Dairy News Issue 252 2011

Miraka set to export first shipment of milkpowder next month Page 9

august 16, 2011 Issue 252

www.dairynews.co.nz

Getting the mix right

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Mixed ration feeding

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Spotlight on milk price “It’s just a beat-up on Fonterra and dairy farmers to get some political points.” – Lachlan McKenzie PAGEs 3-8

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Dairy News // august 16, 2011

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Politicians squabble over milk pricing PETER BURKE

Demand for fertiliser boosts sales.

Horowhenua heifers strut their stuff abroad.

Page 27

Pages 30-31

Tackling lameness among the herd.

Page 48

THE PRICE of fresh milk has become a political football, pending a parliamentary commerce select committee inquiry during the next two months.

Committee chair Lianne Dalziel MP (Labour) told Dairy News she’s determined to finish the inquiry before Parliament rises in early October.

But Agriculture Minister David Carter doubts there is time for a “sensible in-depth investigation” before the election. Labour Rural Affairs spokesman Damien O’Connor has similar doubt.

National bowed to public pressure after the Commerce Commission decided against a full inquiry. Labour and the Greens have since pushed Parliament for an inquiry.

Emotion has grown, fueled by media reports conjuring urban

Agribusiness............................................25-27 Management.......................................... 28-39 Animal Health..........................................41-49 Machinery & Products........................... 51-53 Tractors & Machinery............................ 54-57

But the bigger issue is whether New Zealanders are getting a fair deal on milk, which comes under the purview of the commerce select committee “Sue Chetwin (Consumer New Zealand chief executive) has been saying the real issue that needs to be examined is the farm gate milk price. I accept this needs to be examined. But a variation there will have relatively minor impact on the ultimate retail price of milk.”

Carter says Fonterra’s decision to freeze the domestic price of milk until the end of the year shows it’s being proactive and recognising that rising prices were a concern to consumers.

He notes that for three years the price of milk has risen 9%, but it rose 23% in the previous two years.

Inquiry will also target retailers

News........................................................... 3-21 Opinion.....................................................22-24

perceptions of farm- A parliamentary select ers and supermarkets committee inquiry into retail ‘creaming’ city folk. milk price looks likely.

Now Carter sees some value in an inquiry.

“There is wide variance in retail milk prices and the select committee has an opportunity to see why there is such variation.

That in itself will educate New Zealanders to… shop around for milk.”

Carter says there is a perception some farmers and Fonterra are creaming it. There’s no doubt the international price is high and that means our economy.” dairy farmers are doing better, Carter says MAF, MED and he says.

Treasury are looking at how “That’s good in that when Fonterra sets the farm gate international commodity prices price, which came to light when are high, New Zealand is looking at the implications of in the box seat to reap that Fonterra trading among farmers advantage and pass it on through (TAF) proposal.

PETER BURKE

NATIONAL MAY believe the milk price inquiry will not be completed before the election, but Labour MP Lianne Dalziel has other ideas.

She hopes to get terms of reference for the inquiry signed by the respective parties within a week or so and head straight into the hearings.

“I’m determined we need to report before Parliament rises.

The public want this level of scrutiny of the price of milk and it’s important we have that information in the public arena as quickly as possible.

“In moving quickly we don’t want to undermine the quality of the work. But I’m reasonably confident we could get to the bottom of concerns people have about the different layers

of pricing, from the farm gate to the supermarket shelves.”

Dalziel says the public want to know why a country producing so much milk for the world market can’t sell it at a price they can afford, or even a price comparable to that paid by Australians.

“I’m not predetermining the outcome of the inquiry. The public would like to know the different pricing points of milk

to know they’re getting a fair price.”

Are the supermarkets behaving in a genuinely competitive way? she asks.

“This is not all about the farm gate price.

“Obviously this is an issue because there is an element of mystery in the pricing at the farm gate and I think it would be healthy to look at that in the public arena.”

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Dairy News // august 16, 2011

news

Bring it on – Couper FONTERRA SHAREHOLDERS’ Council

Simon Couper

chairman Simon Couper says he’s confident the price of milk reflects the commodity world market.

In some instances it’s not high enough because

of some of the new dairy products being developed, he says. And the issue is stirred by some smaller, independent processors with agenda to drive down the price of milk so they can turn a profit when they export.

New Zealand farmers want the best price they can get for their milk, he points out.

“It is natural and reasonable they would want a strong milk price.

We need to recognise some parties have vested

“We need to recognise some parties have vested interests in inflaming the milk price debate in New Zealand at the consumer level, whereas they’re taking the milk and exporting it.”

interests in inflaming the milk price debate in New Zealand at the consumer level, whereas they’re taking the milk and exporting it.”

The price issue has become emotive and this downplays the true value of milk as a staple food, he says.

“It’s sad because in real terms the price of milk is reasonable. It is a complete food, especially compared to Coca Cola or bottled water. The food value of milk is considerably higher.”

Couper is confident the raw milk price to other players in the industry is fair, so is the price paid to farmers, many of whom struggle from one year to the next given the financial crisis

and pressure by banks.

“Farmers do what any small-business person does in New Zealand: sell their milk abroad and getting the international commodity price for it.

“Our dairy products bring back $2000 for every New Zealander in the country.

“Fifty cents of every dollar brought back is spent in the local economy. Fiddling around with that by putting in price regulation will cut off the nose to spite the face.

“When prices of milk are high in New Zealand, that’s good for everyone and there is an opportunity for people to shop around to find lower prices.”

‘Settle it once and for all’ LABOUR RURAL Affairs spokesman Damien O’Connor has chided the Commerce Commission for not running a full inquiry into the price of milk They are arguably the best group to do this, he says. “But they don’t seem to have the backbone to undertake it, so the select committee, while not in an ideal situation, will have to attempt to do the same.”

An inquiry is necessary to settle the situation once and for all, he says.

“Farmers need to know that people in the retail chain aren’t taking more than they should. Consumers need to know there is a connection between what the farmers get and what they pay. We need to get things on the table so the dairy industry doesn’t feel victimised during this time of growing international demand for their product and buoyant milk prices.”

O’Connor says the public needs to know the price is fair: that the margins between farmers’ 70c and what consumers pay may be explainable. But he speculates some margins could perhaps be reduced.

“Competition will always be limited and we need to make sure there is a strong Fonterra focusing on global trading.

“The percentage of milk production assigned to domestic consumption is very small. One would hope the industry is not so distracted by relatively lesser issues [that it loses focus] on the long term objective of global trading. That’s why it needs to be sorted.”

Dairy News // august 16, 2011

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Select committee probe not all bad ANDREW SWALLOW

PARLIAMENT’S COMMERCE select committee milk price inquiry is premature and confusing, but some good might come of it nonetheless, says Federated Farmers Dairy chair Willy Leferink.

“It might confirm we are doing the right thing,” he told Dairy News, after National last week said it would support such an inquiry, as called for

by Labour and the Greens.

Leferink says he doesn’t believe the sector has anything to fear from the inquiry and the current debate about pricing isn’t doing the industry image any favours.

“It’s just another attempt to discredit dairy. We’re such an easy target: big, visible, easy to identify.” So best get on with the inquiry as quickly as possible, he says.

“The milk price here is pretty simple. We don’t need a subsidy to sell our milk overseas like they do in Europe or the US.” However, with the committee chaired by Labour’s Christchurch

Federated Farmers Dairy chairman Willy Leferink says an inquiry might confirm “the right things”.

Cost breakdown of 1L bottle of milk sold at $2.20.

Source: Federated Farmers & TVNZ.

East MP Lianne Dalziel and Labour and the Greens intent on making milk pricing an election issue, how fast it proceeds remains to be seen.

While some might look at Australian and UK retail milk prices and say it should be that cheap here, they are entirely different markets, says Leferink. In those countries farmers and processors depend much more on the domestic market. “For us the local market is not a big player.”

Of the 600 million L Fonterra is forced to supply other processors under Dairy Industry Restructuring Act regulations, only 250 million L is used in the domestic market.

If there is a problem with the retail price of milk, it is in the level of competition between retailers, he says.

“A third supermarket operator here would be a big help.”

However, even without that, there are independent stores which choose to sell milk for as little as $2.69 per 2L. “That’s nearly Fonterra’s cost price; $1.30/L.” The Green Party’s call for an independent body to set domestic milk prices is as inappropriate as it would be to fix prices for kiwifruit, meat or any other export-led foodstuff, Lefer-

‘All about scoring political points’ THE NEWS that a parliamentary commerce select committee will investigate milk pricing has met a mixed reaction among other leading dairy farmers.

