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A game changer!
KISSUN sudeshk@ruralnews.co.nz
A GAME changer and a huge boost for farmer confidence.
That’s how Fonterra farmers describe the co-op’s 2024 annual results, a surprise additional 15c/ share dividend for farmers and unit holders and a 50c boost to this season’s farmgate milk price mid-point, bumping it up to $9/kgMS.
High input costs and soaring interest rates over the past few years pushed many farmers into the red.
Waikato sharemilker Matthew Zonderop says the latest results “are an absolute game changer for the farming community and NZ”.
“Those of us with overdrafts and high debts can finally see the light at the end of the tunnel and start to go back into the black which is a huge positive for farming as we have been under the pump for a few years
with high farm working expenses and interest costs,” Zonderop told Dairy News.
“This is a win-win for all New Zealand as the farmer can spend some of their money back into the rural communities which helps drive the NZ economy.”
Fonterra posted a net profit of $1.1 billion for the financial year ending July 31, 2024. The co-op’s final milk price for 2023-24 season is $7.83/kgMS, backed by a total dividend of 55c/share, providing a total cash payout to a fully shared up farmer of $8.38/kgMS.
For this season, Fonterra is forecasting a milk price mid-point of $9/ kgMS, the second highest milk price on record.
Federated Farmers dairy chair Richard McIntyre also points out that with the higher forecast milk price and higher advance rate, more money will be flowing back into the rural communities.
“This will mean a lot of money coming in to rural communities where it will bounce around multiple times and improve the bottom lines of rural businesses and the rural economy,” he told Dairy News
“It’s important to remember that a strong well performing Fonterra is good for all NZ dairy farmers, not just Fonterra suppliers. Because Fonterra is the benchmark that the other independent processors compete against.
“So, when Fonterra’s performing well, they must lift their performance to remain competitive and retain suppliers. This will give a huge boost to dairy farmer confidence.”
Fonterra Co-operative Council chair John Stevenson says the feedback from farmers is that they are “really happy” with the results.
He says the extra 15c/share dividend was unexpected. Fonterra had signalled a strong balance sheet to
farmer shareholders, but no one expected an extra dividend, he says.
However, Stevenson cautioned farmers that the final milk price for this season wouldn’t be known until this time next year.
“We urge farmers to keep a keen eye on volatility,” he says.
Asked if a $9 forecast milk price was a game changer for farmers, Fonterra chair Peter McBride noted that “while it helps the $9 is not the old $9”.
He points out that on farm costs are now a lot higher.
“If you look at fertiliser and labour costs on farm, all those input costs have been pretty much out of control in the last three years,” says “It’s starting to abate now, and farm margins are starting to improve again.
“I think it takes us a long way in the right direction. Farmers will be pleased with our advance rate and cash flow is very important.”
Co-op arrives in Wuhan. PG.06
Maintaining races. PG.12
Sexed semen for elite cows. PG.11
SUDESH
From left, Fonterra’s CFO Andrew Murray, CEO Miles Hurrell and chair Peter McBride announce the financial year 2024 results.
Children pamper calves, learn about farm life
SUDESH KISSUN
sudeshk@ruralnews.co.nz
FROM AUGUST each
year a special group of ‘helpers’ descend on Julie and Brian Pirie’s farm at Ngatea in the Hauraki Plains.
They are primary school students from nearby Ngatea Primary School and until midOctober their job is to choose a pet calf, clean them, brush them and lead them around a special course.
In mid-October the calves are washed and taken by the students to the annual calf club day at school, where the calves and students compete in an obstacle course. They are also judged on leading, rearing and conformation. Ribbons and prizes are
awarded to winning students.
Julie Pirie says between 10 and 15 students, who are from town and have no experience on a farm, come to the farm for five nights a week.
They end up competing with about 50 other students who come from farms around the district. The Piries milk 900 cows on a 274ha (eff) property.
Pirie had the idea to start her own calf club on farm around 15 years ago when she was serving as a trustee at the school.
“I heard that five students were pulled up for poor behaviour and their excuse was that they were bored and had nothing to do,” she told Dairy News
“I remember seeing an article about some-
one starting a calf club to keep students occupied. I thought, let’s bring them to our farm.”
She says the experience has been rewarding and she believes that
the programme has been making a difference to the students.
“We’ve had children from disadvantaged backgrounds coming here, being given an opportu-
nity to occupy themselves with an activity and then getting rewarded with ribbons on calf club days for their efforts in looking after the calves.
“It is boosting their
self-esteem. For example, one girl feared calves when she first came out here, now she’s right into it.”
Calf clubs in New Zealand have been around
Future looks competitive – McBride
FONTERRA CHAIR Peter McBride warns that the future looks increasingly competitive – both in New Zealand and internationally.
In the co-op’s annual report released last week, McBride noted that while the co-op’s strong foundations gave the board great confidence, it must continue as a strong co-op of scale to be successful.
McBride pointed out that Fonterra’s full year NZ milk collections in FY24 were 1.47 billion kgMS, down from 1.48b kgMS in FY23.
“That is consistent with the trend in New Zealand milk volumes that we expect to continue for the foreseeable future,” he says.
He pointed out that the co-op’s scale is one of its greatest strengths and warned that there would be a significant impact on milk prices if Fonterra lost its scale and the cost efficiencies that come with it.
“At the moment, our milk retention teams are competing with one arm tied behind their backs,” says McBride.
“The co-op needs to think about milk retention differently and be open to giving the team more tools to support win backs and retention.
“It’s in our interests to maintain a strong co-op of scale and we look forward to continuing these conversations within the co-op as we close out the calendar year.”
He says the co-op is in good heart and will be able to execute on strategy in FY25 and beyond.
