Dairy News 19 January 2021 by Rural News Group

Dairy prices tipped to rise further. PAGE 3

FARM DAIRIES FAMILY LEGACY

More than just milking cows PAGE 21

Making shade for cows PAGE 18

JANUARY 19, 2021 ISSUE 462 // www.dairynews.co.nz

PROFITS POWER GREEN GROWTH

2020 Canterbury Ballance Farm Environment Awards winners, Tony Coltman and Dana Carver. PAGE 6-7

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DAIRY NEWS JANUARY 19, 2021

NEWS // 3

$7.20/kgMS and scope for more SUDESH KISSUN sudeshk@ruralnews.co.nz

High-tech cow collars. PG.09

Kiwi rotary systems in demand. PG.20

New Kubota UTV raises the bar. PG.22

NEWS ��3-13 OPINION �� 14-15 AGRIBUSINESS ��16 MANAGEMENT ��17-18 ANIMAL HEALTH �� 19 FARM DAIRIES �� 20-21 MACHINERY & PRODUCTS ��22-23

STRONG GLOBAL demand for

dairy products has prompted ANZ to raise its forecast milk price for this season to $7.20/kgMS. The bank’s forecast is 20c higher than Fonterra’s forecast range midpoint and those of other major banks – ASB, Rabobank and Westpac. Milk price futures are currently priced at $7.05/kgMS, having peaked at $7.11/ kgMS in early December. Most banks could also be lifting their forecast payouts in coming weeks. ANZ agriculture economist Susan Kilsby says global dairy commodity prices have continued to firm – gaining 3.9% in the first Global Dairy Trade (GDT) event of 2021. “This follows on from prices firming in the latter part of 2020,” says Kilsby. Kilsby says it remains cautious about the longer-term outlook and still sees scope for dairy commodity prices to soften in the second half of 2021, which could impact the milk price for next season. But the farmgate milk price for the 2020-21 season is becoming more certain as about 70% of the product that will be produced from this season’s milk supply is now contracted. Most of the FX requirements for this season will also have been put in place, thereby limiting the impact

ANZ agriculture economist Susan Kilsby.

of the rising New Zealand dollar on the farmgate milk price for the 202021 season. However, the rising NZD will curb returns for next season. “Commodity prices may also ease next season – particularly if the milk supply in the Northern Hemisphere continues to rapidly expand,” she says. “Economies still have a long way to go to offset the economic impact of Covid-19 and further lockdowns are likely to dampen demand for dairy products.” Global milk supply has also continued to expand but so far demand is keeping pace. Kilsby notes that there has been an enduring lift in milk supply in some of the major dairy exporting regions of the world, including the

US, EU, Australia and New Zealand. “It was feared that this extra supply would not be able to be absorbed by the markets but thus far demand appears to be holding up well, despite some consumption channels being compromised by social distancing restrictions put in place to prevent the spread of Covid-19.” The additional milk from the US is currently matched by additional demand created by the Government-funded scheme to provide food boxes to those in need. These food boxes must contain drinking milk and other dairy products such as cheeses and yoghurts. Funding for this programme was recently extended to the end of April. The dairy portion of this stimulus programme is expected to

absorb 2.5–3% of the total milk being produced in the US when considered on a milk equivalent basis. This is very similar to the rate of growth in milk supply seen recently. In the second half of 2020, milk supply in the US increased by just over 2%. In Europe the expansion of milk production has been more modest, says Kilsby, with growth of about 1% observed in 2020. And while there were disruptions to demand patterns in the early lockdowns, the supply channels have now adjusted to the increase in retail demand at the expense of food service. “The recent growth in EU milk production has mostly been achieved through increased yields as cow numbers have decreased. In 2021, growth is expected to remain modest,” she says. Kilsby says any significant growth in the EU will no doubt result in larger volumes of product being exported, which potentially would be negative for global prices. However, at present production is at its seasonal low and output won’t peak until about April/May. The resurgence of Covid and tighter restrictions on people movements that have been put in place to prevent the spread of the new, more contagious strains could result in some reduction in demand for dairy products, but in general demand has remained relatively strong through previous lockdowns.

DAIRY NEWS JANUARY 19, 2021

4 // NEWS

Dairy’s star billing in NZ economy NEW ZEALAND dairy

exports have grown by over $5 billion since 2015, adding an extra $375 million to wages. Dairy Companies of NZ (DCANZ) executive director Kimberly Crewther says diverse markets and products have helped the dairy sector navigate market events. NZ milk processors make about 1500 different products. “These are meeting needs for a diverse array of customers, from consumer-ready products in retail to speciality products for chefs and food manufacturers, and products used in medical applications,” says Crewther. “If they were considered individually,

whole milk powder, cheese, butter, casein products, infant formula and skim milk powder would all be billion-dollar industries.” The global trade environment will be key to dairy’s ongoing contribution to New Zealand communities and to globally sustainable food systems. “Covid-19 has highlighted the importance of reducing barriers to global trade in food. “We hope 2021 will be when governments globally lean into reinvigorating the rulesbased trading system and turn statements on removing barriers to trade into real action.” High quality trade negotiating outcomes,

such as the elimination of tariffs in the UK and EU Free Trade Agreements, would further enhance the benefit of dairy trade across New Zealand communities, while removing barriers to European consumers accessing lower-emissions New Zealand dairy products. Recent Sense Partners analysis, for DairyNZ and DCANZ, shows the sector is delivering $20 billion in export value. DairyNZ chief executive Dr Tim Mackle says dairy’s sustained economic contribution is a key factor in the country’s Covid-19 recovery, but tourism will also become increasingly important again as borders open. Importantly, dairy

sector growth is supporting wage growth in regional New Zealand. “Dairy provides longterm stability for our communities. Export earnings translate to well-paying jobs, but also support farmers and dairy companies to purchase more than $22.5b worth of goods and services from other industries,” says Mackle. At a community level, in 2019 the dairy sector accounted for more than 5% of GDP in seven regions – and more than 10% in four of those. West Coast has the greatest GDP from dairy, at 16%. “In dollar terms, this equates to dairy contributing more than $100 million to GDP in most regions – including nearly $2 billion in

Canterbury and $2.5 billion in Waikato. This is especially significant because of the limited scale of other high-value export sectors in rural New Zealand.” The dairy sector is a significant employer in many districts, accounting for up to one-third of

jobs in Waimate, and as many as one in four jobs in South Taranaki and Otorohanga. “Around 50,000 people are employed in the dairy sector, on and off farms, generating $3.4 billion in wages in 2019. Twenty New Zealand districts see between $50 million and

$100 million in wages from the dairy sector, which flows on to local spend.” Mackle says increased efficiency on the farm is a factor behind dairy’s success, particularly as farmers develop from a sustainability perspective too.

SYNLAIT EARNINGS DOWNGRADE CANTERBURY MILK processor

Synlait has downgraded its earnings forecast. This follows its strategic customer and cornerstone shareholder a2 Milk Company reporting a massive drop in infant formula sales. Synlait now expects its total consumer-packaged infant formula volumes to be 35% lower than last year. The company says it is trying to mitigate the impact of this drop in sales through its diversification strategy and keeping costs down. “There has been no disruption to manufacturing or demand for Syn-

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strategic customer. “It also remains subject to the ongoing effects of Covid-19, with consumer behaviour, channel dynamics and supply chain disruptions all subject to change.” Synlait will provide an update on infant formula sales during its halfyear result announcement in late March. a2 Milk says disruption in crossborder exporting (daigou channel), which represents a significant proportion of its infant nutrition sales in Australia and New Zealand, had been more significant than expected.

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“With the recent sales performance in the daigou channel not being as strong as previously expected, we now consider that the recovery in this important channel through the balance of the fiscal year will also be slower. “We expect that Covid-19 related travel restrictions will continue to negatively impact the reseller channel due to reduced travel between Australia and China through the remainder of FY21, with limited prospect of a return of a significant number of international students and tourists to Australia during the period.”

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NEWS // 5

Outlook hopeful – DCANZ PETER BURKE peterb@ruralnews.co.nz

THE CHAIRMAN of the

Dairy Companies Association of New Zealand (DCANZ) Malcolm Bailey says the industry appears to be in a strong position given what is happening in the world at present. He says it is very gratifying to see those who monitor the situation revising dairy prices upwards, but he adds that there is still a degree of nervousness worldwide about what might happen to the global economy due to Covid-19. Bailey says last year, people were predicting

Malcolm Bailey

that things would be a lot worse than they turned

out to be and there is hope this may happen

again. “However, dairy com-

panies would still be a bit cautious around price

ANOTHER PRODUCTIVE SEASON JESSICA MARSHALL jessica@ruralnews.co.nz

NEW ZEALAND Dairy Statis-

tics for the 2019/20 season reveal the season was a productive one for dairy farmers. The statistics, released by DairyNZ and Livestock Improvement Corporation (LIC), show that New Zealand dairy companies processed 21.1 billion litres of milk, containing 1.90 billion

kgMS, marking a 0.6% increase in milksolids from the previous season. Meanwhile, the latest count reveals that New Zealand has 4.921 million milking cows, a 0.5% decrease from the 2018-19 season. According to DairyNZ, this increase in productivity is due to farmer uptake of herd improvement tools such as herd testing and animal breeding. “Interest in the highest genetic merit animals continues to grow

year-on-year, with farmers investing in the latest artificial breeding technologies and indexes that focus on productivity, as well as animal welfare and the environment,” a DairyNZ spokesperson told Dairy News. “Farmers are also considering feed quality for their herds, while seasonal factors such as weather conditions which affect feed also have an impact on milk production,” they said. “These factors have all meant

that despite cow numbers reducing, our cows are more productive than ever.” They say that innovation and research will continue its role in ensuring the productivity of the national herd. “New innovations, research and agritech solutions will also continue to play a role in ensuring that farmers can breed more productive and profitable cows.” In the 2019-20 season, 3.68 million cows were herd tested.