Lachlan McKenzie, former chair of Feds Dairy, says it’s “just a beat up.”

“What’ll be next? An inquiry into cellphone prices? Adidas rugby jerseys?

“We’re a co-op and we can’t hide the price of milk. Fonterra pays us 65c/L and Fonterra adds 55c/L to that for the [post processing] wholesale price. Fonterra can’t dictate the retail price.”

As for the Green Party’s call for an independent body to set the domestic price of milk, again McKenzie uses the “what next” argument.

“Are we going to have pricing

bodies for potatoes, carrots, meat?

We went away from price control with Robert Muldoon.”

McKenzie wishes politicians would have the gumption to stand up and point out comparisons with fizzy drinks are not fair.

“It’s just a beat-up on Fonterra and dairy farmers to get some political points.”

The cooperative has been “a bit

quiet” on the issue but in its defence, its own brands only account for 12% of the retail market, he adds.

Ravensdown chairman Bill McLeod, who has a 300-cow dairy farm near Morrinsville, says an inquiry would “probably be a good thing to get it all out on the table and let people look at it.”

However, he too questions whether it’s really justified.

ink says. In practice, any move to suppress domestic milk prices would make it even harder for competitors to Fonterra to establish because the returns would be reduced, he points out.

A TVNZ report that milk prices have increased 23% in five years, compared to inflation of 16%, exposes the weak argument for the price inquiry.

“It seems we’re going into another milk price inquiry because over five years milk prices increased 7% higher than inflation.

“On that basis, we should hold select committee inquiries into council rates, government spending, the emissions trading scheme and even replica sporting gear.

“As a taxpayer and a dairy industry participant, I still think it is premature to hold a commerce select committee inquiry into retail milk prices when an interdepartmental review of the raw milk regulations is still to report.

“Even the Commerce Commission noted this in its recent analysis while MAF has reported separately on the milk price issue as well.

“Raw milk regulations under the Dairy Industry Restructuring Act and the farmgate price paid to farmers are interlinked.”

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No need for inquiry THE COMMERCE Commission says there is enough competition for milk in wholesale and retail markets.

At the retail level there is competition between the two major supermarket chains, dairies, service stations and other retailers.

At the wholesale level, Fonterra Brands and Goodman Fielder fight for market share.

Commerce Commission chairman Mark Berry says its analysis shows that the level of competition, taking into account existing regulation arrangements means that intervention under Part 4 of the Commerce Act is not possible.

The commission this month completed its review of domestic milk markets and has concluded that there is no valid basis for a price control inquiry under Part 4 of the Commerce Act. A price control inquiry is undertaken to determine whether the Commission should recommend to the Government that price control should be imposed.

The threshold for

undertaking a Part 4 inquiry is high, explains Berry.

“We can only recommend control if “little or no competition” exists or is “likely to substantially increase” in a market, and that there is no other effective constraint on the exercise of market power.

“Part 4 regulation is only imposed on firms with a high degree of market power, usually because of the natural monopoly characteristics of the industry in question, such as electricity or gas distribution.”

While competition at the farmgate can be looked into, he points out the Government is reviewing Dairy Industry Restructuring Act (DIRA) regulations.

He also says Part 4 provides for the regulation of the supply of goods or services.

It was not designed to regulate the acquisition of goods and services in markets where the acquirer has a high degree of market power.

For this reason, Part 4 cannot regulate the price and other terms on

Right decision FEDERATED FARMERS says the Commerce Commission decision dispels any notion the New Zealand consumer is being exploited.

“Farmers were highly confident that the Commerce Commission would find out what we knew; the New Zealand consumer is not being ripped off when they buy milk,” says Federated Farmers Dairy chairman Willy Leferink, “What led to calls for the Commerce Commission to look into milk pricing was milk selling in Australia and the United Kingdom at prices not seen for years.

“Some people didn’t seem to grasp that Australian supermarkets use milk as a loss leader to win market share. In February, Australian industry sources estimated Coles was underwriting its milk campaign to the tune of $A300,000 to $A400,000 a week.

“Two other things were overlooked as well; Australian milk doesn’t attract GST and the exchange rate. When you add these two things to official statistics from the March quarter, Kiwi milk retailed at $3.68 for two litres, but in Australia, the average retail price for two litres of milk ranged from $4.28 to $5.84.

“This is why, in March, we welcomed the Commerce Commission’s preliminary analysis.

Everyone had the opportunity to ‘put up’ what evidence they had so that the Commerce Commission could weigh the facts.”

Federated Farmers supplied its research into overseas retail prices and subsidies, he says.

“When you look at ‘non-milk war’ retail pricing from the United States, Canada, Australia, UK, Ireland and France, New Zealand comes in at the lower end of pricing. Our milk doesn’t of course come with the hidden whammy of subsidy.”

which Fonterra (or other processors) acquires raw milk from the farm gate.

It has concluded there appears to be little or no competition in the market for the factory gate supply of raw milk, and little or no likelihood

of a substantial increase in competition in this market.

However factory gate supply is already regulated under the DIRA raw milk regulations and these are designed to constrain Fonterra’s market power, it says.

The Commerce Commission says there is competition in the retail milk market.

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Co-op blames rivals FONTERRA SAYS there is no justification for a price control inquiry or further regulation at any level of the milk market.

Welcoming the recent Commerce Commission announcement not to hold a price control inquiry into the New Zealand milk market, Fonterra chief financial officer Jonathan Mason accused its competitors of stirring trouble.

These competitors want to force down the amount they pay New Zealand farmers for raw milk, he says.

“The reality is that competition is thriving in the New Zealand dairy market,” says Mason.

“If some processors are not doing as well as Fonterra, that’s because Fonterra makes more from a bucket of milk than them – by doing what it was set up to do.

“It adds value to New Zealand milk and is performing well, supported by recent world class processing investments and ongoing investments in value-add. As a cooperative owned by Kiwi farmers, all that value flows back into the

Jonathan Mason

New Zealand economy.”

He says competitors who complain about Fonterra’s milk price are also trying to suggest that it is driving up New Zealand retail milk prices.

Yet many of these companies choose not to supply the New Zea-

land domestic market, preferring to export their products because the export market is more profitable, he says.

“The facts are that retail prices in New Zealand reflect international dairy prices. All around the world, food prices have gone up.”

Fonterra noted that the Commerce Commission intended to review complaints that a move by its Fonterra Brands New Zealand (FBNZ) subsidiary to freeze the price of liquid milk sold to retailers may have breached the Commerce Act. Mason says FBNZ decided in February to freeze liquid milk prices for the rest of 2011, meaning it would absorb the impact of further commodity price rises.

“It is ironic that a voluntary price freeze could be viewed as breaching legislation which has the ‘benefit of consumers’ at its core.”

Fonterra strongly rejects any suggestion that it has used its position in the milk market to prevent or substantially reduce competition, says Mason.

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Miraka off to a smooth start Miraka’s first milk tanker.

DU

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NEW ZEALAND’S newest dairy processor hopes to start exporting milkpowder next month.

Miraka, a joint venture between Maori trusts and Vietnamese processor Vinamilk, launched its new factory near Taupo on August 1.

Miraka chairman Kingi Smiler says a smooth startup means it is on track to send its first shipment of whole milkpowder to Vietnam and China next month.

With 50 suppliers, Miraka hopes to process 210 million litres of milk this season. It has also applied for 50m litres of raw milk from Fonterra under the Dairy Industry Restructuring Act (DIRA).

Smiler says the factory also has capacity to produce skim milkpowder.

“We can switch to SMP easily when we have to,” he told Dairy News.

The new $90 million state-of-the-art factory has 30 employees but only four to five people will be required to run it per shift.

The factory features an eight-tonne dryer and robots which pack milkpowder into bags and load them onto pallets for export.

Miraka is run by a five-member board including Vinamilk chairwoman Mai Kieu Lien, former Fonterra executive Max Parkin, chartered accountant Taaringaroa (Taari) Nicholas and lawyer John Paki.

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Dairy News // august 16, 2011

news

Fonterra battles for Oz milk GROWING GLOBAL demand and expansion in local processing facilities has fuelled renewed competition between Australian processors, including Fonterra, for milk supply.

Warrnambool Cheese and Butter took the unusual step of advertising in local newspapers in Victoria and South Australia, detailing its new farmgate payment package.