“Our consistent underlying financial performance gives the board the
confidence to announce a final dividend of 25 cents, which combined with the interim dividend of 15 cents paid earlier in the year, which is at the top end of our payout ratio of 40-60% of net earnings.
“In recognition of the co-op’s capital management and continued balance sheet strength, for the 2024 financial year we are also pleased to pay an additional dividend of 15c/ share.”
McBride noted that the co-op had made further improvements to the
for over 100 years. The earliest recording of a calf club event was in 1911 when the Boys and Girls Agricultural Group began in Otago. Pirie says the natural partnership of children and young animals was encouraged, as farmers recognised the benefits of children being responsible for training and caring for a young animal.
In regions around the country, the enthusiasm of farming parents, combined with local schools, gave life to calf clubs. Today, many dairy farmers and their children look back with affection at the time they spent selecting, feeding and training calves for calf club and the events continue to be held each year in many rural schools and communities across New Zealand.
FY25 schedule, increasing the advance rate - with the December paid January payment now 85%, up from 75%, and stepping up across the rest of the season.
“The objective of the uplift in advance rate schedule is to deliver cash back to farmers as quickly as possible.
“Any dividend decisions are still at the discretion of the board and will be made in-line with our desire to maintain Fonterra’s “A” band credit rating.”
Ngatea farmer, Julie Pirie says students, who are from town and have no experience on a farm, come to the farm for five nights a week during the calving season.
Maize grain shortage looming?
IF THERE is a maize grain shortage next season, farmers will have to look for an alternative and that may not be easy.
That’s the view of Federated Farmers dairy chair and Horowhenua farmer, Richard McIntyre. He was responding to fears about the uncertainty of having sufficient maize grain grown and available in the North Island in 2025.
McIntyre told Dairy News that right now he’s feeding out maize grain to his cows, which he normally does in the winter and spring.
“Famers rely on having a consistent and regular supply of supplementary
feed and if they suddenly don’t have it, they must find an alternative which is not that easy in certain parts of the country. So, this is certainly a big issue for dairy farmers and has consequences including cost implication,” he says.
Fears of a shortage of maize grain stems from the fact that most of it is grown in the North Island and must be dried to a moisture level of around 14% which has to be done at large drying facilities off-farm. The crux of the matter is that gas is used for drying the grain and there is uncertainty about whether there will be gas available and if there is – how much it will cost.
So serious is the situation that the head of
Federated Farmers arable group, David Birkett, has already called a meeting of all the interested parties – farmers, seed companies, grain merchants and rural contractors together to discuss what
to do next. Because of the uncertainty, now seed companies are holding off giving contracts to farmers to grow grain maize and time is running out for growers to make plans for 2025.
“At this stage no-one knows what the position will be next year and that is creating huge uncertainty for potential maize grain growers,” he says.
In the North Island, maize grain is usually harvested in April, May and June and hence is damp when harvested. Normally the companies that put out contracts for farmers to grow the grain know in advance the cost of drying the grain and include that in the contract price they offer prior to planting. But few if any contracts have been offered so far.
Birkett says given that the past season for maize was something of a disaster, most are apprehensive about what might happen in 2025. He says it’s highly unlikely a
farmer will grow a maize grain crop without a contract and he’s predicting maize grain supply will be down next year. But he adds the maize silage crop will remain about the same as it.
“We have also briefed central government on the issue, but have had little response and it would appear that they taking the view that this is a case of the market doing what it does,” he says.
Finally, Birkett says the issue is a serious one with implications right across the primary sector. He says if less maize is planted it has implications for rural contractors among others.
“This is not just about farming – it’s something of national importance that needs to be sorted out,” he says.
He, like other farmers, is hopeful that a resolution to the problem can be found quickly.
Not everyone is affected by the gas price crisis. Farmers who grow maize silage are not affected. Roughly 50% of the maize grown in NZ is for grain and the other half for maize silage.
Back on the land, McIntyre and other dairy farmers are thinking about alternatives to maize grain. He says maize grain is a carbohydrate and the other alternatives could be wheat, barley or tapioca. McIntyre also notes that others such as pig and poultry farmers could find themselves in a similar situation.
TOLL PROPOSAL A CAUSE FOR CONCERN
FARMERS IN the Tararua District are meeting to decide whether to throw their weight behind a move to oppose the tolling of the new highway linking the Manawatu and their district. The road through the Manawatu Gorge was closed in 2017 after successive slips made the route impassable and now a new road is due to open in 2025. The NZ Transport Agency claims the new 11km-long $620 million road will take nearly 15 minutes off the present alternatives: Pahiatua Track to the south of the gorge and the Saddle Road to the north – both
slow, hilly roads which wind over the ranges and are hardly roads of choice.
Up until just weeks ago, there was no hint that the new road would be tolled and it was assumed that it would just replace the old Manawatu Gorge Road.
So, not surprisingly, there was an outcry when out of the blue, NZTA announced the new road met its assessment criteria for introducing tolls. This would see a light vehicle pay $4.30 per trip and a truck $8.60.
Tararua Federated Farmers president Thomas Read – a dairy farmer
from Dannevirke – says that he’s in the process of getting feedback from his members to see if Feds as an entity will oppose the proposed tolling of the new road.
Read says while his milk goes to the Fonterra plant at Pahiatua, much of the goods for farms such as his on the eastern side of the ranges comes from the Manawatu. He acknowledges that if trucks used the toll road, costs would go up. There is also concern about stock coming across from the Tararua district to the Fielding saleyards – another cost.
“I’m just in the process of making sure our people are aware of the implications of the toll proposal and will support any action we take,” Read told Dairy News.
It’s not just farmers who are affected. Many rural professionals travel regularly to the Manawatu as do students to Massey University and the main hospital for Tararua is Palmerston North.