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price being $6.90 per kg/ MS. This is based on the assumption that there will be no major negative shocks to commodity prices due to Covid in key NZ markets,” says the report. Interestingly the MPI projection on the farmgate milk price is 30 cents lower that the prediction by the ANZ bank, which last week put the forecast payout for the 2020/21 season at $7.20/kgMS. While the outlook for the dairy industry is somewhat blurred in the coming year, MPI says things should come right in 2022 and is predicting export returns in a year’s time to bounce back to what they were last season. However, there are caveats on that – especially given that the SOPI report was done before Christmas and therefore before the most recent world outbreaks of Covid-19.

expectation in the coming year,” he says. His comments come at the same time as the Ministry for Primary Industries (MPI) is projecting a 4.6% drop to $19.2 billion in export revenue for dairy products in the coming year. In its latest Situation and Outlook for Primary Industries (SOPI) it says, in the short term, dairy export prices will remain relatively constrained. It notes that although NZ will have a strong production season, it points out that milk production in the US, Europe and Australia will also be up. At the same time, it posts a warning about the strengthening of the NZ dollar to the US dollar, saying if this continues, it could act as a drag on dairy export revenue growth. “For farmers, these weaker prices are expected to flow through to reduced farmgate returns with the average

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DAIRY NEWS JANUARY 19, 2021

6 // NEWS

Profitability, the platform NIGEL MALTHUS

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be profitable if they are to meet environmental and other targets, say the Regional Supreme Winners of the 2020 Canterbury Ballance Farm Environment Awards, Tony Coltman and Dana Carver. That will be the key message when they host the winner’s field day on January 27 – about nine months later than usual because of the Covid pandemic. The couple’s Canlac Holdings business consists of two dairy farms near Dunsandel in the Selwyn District, running a total of 2150 cows. Known for their willingness to step up and take part in initiatives

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Tony Coltman says faced with having to reduce leaching by 33% by 2022, they have achieved 50%.

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such as the Forages for Reduced Nitrate Leaching (FRNL) research project, they have exceeded the district’s tough Environment Canterbury nitrogen leaching targets while maintaining profitability. When they were named the winners back in March, BFEA judges commended them for their environmental commitment and for promoting wellbeing within their own team and wider community. Coltman says they recognise four key parts to their business – the financial, the environmental, the people, and the animals – and says the business would not be stable if any were out of kilter. However, the key message is that a farm needs profitability to be able to spend on those other areas. Explains Carver: “You can’t make changes that are going to help the animals, land and people if you don’t have money. “You might make one call which is really going to help the animals but it could actually make things trickier on the cash books and trickier on the

A BIG unknown for Tony Coltman and Dana Carver is expected greenhouse gas (GHG) regulations because it is unclear how those emissions will be assessed, measured or taxed. Because the farm has high production, using a lot of grass and a lot of feed, its total GHG emissions are higher than average but it is more efficient than average, he says. “Per kg of milk solids we’re better than the average but at this stage we don’t know how they’re going to measure it and it doesn’t sound like it’s going to be a total figure.” Carver adds that the science on GHG isn’t as clear, and the targets

aren’t as clear, as for nitrate emissions. They are looking at plantings to both reduce emissions and provide shelter for animals but Carver says they have to be careful not to do anything that could cut profit with no gain. “There’s this huge grey area but the government started saying we expect to see a drop in your methane production in the next five years. How do you start that journey when you don’t have the science?” For Coltman and Carver the key is to stay involved, keep learning and keep improving the business so they have a strong platform to act from when the time comes.

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DAIRY NEWS JANUARY 19, 2021

NEWSâ&#x20AC;&#x201A; // 7

for going greener AWARDS DISRUPTION THE 2020 Ballance Farm Environment Awards will finally conclude in late March after a year of unprecedented disruption caused by the Covid pandemic. A round of on-farm judging will take place over the next few weeks before the 10 regional winners convene in Wellington for a series of interviews then the announcement of the national winner at an awards dinner on March 25. The winner will receive the Gordon Stephenson Trophy and be named the National Ambassador for Sustainable Farming and Growing â&#x20AC;&#x201C; traditionally funded for an overseas study tour. James Ryan, the general manager of the New Zealand Farm Environment Trust, says there is a question mark over that, because of Covid. â&#x20AC;&#x153;They probably wonâ&#x20AC;&#x2122;t be going overseas but who knows? That could change.â&#x20AC;? Ryan says the awards dinner â&#x20AC;&#x153;is really about celebrating some of the great things that that these farmers and growers are involved in.â&#x20AC;? Normally the national award would have been decided in the middle of last year, following the series of 10 regional awards. Instead, the Covid lockdown forced the regional competitions online after only two had

Tony Coltman and Dana Carver says a farm needs to be profitable before being able to spend on animals and sustainability.

gation, increased effluent area, lower nitrogen use and lower N-content in imported feed, while maintaining production. Faced with having to reduce leaching by 33% by 2022, they have achieved 50%, says Coltman. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve got some headroom there, so thatâ&#x20AC;&#x2122;s all

good.â&#x20AC;? They are also wellplaced to meet the central Government-imposed limit of 190kg/ha a year of applied nitrogen announced last year. Having got the basics right, the couple have continued to make improvements â&#x20AC;&#x201C; aimed

as much at the wellbeing of their staff as improved production. That includes adding another milking shed, which allows work to start an hour later each day and gives greater flexibility in rostering and reduces the stress on workers. â&#x20AC;&#x153;Now we can run each

of these places on public holidays with just two people so people can have the day off,â&#x20AC;? says Coltman. Automated cup removers have been added to both sheds. Coltman says it is all part of their holistic approach to provide a pleasant working environment, investing in both people and equipment to be in the best position to respond to coming pressures or changes in regulations.

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been held - Canterbury and East Coast. The delays also forced a decision not to conduct a national competition for 2021. â&#x20AC;&#x153;We just felt there was too much uncertainty,â&#x20AC;? said Ryan. However, Waikato is conducting a regional competition this year, having secured independent funding. Judging is currently underway. Waikato was the one exception â&#x20AC;&#x153;just to complicate things,â&#x20AC;? quipped Ryan. â&#x20AC;&#x153;They felt theyâ&#x20AC;&#x2122;d built up some great momentum...and because thatâ&#x20AC;&#x2122;s where the awards originated more than 25 years ago, they were determined just to carry on as per normal.â&#x20AC;? Ryan says the awards will be â&#x20AC;&#x153;tweakedâ&#x20AC;? for the future with more emphasis on feedback rather than just the accolade of an award. â&#x20AC;&#x153;Now we have reflected on where we want to be over the next three to five years, weâ&#x20AC;&#x2122;re looking to put more emphasis on giving participants in the programme quality feedback that they can use to improve the sustainability of their businesses. â&#x20AC;&#x153;Farmers are dealing with so much at the moment we just want to make sure that weâ&#x20AC;&#x2122;re giving them feedback which builds their confidence up.â&#x20AC;?

DAIRY NEWS JANUARY 19, 2021

8 // NEWS

Fonterra China Farms sale almost a done deal SUDESH KISSUN sudeshk@ruralnews.co.nz

FONTERRA’S BID to

offload its loss-making China Farms business has cleared a major regulatory hurdle. Last month, the cooperative announced that it had obtained anti-trust clearance in China. The $531 million deal will be finalised before July subject to a few other regulatory approvals. The co-op will use cash proceeds from the transaction to pay down debt, as part of its overall debt reduction programme. Fonterra announced in October last year that it had agreed to sell its two

wholly-owned farming hubs in Ying and Yutian to Inner Mongolia Natural Dairy Co. Ltd, a subsidiary of China Youran Dairy Group Limited. Over the past 10 years the co-op has invested over $1 billion in China Farms with very little returns. In October last year, Fonterra chief executive Miles Hurrell admitted that China Farms had been a challenge. “We don’t shy away from the fact that establishing farms from scratch in China has been challenging, but our team has successfully developed productive model farms, supplying high quality fresh milk to the local con-

Fonterra spent almost $1 billion setting up the farms with little return coming back to farmer shareholders.

sumer market. It’s now time to pass the baton to

Youran and Sanyuan to continue the development

of these farms.” Hurrell says the sale

of the farms will allow the co-op to prioritise the areas of its business where it has competitive advantages. “For the last 18 months, we have been reviewing every part of the business to ensure our assets and investments meet the needs of the co-op today. Selling the farms is in line with our decision to focus on our New Zealand farmers’ milk. “China remains one of Fonterra’s most important strategic markets, receiving around a quarter of our production. “Selling the farms will allow us to focus even more on strengthening our Foodservice, Con-

sumer Brands and Ingredients businesses in China. “We will do this by bringing the goodness of New Zealand milk to Chinese customers in innovative ways and continuing to partner with local Chinese companies to do so. Our investment in R&D and application centres in China will support this direction,” says Hurrell. Separately, Fonterra has agreed to sell its 85% interest in its Hangu farm to Beijing Sanyuan Venture Capital Co for $42 million. Sanyuan has a 15% minority shareholding in the farm and exercised their right of first refusal to purchase Fonterra’s interest.