WCB is seeking another 50 million litres of milk after investing $A5 million in new capability in its Allansford powder plant near Warrnambool, and $A3.5m to expand its Sungold milk plant by 50%.

It is also upgrading its speciality cheese operation in Mt Gambier.

Gippsland farmers are also being pursued, with Longwarry Food Park planning a new UHT milk line requiring between 20-30m litres each year – or an additional 10-15% more.

Investment has also been increased in Tasmania with the announcement of the new Tasmanian Dairy Products milk powder facility for Smithton, National Foods investment at Burnie and further investment at Fonterra’s Spreyton factory.

Murray Goulburn is doubling the

capacity of its sole packaging plant in China, which packages infant formula produced at its Cobram plant in northern Victoria.

Last month Fonterra announced a new growth incentive payment program, called Boo$t, designed to support suppliers in Victoria and Tasmania who are actively growing milk volumes.

Fonterra general manager milk supply Australia Heather Stacy says encouraging growth while maintaining a strong focus on quality is essential to its ability to meet strong projected demand into the future.

“Boo$t is an innovative way to support our suppliers who are growing milk volumes and we are pleased to be able to strengthen the broad range of incentive payments we offer with this new incentive,” she says.

Fonterra rival Murray Goulburn is also on the prowl for more milk.

Outgoing chairman Grant Davies says this will require greater output from Cobram and MG will take as much milk as possible.

“We all know the affects drought has had on northern Victoria in the past 10-12 years but the good thing is

we’re starting to see a turnaround in milk production,” Davies says.

“It’s not huge, but we’re starting to see it turn around. We can certainly put that milk to good value at the moment.

“Companies are out and about and they want extra supply. There’s healthy competition out there for milk and we’ll be doing our darnedest to keep that milk within our company.”

WCB chief executive David Lord says its 2010-11 year payout of $A5.75/kg MS was the second highest in its history and was largely an outcome of strength of international markets for dairy products.

“We have very strong markets in Asia, Japan in particular, the Middle East. Demand for dairy protein in all forms has been steadily growing year on year, and the last 12 months in particular has been very strong,” he told ABC Radio.

“With the strength of the markets being what it is, processors like us want to make sure they are fully utilised, we want to make sure our plant is full, and that we are manufacturing the maximum amount of

products we can to take advantage of those markets.

“I imagine our competitors are thinking in the same way we are and would be looking for more supply.”

Dairy Australia analyst Joanne Bills says all the companies are conscious they need to offer farmers an incentive to produce more milk after some very tough years.

“It’s fair to say all of them are offering the best prices they possibly can to send out positive signals to farmers,” Bills says.

Bills says the companies would probably prefer that their existing suppliers can supply the additional amount.

“A lot of the companies have Heather Stacy provided growth incentives in their payment systems to encourage farmers looking at the different opthat growth. But certainly if their tions available, particularly in a current supply base isn’t willing or region like Gippsland where there able to grow, they’re equally happy are so many companies on the lookto take on new suppliers. out for milk. Some of them may be “Anecdotally, we know there are switching.”

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Dairy News // august 16, 2011

11

news

Court to determine crucial water plan A KEY water policy likely to affect Waikato dairy farmers will now be finalised in November.

The Environment Court will rule on Waikato Regional Council’s (WRC) proposed Variation 6 to the regional plan, seeking to better manage the growing pressure on Waikato fresh water resources. A five-month court hearing on Variation 6 ended this month before Judge Whiting, who will rule in three months.

Waikato Regional Council river and catchment services manager David Speirs says it will await with interest Whit-

ing’s findings “on this important new policy concerning the allocation of water assets in our region”.

The scale of the issues involved is huge.

Demand for surface water in Waikato is 1.36 million cubic metres per day; demand for ground water is 430,000 cubic metres per day.

All water from the Waikato River has been removed from the natural channel and used at least seven times before reaching the ocean.

WRC lawyer Jim Milne says it was the most complex Environment Court case he had been involved in due to

the number of parties, the complexity of the issues and the technical nature of the proceedings.

Variation 6 seeks to strike a balance between managing the adverse effects of ground and surface water use while maintaining reasonable access to, and maximising the sustainable use of, those resources.

Pressure on water resources in Waikato has greatly increased in recent years.

Spiers says some catchments no longer have enough to allow new allocation of high reliability without one use adversely affecting

another’s use or without marked effects on the environment.

In some catchments competition has risen between those wanting water for domestic and municipal water supply, electricity generation, agricultural development and a range of other uses. “[So] there is increasing need for robust policy to guide decision making on the most appropriate allocation of limited resources. Variation 6 seeks to provide that guidance,” says Speirs.

Variation 6 explicitly recognises the limited amount of water available and seeks to set ap-

There is growing pressure on Waikato’s fresh water resources.

propriate limits on how much water can be taken out of rivers, streams and groundwater resources catchment-by-catchment.

At the beginning of the hearing 37 appeals opposed parts of Variation 6, many arguing more water should be made available for taking

out of rivers and streams or that more of the allocation should be available to an appellant’s sector than to others.

Especially the court heard of the competing interests of the dairy industry, wanting water for dairying near the upper Waikato River,

and electricity generators wanting to retain water for reliable generation.

Speirs says the WRC has tried, through Variation 6, to provide for the protection of existing electricity generation on the river, and all current farming uses in the region.

Keeping floods away

The Manawatu-Wanganui region is prone to flooding with a vast network of rivers and streams.

HORIZONS REGIONAL Council says data collected from river and stream monitoring systems is helping rural residents stay prepared.

Localised flooding occurs often in the Horizons Region; half the region’s people live on floodplains.

Keeping them and their livelihoods safe is a big job, says HRC emergency manager Shane Bayley.

Horizons manages 30 river and drainage schemes across the region, and maintains 460km of stopbanks, 700km of drains, 20 pumping stations and 53 dams.

“Streams and rivers stretch

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across our region like arteries in a body,” says Bayley. “They can rise and fall rapidly and we need to keep a constant eye out for any threat.”

Horizons collects flood warning data from a network of river and stream monitoring systems that provide up-to-the-minute information about river heights and flows. Bayley says accurate data is vital for making decisions in emergencies.

Horizons shares the information publically within minutes of receiving it. The data is sent to

Horizons’ website and distributed via an interactive voice response system (IVR). The IVR issues the flood warnings to subscribed users by phone when river levels rise to a level specified by the user depending on their circumstances.

For example a farmer may wish to be told if stock are grazing near a waterway so he has enough time to move the animals to higher ground.

When the river rises to a designated level, Horizons’ computer system sees this and automatically calls subscribers. The system calls back three times.

12

Dairy News // august 16, 2011

news

Feds curious about farm cancer report MASSEY UNIVERSITY

research into growing up on livestock farms and a possibility of increased blood cancer risks has

Does livestock farming increase the risk of blood cancer?

caught the attention of Federated Farmers.

Feds vice president William Rolleston says it is interested to find

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contribute towards lower mortality rates from other common causes of death, such as other cancers and heart disease, thereby making blood cancer factors stand out.

“It also [says few] comparable studies [have been] done overseas and there needs to be more work on how the results compare with international studies.

“The authors say chemical use might not be the only cause of higher-than-normal rates of blood cancers, but I wonder if contact with animals has somehow altered the immune system development of children on farms.”

Rolleston says Federated Farmers will watch this research but see it as one piece in a puzzle.

“We remain committed to ongoing development and use of health and safety practices already on farms. “This is another reminder for farmers to use safe practices and follow guidelines.”

in brief UK price collusion

COLLUSION ON dairy pricing in the UK has earned four supermarkets and five dairy processors, including Anchor distributor Arla, fines totalling £49.5m ($NZ100m).

Announcing the ruling last week, Office of Fair Trading chief executive John Fingleton said it sent a strong signal that the OFT will act and fine firms where it finds anti-competitive behaviour.

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out more, the study is just one piece of a large puzzle, he says.

“The study headed

by Massey University Centre for Public Health researcher Andrea ‘t Mannetje raises interesting findings of the risks of blood cancers vs different farming types, but there are some inconsistencies which need more explanation.

“One is that crop farmers use more chemicals than livestock farmers, but it appears children from crop farms have lower incidence of these cancers.

“The issue is cause and effect, not at this stage shown. We should always treat such results seriously, but more information is needed to take any special precautions other than common sense safe practices.”