The ‘out of the blue’ announcement on tolling the new road has drawn an angry response from the Tararua district, led by Mayor Tracey
Collis. The council has launched a ‘stop the toll campaign’ and held a public meeting where residents vented their anger at NZTA and the Government for allowing the toll proposal. Collis is quoted as saying she is very unimpressed with the short consultation period. Submissions close on October 7.
The final decision on whether to toll the road will be Cabinet’s, but if the tolling goes ahead, National MPs in the surrounding regions are bound to hear from their constituents. – Peter Burke
PETER BURKE peterb@ruralnews.co.nz
Richard McIntyre says suddenly finding an alternative to feed isn’t that easy in certain parts of the country.
Co-op opens its doors to Wuhan
FONTERRA HAS opened its sixth application centre in China to meet growing demand for foodservice offerings.
Based in Wuhan, the new application centre will bring the co-op closer to the local market and enable rapid launch of innovative product applications in response to market trends and local customers’ needs.
The co-op says application centres play a pivotal role in driving innovation and tailoring Fonterra’s foodservice offerings to the tastes, culture and trends of the area in which they’re located.
Speaking at the centre’s opening ceremony this month, Teh-han Chow, Fonterra Greater China chief executive, says Wuhan is renowned for its strategic location
as a gateway to China’s heartland and presents opportunities for highquality development.
“Wuhan, as a strategic stronghold for the rise of central China and a new first-tier city, has been actively developing key industries such as beverages, premium tea and dairy products in recent years. It has become a culinary icon in central China with strong dining consumption momentum.
“Our application centre in Wuhan aims to not only service the strong demand in central China, but also support the development of the local dairy industry and expand its influence on the national market.”
The newly opened facility will provide a platform to explore the use of Fonterra’s dairy products across various foodser
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vice channels. Fonterra’s other application centres in China are in Beijing, Shanghai, Guangzhou, Chengdu and Shenzhen.
The Wuhan application centre is equipped with modern facilities, designed for customer visits and large-scale demonstrations. A team of Fonterra’s technical experts and chefs are based at this application centre. They will help cocreate diverse application scenarios and provide interactive experience for
customers through product development seminars, demonstrations, and virtual live teachings.
Earlier this month, Fonterra announced that it would invest $150 million to build a new UHT cream plant at its Edendale site in Southland.
The investment is part of the co-operative’s strategy to grow further value by expanding its Foodservice business in Asia and increasing production capacity for highvalue products.
Milk research wins global dairy award
A FOOD SCIENTIST from the Riddet Institute has wowed judges at an international dairy industry award, confirming the Palmerston North institute’s strength in milk research.
Riddet Institute post-doctoral researcher Natalie Ahlborn is heading to Paris in October after coming second in the International Dairy Federation (IDF) Professor Pavel Jelen Early Career Scientist Prize.
This is not the first time Riddet Institute scientists have been recognised. In 2022, two Riddet Institute scientists took out top spots in the same award; Dr Debashree Roy was second and Dr Nick Smith was fourth.
The IDF is an international authority in the development of science-based standards for the global dairy sector, with the prize specifically for scientists who gained their highest degrees three years ago or less.
Ahlborn has been researching processed milk and its effects on digestion and nutrient absorption, as part of the Ministry of Business, Innovation and Employment (MBIE) funded ‘New Zealand Milk Means More’ research programme at the Riddet Institute, based at Massey University in Palmerston North. Pasteurisation, UHT treatment,
and homogenisation are commonly used to process milk, but Ahlborn wanted to know what these treatments mean for digestion and nutrient uptake. She examined milk nutrient digestion and absorption in the gastrointestinal tract, finding that the protein in UHT milk was digested the fastest, followed by the protein in pasteurised homogenised milk, then pasteurised non-homogenised and, finally, raw milk. Curd formation and stomach emptying of solid matter and lipids were also measured. There were substantial differences in digestion of the fats and solid portions of the milks.
The research has created a fundamental understanding of how processing affects the gastric digestion of milk protein, and how this might contribute to milk’s nutritional outcomes. Ahlborn says the findings could lead to tailored milk products that deliver superior nutritional value to consumer populations with different nutritional needs, such as those of athletes or the elderly.
“As the global population grows and ages, the need for quality nutrition is paramount, and this research could contribute to meeting this need.”
Ahlborn will receive a printed certificate recognising
the achievement and an honorarium of €200 (NZ$360). She will attend the IDF World Dairy Summit 2024 to be held in Paris, France, from 15 to 18 October 2024 to collect her award and present her research.
The IDF Professor Pavel Jelen Early Career Scientist Prize was created to acknowledge the work of scientists and/or technologists in the dairy science and technology field and aimed toward ‘early-career’ scientists, including graduate and postgraduate students.
It is named in honour of Professor Pavel (Paul) Jelen, a Czech-born scientist and educator who researched dairy science and technology, and was known for encouraging, mentoring, and educating students, early-career scientists, and technologists.
The IDF is the leading source of scientific and technical expertise for all stakeholders of the dairy chain. Since 1903, IDF has provided a mechanism for the dairy sector to reach a global consensus on how to help feed the world with safe and sustainable dairy products.
The Riddet Institute is a New Zealand Centre of Research Excellence and is hosted by Massey University in Palmerston North.
Fonterra’s sixth application centre opened in Wuhan this month.
Natalie Ahlborn
Industry-wide approach helps farmers succeed
NEW ZEALAND farmers may be faced with increasing business challenges, but at least one sector has their back when it comes to collaborating for the greater good of pastoral agriculture in this country.
After 14 years in the seed industry, Barenbrug’s outgoing managing director Michael Hales says he’s been impressed by how well all those involved in the forage value chain work together to add value to NZ farming.