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DAIRY NEWS JANUARY 19, 2021

NEWS // 9

LIC inks hi-tech cow collar deal SUDESH KISSUN sudeshk@ruralnews.co.nz

LIC HAS formed a

distribution partnership with Israeli-based Afimilk to market its hi-tech cow collars in New Zealand. The AfiCollar, worn around the cow’s neck, collects data on animal health, wellbeing and fertility. Afimilk is one of the dairy industry’s leading producers of cow behaviour sensors, farm management software and milk meters, and supplies cow collars internationally. LIC unsuccessfully sought shareholder approval last year to by a 50% stake in Afimilk; the $109million deal failed to receive the required shareholder support to proceed. LIC chief executive Wayne McNee says, as sector leaders, the parties remained in contact and recently reached a new agreement regarding Afimilk’s cow collar technology. “We are working to build an integrated, collaborative technology ecosystem that makes it as easy as possible for farmers to adopt new

The AfiCollar, worn around the cow’s neck, collects data on animal health, wellbeing and fertility.

technologies. Farmers need to be able to choose the technology and products that are best suited to them. “Our role is to ensure that proven technology can integrate with LIC’s existing systems and herd management software into the future.” McNee says AfiCollars are among the best in the world and well suited to meet the unique

challenges of New Zealand’s pastoral dairy environment. “Our proven work in genomics, reproduction and animal health is enabling farmers to be more efficient and their herds to be more productive each year. Cow behavioural monitoring devices like the AfiCollar will deliver complementary on farm benefits such as more

accurate heat detection and animal health and welfare monitoring.” AfiCollars will integrate with Protrack, LIC’s farm automation technology, which will allow for increased efficiency and faster, more informed decision-making on farm. There is already strong demand for cow wearable technology by farmers, and for it to

WORK WITH WORKSAFE OR FACE THE MUSIC JESSICA MARSHALL jessica@ruralnews.co.nz

WORKSAFE IS reminding business owners that they must work with their inspectors or run the risk of enforcement action. The comment follows the conviction of Manawatu dairy farmer Daniel Reuel Sproull, who entered no plea to two charges under Section 176 of the Health and Safety at Work Act, and a deemed not guilty plea was entered by the court at a pre-trial hearing. Sproull was convicted on both charges at the Palmerston North District Court and fined $4,000 for preventing inspectors from accessing his property and failing to attend or make alternative arrangements to complete a required interview at WorkSafe’s offices. WorkSafe Area Manager Danielle Henry says the incident occurred in November 2018 when

WorkSafe inspectors met with farmers across Palmerston North to help educate and upskill them about hazardous substances. As part of this work, inspectors visited Sproull’s property on multiple occasions. He refused the inspectors entry onto the site without proof of proper authority to do so. He was shown WorkSafe identification cards by inspectors but did not accept these as proof of their appointments and turned the inspectors away. He was then provided further confirmation but still refused to assist them or allow him onto his property. In one instance, he blocked access to areas of his business and failed to attend a required interview. During sentencing, the judge confirmed that he found the behaviour to be deliberately obstructive. Sproull was ordered to pay a contribution to the prosecution’s

legal costs totalling more than $4,000. Henry says under the Health and Safety at Work Act, all reasonable assistance must be given to WorkSafe inspectors who are entering or inspecting a site. She says there was no indication or belief at the time of the incident that Sproull had breached the Act. “Our inspectors simply wanted to ensure Sproull knew how to keep workers safe when working with or storing hazardous substances,” she says. Henry says that Sproull’s unlawful prevention of the inspectors’ entry to the site left WorkSafe with no option but to prosecute. “Our education work is critical to lifting health and safety performance and deliberately obstructing our inspectors from carrying out their work at any time makes no sense at all.” @dairy_news facebook.com/dairynews

integrate with LIC’s farm automation systems.

“The ‘connected cow,’ wearing this technology,

will shape the future of the dairy industry and help New Zealand maintain its world leading edge in precision farming,” says McNee. “LIC is looking to work with other leading New Zealand and international technology providers to continue to offer the very best options for our farmers wanting to utilise new technologies coming to market.” Afimilk chief executive Yuval Rachmilevitz says he is excited to be cementing a new agreement with LIC for the distribution of AfiCollars. “We share a combined commitment to enabling farmers to continually improve on-farm productivity through new technology and it is exciting to be further enabling this in New Zealand.”

DAIRY NEWS JANUARY 19, 2021

10 // NEWS

‘Upside potential’ for milk payout SUDESH KISSUN sudeshk@ruralnews.co.nz

RABORESEARCH SENIOR analyst Emma

Higgins says resilient Chinese demand is helping

dairy prices remain high. She says there’s “upside potential” for the forecast farmgate milk price if prices the recent price rises on Global Dairy Trade (GDT) auctions continue this year.

The latest Global Dairy Trade (GDT) auction, the first for 2021, recorded solid gains in whole milk powder (WMP) and fat product prices, building on gains in the two December auctions.

WMP prices, used by Fonterra to set its payout, sit at a 12-month high of US$3,306/metric tonne. Skim milk powder prices rose 4.1% to over US$3,000/MT. Higgins says while an

Emma Higgins, RaboResearch says strong Chinese demand is fuelling dairy price rises.

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overall lift in commodity prices for the last GDT event wasn’t surprising, the magnitude of the rise was unexpected – particularly for skim milk powder (SMP). “We are happy with our current forecast milk price of $7/kgMS for now, but there’s cer-

demand from China. While most countries are still dealing with waves of Covid-19, China’s economy is bouncing back after weathering the Covid storm. Fonterra said last month that China was continuing to recover well from Covid-19 and this

“We are happy with our current forecast milk price of $7/kgMS for now, but there’s certainly upside potential for the forecast farmgate milk price should these prices continue into the New Year.”

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tainly upside potential for the forecast farmgate milk price should these prices continue into the New Year,” she told Dairy News. Last month, Fonterra narrowed its forecast payout range to $6.70$7.30/kgMS. ASB lifted its forecast to $7/kgMS. ASB senior economist Chris Tennent-Brown notes that the latest GDT price rise built on gains of December that led to the bank lifting its forecast price. He says WMP prices have now edged comfortably ahead of where they were a year ago. “The contract curve remains flat and stable, so price gains aren’t being driven by short-term supply fears. “The latest GDT result provides a buffer to our $7 forecast, and more of the same over the coming events could well see Fonterra narrow its forecast range.” Gains on GDT auctions over the past two months are being mostly attributed to strong

was reflected in recent GDT auctions. The co-op noted a strong demand from Chinese buyers for WMP. “The impact of Covid19 continues to play out globally, and we continue to have a watchful eye on the increasing Northern Hemisphere milk production and New Zealand dollar,” said Fonterra chief executive Miles Hurrell. “However, we have contracted a good proportion of our sales book for this time of the season, which has given us the confidence to narrow and lift the bottom end of the forecast farmgate milk price range.” New Zealand milk production also impacts GDT prices; a drop in production can spark supply fears. Data released in late December by the Dairy Companies Association of New Zealand (DCANZ) showed NZ November milk production was down 2.5% on a tonnage basis and down 2.7% on milksolids basis on November 2019.

LATEST STORIES EVERY DAY www.ruralnewsgroup.co.nz

DAIRY NEWS JANUARY 19, 2021

NEWS // 11

Expat workers ready for NZ DAIRY INDUSTRY

recruitment company Rural People Limited is seeing a huge increase in overseas interest to fill New Zealand farming roles. Rural People director Paula Hems says these overseas workers will be key to keeping the economy in a healthy position. While there has been an increase in Kiwis applying for farming roles since Covid-19, Hems says they often do not have the experience or the right attitude to fill the many roles available. This has seen a need to expand and consider overseas workers. Rural People hires, on average, 100 Kiwi and overseas workers annually to work on dairy farms throughout New Zealand, as more farmers face urgent labour needs. Recently the Government eased some restrictions for overseas workers, offering threeyear work visas for potential workers from around the world to come to New Zealand. Despite these relaxations, it is extremely important that the “right” person is placed in these roles and all legal requirements are met with a thorough recruitment process being followed, says Hems. She says such has been the shortage of quality candidates, that recently a guy who only had one month’s experience in dairy, obtained a three-year visa because the client was prepared to meet the salary requirement of $25.50/hour because they were desperate for staff. “In the past it has been important to follow the government directive and recruit Kiwi’s, but recently Rural People have advertised jobs and had up to 25 applicants, of which none were Kiwis,” she says. This has led to a growing demand for overseas workers on dairy farms, which with Covid-19, recruiting offshore applicants has been thrown into disarray.

