture cover will stay low until the summer.

Therefore average pasture cover (APC) at calving (and supplements available) determine how well cows are fed for the first two months after calving.

This article covers what you can do if APC is below target at the start of calving.

Calculating the required

APC at calving APC is determined by calving rate, cover at balance date and decisions about use of supplements.

For most farms this APC target is 2200-2400kg DM/ ha.

A formal feed budget is often not required if there is enough knowledge from previous years to determine APC at calving and balance date.

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farm a feed budget will help determine the amount of feed required (cover, grazing off, supplement) and predict APC at calving.

Feed budgeting is a prediction based on best available knowledge, so learn all you can about the farm’s growth rates, soil temperature, nitrogen application, conditions that may cause feed wastThe level of pasture age and feed intake esticover at calving is crucial. mates.

If APC is below target Face your situation: walk the farm, confirm the size of Can you grow more pasture? any deficit and ❱❱ Apply nitrogen plan how to fill ❱❱ Minimise pugging the deficit ❱❱ Slow the rotation (feed supplement) to increase APC as quickly as possible for the next two weeks; Can you increase feed supply? share your ❱❱ Reduce wastage to make reserves last longer plan, seek ❱❱ Buy in additional feed advice. And Can you reduce feed demand and slow the rotation? continue to monitor actual ❱❱ Reduce stocking rate (if possible get later calvers or dry stock off the farm) pasture cover ❱❱ Prioritise stock and check intakes; cow intake at calving is significantly less weekly and adjust than peak intake. the plan weekly or fortnightly if necessary.

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Make sure to meet the calves’ need for colostrum, water and shelter.

Are you ready?

Six tips for success CALVING GETS underway in many regions this month, getting farmers excited to see their future herds hit the ground, LIC says.

“Getting the most out of these carefully bred young stock starts at birth, so here are some tips to help you and them survive and thrive in the rush of spring”: Immunity - Is delivered via colostrum. Make sure they have had 2-3L of first milking colostrum in the first six hours and another 2L in the first 24 hours of life.

Top notch process - When and how do you collect the calves? Do you have a system for making sure every calf gets navel sprayed, tagged and fed colostrum?

Roster well ahead - Make sure your staff know which days they’re rostered on. If you’re sole charge, consider hiring casual help occasionally to let you spend time elsewhere if you need to get essential jobs done.

Keep on top of bugs - There aren’t enough hours in the day to do everything, but make sure you stay on top of calf shed sanitation. Mortality rates can soar quickly in dirty sheds. Talk to your veterinarian about the best products to use.

Calf care - For a refresher on the key points, read the Calf Care resource from DairyNZ. Make sure you know how to meet the calves’ needs for colostrum, handling, shelter, bedding, and water.

The right rearer - Have you got the right rearer for your calves? They need to be reliable, hard-working, caring and observant, and have the willingness to deliver extra TLC when it’s needed.

With processes in place, staff trained and the calves in good hands once they’re in the shed, calving should go smoothly.

DAIRY NEWS JULY 26, 2016

CALVING // 29

Ensure a gold diet from day one TO SET up a dairy cow for a long, productive life you must give her the best possible start, says DairyNZ. Extra effort now will pay dividends throughout her milking life.

Heifers that reach target weights make successful milking cows and growing them well starts from the day they are born.

All calves, including bobbies, must receive adequate fresh colostrum within the first 24 hours of life and should be fed colostrum, or a colostrum substitute, for at least the first four days of life.

Always handle calves gently and with care.

Do not allow anyone to throw, hit or drag a calf at any time. Electric prodders must not be used on calves.

Calves not with their mothers must be provided with shelter to stay warm and dry.

Calf pens must be fit for purpose and well maintained. Bedding areas must be comfortable, clean and dry, with adequate ventilation but draft free at the calf level.

Exposed concrete, bare earth and mud are not acceptable.

Calves should be fed at the same times each day to minimise stress; always ensure calves have access to plenty of fresh water.

Feed calves adequate quantities of good quality feed to rapidly achieve weaning weight with a well-developed rumen.