As well as leading one of the country’s best-known seed companies for the past seven years, Hales has also been closely involved with the NZ Plant Breeding and Research Association, the national Grain and Seed Trading Association and the NZ Seed Authority.
“In those situations, which often entail working with different external groups like Federated Farmers and regulators at MPI and Asure Quality, you get to see how well industry participants collaborate for the overall good of the NZ farmer.
“It’s useful to sit down and build relationships with people from across different areas of the pastoral industry, instead of just focusing on our own role as plant breeders and suppliers of proprietary seed. We all have a common interest in helping farmers succeed.”
He says this year’s launch of the new world-class Seed Certification Information System is a good example of what can be achieved with such an approach.
Hales first joined Barenbrug NZ in 2010 as marketing manager, following senior roles with Syngenta and Rabobank.
His time with the company has coincided with rapid advances in
science and technology available to plant breed ers, including technolo gies which have enabled faster, more accurate identification of prom ising new pastures and endophytes.
important advances in the way seed is man aged before it reaches the farm, he says.
much more empha sis now on just-in-time delivery, so that seed is held in ideal condi tions until it is required for sowing on farm. That’s led to us investing a new facility in the North Island to put us closer and make us more responsive to our customers and farmers in autumn.”
BOOST FOR METHANE VACCINE RESEARCH
THE GOVERNMENT and the agriculture sector are pumping $13.5 million into research of a methane vaccine.
food remains as important
tinue to improve the way we do things without getting side-tracked by things that distract us from what we are good at.”
Hales says the launch of Shogun hybrid ryegrass in 2012 is one of the highlights of his time with Barenbrug, not only because it rapidly became such a commercial success but also, he says, because it significantly grew the NZ hybrid ryegrass segment.
As for farming itself, “it’s a difficult business, and I don’t think the rest of the country realises the value that farmers and farming bring to our economy”.
But the ability to produce sustainable, high quality, nutritious human
Hales has now been appointed managing director of Barenbrug UK and will be moving to Bury St Edmunds in October. He’s looking forward to the challenge of working in a completely different agricultural economy and says much of his initial focus will be learning about the market and the people.
Jaime Heywood has been appointed as his successor at Barenbrug NZ and comes to the job after 15 years in the Barenbrug executive team. Heywood has held key roles, including finance director and, since 2020, finance and operations director.
AgriZeroNZ and the New Zealand Agricultural Greenhouse Gas Research Centre (NZAGRC) are forking out $8.5m and $5m respectively to new company Lucidome Bio, which is spearheading the next phase in the pioneering research.
AgriZeroNZ chief executive Wayne McNee says it is pleased to boost its support for the research, following prior funding to set up the entity to attract international investors and accelerate development.
“A vaccine that reduces methane from ruminant animals would be a transformational tool for New Zealand’s agricultural sector and for farmers worldwide.
“It’s widely recognised as the holy grail to reduce emissions, as it’s a low cost, high-impact solution which has the potential to be adopted into all farming systems.
“We’re really pleased to be backing Lucidome Bio, alongside the NZAGRC, in a shared effort to get a vaccine to farmers sooner,” says McNee.
A successful vaccine would trigger an animal’s immune system to generate antibodies in saliva that suppress the growth and function of methaneproducing microbes (methanogens) in the rumen, significantly reducing the quantity of the potent greenhouse gas it burps out.
NZAGRC executive director Naomi Parker says the reliance on antibody production in saliva and the complex nature of the rumen makes this work incredibly challenging, however the progress to date gives confidence it can achieve success.
“We’re proud to be long-standing supporters of this work and help Lucidome Bio achieve a world-first by turning the vaccine’s research legacy into a safe and effective tool for farmers.
“This is no easy task, but the research team has made significant progress over the years and achieved many groundbreaking advancements which provide critical foundations to support future success.”
Lucidome Bio interim chief executive David Aitken welcomed the funding and emphasised the new venture’s commitment to technological innovation in tackling this global opportunity.
“We know farmers are looking for effective and affordable ways to reduce methane. Our vision is to help farmers feed the world while protecting our planet. We’re focused on making the technology breakthroughs needed to commercialise a safe, effective vaccine that reduces methane emissions at scale and addresses one of the world’s biggest climate change challenges.
“This funding will allow us to build the team, carry out field trials in animals and progress development of the vaccine for farmers,” says Aitken.
Barenbrug NZ outgoing managing director Michael Hales.
MILKING IT...
Dairy giant
PART OF the reason China is buying less of our dairy produce is their success growing their own supply. It increased its selfsufficiency in milk production by 11 million metric tons/year from 2018 to 2023, or effectively as much as Australia’s current annual production. China’s annual domestic production is now in the order of 40 billion litres of milk. The country’s WMP imports plunged from an average of 820,000 metric tons in 2021 to a mere 430,000 metric tons in 2023. More than half of that drop was at NZ’s expense – the downside to being the biggest supplier of WMP to China. Aussie and Kiwi farmers once got good money for Friesian heifers to the China live export market but it certainly helped boost growth of their domestic supply.
Speedy chair
FEDERATED FARMERS and its members don’t have much love for regulations-obsessed regional councils.
So, when reports surfaced that the council car of the beleaguered chairperson of Environment Canterbury (ECan) was clocked speeding 678 times since January, reaching speeds of 157kph, the Feds couldn’t resist a dig.
“If only ECan could process consents this fast!”, screamed the Feds’ official X account.
The Press reported that a council spokesperson said the chief executive had brought the breaches to the chair’s attention, but did not yet know if he was driving the car on each of those occasions, as others were able to drive it.
Sour grapes
AS A country we should be celebrating Fonterra’s solid annual results announced last week.
More money for Fonterra means more moolah trickling into rural towns and communities.
Sadly, not everyone is elated with the co-op.