Paula Hems, Rural People, says Kiwis applying for farming roles since Covid-19 often do not have the experience or the right attitude to fill the many roles available.

OLD SCHOOL RURAL PEOPLE started four years ago, with Paula Hems still believing in the “old fashioned” way of recruitment. The process consists of an interview with the candidates that apply for the roles, a reference check and then presenting two or three potential workers to the client to interview. They then choose the person they think best suits the position and the culture of the farm. This is a process that has worked for many years and still works today, Hems says. “What you may find is that some recruiters take short cuts and sim-

Hems says this has meant it is impossible to bring overseas workers into New Zealand right now. “It is very frustrating because some of the farmers and the candidates are prepared to pay for managed isolation but there aren’t enough rooms in the isolation centres,” says Hems. “The Government does not class these workers as ‘important enough’ to come here. Even people that have worked here for six plus years, paid tax and were good honest hard workers who just happened to go home for a holiday last January, have not been allowed back, which has left the dairy industry again with a huge staff shortage.” Despite travel restrictions and new quarantine requirements, New Zea-

ply send a couple of links to Skype interviews and expect the client to choose one of them,” she says. “For me this is really strange. For me, really getting to know my client is non-negotiable. I would never, and have never, placed a person on a farm that I have not visited. I find out so much information when I sit down with my clients and get a really good overview of the business and the team so that I can match the person exactly to the position. “I always say anyone can ‘fill a job’ but for me it’s more than that, it’s about our business becoming an extension to my client’s business.”

land remains popular with overseas dairy workers because of better money, working conditions, ethical employers, and our farming credentials. “New Zealand is a stunning country for overseas people to come here, earn better money than they currently get paid as well as having a better life for their families,” says Hems. “Coming to work in New Zealand provides overseas workers with a vastly different farming experience and one they may never get if they remained in their country of birth.” Hems says for example, they have employed several people who previously worked in Saudi Arabia. For them the climate here is much better and the fact that they get to

see cows outside and eating grass, that is a huge difference to what they have been used to seeing, she adds. “When working with fantastic farmers, who are the backbone of our country, it is important that we work hard to source the right candidates and to have the strong ethics that need to be followed in the recruitment industry.” She says this ensures all parties are represented correctly. Often foreign workers can be exploited, which in her mind has no place in our country. “This can see exorbitant fees being charged for overseas workers seeking a three-year visa, which requires the same amount of work as a one-year visa, but some companies choose to add huge margins for some reason.”

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DAIRY NEWS JANUARY 19, 2021

12 // WORLD NEWS

Fully recycled bottles for European co-op SUDESH KISSUN sudeshk@ruralnews.co.nz

ONE OF the world’s largest dairy cooperatives is moving to 100% recycled polyethylene terephthal-

ate (PET) bottles from next month. FrieslandCampina, Europe’s largest farmerowned milk processor, has also developed a new ‘zipper’ that allows consumers to easily remove

wrappers from PET bottles before putting them into recycling bins. Patrick van Baal, global director packaging development at FrieslandCampina, says with the 100% recycled

PET bottle, the co-operative is taking a new step in making its packaging circular. “Our ambition is to become fully circular…that is why we are increasing the recycled content of

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MILK COOLING Milk cooling affects milk quality. The quicker the milk is cooled after milking, the better the quality when it is collected from the farm. The Ministry for Primary Industries has introduced new milk cooling standards. The new rules now apply to all converted farms.

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16 FEBRUARY

our PET bottles from 20% to 100%,” he says. “This step is crucial because in order to achieve our sustainability goals, all packaging must first become recyclable and/or reusable.” This move makes FrieslandCampina the first company in the dairy sector to make its bottles virtually circular for its brands in the Netherlands, Belgium, the United Kingdom and Hungary. Van Baal says one of the objectives of FrieslandCampina’s sustainability programme ‘Nourishing a Better Planet’ is to make the entire packaging portfolio sustainable and to reduce the amount of packaging materials to a minimum as well. Five years ago the co-op switched to PET for all its drinking bottles because PET can potentially be made fully circular. Also, unlike glass, it is lightweight and has a low carbon footprint. By making all new PET bottles from old PET bottles, FrieslandCampina

will reduce production of about 1.9 million kilograms of new plastic. Van Baal says the zipper will allow consumers to easily remove the label, so the bottle can be sorted and recycled much better. “After your bottle has been discarded, it will go to a sorting centre,” says van Baal. “The sorting is done by machines, and when the label is still on the bottle, the machine can’t ‘see’ the bottle underneath it. “Besides, when the bottle and the label go to the recycling factory together, the inks and the material of the sleeve will mix with the transparent bottle material, making it less transparent and lowers the quality.” He says labels are important and not only there “to be pretty”. “It also covers the whole bottle and in that way keeps the light out of the bottle, keeping your product fresh for longer. Without the label the product would spoil quickly and we really don’t like food waste.”

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IN BRIEF Bega, Lion merger THE ACQUISITION of Lion Dairy and Drinks (LD&D) business by listed milk processor Bega Cheese later this month will create one of Australia’s biggest dairy companies. The A$534 million deal is expected to be finalised by the end of this month. The LD&D business includes fresh milk, yoghurt, desserts and chilled juice. It also owns 13 manufacturing sites and has Australia’s largest national cold chain distribution network supplying food service and convenience stores. The combined business is expected to have revenues of A$3 billion and boost Bega’s milk collection, from 950 million litres to 1.7 billion litres. Bega Cheese executive chairman Barry Irvin says the acquisition will create significant value for shareholders. “The acquisition delivers important industry consolidation and value creation with synergies across the entire supply chain. The expanded product range, manufacturing and distribution infrastructure and brand portfolio realises our ambition of creating a truly great Australian food company.”

DAIRY NEWS JANUARY 19, 2021

WORLD NEWS // 13

A typical Indian family dairy farm in Punjab.

Oz farmers eye Indian milk market ties THE AUSTRALIAN

dairy industry is exploring long-term strategic partnerships with the world’s biggest producer of milk – India. Dairy Australia says consumer demand in India for dairy milk products is expected to outpace supply until 2035, creating huge demand for value-added milk products. It has been awarded a $76,400 grant under the Agricultural Trade and Market Access Cooperation (ATMAC) program to build a long-term engagement plan with Indian dairy sector counterparts. The ATMAC project will support long-term strategic engagement between the Australian and Indian dairy sectors to explore ways to improve collaboration and identify mutually beneficial opportunities. The project is taking a long-term focus and aims to position Australian

dairy farmers, processors and supply chains are preferred partners for their Indian counterparts into the future. Dairy Australia managing director David Nation said that the agreement will provide long term opportunities for the industry. “Dairy Australia recognises the importance of long term partnerships in trade that include both government and industry support,” he says. “The ATMAC project is timely to help focus Australian dairy businesses on possible areas for cooperation and relationships. “Joint activities are supporting trade to India, with comprehensive research into the Indian dairy market to gain an understanding of India’s supply chain, state of the industry, key stakeholders and consumer behaviours. “Australian industry participants are much better informed of Indian

MILK GROWTH IN 2018 India produced 186 million tonnes of milk, which was 22% of that year’s global total milk production of 843 million tonnes, according to the UN’s Food and Agriculture Organisation (FAO). Milk output grew 5% over 2017 levels in India, while it was just around 1% in the European Union and the US. The last five decades have seen the tide turning for India, which accounted for just 5% of the world’s milk production in 1970. India is expected to produce 300 million tonnes of milk by 2022. Milk consumption is also increasing. India’s biggest milk-producing states, according to 2017-18 data from the National Dairy Development Board, are Uttar Pradesh, Rajasthan, Madhya Pradesh, Andhra Pradesh and Gujarat.

production systems and the market and the project will support a series of senior level meetings with key Indian dairy industry stakeholders,” Nation said. India is the biggest producer of milk globally grossing slightly over 22% of total world production (twice that of the US),

India has around 3.6 million dairy farmers milking around 300 million cows. Most farms have only one to two cows with the odd larger farm pushing up the average. Milk is mostly consumed by the farmer and his family. The national milk processing sector is small but growing.

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DAIRY NEWS JANUARY 19, 2021

14 // OPINION RUMINATING

EDITORIAL

Dairy’s star billing

MILKING IT... Cheers, Coon’s history!