The calf should drink at least 2L of fresh colostrum during the first six hours of life to get protective antibodies. To achieve this, pick up calves twice a day and give them gold colostrum. Gold colostrum is valuable even if it contains blood or with clotty mastitis milk. It is best fed fresh but may be frozen for up to six

months. Thaw/heat in warm water; do not microwave.

Test the level of antibodies in a batch of colostrum using a Brix refractometer, available

from a vet, farm supply store or a home brew shop.

Brix higher than 22% is best for newborns.

Store colostrum in multiple drums (to reduce risk of loss), in a cool

place and out of direct sunlight. Stir twice a day; a colostrum keeper or yoghurt starter, available from supermarkets, can be added to each drum to preserve it.

Calves should be fed colostrum, at least for the first four days of life.

HEALTH AND HYGIENE ■■

Scrub all feeding equipment well with hot water and detergent

■■

Remove sick calves promptly to a designated sick pen

■■

Frequently clean and disinfect pens where sick calves are treated

■■

Disinfect hard surfaces

■■

Ensure bedding is regularly refreshed

■■

Control the spread of disease by minimising movement between pens. Calves of the same age should stay in the same pen. However, small or unthrifty calves may be better off with a healthy younger group.

■■

Vaccinate, treat for parasites and provide access to shelter.

REGULAR CHECKS ■■

Calves must be checked twice daily for signs of ill-health and treatment given when needed.

■■

Check for the following:

■■

Noses clear of discharge, moist and cool

■■

Calves alert and with responsive ears with no infection around the ear tag

■■

Navels clear of infection

■■

Mouths clear of ulcers

■■

Calves stand and walk normally, i.e. no joint problems

■■

All calves feeding

■■

Calves’ coats must be shiny and supple

■■

If you lightly pinch a calf’s skin and it is slow to return to normal it may be dehydrated and need electrolytes immediately.

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DAIRY NEWS JULY 26, 2016

30 // CALVING

Heavy rain and cold winds on the cards – Metservice PETER BURKE peterb@ruralnews.co.nz

WILD,STORMY WEATHER is likely to

grip the country as calving gets underway in earnest, says a meteorologist.

Georgina Griffiths, Metservice, says the next two weeks look changeable with a drop in temperature, rain and cold winds on the cards.

wind-chill will be a factor.

The weather is going to be very changeable so farmers must check the weather forecasts daily....

Southland stands out as a region for wind-chill.

So farmers are going to get difficult weather in the next few weeks -- just when they don’t need it.”

Griffiths predicts temperatures will show an ‘amplified’ response – large swings in

The seasons are running late and August may be the coldest month this winter.

She predicts heavy rain in the next four weeks for Taranaki and Southland, the latter also likely to get cold southerly winds and snow to low levels. August can be a mixed-up month for weather, she says.

“From a calving and lambing point of view it’s going to be windy, so

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temperatures every few days – hence the need for farmers to follow the forecasts closely.

“It also looks on the wet side for the central and western North Island from Taupo to Wellington, and for Wairarapa in the next four weeks.

Gisborne and Hawkes Bay look on the drier side for the same period. In all other regions, near

The weather will be a challenge this claving season.

normal rainfall totals are predicted in the next four weeks.”

In Waikato, near normal rainfall totals are signaled for the next four weeks but temperatures will be very changeable in the next ten days then run

average-to-cooler at the start of August.

Gisborne rainfall will be below normal for the next month; temperatures will be very changeable for the next ten days and then run a touch cooler at the start

of August.

New Zealand has seen these conditions before, notably last November when it was very cold, Griffiths says. “We have a very active Tasman Sea and a volatile Southern Ocean.”

Look after each other PETER BURKE peterb@ruralnews.co.nz

DAIRYNZ IS encouraging farmers

to look out for neighbours and friends as financial pressures persist into the new season.

Andrew Reid, DairyNZ general manager extension, cites this concern as calving gets into full swing and farmers face another season of uncertainty over the milk price. This pressure is on top of the normal challenges of calving.

He says it’s important that farmers support each other and where possible get off farm and also check their neighbours.

DairyNZ staff report some calves have dropped and most farms have a reasonable supply of feed, Reid says.