‘Serial Fonterra hater’, Greenpeace issued a release last week calling out Fonterra for ‘profiting from rainforest destruction’. But only two million tonnes of palm kernel expeller are imported, and they make a small portion of the feed going into cows.
Greenpeace would love to see fewer cows in NZ. Fortunately, that view isn’t widely shared by New Zealanders.
Seaweed wonder
RESEARCH ACROSS the ditch has found that seaweed doesn’t just make a tasty wrap for sushi rolls.
Australian researchers found that feeding it to cows can slash methane pollution from the animals’ burps by over 50%.
Researchers worldwide have been investigating different ways to make cows’ burps more environmentally friendly, and some, like the Australian researchers, have proven that red seaweed could be a gamechanger.
As the Guardian reported, a 200-day trial at the Kerwee Feedlot near Brisbane, Australia — one of the longest commercial trials of the red seaweed additive so far — found feeding cows a supplement derived from Asparagopsis, a type of red seaweed, more than halved methane released from the cattle.
On day 29 of the trial, cows given the supplement produced 91% less methane — the largest reduction measured during the study.
A game changer!
FONTERRA DESERVES a pat on the back for delivering another solid set of financial results.
They are the culmination of a huge amount of hard work put in by everyone across the co-op, led by chief executive Miles Hurrell and his management team. They must be commended for continuing to deliver consistently strong financial results in an increasingly volatile world.
The results also delivered relief to Fonterra’s 10,000 farms, whose owners have a stake in the co-op. Life on farms has been tough thanks to high input costs and interest rates over the past few years.
Fonterra is an extension of the farm businesses. Peter McBride, Fonterra chair, says the co-op exists to provide certainty and manage risk on their behalf, while maximising returns via a competitive and sustainable milk price, and a respectable return on the capital they invest in Fonterra.
Stable earnings across the co-op - Ingredients, Foodservice and Consumer channels- contributed to earnings before interest and tax (EBIT) from continuing operations of $1.6 billion.
Last year the co-op’s Foodservice channel was the standout performer with a return on capital of 19.6%.
Fonterra finished the year in a strong position - a solid return on capital of 11.3%, significantly above its five-year average and with a gearing ratio of 24%, a drop of almost 50% over the previous year.
A strong balance sheet delivers benefits and Fonterra farmers will receive an extra dividend of 15c/share.
Fonterra farmers, like other sectors of the agriculture sector, have been doing it tough for the past few years.
For many farmers, the extra cash this season would be used to catch up on deferred farm maintenance and improve cash flows, making life a bit easier on the farm in the coming months.
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Carry on with clever feed planning
IN MANY parts of the country, dairy farmers have enjoyed favourable growing conditions throughout winter and spring, leading to reduced use of stored and imported feed and higher-than-expected production to date.
Combined with an improved milk payout forecast and falling interest rates, the outlook is more favourable compared to this time last year. Interestingly, 12 months ago we discussed navigating a drop in payout in our “Feed for Thought” podcast (Navigating a drop in payout –Feed for Thought).
The key message then was to stick with the fundamental principles that make your system successful—an approach that remains relevant today.
Building on early season momentum
One of the key principles that applies now is setting your farm up for the summer season. Dairy farmers have an opportunity to build on early season momentum, transitioning from a pasture deficit to a surplus. Proper management of this period can help mitigate the effects of low pasture production during the summer, directly impacting the farm’s bottom line.
While harvesting pasture silage is a natural solution for managing surplus pasture, incorporating a maize crop into the rotation is another option that offers multiple benefits. Maize is a reliable feed crop, capable of producing over 25t DM/ha under optimal conditions, making it one of the highest-yield-
ing crops available to farmers. In comparison, ryegrass typically yields between 12 to 18t DM/ha annually. This extra feed supply can be achieved with minimal disruption to the grazing system, balancing the need for both pasture and stored supplementary feed. Managing summer variability with maize
Despite the favourable early season conditions, some farmers are cautious that these conditions may not last. If we experience a more tradi-
tional, dry summer, maize is well-positioned to thrive, thanks to its excellent water-use efficiency. Maize typically requires around 400–600mm of water per growing season, which is significantly less than pasture and many alternative crops. Additionally, maize’s deeprooting system—often extending 1.5 meters into the soil—enables it to access deeper water reserves during dry periods.
Considering the economic environment
Although the dairy outlook is more positive than a year ago, farmers are still feeling the effects of high inflation and rising on-farm costs. This economic pressure is leading many farmers to focus on cost-effective solutions this season.
One practical solution is growing maize
LANEROTR R1
on effluent-treated paddocks, which provides an opportunity to utilise on-farm nutrients and reduce input costs. Dairy farm effluent is rich in nitrogen, phosphorus, and potassium—essential nutrients for plant growth. Because maize produces high yields, it has a demand for nutrients and can remove up to 240kg of nitrogen and potassium per hectare when yielding a 20t DM/ ha maize crop. By growing maize in areas where effluent has been applied, farmers can reduce the need for synthetic fertilisers, saving up to $1,000 per hectare. This not only lowers input costs but also ensures more sustainable nutrient management on the farm.
Balancing maize with alternative feed strategies
Another factor cur-
rently influencing farmers’ decision-making is the falling price signals for some imported feeds. These are leading some farmers to take a “wait and see approach” to supplying summer feed, as it can be purchased when needed, without the upfront costs associated with growing maize.
However, relying solely on imported feed comes with potential risks. If summer conditions turn dry and demand for supplementary feed increases, the price of these feeds could spike, making it less affordable than it appears now. In contrast, growing maize on-farm provides a more stable, reliable feed source that is not subject to market fluctuations. While the current price signals may tempt some farmers to reduce their maize planting, it’s
important to balance this decision against the longterm security maize silage offers.