Sanctuary closes

Fresh for 60 days

AUSTRALIA’S ‘COON Cheese’ has been renamed after critics called the brand name racist. Saputo Dairy Australia says, from July, the dairy products will be known as Cheer Cheese. The change follows a “careful and diligent” review to ensure the brand is “aligning with current attitudes and perspectives”, the Canadianowned company says. It was originally named ‘Coon’ after American cheese pioneer Edward William Coon, who died in 1934, ABC reports. The brand name is also a racial slur for people with dark skin. Saputo says the new name was chosen because it reflects happiness.

A NORTH Canterbury cow sanctuary that was investigated by Ministry of Primary Industries for alleged animal welfare breaches has folded. ‘Til the Cows Come Home’ opened its doors near Cust in July 2017, to provide a ‘safe haven’ for rescued farm animals. Owner Jasmine Hubber, 20, at one stage had about 200 cows across six grazing sites. Many of them were sick or injured bobby calves or retired dairy cows, which were saved from slaughter. In September 2020, MPI staff visited the sanctuary following a call from a member of the public who was concerned about the condition of the cattle. Inspectors found about 200 cows across multiple properties, with large numbers “in poor condition”. Five malnourished animals had to be put down and dozens were re-homed.

A QUEENSLAND-BASED company is set to release its own production of milk this year that stays fresh for at least 60 days. Naturo, a food-technology company on the Sunshine Coast, is expected to unveil its unpasteurised milk at the end of next month. The milk, created by Naturo chief executive Jeff Hastings, uses the haelen method which involves cooling the liquid down - rather than heating it up - which is normally the case during pasteurisation. Naturo’s milk has even caught the eye of the Australian federal government which has given the company a A$1 million grant. Milk trials were on track with the product expected to be ready for domestic sale at the end of February. It’s expected that once it’s up and running, up to ten million litres of the milk will be produced each year, and will be shipped around Asia.

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Dung paint INDIA NOW has its own cow dung paint, a worldfirst. The ‘Khadi Prakritik Paint’ is a first-of-its-kind product which is being touted as eco-friendly and non-toxic, with anti-fungal and anti-bacterial properties. With actual cow dung as its main ingredient, the paint is said to be cost-effective and also odourless. The Khadi and Village Industries Commission, which launched the paint , says it is free from heavy metals like lead, mercury, chromium, arsenic, and cadmium. This technology will increase the consumption of cow dung as a raw material for eco-friendly products and will generate additional revenue to farmers- about $500 annually from each animal.

THE STATISTICS speak for themselves; the dairy industry remains the country’s star performer. Recent Sense Partners analysis, for DairyNZ and Dairy Companies of New Zealand (DCANZ), shows the sector delivering $20 billion in export value to the year ending September 2020. There is no doubt that dealing with the uncertainty and the ‘new world’ that Covid-19 has delivered has been a struggle. However, the industry has been one bright spot in this crisis. Dairy accounted for almost 25c of every export dollar New Zealand generated in the past year. The sector employs 50,000 people and generated $3.4 billion in wages in 2019. Dairy jobs are well paying, with median wages for both dairy processing and farming above those of comparable industries. The median wage for dairy farm workers ($52,700) is 9% higher than the median average for all agriculture jobs. Exporting success has supported the dairy sector to continue growing its economic contribution, delivering $10.2 billion in value add to the economy in the year ending March 2020. While a significant proportion of export value comes from milk powder products, almost half comes from other products. Across NZ, dairy contributes more than $100 million to gross domestic product (GDP) in all but two regions. The largest GDP contributions are nearly $2 billion in Canterbury and $2.5 billion in Waikato. Dairy contributes at least $50 million in wages in 20 districts, and more than $100 million in wages in half of those. Dairy makes up one third of all jobs in Waimate (South Canterbury), and more than one in every four jobs in south Taranaki and Otorohanga, also accounting for one of five jobs in Southland and more than one in 10 jobs in the Westland, Matamata-Piako, South Waikato, Clutha, Tararua and Ashburton districts. Last season’s final payout of $7.14/kgMS and a 5c dividend from Fonterra means most farmers ended the season in the black. This season’s forecast payout is hovering over $7/kgMS and with almost 70% of the season’s product already contracted to global buyers, another profitable year looms for many farmers. But as this month’s ANZ Research says the recent focus on Covid-19 has highlighted the virtues of our primary industries but we can’t rest on our laurels. We need to continue planning ahead to ensure our farm businesses are in a good position to withstand future financial shocks and also position our industry to take advantage of the growing focus on sustainability. By all accounts the dairy industry is doing just that. The results speak for themselves.

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DAIRY NEWS JANUARY 19, 2021

OPINION // 15

Fonterra’s core advantage SIMON COUPER

THIS IS the fourth of five

articles aiming to explore dairy industry strategies in NZ and provide a perspective for viewing Fonterra’s strategy. The purpose of this article is to understand what a core strategic advantage is, why it is important and what Fonterra’s core strategic advantage(s) may be. What is a core strategic advantage? Put simply, a core strategic advantage is the aspect or speciality that enables a firm to compete with or outperform its competitors. This may take the form of a high tech value adding process, human capabilities, physical assets that deliver scale and/or complexity that is hard to emulate. Other ways to gain a strategic advantage are to create a point of difference delivered by branding, legal protection or geographic positioning. Over the last three articles we have identified the basic strategic positions of three different firms. This builds a picture of what their core strategic advantage may be. For example OCD as a “Cost Leader”, has the core strategic advantage of being operationally excellent. OCD can minimise its processing costs while maintaining considerable product mix optionality. Leading with “Customer Intimacy,” Tatua maximises value with a high degree of technical specification of ingredient products and close working relationships with its customers. As a “Product Leader” a2’s strength is its patents and the clever supplier agreements which allow it to control the supply of a2 going to market. Another way of understanding the core strategic advantage of a firm is to assess its position on the value chain. In their recent report to the Productivity Commission, TDB Advisory (a consultancy) outlines the position of all major dairy firms in NZ in terms of the value chain.

They make the point that moving up the value chain can destroy value if costs increase more than revenues.* This suggests that firms who stick to their core strategic advantage should have a better chance of staying competitive. The idea of moving from a commodity return to a value added return that “smoothes payout” is a long time embedded in the NZ dairy psyche. But was it ever realistic? The many attempts Fonterra has embarked upon to “move up the value chain” or build a vertically integrated model have mostly not succeeded. So while over ninety percent of our farmer returns have always come from the milk price, rather than being valued as an advantage, this aspect of the business has been used as a backstop. So where should we look to find Fonterra’s competitive edge? Given the fall of Fonterra’s share of NZ milk from 96% to 81% and a Return on Capital Employed (ROCE) below most of our NZ competitors*, it would be misguided when looking for a strategic advantage to point to any one aspect of our cooperative and simply cry “Eureka!”. In my view there are three questions we need to ask of our cooperative simultaneously. What is our core business? What is it we think we are good at? What are we not good at? Fonterra’s core business is collecting farmers’ raw milk, then processing and delivering it to customers in the market as an ingredient, commodity or food service product with the aim of generating the best milk price possible. With regard to what we think we are good at, the best insight I have gathered from experienced dairy industry participants pointed to Fonterra’s strategic advantage as being: ingredients, innovation (product and process), logistics and its farmers. This suggests that with Fonterra’s size we have the advantage of being

able to supply globally across multiple products to customers (like Nestle) who prefer to deal with bigger suppliers. Like any business, anything that repeatedly loses money, decreases in value or continuously achieves returns below the firm’s weighted average

Simon Couper

cost of capital, indicates things Fonterra is not (currently) good at. The observations we have made of three other firms clearly suggests that there are distinct defensible strategic positions that can return value. It is also clear that these firms understand

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their core strategic advantage that delivers that position for them. Identifying Fonterra’s core strategic advantage or required strategic advantage is the key element for the strategy going forward. Therefore understanding Fonterra’s core strategic advantage is

the first step in discussing any changes to the capital structure. In the next issue we will look at what a good strategy should contain. *www.tdb.co.nz • Simon Couper is a Waipu farmer and a former chairman of Fonterra Shareholders Council

DAIRY NEWS JANUARY 19, 2021

16 // AGRIBUSINESS

Cow toilet collects gold MARK DANIEL markd@ruralnews.co.nz

WHILE WE are used to hearing

about the latest hi-tech tractors or machines winning medals for technical innovation, it seems that in the livestock sector, designers and manufacturers are also taking awards, often for developing solutions for more basic problems. That’s the case for a Cow Toilet, which took out the only Gold Award at the 2021 Digital Eurotier Livestock Machinery Event. Featuring a suspended bowl that collects the 15 to 20 litres of urine produced by a typical housed European cow every day, the toilet, designed by Dutch firm Handkamp, separates manure from urine at source to help reduce ammonia emissions. The collection system is integrated into the rear section of a specifically designed feeding station. In operation, the front of the unit stimulates a specific nerve bundle

just about the cow’s udder, causing the animal to spontaneously urinate. The resultant liquid is filtered through a sieve, then drained via a suction line to storage. Tests on local farms show that the system collects around 50% of the daily urine production, which given there are 1.5 million dairy cows in the Netherlands means there is a potential to collect 15 million litres of urine. The manufacturer is already looking for uses for the liquid, with tests already underway to assess its viability as a fertiliser on local fruit farms. There is also research being done on its viability as a fuel or for the generation of electricity. Back in the dairy barn, additional benefits of separation are said to be cleaner floors, improved hoof health and better air quality. Still around 18 months away from commercial availability, the €20,000 units, each capable of dealing with 25 cows, are also being trialled for possible integration into robotic milking systems.