“It’s been a reasonably favourable growing season for pasture over the last couple of

months with just a few frosts hitting in the last couple of weeks or so. But in general terms pasture growth has been pretty favourable for farms for the new season.”

But some farmers in Taranaki, lower North Island and some Waikato regions have cows suffering ongoing effects of facial eczema.

“We have reports from Taranaki of quite a lot of FE --clinical and sub-clinical cases. So there will be a carry-over effect into spring for some of these farmers.”

On the positive side, farmers have culled their herds and are modifying their management and working to get the best from pasture instead of buying a lot of supplementary feed.

Reid says this change appears to be a direct response to the ‘pasture first principles’ DairyNZ promoted in autumn.

“The autumn initiative gave confidence back to farmers who had

become very reliant on imported feed to support their production targets. [So] rather than production being the focus, the main driver now for farmers is profitability -- realising that producing more doesn’t mean you are more profitable. They are also realising pasture and its management is the foundation principle of a profitable farm.”

Reid describes the mood of farmers as cautiously optimistic and resolved to get through the season.

Farmers know they are not out of the woods yet and the turnaround will not be fast.

“Farmers know what they are dealing with and they can implement plans with a bit more certainty.”

Cow condition around the country is typical for this time in the season. The weather remains an unknown.

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MACHINERY & PRODUCTS // 31

Six of the best from SDF MARK DANIEL markd@ruralnews.co.nz

HOT ON the heels of its 9 Series launch at Fieldays, at home in Germany tractor maker SDF is trumpeting the arrival of its new 6 Series -- six models from 155 to 226hp (max boosted).

These tractors can be configured to customers’ preferred specifications in a choice of two wheelbases, three transmission variants and two options for varying levels of comfort.

At the business end, a Deutz 6.1L, Tier 4 engine is said to be more responsive, have more torque in reserve and at start-off and uses up to 5% less fuel with a revised SCR and passive DPF system. A redesign of the DPF unit sees no fuel being injected directly into the filter, lower running temperatures and ultimately longer regeneration intervals, and service intervals scheduled for 6000 hours. A new ‘torque

ledge’ produces constant values between 1000 and 1900rpm, and constant power is developed from 1600 to 2100rpm A new ZF sourced transaxle assembly comes in various options: a manual set-up with five main gears and six powershift steps changed by push button; a new RC version which can be run in manual, where the operator controls all functions; semi-automatic or field mode where main gears are shifted manually and powershifts are automated; or a fully automatic transport mode where main gears and powershifts are automated, the former with a robotic shift system. These two options therefore offer 30 forward and 15 reverse speeds, or 54F &27R if a creep set is fitted.

Existing users will see a huge difference with the 6-stage power-shift, as until now the choice has been limited to four steps.

In operation, the transmission will offer

17 speeds in the main working areas at 3-18km/h, speed changes are 18% to the next gear and there is always a minimum of two powershift steps available before a gear change is required.

Speed matching is also standardised on both options, while a choice of 40 or 50km/h is available subject to local operating conditions.

At the top end of the series, the popular TTV version, offering stepless speed control from start to maximum speeds of 40, 50 or 60km/h, becomes the third transmission choice, with four mechanical ranges which should find favour with contractors or large operators.

Interestingly the TTV tractors are available with an industry unique external disc brake system designed for use in high-speed haulage applications.

At the front end an optional new suspended axle layout uses double hydraulic cylinders with a longer stroke offering

increased damping effect, and a new anti-dive and anti-rise function keeps things on the straight-andlevel by monitoring speed and braking intensity, and ensuring a far more comfortable ride for the operator.

Also up front a newly designed front bolster assembly now becomes the mounting point for the optional front linkage system, said to be narrower, offering better forward vision, tighter turning radiuses and an increased capacity of up to 5.48 tonnes.

The standard or MaxiVision2 cabin is designed – as is the rest of the tractor – by the Giugiaro design team in Italy; it offers the driver different levels of comfort dependent on the overall level of technology the tractor is supplied with.

SDF tractors can be configured to customers’ preferred specifications.