Strategic cropping for a resilient summer By planting maize, farmers can effectively manage surplus pasture, reduce reliance on imported feed, mitigate risk and efficiently utilise on-farm nutrients.
Maize’s drought tolerance, high yield potential, and ability to recycle nutrients from effluenttreated paddocks make it a valuable addition to the farm system. Even in a season with favourable pasture growth to date, maize can provide a reliable future feed source that helps mitigate risks and maintain consistent production.
• Wade Bell is Genetic Technologies farm systems manager. Contact him at wbell@genetic.co.nz
Introducing the Landquip Lanerotr R1
The Lanerotr R1, designed with input from dairy professionals, clears laneway edges efficiently, improving drainage and reducing herd lameness. Built tough in Hawke’s Bay, it operates at 1.5 km/h, clearing up to 5 km per day with a quick 5-minute setup. The R1 easily mounts to any tractor with a standard Eurohitch and requires a 50L/m hydraulic flow. Its durable, all-welded construction and American hydraulic motor, with built-in protection, ensure long-lasting performance.
Available now - sales@landquip.co.nz
Will silver turn to gold for state farmer?
TUCKED AWAY in a remote part of the central North Island, staff at a Pāmu (Landcorp) farm are working hard to solve one of the biggest challenges facing the dairy and beef sectors.
Simply put, it’s about producing a sire that will meet the requirements of the dairy farmer to produce a calf that has an easy calver but also meets the needs of calf rearers, finishers and right through the beef value chain.
Goudies Station, southeast of Reporoa, is unusual and complex.
It’s a long narrow farm –1779ha effective and 18km long – and among other things acts as a firebreak between Timberlands forests. It’s a serious drive from one end of the farm to the other, but the laneways are good, the land is flat and travel is easy. The soil is light pumice, but rainfall and heavy overnight dews make for good grass growth.
It’s a breeding operation and, on the beef side, the team at Goudies works closely with Focus Genetics and LIC. As well, the farm has a nationally recognised Romney ram breeding operation, and 1400 hinds are also run on the property.
This is quite a handful for farm manager Tim Bowron who’s a career farmer having
been brought up on a sheep and beef farm near Taupo. He’s been the manager at Goudies for seven years now and he and his six permanent staff and other contractors run the property. Daily they deal with a multiplicity of impor-
tant and complex tasks on farm and interact with outside organisations which have an interest in the Goudies breeding programmes.
But it’s the beef breeding work that’s turning heads in the dairy and beef sectors as the heat
is now on to utilise what was often seen as an unwanted by-product of the dairy industry – the bobby calf. Slaughtering bobby calves internationally is seen as a negative and a waste. One of the problems has been the variability of the calves
THE RACE IS ON
THE RACE is now on at Goudies to speed up the programme to get the genetic gain that they believe is possible.
Tim Bowron says it’s not only about producing the perfect calf but having the hard data to back this up and being able to convince all those in the dairy beef value chain that they are onto a winner.
“We expect this programme to run for another three or four years, because we want to conclusively prove it works internally before we express this in the commercial world – both in dairy and beef farms,” he says.
The other part of the equation is of course the type/breed of dairy cows that the Silver Stabilizer will be put over. For several years, the kiwi cross has been the choice of many dairy farmers. But Bowron says Pāmu moved away from this some years ago and is putting more Friesian into the mix. He points out that the Friesian adds more size and also reduces the amount of yellow fat from the Jersey.
“The ultimate goal is to produce from those dairy cows, from which a replacement is not kept, a consistent and saleable beef animal that is at least as good as, if not better than the traditional beef animal, and at the same time go some way to solving the bobby calf problem. That will be the gold standard,” he says.
produced by dairy farmers – other than those used as replacements.
The work at Goudies is geared to producing a high-quality sire to go
over the cows that farmers don’t want to keep a replacement heifer from.
The goal is to get a consistently saleable, fastgrowing quality calf that
will give a high return and can probably be ready for slaughter in 18 months.
The answer is simply silver – well actually Silver Stabilizer, which is the name given to the special sires that have been bred here since the programme began 18 months ago. Bowron says the Silver Stabilizer is the marker gene that can easily be identified by the dairy industry, indicating short gestation, low birthweight and high performance.
“This is all very new. We are running 350 Silver Stabilizer cows and these are a combination of the Simmental, Red Angus and Gelbvieh. The latter is a cattle breed originating in Germany and is primarily used for beef production. These are crossed with a Charolais and what we are getting is a silver-coloured calf which is an easier identifier when mated over dairy cows,” says Bowron.
Pamu Goudies Station manager Tim Bowron.
The Silver Stabilizer is a saleable, fast-growing quality calf marker gene.
Using sexed semen on elite cows
AS DEMAND for sexed semen soars, CRV is encouraging dairy farmers to take full advantage of it by using it on the top quartile of their herds.
This season, CRV has seen a significant 45% increase in sexed semen sales compared to last year. Sexed semen now makes up 4.8% of CRV’s total dairy semen sales – a 33% rise from last season. The number of CRV customers using sexed semen has also grown, from 20.6% to 22%, with average order sizes increasing by 25%.
CRV managing director James Smallwood says these figures indicate that farmers already using sexed semen are buying more as they strive to accelerate herd profitability through genetic gain, produce more quality replacements from their
best cows, and reduce bobby calf numbers.
“Using sexed semen on the top 25% of your herd is crucial for driving genetic gains and ensuring that the best-performing cows are producing the next generation of replacement heifers. Each pregnancy from sexed genetics gives a 90% chance of a heifer, adding even more value to your investment.