There may be other reasons for this result, e.g. chance or delays in seeing a doctor.

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Dairy News // august 16, 2011

13

news

Uruguayan visitors see how Kiwi farming works AN OVERVIEW of New Zealand farming and economics was last week afforded Uruguayan Agriculture Minister Tabare Aguerre and 24 of his country’s officials and industry representatives.

Uruguayans last visited officially in 2007, a party that included the former President Tabare Vazquez and then Minister of Agriculture Jose Mujica, who Uruguayan Agriculture Minister Tabare Aguerre with Lincoln University vice-chancellor Roger Field. is now President.

On a week-long tour Aguerre met government taker” on international mar- the visitors saw the demonand opposition leaders, and kets: the need to foster cost- stration dairy farm, hearing visited processing plants and efficient industries resilient to from South Island Dairying Lincoln University, where he price downturns, and the need Development Centre director spoke to agribusiness profes- to reinvest surplus cash when Ron Pellow, Virginia Serra, sor Keith Woodford. prices – and so farm incomes DairyNZ and Professor Keith Aguerre heard of New Zea- – are strong.

Cameron head of Lincoln’s land’s experience as a “price At Lincoln University Centre for Soil and Environ-

mental Research.

They heard about lamb and wool supply chains from Nic Lees, Faculty of Commerce; price volatility, finance and technology transfer (Woodford); gene marker technology from Jonathan Hickford; and the university itself from the vice-chancellor, professor Roger Field.

The group sought knowledge of New Zealand’s agricultural value chains, especially dairy products and sheep meat; management of price fluctuations; and how uptake of technology and innovation is encouraged.

Lincoln has long been associated with Uruguay, notably through the work of the late Sir James Stewart, whose name is revered.

Shed, data tie-up A NEW CRV AmBreed and MilkHub partnership is catching the attention of farmers wanting to streamline their operations, the companies say.

The two companies now offer an integrated online dairy management system, combining daily operational shed data and herd recording.

The system is accessed from a single online interface, drawing data from MilkHub’s integrated management system and CRV’s herd testing and herd recording database.

This means cow data need only be entered once to run the automated dairy management system and record cows on the National Dairy Database. Cow data is updated daily on the system as it is generated from the inshed activity giving access to up-to-the-minute management tools.

CRV AmBreed says the technology is easily understood for practical, in-shed daily use, and delivers sophisticated herd and farm management tools for better long-term decision making on farm.

“The partnership combines the daily operational power of MilkHub with CRV AmBreed’s ability to offer benchmarking for animal evaluation and herd improvement.

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Dairy News // august 16, 2011

news

LIC chairman to retire RETIRING LIC chairman Stuart Bay says he retires “on a high”, after seven years in the chair. He was previously deputy chair for eight years.

Referring to the company’s recent financial results, he said “It’s a great high to go out on.

The company, like the industry, is in great heart and there will never be a better time to look ahead and plan the board succession to ensure the next phase of growth.”

He has reflected often that a good skipper knows when to go; chairing a board exacts a heavy cost on families, due to time and attention away from home, he says.

He has a 24-year history with the cooperative and its predecessors,

first the regional herd improvement board, then Livestock Improvement Association which later became LIC. “There is huge satisfaction in being in an organisation achieving a lot. We have remained committed to a philosophy expressed in the mission statement [from] 1939: to improve the net income of New Zealand dairy farmers.

“I have been privileged to be involved in some of the most radical advances in the dairy industry, which have delivered... huge benefit to farming families, the industry and the economy.”

Bay says it’s difficult to isolate the “most satisfying moments” of his LIC career. But “hard to surpass” are the

Stuart Bay

“I have been privileged to be involved in some of the most radical advances in the dairy industry, which have delivered... huge benefit to farming families, the industry and the economy.” introduction of the first profit-based breeding index, genomic selection, share trading among farmers and doubling the size of the business in five years.

“LIC introduced breeding worth (BW) when the rest of the world’s dairy nations were evaluating a cow’s worth based on her total production. The tendency overseas was large animals which produced equally large volumes of milk, but in New Zealand we focused on an animal and a way of

evaluating her based on the profit she generated.”

Bay maintains bringing in genomically selected dairy sires “marked one of the most significant evolutions in animal breeding”.

“This was an outcome of a hard-won argument with the then New Zealand Dairy Board, which opposed our investment in the new science of marker-assisted selection.

“We persevered, and our shareholders supported us, enabling science and technol-

ogy delivering millions of dollars of additional benefit.”

Besides his LIC work Bay has developed and extended the family’s

farming business and had governance roles in New Zealand Dairy

Group, AFFCO, Dairy Meats, Trustbank Waikato and SAITL.

King to take over LIC DIRECTOR and Nelson farmer Murray King is LIC chairmandesignate.

King has three dairy farms and support property in North Canterbury and Nelson, totaling 600ha and milking 1600 cows.

He is also a director of the South

Island Dairy Development Centre and chairman of Waimea Water Augmentation Committee.

He has served on the Fonterra directors remuneration committee, was an LIC shareholder councilor and has worked as an LIC AB technician.

Price freeze pays off for co-op DAIRY FARMER-owned cooperative LIC had a record year in 201011, with sales of $166 million and net earnings of $17.1m.

Chairman Stuart Bay says this reflects the vibrancy the farming industry is renowned for, and the success of a price freeze policy. The 2009-10 year was challenging on most farms and LIC had kept to 2007 product and service prices to help farmers manage in a tough season and continue investing to position their businesses to take advantage of the market recovery, when it came.

In 2010-11, even though dairy payouts improved, prices were held again.

“We’re a farmer-owned cooperative, and made a conscious decision that extending the price freeze was the best support we could give our farmers to help them regain lost momentum during the downturn years.

“That commitment was rewarded with record demand for our genetics and farm improvement products and services.

“In the dairy genetics area record volumes of DNA proven semen were sold in New Zealand with growing demand in our international markets. Farmers around the world recognise that high genomic merit yearling bulls are now the new revolution in animal breeding and LIC has strengthened its leadership as a developer of profitable dairy genetics.

“Strong growth [also came in]

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“In the dairy genetics area record volumes of DNA proven semen were sold in New Zealand with growing demand in our international markets.” farm automation with LIC’s range of Protrack systems the market leader in New Zealand.

“Farmer uptake of new software, customised milk testing, DNA animal identification and disease diagnostics also increased.”

At $166m, revenue was 21.4% up on 2009-10’s $136m and 10.2% better than the cooperative’s previous best of $151m in 2008-09.

Underlying net earnings at $17.1m were up from $9.1m. A record net dividend to shareholders of $13.6m will be paid.

Improved sales volume saw earnings before interest, taxation and fair value adjustments on biological assets jump 45% to $24.3m.

Total assets including cash, software, land and buildings and bull teams, at $236.8m, are up $13.2m, giving the firm a stable equity at 78%.

Operating cashflow for 2010-11 was “strong” at $21.3m. Investments during the year were $22.1 million.

The dividend of $13.6m represents 80% of underlying earnings.

Last year $7.3m was paid out, and the 2009 dividend was $12.8m. The 2010-11 net dividend equates to 8.4c/

cooperative control share and 44.9c/ investment share, giving a gross yield of 17.6% on investment shares

compared to 11.2% last year.

The fully imputed dividend payments will be made to shareholders August 25.

Bay says it is extremely pleasing to report such strong performance to shareholders a decade after LIC became a user owned cooperative under the Dairy Industry Restructuring Act of 2001.

“We’ve achieved a lot in that time

and can take pride in... an ever-growing range of products which make farming more productive and profitable, and which make farming lifestyles more satisfying, enjoyable and sustainable.

“LIC is positioned well for the year ahead as we continue to invest, innovate and deliver new and updated products and look for opportunities to grow the business.”

Strong demand for LIC products like Protrack Drafter helped boost profits.

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16

Dairy News // august 16, 2011

news

Smith chides Labour’s ETS plan CLIMATE CHANGE

Minister Nick Smith has taken a swipe at Labour’s policy on the Emissions Trading Scheme (ETS).

Speaking at the recent Climate Change and Business conference in Wellington he said La-

bour’s policy to introduce the obligation at farm level in 2013 is administratively not-doable.

“The recently announced Labour proposition to include agriculture two years earlier in 2013 and to adopt the tough allocation model of

“A farmer next decade under this policy will be paying five times more for their emissions than Rio Tinto or Methanex.”