New features include a redesigned central console for system information,

capability.

a choice of 12 or 8 inch displays for the I-Monitor and ISOBUS VT4

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DAIRY NEWS JULY 26, 2016

32 // MACHINERY & PRODUCTS

Harvester with more bells and whistles important as the efficiency of the engine itself.

“Dynamic Power lets the operator choose from three operating strategies – maximum power, high power or normal power.

The system then automatically adjusts the engine’s power curve to meet the power demand and engine speed and can improve fuel efficiency by up to 10.6%.”

In the wide-open throttle range, the system achieves maximum efficiency between 1800 and 1900 rpm, whereas by contrast in the partialload range, the engine can be set to run as low as 1690rpm as well as automatically increasing the engine’s power curve in 10 increments to best suit the prevailing conditions. A further new function allows the machine

MARK DANIEL markd@ruralnews.co.nz

CLAAS HAS improved its industry-leading Jaguar self-propelled forage harvesters, including advanced engine and control technologies and a tyre pressure control system for the drive and steering axles.

The Jaguar range comprises 10 models in the maker’s 900 and 800 series, making it the widest range of forage harvesters worldwide. They boast a lot of ‘smart’ technology – optional Dynamic Power, Cruise Pilot, Claas Auto Fill and automatic tyre pressure control.

Luke Wheeler, Jaguar product manager, comments “intelligent management of harvesting operations is just as

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to drive into the crop at maximum engine power before the system automatically matches the engine’s power curve to the most efficient setting.

The Cruise Pilot function automatically maintains the desired vehicle speed, engine speed or throughput to maximise efficiency, working to preset values such as target speed, engine speed or throughput chosen by the operator.

A new feature is the automatic chop length control function, which automatically adjusts the chopping length according to moisture content.

Other options for the new season include the addition of the Cmotion multifunction lever, integrated in the right armrest and providing fingertip control of up

Claas’ selfpropelled forage harvester.

to 13 key functions; this will be familiar to operators of Lexion harvesters equipped with the CEBIS operating system Automatically Fill automatically regulates the loading of forage harvesting transport vehicles by using 3D digital image analysis to regulate the longitudinal and transverse position of the discharge spout to ensure optimum filling, day and night In the cabin, improvements include an optional leather driving seat with integrated heating and cooling functions, optional LED lighting systems and a keyed lock system for the cab door, ignition and fuel tank.

The five models in the 900 series can be fitted with the optional auto-

matic tyre pressure control, now extended to both the drive and steering axles.

This is said to improve ride comfort and traction in the field, and improve stability and fuel efficiency on the road; in operation the control line checks the air pressure every 30 minutes, while the inflation/deflation line automatically adjusts the pressure depending on the position of the road travel switch.

The new Direct Disc 600/500 fronts incorporate the maker’s new Max Cut cutterbars, said to produce a very clean stubble; and a much larger diameter intake auger makes them particularly suitable for harvesting crops up to 4m tall.

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DEALERS NATIONWIDE

Shake it and help grass grow THINKING ABOUT subsoilers, few farmers in New

Zealand and beyond will be unaware of the McConnell Shakaerator; after all it’s been around for 35 years.

It differs from traditional subsoilers in using vibration to reduce draught requirement, meaning a smaller tractor can be used, and a smaller fuel bill to complete the job.

In practice an eccentric weight is mounted under the machine’s headstock and connected to the tractor’s PTO. The resultant vibration allows the low draught legs to penetrate easily and in doing so improve vertical drainage, ease compaction and help promote vigorous grass root growth.

Ideal in typical NZ situations for removing pugging created by overwintered stock, the machines are also said to be ideal for removing the tractor ‘pans’ typically found 200-250mm below the surface. Depending on the selection of a 24 or 30 inch length leg, working depths of up to a maximum of 350400mm can be achieved respectively.

Easily optioned to suit specific tasks, the grassland version is supplied with individual spring-loaded disc assemblies which slice through the surface mat to allow the subsoiler legs into work without creating any bulldozing of the sward.

At the rear of the machine a full width large diameter smooth roller offers incremental depth control, as well as helping to reinstate the surface after the machine has passed through, ensuring the pasture is brought back into production pronto.