“With frozen sexed semen you can target your best cows when they come on heat to ensure these cows create the next generation, which is difficult to do with fresh sexed semen. This not only improves your herd’s productivity but helps close the 165 kgMS industry production gap between top and bottom quartile cows,” he says.
While the growth in the use of sexed semen
by New Zealand dairy farmers is encouraging, Smallwood says it is still well behind other competing dairy industries internationally.
“As a global company we’re seeing firsthand how sexed semen is being used successfully in offshore markets,” says Smallwood.
“Faster adoption of it
in New Zealand could significantly accelerate our dairy industry’s rate of genetic gain. It is a crucial technology dairy farmers have at their fingertips to lift their future herd’s performance.
“As providers, we’re working to make quality sexed semen from our highest indexing bulls more accessible and cost-
effective and provide comprehensive support to help farmers leverage this valuable tool effectively. To maximise gains, sexed semen needs to be used correctly and on the right cows.”
Data from Fonterra’s Efficiency Evolution roadshow indicates that the top 25% of cows in our national herd pro-
duce, on average, 165 kgMS more than the bottom 25%. This production difference represents a significant revenue gap.
“Selective breeding allows farmers to capitalise on these top-performing animals,” says Smallwood. “By breeding from the best, farmers can steadily improve the overall productivity of their herd.
“Conversely, identifying the bottom 25% plus can also be profitable. Poor-performing or low genetic merit cows can be culled or bred for dairy beef which prevents any temptation to keep a replacement heifer from this low genetic merit group.”
Selective breeding through sexed semen not only improves productivity but also contributes to sustainability. By focusing on the top-per-
forming animals, farmers can reduce emissions intensity and breed more efficient herds. Fonterra figures suggest that the top 25% of a herd is over 16% more methane efficient per kgMS than the bottom 25%.
CRV is committed to helping farmers get the most out of sexed semen by offering tailored support and education.
“It’s not just about using sexed semen – it’s about using it strategically,” says Smallwood.
“By focusing on the top quartile of the herd and developing a customised mating plan, farmers can unlock their past investments and realise the full potential of their genetics. We’re here to provide the expertise and guidance needed to make that happen. It is all about creating healthy and efficient herds.”
This season, CRV reports a 45% increase in sexed semen sales compared to last year.
Tractor makers’ messy divorce plays out in Indian courtroom
MARK DANIEL markd@ruralnews.co.nz
DIVORCES CAN be messy events, particularly when the warring parties are arguing about current or potential assets.
One separation currently passing through the courts is that of AGCO and TAFE, a move which seems to have caught the financial world off guard, although rumours suggest the former was less than enthusiastic about TAFE’s 16% market shareholding, although AGCO itself owns 21% of TAFE shares.
It might be interesting to understand the ‘he said, she said’ arguments when you understand the size
of the Indian tractor market and see the potential that is contained within.
Said to be the largest market in the world (by unit), over 945,000 tractors were sold in the 2023 financial year.
The numbers are always watched closely by overseas manufacturers who are drooling to get a share.
Currently, the market is dominated by indigenous players like Mahindra, who hit 390,000 units in that year, and TAFE who came in a relatively distant second with 170,000 sales. Local operators Sonalika and Escorts took third and fourth places, while John Deere came up fifth with 83,000 machines and New Holland taking sixth spot with 35,000 tractors.
More recently, Deere looks to be building on that result, indicating a
10.6% increase in sales in July 2024 over July 2023. Likewise, New Holland was up by 7.6%, although it appears that Kubota hit the wall and saw sales dropping by 33%.
Those with a keen eye will notice that AGCO and its Massey Ferguson brand appear to be missing from these statistics. But one should remember that for many years AGCO has licensed the famous red brand to TAFE, effectively excluding themselves from selling directly into this huge market and letting TAFE decide which brand it wishes to promote and sell.
Sources tell Dairy News that AGCO wants to stop the longstanding agreement on the premise of TAFE’s “continued poor operational performance as a supplier, brand licensee and dis-
tributor to AGCO, as well as a lack of focus on AGCO customers in several key markets”.
It is also understood that those residing on the upper floors of AGCO HQ have become increasingly restless about wanting to control their own destiny in this market, rather than rely on a third-party, especially given the increasing success of its two major competitors John Deere and CNH.
That patience is also being tried by TAFE’s insistence that the AGCO board make changes to internal housekeeping matters, while the Indian company remains permanently under the control of Mallika Srinivasan.
Looking at the global market in more detail, farm sizes in the western world are increasing, while in India
they are getting smaller, as plots are divided between families when land is passed on after a farmer’s death. Reports suggest that small and marginal holdings account for around 86% of all farms, although the government’s SMAM (Sub Mission on Agricultural Mechanization) scheme is helping machinery of all types find its way onto paddocks.
Looking at the broader picture, manufacturers from outside India who produce units for larger farmers will find it easier to scale down than the local producers of small tractors will find it to scale up, particularly as they have no home market in which to sell a larger tractor.
MAINTAINING RACEWAYS THE EASY WAY
FARM RACES or laneways are central to moving animals, people and machinery around the farm.
In the case of dairy farms, their maintenance is paramount as cows may walk considerable distances two or even three times a day.
Ideally, races need to have a slight crown in the centre that slopes away to either side, allowing surface water to drain away freely, helping to reduce the formation of holes and mud.
Over time, the preferred track of animals
moving in a procession can mean the build up of “berms” or ridges along the sides of the race, meaning water is stopped from draining.
Typically, races are maintained and reprofiled using tracked excavators to remove the build up of material at the side of the race, which needs to be hauled away with a tractor and trailer. Research suggests that this process is relatively slow, with the machines typically able to remove around 125 metres of build-up per hour, with a rate for the machine and driver at around $225/ hour. Back in 2021,
Hastings-based Landquip were displaying a range of products for horticulture at the Mystery Creek Fieldays, one of which was a sweeper designed to move orchard prunings.