Designed by Dutch firm Handkamp, the Cow Toilet collects 15 to 20 litres of urine produced daily by a typical housed European cow.

DAIRY AWARDS ATTRACT 366 ENTRIES THE NEW Zealand Dairy Industry Awards has received 366 entries for its 2021 competition. Awards general manager Robin Congdon says more entries were received than last year and notably more Share Farmer of the Year entries, which are traditionally harder to come by. Waikato came out on top with 66 entries across all three categories, then Canterbury/North Otago with 54

entries, followed by Southland/Otago achieving 39 entries. The national awards night will be held in Hamilton in May. Meanwhile nominations to a national award that flushes out dairy farmers promoting sustainable dairying are open until March 20th. The Fonterra Responsible Dairying Award was introduced by NZDIA to recognise those dairy farmers who are respected by their farming peers and

their community for their attitude and role in sustainable dairying. Entry for this award is by nomination only via dairyindustryawards.co.nz. Congdon says that is important to showcase the good work farmers are doing within the industry as it does not always get the exposure it deserves. “We have excellent, experienced dairy farmers creating and working on wonderful projects that have a posi-

Memorial Trophy. The Dawsons impressed the panel of judges with their genuine commitment and passion. Nomination forms are available at dairyindustryawards.co.nz, with entries closing March 20th. From those nominations, three finalists will be selected and interviewed by a panel of judges.

tive effect on the environment.” “We want to hear about the people who are farming responsibly, both environmentally and socially, and showcasing excellence on a daily basis. This is a chance for people to nominate their neighbour, their employer or someone in their community.” Hawkes Bay/Wairarapa farmers Nick and Nicky Dawson won the 2020 Fonterra Responsible Dairying Award and received the John Wilson

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DAIRY NEWS JANUARY 19, 2021

MANAGEMENT // 17

Moves to improve winter grazing requirements DAIRYNZ SAYS it sup-

ports recommendations to the Government from an advisory group looking to improve winter grazing rules for farmers and achieve better environmental outcomes. The Southland Advisory Group was formed after concern from farmers and sector organisations that a number of new winter grazing rules were impractical, challenging to meet and costly for councils to implement. The rules are part of the Government’s National Environmental Standard for Freshwater. “While we support the intent of the Government’s regulations, which is to protect the environ-

ment, the rules need to be fair, reasonable and achievable,” said DairyNZ strategy and investment leader Dr David Burger. “We are pleased to have worked with farmers and sector organisations to develop clear and practical recommendations for on-farm wintering actions which will lead to better outcomes for the environment and local communities.” The advisory group, made up of two farmer representatives and representatives from DairyNZ, Beef+Lamb New Zealand, Environment Southland, Federated Farmers and Fish & Game, was formed after farmers expressed their concerns about the

DairyNZ welcomes moves to improve winter grazing rules.

regulations, wanting fair and pragmatic solutions. “This collaborative approach is the way forward for developing regional council plans as the National Environmental Standard for Freshwater takes effect over

the next few years,” says Burger. “We know farmers have made significant strides in improving their wintering planning and care for the environment and animals, and acknowledge there’s more to do –

we are on the journey.” The group is unanimous in its recommendations, which were presented last month to Minister for the Environment David Parker and Minister of Agriculture Damien O’Connor.

Taking onboard the areas of concern from farmers, DairyNZ and the other advisory group members have recommended to the Government these changes be made: The group agrees that farm plans are the future for managing freshwater and whilst these are developed and rolled out, the group recommends work commence immediately on a step that can be used in the interim – an Intensive Winter Grazing module. This would enable farmers to identify the specific risks on their property and identify the good management practices they implement to mitigate the impacts on freshwater.

The pugging and resowing date conditions should be removed. The group have also recommended a new measure which focuses on the management of critical source areas. Pugging and resowing rules would lead to perverse outcomes, but managing critical source areas would lead to improved environmental health. The recommendation suggests these areas are protected within intensively grazed areas via buffers. Until the Government has considered the recommendations and implemented any changes, farmers will still need to plan to meet freshwater requirements.

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18 // MANAGEMENT

Growing a family legacy WHAT STARTED with

planting some acacia trees 25 years ago has become a multi-generational passion for the Hunt family in Te Awamutu. The Hunts are taking the long view on shade planting and sustainability. “Grandpa was against it at the time; grandma claims she suggested it,” says Sophia Hunt, whose grandparents were the original owners of Orakau Dairy in Te Awamutu, Waikato. Sophia now helps farm Orakau – a 350-cow operation split into two herds – alongside her parents Rose and Vernon, and sister Margie. What grandma and grandpa were disputing was Rose and Vernon shutting up a 1.5ha paddock with some mature acacias about 25 years ago, allowing the self-seeded acacias to grow, instead of being nibbled off each time cows grazed the paddock. The farm had a few stands of mature macrocarpas at the time, planted for timber and used by cows for shade and shelter. But the macrocarpas needed to be milled, and there was concern about the trees causing slips. So, Rose and Vernon decided to close the acacia paddock and create a new shade and shelter

area. “The paddock was closed to stock for about seven years,” says Rose. “We’d intended to shut it for only five years, but the young trees needed a little longer to establish.” By shutting the paddock, the seedlings were able to grow into tall trees, creating a shady glade. Rose and Vernon also planted pin oaks, meaning there are now plenty of trees along races, including ongoing new plantings of pin oaks, kahikatea, blue gum and walnut. It’s fitting that trees are so prominent in their approach because the name of the area, Orakau, means ‘place of trees’. “But you can’t do it all at once,” says Rose, “so we’re fortunate this farm has been in the family this long. And even if we don’t reap the benefits, the next generation will.” And Sophia is continuing the tradition. “I buy a bunch of trees and think, ‘Where am I going to plant them?’ We’re lucky to have soil that doesn’t allow trees to blow over when it’s windy. “We still need more trees, but I’m mindful of gateways, and getting in and out, as well as where roots could potentially block drains.” Sophia’s latest tree endeavour is to bag up little seedlings growing

Under the watchful eye of Jack, Sophia Hunt prepares oak seedlings for planting on the farm that’s been in her family for more than 100 years.

Hot tips for cool cows SOPHIA’S TIPS for other farmers wanting to keep their cows comfortable in summer: ■■ Make water available in the race and allow cows time to drink before leaving the paddock – don’t rush them.

under the mature oaks, and she’ll plant them elsewhere on the farm in a couple of years’ time. She hopes starting with seedlings that haven’t had the tap root cut, and protecting them as they grow, will produce better shade trees than purchasing large saplings. These are just some of the many initiatives taken at Orakau to keep their cows cool as part of their commitment to animal care on-farm.

“Our motivation is animal wellbeing for the most part,” says Sophia. “We use the acacias on hot days for the second herd because it’s on their way to the dairy. “We try to keep the cows close to the shed during the day and use the far paddocks at night, so cows aren’t using up too much energy during the hotter time of the day. “It’s uncomfortable for us to see them panting. The flow-on effects of

planting trees are happier cows that move a little easier, as they can manage the heat.” The Hunts allow their cows to move at a ‘glacial pace’ and to take as long as they need drinking before leaving the paddock. There is a trough at the exit from the dairy, and four big troughs on the races, so cows typically have access to at least two troughs on the way to and from milking.

■■

Manage paddock selection to avoid long walks in the heat of the day.

■■

Misting fans make a huge difference for the cows, as well as helping with flies and making cups easier to clean.

■■

Try to plant a few trees every year. When planted in the right place at the right time of year, and fenced for protection, you should have a good strike rate.

This ensures the animals’ water intake is optimum. The Hunts describe their acacia glade as a “triple whammy”: it provides shade, feeds the bees, and fixes nitrogen “We all know cows can bully each other in the paddock, so this gives them all a chance to drink,” says Sophia. All troughs are cleaned every two years. There have been sprinklers over the yard for 27 years to mitigate heat. “They

are very effective. I’m not sure if all the cows like them, but we leave enough space so they can avoid the sprinklers if they want to,” says Sophia. Sophia would like to make changes to the milking routine in the summer, but for staffing reasons, hasn’t changed the routine yet. “I would like to try milking earlier in the morning, with the second milking at midday, and put a shade cloth on the feed pad and the back of the yard. I’m very aware of the heat radiating from the concrete onto the cows.”