90% of 2005 emissions, no provision for growth and an 8.3% phase out

per year is unfair and unworkable.”

Smith says it is a

‘marginal call’ to include agriculture, given no other country is doing so and that limited mitigations are available to farmers.

“The part we find inexplicable [in Labours policy] is to treat agricultural emissions Climate Change Minister Nick Smith and Australian Parliamentary Secretary for Climate Change Mark Dreyfus at the conference.

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significantly tougher in New Zealand than emissions from industries such as aluminium, steel and methanol.

“A farmer next decade under this policy will be paying five times more for their emissions than Rio Tinto or Methanex,” he says.

Smith says Labour’s policy would have New Zealand the only country including agriculture and, globally, our farming would be the hardest hit of any industry in the world.

“The ETS is not intended as a cash cow or a new source of revenue. Nor do we want to reduce New Zealand

production only to see the goods produced elsewhere less efficiently.

The purpose of the ETS is to drive investment in less emissions-intensive production.”

Smith says a key factor in determining the future of agriculture in an ETS will be the availability of practical technologies to enable farms to reduce emissions without reducing their contribution to the New Zealand economy.

New Zealand believes it can make its greatest global contribution to climate change via work by the Global Research Alliance on agricultural emissions.

A different approach for Oz Australia has no intention of including agriculture in any Emissions Trading Scheme according to their Parliamentary Secretary for Climate Change and Energy Efficiency, Mark Dreyfus.

He told delegates at the recent Climate Change and Business conference in Wellington that Australia has passed legislation setting up a ‘Carbon Farming Initiative’ (CFI) which registers methodologies for reducing emissions and sequestering carbon. He says Australia will not follow New Zealand’s lead by including agriculture.

“Our economies are different and other developed countries have responded in different ways focusing on what are the proportions of emissions that different sectors in the economy contribute. In our case 23% of Australia’s emissions come from the land sector whereas in your case some 48% of emissions come from the land and farming sectors,” he says.

Dreyfus says the registration of methodologies is designed to set up opportunities for landholders to have an income stream by earning carbon credits through a range of activities approved under the scheme. “It’s just a different approach,” he says.

There are wide range of ways that landholders can earn carbon credits under the CRI according to Dreyfus.

“These include improving manure management in piggeries, better savannah burning techniques in the tropical top end of Australia, soil carbon techniques, and planting trees on marginal farming land,” he says Dreyfus says Australians are having the same debate about land us as New Zealand. “All our agricultural industries are important to us – darying, beef, sheep, horticulture and arable farming. Clearly many Australians do not want to see prime agricultural land consumed with forestry,” he says.

Dairy News // august 16, 2011

17

news

in brief Tatua scores food certification

WAIKATO PROCESSOR Tatua Co-op says its new food certification reflects commitment to food safety.

Tatua has become New Zealand’s first organisation to achieve Food Safety System Certification 22000 (FSSC 22000). It is one of 400 companies worldwide with FSSC Certification.

FSSC 22000 is an internationally recognised and independent food safety certification system for the food manufacturing sector.

Tatua chief executive Paul McGilvary says gaining FSSC 22000 certification demonstrates its commitment to the manufacturing and supply of safe foods to our customers worldwide.

“This proves we comply with independent, international food safety standards throughout our manufacturing and supply chain.”

FAR levy vote

VOTING IS underway in Foundation for Arable Research’s (FAR’s) fourth referendum on use of levy.

FAR chief executive Nick Pyke says farmers will decide if FAR will continue to invest levy to deliver benefits to farmers.

FAR’s recent winter road-show targeted arable farming communities nationwide and was attended by about 20% of the country’s growers, Pyke says.

More power, less gas NEW ZEALAND Agricultural Greenhouse Gas Research Centre (NZGGRC) director Harry Clark has one of the most challenging scientific tasks: create a cow that’s high-producing but emitting less methane.

He told delegates to the recent Australasian Climate Change and Business Conference in Wellington about research New Zealand is doing to develop such a cow.

Methane emissions are much influenced by what an animal eats so by changing the diet it may be possible to reduce methane output.

But he says this is difficult in New Zealand where animals graze outside all the time and the farmer has limited control of diet.

“One option is to change the species of pasture they eat. The aim

is to breed grasses or clovers that have specific qualities that would reduce emissions.”

But Clark emphasises

the methane. We know of some compounds that can do this but they’re not safe. So can we develop safe compounds

them. However using modern genomic technology, we are looking at their genetic make-up with a view to seeing if there is a way they can intervene and inhibit the specific activity of that enzyme and therefore “The aim is to stop that organism functioning.” breed grasses or Clark says his team clovers that have spends a lot of time sequencing the genomes of specific qualities these organisms because that would reduce the more genomic information they have, emissions.” the more they can Harry Clark move to develop inhibitory compounds it’s not the animal that that would reduce the to reduce the activity. produces the methane, activity of the organisms Genetics is another rather it’s the microbes that produce methane scientific pathway Clark living in its digestive and still allow the and his team are looktract. animal to become highly ing at. They have good “So is it possible to productive?” evidence individual manipulate the microbe Understanding how animals can produce community so that it the microbes work is less methane even on produces less methane?... challenging, Clark says. the same diets. Trials You can find compounds “At present we can with small numbers of that can inhibit the identify what they are sheep have proved some activity that produces but we can’t culture animals will naturally

produce less methane.

The next step is to do the same with a larger group of animals.

“We’re looking to genomic technology to see if there is something specific in the genetic makeup of these animals that could then allow us to identify animals that will produce less methane. This is at an early stage but is looking optimistic.”

New Zealand leads in much of this research, Clark says. Though the focus is on the dairy cow as a major contributor to methane, in the days when there were more sheep, they were the ‘problem’.

Overall the amount of methane being produced by farm animals has not changed much over the years. The focus will now be on how much product is produced per unit of methane.

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Dairy News // august 16, 2011

news

ETS makes no sense – Ferrier PETER BURKE

OUTGOING FONTERRA chief executive

Andrew Ferrier has gone on the offensive over agriculture’s inclusion in an Emissions Trading Scheme (ETS) saying it makes no sense. He said this at the recent Australasian Climate Change and Business conference in Wellington where he was the keynote speaker.

New Zealand has one of the lowest carbon-cost dairy industries, he told 200 delegates.

Applying an ETS to agriculture in New Zealand, when it’s not applied anywhere else in the world, would ultimately lead to a shift in dairy production to countries of lower emissions efficiency.

Emissions efficiency can be achieved without more carbon costs being piled on to our farmers, Ferrier says.

“Dairying is already paying its way. The ETS has resulted in higher

simply reduce profitability and reduce dairy growth in New Zealand.”

Ferrier says the populist view is that farmers are climate change deniers, but he says this in untrue and that

“Piling more carbon costs on farmers will simply reduce profitability and reduce dairy growth in New Zealand.” on-farm costs of some $3600 a year compared to an urban household’s costs of about $133. With the removal of transitional provisions, the entry of agricultural gases and a $50 carbon price, those on-farm costs will rise to $22,000. That’s 28% of the average dairy farm’s cash surplus.

“Piling more carbon costs on farmers will

a great deal of work to curb emissions has been achieved on farm. He says since 2003 Fonterra’s New Zealand dairy farmers have reduced emissions of the two agricultural greenhouse gases by about 8.5%/L of milk, resulting in about 1.4 million tonne less carbon dioxide-equivalent emissions per year.

“These reductions are

Fonterra’s new milk tankers use 30% less fuel and 35% fewer emissions than its old fleet.

attributable to a range of factors including improved bovine genetics, nutrition, fertility and production efficiencies.

But mostly it’s down to

the innovative and adaptive style at the heart of our dairying community.

“Many of the changes not only reduced emissions, they also contrib-

Co-op trims carbon footprint ANDREW FERRIER says Fonterra has been working for eight years on reducing its carbon emissions.

This made sense: it made good economic sense, such that customers asked about Fonterra’s carbon footprint; they were being proactive for the day when New Zealand introduced an ETS. Ferrier says Fonterra’s energy efficiency programme began in 2003 and within three years it had improved energy efficiency 10% and reduced CO2 emissions by 150,000 tonnes per year.

“We have now invested $40 million in energy efficiency initiatives and reduced the energy consumption in our New Zealand operations by 13.9%/t of product. That’s an annual reduction equivalent to the electrical energy consumed by 100,000 homes in one year. In climate change terms, it is a 320,000 tonne reduction in C02 equivalent emissions.”