Dependent on soil type the units can be equipped with standard or long-life points, and the 2.5m frame can be equipped with two-five leg assemblies dependent on terrain and available power. www.agriquip.co.nz

DAIRY NEWS JULY 26, 2016

MACHINERY & PRODUCTS // 33

New Tangle Free Hotpost MARK DANIEL markd@ruralnews.co.nz

RESEARCH AND development

by Strainrite has resulted in the company’s Tangle Free Hotpost.

Primarily used to hold a herd of cattle in a break-feed crop, the shaft of the pigtail stake is electrified using an insulator just above ground level instead of at the pig-

tail end, which helps deter more boisterous bovines from pushing over the fence to get to the rest of the crop.

Ease of use is ensured by an insulated hand grip just below the pigtail – none of the protruding handle seen in the previous design – which helps reduce the tendency of shafts to tangle.

The shaft of the Hotpost is manufactured from high strength,

Manufacturers get around the table

bend resistant galvanised spring steel, and uses the galvanised steel foot proven on the company’s popular gold foot post; it is said to offer superior strength and excellent ground holding characteristics.

The new post also has an integral, formed spring steel pigtail that carries no risk of poly-wire or tape cutting through plastic coatings and causing electrical shorts.

Dairy farmer Alf Teasdale, who has used the posts with conventional pigtail standards for years, comments “getting supplementary feeding wrong can be disastrous to a cow’s health, but these new standards reduce the potential for breakouts and are quickly respected by stock”. www.strainrite.co.nz @dairy_news facebook.com/dairynews

Tangle Free Hotpost.

Prepare to be impressed

IN A sign of the times, and to offer farmers and contractors cost effective solutions in machinery, New Holland has a deal for the supply of fixed chamber round balers from Italian hay equipment manufacturer Mascar, at this stage for the European market.

NH describes the Mascar range as “rugged, straightforward, reliable and compact, combining low operating cost with exceptional performance”.

Signing in Turin, NH agricultural brand president Carl Lambro, with Mascar president Sante Maschio, said the partnership will help address a rising demand for quality, productivity and reduced operating costs.

“NH and Mascar have pledged to co-operate in [developing]… our comprehensive range of round balers’ productivity and efficiency, and to meet specific customer requirements”.

The fixed chamber balers will be integrated into the current NH ranges to offer customers greater choice, and will be previewed at the 2016 EIMA machinery event.

Pottinger builds for the future CLOSE ON the heels of news of an increase in manufacturing capacity, machinery specialist Pottinger last month began building an aptly named SpareParts World at Taufkirchen an der Trattnach, Austria.

Close to its headquarters at Grieskirchen, the 7000sq.m building will rise on a 3ha site to warehouse 50,000 spare parts.

The facility will have an automated small parts warehouse and a mechanised pallet rack system to allow the dispatch of up to 800 customer orders daily -- around 3.5 million items a year.

The move is to sustain parts supply on time throughout the year, items flowing seamlessly to end users worldwide and catering for the need of a growing whole-goods business in the future.

The building will be finished in early 2017.

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The new 5-Series G tractors from Deutz-Fahr deliver unparalleled on-farm productivity with industry leading features such as true four-wheel braking, Stop & Go, double-displacement steering, a 100% locking diff, and a super quiet, ergonomically designed cabin.

These new four-cylinder models (105hp and 115hp) provide the benefits of a big tractor in a compact, muscular workhorse ideally suited to New Zealand farming.

Call your local Deutz-Fahr dealer for all the details and prepare to be impressed.

www.originagroup.co.nz

NOW READ IT ONLINE ■ ■ ■ ■ ■

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DAIRY NEWS JULY 26, 2016

34 // MACHINERY & PRODUCTS

Kubota’s skid steers hit the mark compactness and high manoeuvrability make them an ideal fit around yards or buildings, particularly those with limited access or height restrictions, like chicken

rearing units.

Kubota’s new SSV Series offers two models of 64 and 74hp, now on sale.