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DAIRY NEWS JANUARY 19, 2021

ANIMAL HEALTH // 19

Family farm comes full circle with Jersey genetics FOUR GENERATIONS have farmed

on John Totty’s 465-hectare property at Staveley, mid-Canterbury with Jersey cows featuring prominently throughout the years. The Staveley Jerseys stud was founded by John’s grandfather, a passionate Jersey breeder, in the early 1960s. Back then the farm milked 150 cows and ran dairy replacements, sheep, beef, and crop. When John’s parents took over the business the farm was expanded, purchasing a neighbouring property in 1995 which was converted the following year. A Friesian herd was purchased and for 20 years the property supported a 750-cow herd while continuing to run young stock. In 2015 John purchased the dry-land farm, which today milks 1000 cows across two sheds with young stock grazed off-farm. Seven years ago, the farm was 50:50 Jersey and Friesian genetics, today the farm is about 70% Jersey genetics and breeding back towards a full Jersey herd. John says the transition to Jerseys has been an easy decision. “Every season we have increased the Jersey content of the herd and managed to hold or increase per cow production without any farm system changes. This season we have increased production by 15% while only increasing cow numbers by 10%.” John says the ultimate goal is to achieve efficient, profitable production. “We are aiming to get to the point where we produce a kilogram of milksolids for every kilogram of liveweight, while keeping farm working expenses under $4.” “Seven years ago, with a 50% Friesian herd, we were doing 265,000kgMS, now we are achieving 385,000kgMS with a predominantly Jersey herd, at a lower cost. As a bonus, our Fonterra

“It has really simplified the operation. The top herd is mated to AB for six weeks using Jersey sires followed by four weeks of Jersey bulls and two weeks of short gestation dairy.”

John Totty says the transition to Jerseys has been an easy decision.

cheque is always ahead of the company average too.” The flexibility of Jersey’s was reinforced in John’s first year on the farm when a severe drought forced the herd on to once-a-day (OAD) in December. “The Jerseys powered through but the Friesians sulked and had to go back on twice a day when the drought broke to get their appetites up. “Jersey’s will hold production through tough times, and recover a lot quicker in Autumn.” Up until this season the farm had previously split the herds by breed but this year for the first time the herds have been split by BW. “Mixed herds didn’t work well with big Friesians. Over time we have achieved more consistency in size through the use of jersey artificial breeding (AB) sires and the sale or culling of higher Friesian content animals, and that has enabled us to split herds

by BW instead. “It has really simplified the operation. The top herd is mated to AB for six weeks using Jersey sires followed by four weeks of Jersey bulls and two weeks of short gestation dairy. Whereas the jersey bulls go straight out with the lower BW herd meaning we are only doing AB through one shed.” John says the flexibility of the Jersey breed also includes the adaptability to variable milking intervals. “One of our business goals was to move to a 10 in 7 system – that is 10 milkings in 7 days, a variation of 16-hour milkings but with more convenient milking times for staff. This season is our first employing the 10 in 7 system full season.” “Jerseys have around a 30-hour holding capacity versus a Friesian at around 20-hours, and this is a big advantage when using variable milking intervals.”

In John’s business, the Jersey advantage extends beyond just efficiency and profitability to management traits like calving ease, animal health, and mastitis. “Jersey’s have tremendous calving ease – we averaged one assisted calving per week this season. We also have very few down cows, and often they are our older F16 girls that are more prone to metabolic issues. “This season we had just four cases of clinical mastitis in August and thirty cases total over calving. Our somatic cell count is currently sitting around 100,000. “All of these factors contribute to reduced animal health costs, reduced labour costs, and more manageable hours for staff.” Jersey’s have also been key to cash flow in the business, with a ready market in the South Island for surplus stock.

“There is a good market for Jersey bulls with everyone using them over their heifers due to the superior calving ease. We also sell our young empty cows as carryovers, as well as our lower production worth (PW) animals, bringing through higher breeding worth (BW) replacements that better meet our herd goals. “We’ve even had instances where people have come to look at our surplus Friesian or crossbred stock and ended up buying our surplus Jerseys because of their breeding worth, type and proven efficiency.” The Jersey cow is also gaining a growing reputation for its lower environmental footprint. In the South Island where wintering practices have come under the spotlight, a lighter cow could be beneficial. “In our business the environmental picture is becoming more and more important, particularly around pugging and winter grazing. We always try to have an eye to the future and a lighter cow that has less impact on the soil structure could be critical going forward.” It’s that foresight that has seen the business go from strength to strength and build on the foundations set over the past four generations.

DAIRY NEWS JANUARY 19, 2021

20 // FARM DAIRIES

Kiwi rotary systems star in Chinese mega dairies ANOTHER NEW Zealand company has had success exporting dairy technology to China. Waikato Milking Systems is mid-way through another major project installing four 80-bail Orbit Concrete Rotary parlours for New Hope Animal Husbandry, which has its head office in Chengdu, central China. The four milking plants will be installed across three farms and collectively they can milk up to 48,000 cows a day. Each plant has been designed to the same specifications and capable of operating up to 21 hours per day, if required, seven days a week. Waikato Milking Systems China Manager David Morris says three plants had been installed in 2020, the first was commissioned in July 2020 and the second and third will be commissioned in March 2021. The fourth will be installed and commissioned late in 2021. All four plants were designed and made at the Waikato Milking Systems manufacturing plant in Horotiu, north of Hamilton, and exported to

There is high demand for reliable, high performing milking technology as China continued to ramp up its herd sizes and milk production. Right: David Morris

China for installation during 2020. Data compiled by global business data platform Statista show China will have about 6.23 million dairy cows by 2024. It is the fifth largest producer of cow milk in the world, New Zealand is seventh. Morris says there is high demand for reliable, high performing milking technology as China con-

tinued to ramp up its herd sizes and milk production. All of the plants Waikato Milking Systems exported to China featured heavy duty bail work for handling large numbers of bigger animals, for durability and longevity. Two of the rotary systems will work side-byside at New Hope Animal Husbandry’s farm in Ningxia, Northwest of

Xian, 1000 kilometres north of Chengdu. “The farm at Ningxia has about 10,000 animals including dry cows and replacements,” Morris says. “The farm has two milking herds, each with a maximum of 3000 cows. “Each of the rotary systems will have throughput of 520 cows/ hour, and milking will be three times per day,

increasing to four times later on. “We’re looking at 16 or 21 hours milking time per day.” The other two Obit rotary plants will be milking cows at New Hope Animal Husbandry’s farms near Jinchang, in the Gansu province, bordering Inner Mongolia to the north of China. They will operate under a similar pro-

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gramme to the rotary plants at Ningxia, each milking about 520 cows per hour, three times a day moving up to four times a day later on. “We expect these systems to be operating 16 or 21 hours per day also, depending on how many cows the operator wants to put through.” Morris says installing the four milking plants had been a challenge because of the extra precautions prompted by Covid19. But installation teams in China worked hard and long days to build each of the plants and assemble the components in about three weeks. “Since 2012 Waikato Milking Systems has installed over 40 cow rotary parlours in China, including 15 which were 80-bail systems and most

are now milking four times per day,” David said. “The market in China is aware of the quality of New Zealand-made dairy products, they know we can make superior milking systems that stand the test of time.” @dairy_news facebook.com/dairynews

DAIRY NEWS JANUARY 19, 2021

FARM DAIRIES // 21

Dairy conversion – Otaki style Near the Horowhenua town of Otaki, dairy conversion has taken on a whole new meaning. It’s not a case of converting sheep and beef farms to dairy farms, rather it’s a case of just converting old dairy sheds to country style tourist accommodation. Reporter Peter Burke visited two such conversions by two pretty special and creative women. THE TWO conversions are complementary – one offers an experience on a commercial dairy farm while the other has a focus on horses. Stacy Faith and her husband Andrew milk 360 cows once a day to supply Fonterra. They separately milk 20 more to supply A2 milk for the vending machine they have installed at their farm gate. It’s a farm that has long been in the Faith family. The old dairy shed dates back to the 1950s and ‘60s and Andrew Faith can’t remember his father even using this shed. It seems it was a walk through shed and about five cows could be milked at a time using machines. At that stage the herd comprised about 60 cows. Stacy says the idea of doing something with the old disused dairy shed came when she and her son went to Hamilton to watch the Phoenix football team play. “About three years ago, we were on our way home and we picked up a hitchhiker who was a woofer from the US and he told us about the fact that he was travelling around and staying in various places and working and needed accommodation. I suddenly remembered that we had this old cow shed doing nothing at all and thought that this could

Stacy Faith

From the outside it still looks like a dairy shed except it is painted white with black cow-like symbols.