Several dairy farmers and contractors asked
for Cattle Troughs
Flow
if the orchard sweeper could be used for cleaning the edges of dairy races or laneways. Fast forward to 2024, Landquip put their thinking caps on and came up with a solution.
Built in Hawke’s Bay, the Lanerotr R1 quickly removes the soil and
grass build-ups along the edges of races to restore drainage, leading to a drier surface and a reduction in lameness.
The manufacturer suggests operating at around 1.5km/h it’s easy to restore up to 5km races during a working day. A 5-minute set-up
Mount
to Clean
for Small/Low Demand
in Check-Valve
time means it is easy to fit the machine during a busy day or even between milkings.
Mounted on a frontend loader, using standard Euro quick-hitch couplings, a robust frame carries the clearing rotor, offset to the right-hand side of the tractor.
The operating height is maintained via a wheeled under-carriage, with the loader in the float position to ensure the unit follows any undulating contours.
The frame incorporates an integral breakaway pivot if the scraper paddles encounter any immovable objects, while the rotor motor
is also equipped with hydraulic overload protection. Said to be suited to a tractor of around 90hp, with 50 litres/minute hydraulic oil flow, the loader will require a third service function, with a detent function to maintain constant flow to the rotor.
Offered with a 2-year warranty, the R1 features a minimum number of wearing parts, while offering the ability to restore up to 750 metres of race edges per hour, with a typical cost of $150/km, compared to a more traditional method that would run to $1,800/km. www.landquip.co.nz
for Compartment Troughs/Tanks
Flow
Mount
to Clean
MARK DANIEL markd@ruralnews.co.nz
The Lanerotr R1quickly removes the soil and grass build-ups along the edges of races to restore drainage.
Quick, accurate access to data
AGRI-TECH COMPANY
Precision Farming is linking with John Deere’s Operations Centre guidance technology to automate nutrient and spray record-keeping and Nitrogen Cap compliance for farmers.
The connection also extends to Ravendown’s HawkEye and Ballance Agri Nutrient’s MyBallance software, streamlining farm management, eliminating manual reporting, and saving farmers and their partners’ valuable time.
Precision Farming chief operating officer Chloe Walker believes farmers need quick, easy access to accurate data.
“We are leading the way in application data connectivity to help farmers reduce paperwork and improve their nutrient management. It’s about saving farmers time, keeping costs down and improving sustainability outcomes. Our connection with John Deere Operations Centre is another crucial step towards providing farmers with the tools they need.”
Walker also believes the connection brings together the strengths of all the partners involved.
“This integration merges John Deere Operations Centre’s advanced guidance technology, precision agriculture solutions and operational planning capabilities with Precision Farming’s automated nutrient management tools.
“Farmers can now easily connect their John Deere tractors to our platform, as well as MyBallance and HawkEye.
“This means they get real-time reporting, automated Proof of Application, nutrient heat mapping and simplified nitrogen cap compliance.”
Siobhan Lynch, director of sales – Precision Technology at Brandt Agriculture, says that as a John Deere dealer, she has seen first-hand how this technology can make a difference for farmers.
“We first met the Precision Farming team at Mystery Creek Fieldays in 2023 and discussed how this integration would benefit our customers. Just one year later, we proudly stood together at the 2024 Fieldays to prelaunch the integration with some of our Precision Agriculture customers.
“Precision Farming has made data transfer between these systems effortless, eliminating the need for the frustrating manual process farmers used to endure. It’s a huge step forward for efficiency and simplicity in farming operations.”
Mike Cleland is integrated solutions manager with Southland Farm Machinery Limited, John Deere dealers for the lower South Island.
“John Deere tractors have been equipped with world leading guidance technology since the mid 2000’s. It is included in basically all new tractors,” he says. “So, to now have Precision Farming’s connection with Ravensdown and Ballance directly working to and from the tractor’s display is a fantastic advancement for our customers.”
Drummond & Etheridge research & development manager Paul Galletly agrees. “Data from John Deere Operations Centre is essential to farmers as it saves them both time and money in their everyday operations,” he says.
“Having the connectivity to MyBallance and Hawkeye is a huge asset and will be a great benefit to both our customers and the environment.”
These collaborations help farmers make datadriven decisions, save time, and contribute to better environmental outcomes eliminating the hassle of manual nutrient and N-cap reporting.
“Manual reporting is time-consuming and prone to inaccuracy,” Walker explains. “Automating this process saves time and ensures accuracy. By connecting John
Deere tractors to these platforms, farmers can ease their administrative burden and focus on what they do best - farming.”
Beyond the opera-
tional benefits, Walker says this partnership represents a significant step towards more profitable and sustainable farming practices.
SIP has a SILVERCUT mower to suit every farming situation
FOUR GREAT REASONS TO CHOOSE A SIP SILVERCUT MOWER:
1: Collision Safety System:
If the mower happens to encounter an obstacle, the design of the hinge enables the mower to move simultaneously backwards and upwards to ride over the obstacle. Once the obstacle is cleared the mower automatically returns to the cutting position.
3: Hydro-pneumatic suspension:
The advanced suspension system ensures that the ground pressure is consistent across the entire cutterbar, resulting in a precise and clean cut.
2: Disc Drive Safety System:
The unique solution of four brass shear pins protects the cutter bar gears from impact and subsequential damage. This effective but simple solution enables the mower to be repaired easily and cost-effectively in the field, often by the tractor driver.
4: Three Year Warranty:
The SIP SILVERCUT range of mowers come standard with a full Two-Year Warranty, plus an additional third year of warranty subject to regular dealer servicing, resulting in worry free operation.
Precision Farming says farmers need quick, easy access to accurate data.