Fonterra has an eco-efficiency drive to

production collect 70 million L/day.

Our GPS-based scheduling system streamlines collection so tankers collect maximum milk for minimum distance travelled.

“We’ve adopted supply chain efficiencies which have reduced truck movements in the upper South Island by 3000 a year, and warehouse upgrades that have reduced truck movements in Waikato by 50,000 trips per year.”

Fonterra is spending $27 million on tanker upgrades. “We’ve gone for fuel-efficient vehicles with emission control systems. They will use 30% less fuel and have 35% fewer emisAndrew Ferrier sions than our old fleet.

“Every one of these initiatives cut waste to landfill. Factories reuse or remakes great economic sense, they cycle 92% of their waste. And it has other make great emissions sense and they are schemes to reduce its carbon footprint. building on our reductions track record and “We have 450 tankers which at peak milk securing our market attractiveness.”

uted to efficiency and productivity. We have farmers who are among the most emissions-efficient in the world.”

Ferrier says if the

industry could get all its farmers to the same level of efficiency as the best-practice farmers, it could reduce the carbon footprint further.

More milk less emissions FONTERRA BELIEVES it can by 2030 achieve a 30% reduction in the ‘emissions intensity’ of each litre of milk sourced and processed in New Zealand.

Ferrier says this would mean increases in milk production with no increase in emissions.

In aggregate terms this would mean a 4.9 million tonne reduction in per annum global emissions.

“Getting there does depend on science, given 85% of emissions occur on farm and it is important we are upfront about that. But, if we do see a science breakthrough, a further reduction may just be possible.

“Farmers have a good track record and we are optimistic they will adopt new technology and change the way they farm if it makes sense, is affordable and enables more production with fewer emissions.”

Dairy News // august 16, 2011

19

world

Investors take large bite of Bega Cheese THE FLOAT of Australian dairy processor Bega

Cheese is proving popular with investors and farmer shareholders but its value has been questioned by shares investment research publication, Intelligent Investor.

The two share issues were closed late last month ahead of schedule and oversubscribed.

The pool of shares for employees, farmer shareholders and Bega locals due to close on August 16 was also closed early due to popular demand.

This will make the Bega Cheese Group Australia’s biggest listed dairy entity when it begins trading on the Australian Securities Exchange at the end of this month.

It wanted to raise $A35 million through a 17.5 million share issue to the public under the offer price of $A2 a share. A further 850,000 shares will be issued under the Employee Loyalty Offer.

Bega plans to use the $A35 million to primarily reduce interest-bearing debt and improve the company’s gearing levels and interest cover ratios, according to its prospectus.

In a letter with the prospectus, Bega chairman Barry Irvin says it had grown its revenue in recent years to a forecast $A942 million this financial year.

However, Intelligent Investor research director Nathan Bell told ABC radio it would advise investors to steer clear of the stocks.

“Bega doesn’t even own its own brand, it sold the rights off ten years ago. All it gets is a 2.5% royalty on the sales,” Bell says.

“It’s not really a brand business that you’re buying, it’s actually a low margin contract manufacturer, which is a whole different ball game.

“The returns on equity or the returns on capital are absolutely lousy.

“I think the institutional investors would have seen straight through this and the reason it’s been floated on CommSec, is because individual investors are not generally as experienced as other investors.”

Kidder Williams is advising Bega Cheese on the float and its managing director, David Williams, says Intelligent Investor has missed the mark.

“Bega owns its own brand and it leases or licences that brand to Fonterra in Australia only,” he told ABC Radio.

“It owns the brand and uses the brand itself in the international market, so it has significant export sales of Bega branded cheese into South-East Asia, and the Middle East and elsewhere.

“It is a high multiple (price to earnings), but it’s not high compared with some of our international peers.”

Bega Cheese’s decision to list followed a meeting of 150 supplier-shareholders in April.

In overwhelmingly approving the float with about 90% support, the company’s 150 farmer-shareholders have also acted to protect Bega’s local identity.

Shareholding restrictions will be in place for at least five years, with options for a five year extension – and a majority of directors will be farmer suppliers.

Shares will be capped so that no shareholding can be greater than 5% and a minimum of four dairy farmers will fill the eight board positions.

Bega follows Warrnambool Cheese and Butter as another major player in the Australian dairy field to be publicly listed.

Irvin says the decision to list on the ASX was an important day in Bega Cheese’s history.

Irvin says the listing will create a new level of financial strength for existing shareholders and “position Bega Cheese for opportunities that will inevitably come from further industry rationalisation and the ever growing international dairy market place”.

Irvin believes most existing Bega shareholders will stay and use their cashed-up status to reinvest in their businesses.

“We believe many shareholders will reinvest the money back into their business. They will be more financially secure and more likely to invest or expand, or

look at succession planning.”

He says it will give shareholders the opportunity to realise the value of their shares if they wish to take advantage of that.

Bega employs nearly 1400 people.

Bega Cheese shareholders will stay after its listing this month, says Barry Irvin.

20

Dairy News // august 16, 2011

world

Victorian farmers buoyed by high farmgate prices STRONGER FARMGATE prices and favourable seasonal conditions are boosting dairy income in Victoria. An annual Dairy Australia and Department of Primary Industries survey reports net incomes have improved on average $A171,000 over last season.

The 2010-11 Dairy Industry Farm Monitor Project surveyed 74 farmers across the state, with 72 recording positive earnings before interest and tax while 64 recorded a positive return on equity. This is an improvement on 2009-10 when 50% of surveyed farmers recorded a negative return on equity.

The fifth annual survey collected data from farms across Victoria’s north and south west and Gippsland.

Participants were from a range of farm and herd sizes and geographical locations within each region.

The farm monitor project is a financial and comparative analysis of

selected dairy farms.

It provides the industry with farm-level data relating to profitability and production and identifies the key drivers of farm performance.

For the average surveyed farm milking about 300 cows with a milk production of 151,554kgMS, the average gross farm income is about $A987,000 and earnings before interest and tax is about $A290,000.

Whole farm average net income in the north was $A120,184, which follows a loss of $A34,868 in 200910, while south west Victoria and Gippsland farms recorded average net incomes of $A195,065 and $A195,668 respectively.

The average return on assets was 6.2% compared to 2.2% the previous year and the average return on equity was 7.8% compared to -0.3% per cent.

Over the year, costs rose by 6% which was offset by the higher milk

Dairy farmers in Gippsland, Victoria are enjoying a good season.

price, however it should be noted repairs and maintenance costs increased by 33% across the state and 44% in northern Victoria. This indicates that with increased incomes farmers are attending to essential repairs and maintenance that have been delayed over the past couple of years due to tight cash flows.

The survey also revealed 90% of farmers in northern Victoria intend to increase milk production in the next 12 months. In south west Victoria and Gippsland 50% of farmers have the same intentions.

Dairy Australia managing director Ian Halliday says the results re-

flect a good improvement in profitability on Victorian farms following years of challenging seasons.

“These results just go to show how resilient, adaptable, strong and savvy our Victorian famers are after year on year of dry conditions, low milk prices and rising costs where many made a loss,” he says.

“It really is testament to those who can turn their businesses around; many will now be able to consolidate, reduce debt and attend to essential farm maintenance. It is farmers like these who believe in the industry and will ensure it has a strong future.”

Results from the project have reflected Dairy Australia’s 2011 Situation and Outlook Report released in May. Halliday says the industry’s position has continued to improve with high international commodity prices, strong 2011-12 opening farmgate prices of $4.60-$4.90/kgMS and favourable seasonal conditions across most production areas.

“Victorian dairying regions are enjoying arguably the best conditions for a decade with good export demand growth, competition for suppliers and favourable seasonal conditions,” says Halliday.

Price war ruling ‘disappointing’ QUEENSLAND DAIRY

farmers are bracing for more ‘cutthroat discounting’ by supermarkets because of a ruling from the Australian competition watchdog.

Queensland Dairyfarmers’ Organisation (QDO) says the Australian Competition and Consumer Commission (ACCC) made a premature conclusion that supermarket chain Coles has not breached the Competition and Consumer Act 2010 by its $1/litre milk discounting and triggering the

current retail milk war.

QDO president Brian Tessmann says ACCC’s conclusion is premature “because a lot more of the impact of this cutthroat discounting is still to come”.