Importer CB Norwood Distributors lists innovative features said to

set the SSV Series apart, notably a unique, slideup, front-entry door that rises upwards instead of out, allowing access even when the machine is in a tight spot.

A dust-resistant pres-

Buying a Mixer Wagon?

Make sure it passes the Webbline 17 point assessment.

surised cabin with climate control offers a comfortable workplace, a sidelight for better visibility and safer operation at night, and an optional multifunction lever allows fingertip control of machine and implement functions.

The SSV65 and SSV75 have hand-and-foot controls, and pilot control models are expected to join the line-up next year.

Power is provided by a Tier 4 four-cylinder Kubota diesel engine, the choice of two travel speeds

When you’re considering purchasing a mixer, tap into Webbline’s extensive knowledge and history of selling equipment to New Zealand farmers for over 50 years.

No two farms are the same and every operation requires a mixer that is totally compatible in order to increase production and to save valuable time and money.

With very attractive leasing options and a range of German built BvL mixers available, you need to talk to Webbline to improve your bottom line.

and optional high-flow hydraulics.

Kubota’s vertical lift geometry combines to allow the SSV65 to offer a capacity of 885kg and breakout force of 2195 kgf; the SSV75 offers 1220kg and a breakout of 2669kgf. www.kubota.co.nz

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BVL SHEAR GRABS

markd@ruralnews.co.nz

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SKID STEER loaders’

Kubota’s new skid steers.

models to its well established Gator 4x4 utility crossover range.

The 590i and 590i-S4 four person vehicle provides performance and comfort, and the ability to be customised to suit individual taste or specific tasks.

A new 586cc 2-cylinder petrol engine has electronic injection and develops 32hp at 5600rpm; it will take the vehicle to around 72km/h. Also new is an 875W, 65A alternator which takes account of the need to power work lights, sprayers and winches without flattening the battery.

Both units have independent suspension at each corner, the base machine having 10.5 inches of ground clearance and the S4 version slightly less at 9.3 inches; cargo capacity is 181kg, overall payload 363kg and towing capacity 499kg.

Attention to detail includes isolation of the powertrain to reduce vibration, and extensive use of sound deadening materials around the engine and CVT unit to reduce noise.

Other upgrades are a 28L fuel tank, a back-lit instrument cluster giving readout of engine details, and warning indicators for seat belts, power steering function and maintenance reminders.

Joining the 590i models is a new mid-sized XUV 560, with the same load carrying and towing capacities, and the same ground clearance, but running a slightly different engine. Here a 570cc V-twin delivers 16hp and a top speed of around 50km/h.

A ROPS structure provides safety and easy access and exit, plus 3-point seat belts for operator security.

A sealed under-hood area provides a place for knickknacks, and a one piece composite cargo bed offers in-built tie down points and a rear tailgate said to be operated singlehanded for access and oversize objects. www.johndeere.com.au

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©2016 Bombardier Recreational Products Inc. (BRP). All rights reserved. ™, ® and the BRP logo are registered trademarks of BRP or its affiliates. Products are distributed in Australia. by BRP AU. Make sure that all laws and regulations, are respected. Ride responsibly. *Can-Am promotion ends July 31, 2016 or until stock runs out. Only 2014, 2015, 2016 Commander 800cc, Outlander 450, 500 and 650 cc models eligible. Commander 800cc models receive $1500 rebate. Outlander 450cc models receive $500 rebate. Outlander 500 and 650cc models receive $1000 rebate. Only 2015 and 2016 Maverick X DS Turbo models eligible and receive $3800 worth of accessories that must be ordered from the same BRP approved dealership as the unit is purchased. Only 2016 Defender HD8 models eligible and receive $2000 worth of genuine Can-Am parts and accessories that must be ordered from the same BRP approved dealership as the unit was purchased. ^3 year warranty covers MY13/14/15/16 Can-Am Outlander and Renegade, and MY16 Can-Am Defender models only. 2 year warranty covers MY13/14/15/16 Commander and Maverick models only. Always ride responsibly and safely. Always wear protective gear & approved helmet. Only available at participating BRP approved Can-Am dealerships.

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Looking for technical tips & know-how?

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