be re-purposed. The main reason was to have somewhere for the woofers to stay, because I had three kids at home and the kids didn’t really want anyone else in our home, so the idea was why not have them live up in a converted cow shed,” she says. Stacy says there was no specific plan for the conversion from old shed to new accommodation, but with the help of builders the project came together and was completed in about nine months. She says ideally she would have liked to have had two bedrooms, but they would be small so they opted for a one bedroom that can accommodate four people. “So it’s like when people go on holiday, they all cram into a tent together and everyone

seems to be happy,” she says. From the outside it still looks like a dairy shed except it is painted white with black cowlike symbols. The yards are in front of the kitchen and are still used occasionally for dealing with young stock. Inside it is spick and span and is dairy-farm themed with bar stools made from old tractor seats, towel rails made from disused parts of a water trough. The toilet and shower are in the area where the milk vat used to stand and cow mats, not cow pats are very much in evidence. Many of the materials in the shed are recycled and add to the character of the place. From the kitchen and lounge you can see the cows pass by each morning on their way to be

milked. You can also see the Tararua ranges to the east and Kapiti Island in the west. It’s a beautiful rural setting. Overall the cost of the conversion was about $50,000. Stacy says the location of their accommodation suits travellers going to and coming off the Cook Strait Ferries as it just about an hour from Wellington. Before Covid, a large number of the guests were from overseas. “Now…about 80% are Kiwis and about 20% from overseas. We used to get people from all over the world – we even had a couple from Latvia who were beef farmers,” she says. For visitors there are options as to what they can do, ranging from just sitting and watching the farming operation to

OF HORSES AND COWS JUST TWO kilometres south of Stacy Faith, Mandy Robinson has also converted an old dairy shed into a B&B on a farm that used to belong Brendon Faith – Andrew’s brother. She bought 7ha of land in 2000 where she grazes her 11 horses, and which offers grazing for about another 10. The site is beautiful with views of Kapiti Island and the Tararua Ranges. In her early life, Mandy Robinson worked overseas and was purser on a cruise ship, but it was her love of horses that brought her back to NZ where for the last 30 years she’s been

running a successful equestrian operation. She used to have the horses at Queen Elizabeth Park at Paekakariki but moved them to the Te Horo site a couple of years ago. So while the old dairy shed provides the accommodation, it’s the horses that are the attraction for visitors to the property. In 2016, work started on converting the dairy shed to a B&B. It was no small challenge with the shed just a shell with rusting pipes and the like and something of an eyesore. “It was the location that inspired me to renovate the shed

because I thought other people should enjoy this incredible view, the sunshine and privacy, which is unique. I very much enjoyed the process of design, build and fitting it out. I enjoyed meeting the people who worked on the project and all those subsequently that have come to stay,” she says. The completed accommodation consists of a two bedroom, self contained unit that can sleep five people and is designed for the disabled. As well there is small studio unit which is located where the vat used to be in the original shed and can sleep two people.

actively participating in it. “Near to the dairy shed there is a paddock where we put our cows that are about to calve and people can see the calves being born. They can also wander down to sheds and see me feeding the calves. There is an option, which costs an extra $50, where they can come down to the shed and help milk the cows and fully participate in the morning milking. I charge for this because they need

to be equipped with overalls and gumboots,” she says. Those staying at the shed get a real taste of country, with milk, eggs and bacon all from the farm. Stacy supplies their A2 milk, but also regular milk, recognising that not everyone can drink raw milk. All the guests have to do is cook their own breakfast. Running this small B&B is just one of Stacy’s tasks. She rears the calves,

is the backup milker, looks after the vending machine and off-farm is a very busy swimming instructor. But she enjoys dealing with visitors who are mainly townies who ask the usual questions about the cows and farm life generally “I am not out to make millions, but I want people to experience farm life and put farmers in a positive light and change people’s attitudes,” she says.

DAIRY NEWS JANUARY 19, 2021

22 // MACHINERY & PRODUCTS

MERLO GOES GREENER OBVIOUSLY NOT wishing to get left

The new RTV520 comes with all the much-loved and unique features of the RTV500 along with a host of new ones.

New Kubota UTV raises the bar MARK DANIEL markd@ruralnews.co.nz

KUBOTA NEW Zealand’s new

RTV520 claims to set a higher standard in performance and comfort for drivers. It reportedly builds on the proven RTV500, but sporting a bold new look, improved suspension and increased engine displacement. Kubota New Zealand product

manager for agriculture Mark Basile said the new RTV520 comes with all the much-loved and unique features of the RTV500 along with a host of new ones. A new water-cooled two-cylinder engine increases in power from 15.8 to 17.4 hp, delivering an increase in towing capacity to 530kg, while keeping noise levels in check at 83dBA. The redesigned hood features a new front grille, and improved headlight design, while updated graphics on

the cargo tray, improve the look of the RTV520. A major upgrade centred around suspension performance, sees a new five link rear system increases suspension travel by 30% and 20% at the rear and front respectively, delivering a smoother, more comfortable ride, particularly over rough terrain. The Variable Hydrostatic Transmission (VHT) provides smooth and powerful acceleration in all types of terrain, working with smooth throttle

control to deliver great traction and increased manoeuvrability. “For those looking to optimise, a range of accessories specific to the RTV520 are available including a plastic canopy and windscreen for the cab, new black front guard, black alloy wheel assemblies and a new glove box which mounts under the steering wheel,” says Basile. www.kubota.co.nz @dairy_news facebook.com/dairynews

2 6

behind by some of its competitors, Italian manufacturer Merlo is planning to add to its green-liveried telehandler range- with another set of green credentials in the shape of an all-new, all-electric batterypowered Merlo e-Worker model. The new e-Worker has a 2500kg capacity, 4.8m maximum lift height and a 60hp power output which, at an average 6kW/h consumption, translates into a working span of eight hours. The new model will be built in two versions, a two-wheel drive 25.5-60 and the four-wheel drive 25.5-90. Turning to how it works, the machine’s battery powers the hydraulic pump for arm movements while motors power its traction and movement Suitable for on-road and off-road applications, the manufacturer claims that the e-Worker has a “distinct edge when working in enclosed environments” such as herd- homes, grain stores, stables or environments where low noise and zero emissions are a requirement. The machine meets all active regulations for frontal tipping prevention, offers maximum driver comfort and visibility thanks to its easy entry 785mm wide cab, with its compact stance offering exceptional maneuverability and handling in tight spaces. Meanwhile, the Patriarch of Merlo is showing no signs of slowing down yet, moreover promising a raft of “new innovations” in the coming months. Founder of the telehandler manufacturing company, Italian engineer Amilcare Merlo, was recently conferred with an honorary degree in Mechanical Engineering by the Polytechnic of Turin in a ceremony held to coincide with his 86th birthday. Speaking after the event, the octogenarian inventor talked about “incredible things” as he forecasted a future of “new inventions”, while also advising the students present, to whom he dedicated his degree, to “dare all the possibilities” and cautioning that “those who don’t dare never achieve anything”.

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MACHINERY & PRODUCTS // 23

Kuhn bolsters mower range KUHN HAS bolstered its mower conditioner range with the addition of two rear mounted/ vertical folding models with a 3.10m working width. The FC 3115 D features the gearbox powered Digidry steel pivoting finger rotor, with a 540mm diameter. Drying is uniform over a wide width, a benefit in heavier or longer forage, while the user can also choose to produce a swath of varying width. A slow rotor

speed is said to be ideal for conditioning delicate forages. The FC 3115 R is equipped with a Squareflex roller conditioner, using large diameter, exclusively profiled roll-

ers, featuring a standard double drive synchronized for life. This design ensures an effective conditioning of any forages, with a high output and minimal main-

tenance. Both models are fitted with the new Optidisc Elite cutter bar renowned

for its robustness and quality of cut in all conditions, zero maintenance and the fast-fit quick-release knife system.

The lift-control suspension offers a constant suspension for improved plant

cover protection coupled with a release system, to protect against obstacles. For farms located in hilly areas or with mediumsized tractors, an adaptable counterweight on the left side of the chassis is available as optional equipment to reduce imbalance in the tractor hitch. The mowing unit folds to 126° to achieve maximum compactness for transport and optimal weight balance on the tractor’s rear wheels.

BRINGING FLAT BATTERIES TO LIFE GIVEN THE absence of power

outlets in many remote buildings on New Zealand farms, there’s every chance of ending up with a flat battery when away from civilisation for an extended period. To counter that, Projecta has just released new personal solar chargers. The company says a Projecta PP15 solar charger would make a great back-up for those planning any time in the backblocks, with high country mustering being a case in point. Drawing power from its folding monocrystalline solar cells, the 15W charger features a builtin power bank, which can store

power from the sun and continue charging devices when night falls. USB-powered devices can be charged directly and simultaneously from the three available USB ports, with a total combined output of up to 2.4A (5V). The solar charger kit comes with corded loops and carabiners for versatile mounting to sheds and backpacks for ideal sun exposure, folding up neatly into an ultra-portable carry case when not in use. The PP15 is complemented by the PP10, a 10W model that directly charges portable devices without a power bank, both part

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of Projecta’s recently released COMPAC range of personal power devices, aimed at those wanting off-the-grid power for their portable devices, or a peace of mind power solution for emergencies. Also available, are a pair of power banks, PB5 and PB10, which offer USB-C fast charging and one of the smallest footprints relative to their large capacity (5,000mAh and 10,000mAh respectively). The lightweight and compact power banks are capable of charging 18W laptops, such as the MacBook Pro, plus a wide range of USB-powered devices.

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