“The major impacts on farmers will hit in the coming months, as farmers seek to renegotiate new contracts for the coming year. The ACCC conclusion is short-sighted and lacks supportive evidence, and farmers have every right to be sceptical.”

Tessmann says the

dairy industry had presented a mountain of evidence – including numerous submissions and presentations to the current Senate inquiry – detailing the far-reaching and sinister impacts of the milk war.

“Over the last decade major supermarket discounting has stripped hundreds of millions of dollars out of the domestic fresh milk supply chain. It cannot continue like this,” he says.

But the ACCC is not convinced. Chairman Graeme Samuel says the

major impact of the milk price cuts since January seems to have been lower supermarkets profit margins on house brand milk.

“These price reductions have benefited consumers who purchase house brand milk,” he says. “Price cutting, or underselling competitors, does not necessarily constitute predatory pricing. Businesses often legitimately reduce their prices, and this is good for consumers and for competition in markets.”

But Tessmann says

the ACCC needs to answer more questions about the nature and breadth of its investigation.

“Using milk as a marketing agent doesn’t reflect the true value of the product and doesn’t return enough to the domestic fresh milk supply chain to support farmers, processors, transporters, vendors and retailers.

“In Queensland 180 farmers are having their income impacted because of the milk war, causing a significant shift in sales to the

Australian supermarket Coles’ decision to sell milk at $A1/litre is not anti-competitive, it has been ruled.

discounted supermarket branded milk, and that evidence is in black and white in their monthly

milk cheques. But the ACCC is ignoring this impact, which is getting worse by the month.”

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world

‘Give us a fair go’ UK DAIRY farmers are backing a parliamentary report calling for fairer raw milk contracts.

The UK Parliament’s environment, food and rural affairs committee (EFRA) wants the Government to ensure British dairy farmers have more power in price negotiations.

National Farmers Union (NFU) dairy board chairman Mansel Raymond says it’s time all milk buyers gave farmers the equitable trading conditions they deserve.

“UK dairy farmers are some of the most efficient, skilled and committed in Europe so it’s frustrating we’ve got to the stage where the UK has the lowest milk price in the EU.” The industry has been challenged to draw up a voluntary code of practice for dairy contracts and negotiations, he says.

“We have identified those weaknesses so let’s work together to put things right. This is the only way we can look forward to a future of growth and profitability for our industry.”

Poor farmgate prices are forcing UK dairy farmers out of business.

Farmers are fleeing the sector in their droves as the big supermarkets force prices down ever lower. Each week, nine dairy farmers in Britain are forced to sell up.

Raymond says meeting the target of 15 billion L by 2020 requires a stop to the continued shrinking of the national herd.

“It also means the use

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of better contracts and negotiations to ensure our dairy farmers get a fair return on their investment and to see a vibrant industry for the

next generation.”

NFU chief dairy adviser Robert Newbery says the key problem is dairy farmers routinely fail to see prices rise as fast and

as high as the dairy commodity markets.

“Yet when these markets fall, the milk price paid to farmers drops like a stone,” he says.

UK dairy farmers want “a fair price” for their raw milk.

22

Dairy News // august 16, 2011

opinion Ruminating

Editorial

Dispelling the ETS myth

milking it...

Flying high with butter

Paying for cows’ pension FEELING GUILTY about hard-working cows that provide you milk?

Well, some Londoners are. They can now soothe their collective conscience by drinking milk from cows that will only die of old age.

The Hindu Ahimsa Foundation guarantees no cows, bulls or calves will be slaughtered in the production of its milk.

Fifty London families have ordered the recently launched Ahimsa milk at $4.45/L plus delivery.

The price includes a

$1.95 for production, processing and bottling, $1.30 towards a pension fund, hospice costs and vet costs, and 60c for admin and overheads.

Cows at the foundation’s organic farm in Kent will be in calf only every two years and will be required to calve only five times.

At age 13 each cow will be retired to a farm sanctuary in west Wales. Heifer calves will join the milking herd and bull calves will be reared and kept until their death at about 17-20.

COWS WEREN’T jumping over the moon in this month’s Ohio State Fair butter sculptures, but the refrigerated exhibit does have a space travel theme.

The usual cow and calf made of butter were accompanied this year by a butter space shuttle and astronaut.

The American Dairy Association says the display paid tribute to the shuttle program’s 30year legacy. The last space shuttle flight ended last month with the landing of the Atlantis.

The trade group says in a news release that the butter sculptors “had a blast” creating the exhibit. The work took 475 hours and used 700kg – about 6200 sticks of butter.

Cow milk too salty?

FIRST IT was the high protein content in milk. Now, it’s the salt.

Researchers have found humans fed cow milk before 12 months tended to have the highest salt diets.

Pauline Emmett and Vicky Cribb, nutritionists from Bristol University, found seven in 10 babies had too much salt in their diets. The study, published in the European Journal of Clinical Nutrition, looked at 1200 eight-month-olds born in 1991 or 1992.

Cow milk, they noted, contains 55mg salt/100ml, almost four times that found in breast milk (15mg / 100ml).

Concentrations in formula milk vary from 15 to 30mg / 100ml.

A baby consuming 700ml of cow milk daily would be getting 385mg of salt from that source alone – almost half the recommended maximum (1gm) for a baby up to one year old. One in eight of the children studied were fed only cow milk, as opposed to breast or formula.

Foot-in-mouth analogy

FEDERATED FARMERS Dairy chair Willy Leferink last week concluded a milk pricing media release saying “You have to seriously ask if the All Blacks jersey is fast becoming the new milk.”

That will be the $220 jersey most people think is outrageously over-priced.

So what is Leferink saying about the price of milk? For all the talk about ‘new brooms’ on Federated Farmers board, it seems they still need some coaching in communications.

ANDREW FERRIER went on the offensive at the recent Climate Change and Business Conference in Wellington, delivering a great speech to an audience that included some important people.

Though not everything in the dairy industry is right, conversely it’s not all bad, and Ferrier said so in a logical, convincing way.

He acknowledged dairying contributes to greenhouse gas emissions, but in a 20-minute presentation he pointed out that, contrary to popular belief, most dairy farmers are not climate change skeptics and they and the wider dairy industry are actually on the same page as many of the industry’s critics.

Ferrier gave a comprehensive, state-of-the-environment report from Fonterra, showing that the dairy industry has for several years been working on ways of reducing its carbon footprint. His report delivered hard facts devoid of clichés and ‘bureau-speak’.

Every farmer should read Ferrier’s words and use his key points to counter the often-heard criticisms that dairy farmers are profit takers who care little for the environment.

Agriculture Minister David Carter has recently urged Fonterra to be more proactive in getting its message to the ‘man in the street’.

Ferrier set out to influence the influencers, even the opponents of dairying. He front-footed the case for dairying and did it well.

With a general election close, Labour and the Greens appear to believe ‘rural bashing’ will win them votes. But these well-intentioned people seem to forget the dairy industry is an important economic tool for powering our fragile economy into a stronger state.

The myth that farmers don’t care about the environment was well and truly dispelled by Ferrier.

– Peter Burke.

Write and Win! WINNING a new pair of Skellerup Red Band boots has just become easy.

The best Letter to the Editor published in Dairy News each issue will receive a pair of boots. So, put your pen to paper and let your views and comments be known through the most widely read farming publication. And you may end up bagging the Skellerup Red Band boots.

Send to: Letter to the Editor PO Box 3855, Auckland 1140 or Email: dairynews@ruralnews.co.nz.

This issue’s winner is Shannon Hutching-Bell, Ohope. A voucher for a pair of Skellerup Red Band Gumboots is in the mail.

Dairy News // august 16, 2011

23

letters

Where is transparency and fairness?

I AM not satisfied with the value accuracy of our current Fonterra shares. Figures quoted to me by Fonterra show that in 2004-05 the share price was $4.69 and the payout was $5.59/kgMS. 2005-06 had a share price of $5.44 and payout of $4.20/kgMS; 2006-07 $6.65 and $4.46/kgMS; 2007-08 $6.79 and $7.66/kgMS; 2008-09 $5.57 and $5.21/kgMS; 2009-10 $4.52 and $6.10/kgMS; and 2010-11 $4.52 and $7.50/kgMS. Your equity in Fonterra is the share price. If you were to cease supplying, the value of the shares would supposedly be an accurate valuation of the company.

The situation, as I see it, is shareholders who sold shares in the 2007-08 season sold out at $6.79/ share and will come back to Fonterra at $4.52/share.

If that supply say was an average of 100,000kgMS when they exited, they were paid $679,000. This year with a similar payout they come back at $452,000. That’s an asset gain of $227,000 at the expense of all shareholders.

I’m told no fewer than 30 suppliers are coming back this season at a cost to the cooperative of conservatively $6 million.

The suppliers who transferred to Open Country Cheese have not lost $300,000 of share capital.

They will be celebrating now. The payout price will take many years to reach $300,000 of lost revenue.

These facts, as grim as they are, will be good ammunition for Open Country Cheese executives.

This devaluation will be a solid test of whether the Fonterra Shareholders Council is worth its place or alternatively its cost.

If I was a director of Fonterra when this valuation was first exposed, I would have resigned.

I could not have an issue like this on my conscience. To me integrity is far more important.

Why is Fonterra using three different reasons for the devaluation: farmers’ vote for it, the milk price and trading in an protected market Using three different excuses raises alarm bells to me. We should question these issues: 1. No return on retention $33,000 per shareholder.

2. With a good annual trading performance the share values should rise. Where is this money?

If the share values are restricted or controlled, shareholders have an equity loss of conservatively $227,000 each (per 100,000kgMS).

I believe the shareholders business case is a follows: 60% of income is on-farm (the raw product price); 40% is off-farm (manufactured and marketed improvements).

We must all scrutinise closely the performance of the off-farm side of the industry.

I think I have a good reason to challenge the integrity of Fonterra.

I feel this suppressed share price is definitely not the correct reflection of Fonterra’s value. I discussed the loss of share value with a Fonterra director recently, and he stated we voted for this devaluation when TAF (trading amongst farmers) was approved.

I then challenged him over the transparency issue of this vote and I stated that if shareholders knew they would be losing $250,000-300,000 of hardearned cash, Fonterra would not have got that vote through.

Fonterra’s cooperative philosophy states that transactions between Fonterra and the supplying shareholders must be transparent and fair.

What has changed in the valuation system? The cooperative, as I see it, has not changed. We are still trading in the same countries, and there have been no dramatic changes to structure. As regards to ‘protected markets’ we have been trading in a protected market for as long as the cooperative has been in existence.

Therefore I see no valid reason for such a low valuation of the share price.

I consider my equity loss a major, not a minor, matter.

Bruce Rowe Te Awamutu

Meet the real Rosie the Cow PLEASE TELL your cartoonist Mr Evans that Rosie the Cow does really exist.

My grandmother brought Fresian cross calves and we, her seven grandchildren, named them.

I called mine Rosie but grandma could only fit Rose on the tag. Here is a photo of me and Rosie and she is pregnant.

When she is sold, we will pay Grandma what they cost and I will bank the rest for when I go to university.

Shannon Hutching-Bell (aged 9) Ohope

24

Dairy News // august 16, 2011

Opinion

Not the time to blaze new trails on ETS offset scheme which delivers cash to farmers rather than require them to pay an emissions fee.

Other nations have not implemented domestic climate change policy at the rate expected in 2009. The Kyoto Protocol first commitment period concludes at the end of next year and major emitters like Japan, Canada, Russia and the US have stated they will not sign up to a second commitment period.

As a result, the direction and ambition of international climate change policy remains uncertain. Not surprisingly, farmers feel this is not the time to blaze new trails by implementing policies that will place costly obligations on agricultural emissions while the only policies proposed by competitors will be the opposite.

Emissions efficiency can be achieved without more carbon costs being

Fonterra farmers have concerns about ETS, says Andrew Ferrier.

bon-cost dairy industries in the world. Applying an ETS on agriculture here, when it is not applied elsewhere in the world will ultimately lead to a shift of dairy production to far less emissions efficient countries.

We all know the world must dramatically increase food production in the next 20–30 years. In fact, the UN says global food production has to double by 2050.

How is this food going to be produced? With what impact on global warming? We need to start by allowing the most efficient industries in the world, economically and environmentally, to grow to do their part in feeding the world. And this certainly doesn’t start by putting economic disincentives on the efficient dairy industries

like New Zealand, while leaving inefficient ones to grow unfettered.

In fact, organisations like the UN Food and Agriculture Organisation are emphasising the need for this higher production to come from emissions efficient countries. The World Economic Forum calculates that if 10% of agricultural production moved to more efficient locations, 178 million tonnes of carbon dioxide equivalent emissions could be reduced. That’s four times the total net emissions of New Zealand.

And New Zealand is an emissions-efficient country for dairy products to start with, and Fonterra and our farmers will not rest where we are.

We have been working on emissions reduc-

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tions since 2003. The carbon footprint study we completed in March 2009 has focused our effort.

The study calculated the greenhouse gas emissions of five of our high volume, high turnover dairy exports: butter, milk powder, milk protein concentrate, cheese and caseinate.

The results were calculated measuring carbon emissions through each stage of the product lifecycle, from on-farm and farm-related inputs where raw milk is produced, through to the finished commodity ingredient leaving New Zealand dairy processing sites and being transported to overseas markets.

This study has enabled us to better focus our efforts to reduce greenhouse gas emissions.

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AMONG OUR dairy exporting competitors, only the European Union has an ETS and agricultural gases are not part of the EU scheme.

Proposed schemes in the US have stalled and there are few prospects of schemes by emerging competitive producers such as Argentina and the Ukraine. Australia will now likely have an ETS, but keep in mind that agricultural gases will be included via an

piled on to our farmers and those costs are real.

Dairying is already paying its way.

The ETS has already resulted in higher onfarm costs of some $3600 a year compared to an urban household’s costs of around $133. With the removal of transitional provisions, the entry of agricultural gases and a $50 carbon price, those on-farm costs will rise to $22,000. That’s 28% of the average dairy farm’s cash surplus.

Piling more carbon costs on farmers will simply reduce profitability and reduce dairy growth in New Zealand.

And to me, this makes no sense. New Zealand is one of the lowest carGADGET7170

Fonterra and its farmers are taking action on climate change. But they also have concerns about the ETS. Outgoing Fonterra chief executive Andrew Ferrier told a recent Climate Change and Business Conference why farmer concerns are not unfounded.

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25

Agribusiness

Global demand dictates local prices NORMAN REPACHOLI

DESPITE A period of relative stability, many factors are guiding dairy commodity prices.

In addition to the usual geographic supply-and-demand factors following the northern and southern hemisphere production curves, individual dairy commodities are forging their own pricing path.

This article overviews the four major commodity markets and some of the factors manufacturers consider when deciding how to process milk.

Skim milkpowder (SMP) Prices have received a boost from competition for relatively small volumes available on GlobalDairy Trade, but auction prices are now being scaled back.

Demand for dairy protein in the form of SMP has remained strong all year, absorbing growing volumes from the US without having a detrimental effect on prices.

Whole milkpowder (WMP) China continues to drive the global WMP market and preferential access with New Zealand makes them China’s largest WMP supplier, providing 93% of Chinese WMP imports.

Strong buying from China January-May 2011 means buyers have ample inventories of WMP. This reduces competition in WMP markets and is a big cause of WMP prices easing during the last two months. It is likely Chinese buyers are trying to postpone purchases until the beginning of 2012 when a discount to current

tariff rates (for New Zealand) takes effect.

Cheese Cheese markets are well balanced with steady demand from major buyers in Russia and Japan while global supply growth has been quite modest this season.

Similar to SMP, global market demand for cheese has been strong enough to absorb a 20% increase in export volumes from the US (May11 vs May10) without seeing commodity prices drop much.

The problem is US dollar prices have not increased enough since early 2011 to offset the

butter producers are choosing to sell on the world market rather than store it for later this year. The rationale is ‘better to sell now at high prices rather than build stocks and risk inventory write downs’ if prices fall later. But come Thanksgiving and pre-Christmas buying, US manufacturers will be choosing whether to supply the domestic or global market. It’s unlikely there will be the volume to adequately supply both, so prices will head up.

In addition to the seasonal demand spike in the US, a hot summer in Europe has lifted

Dairy manufacturers go for products that maximise returns for milk they collect.

“When planning how to use milk collected, manufacturers will consider such factors as sales commitments, and plant capability and utilisation.” increasing Australian dollar, so local currency spot returns are down about $A200/t. A large volume of US cheese was recalled following reports of foreign matter discovered in bulk cheese, reducing commercial inventories intended for use later this season and exposing cheese markets to a sharp increase in prices if milk supply wavers.

Butter Global butterfat markets remain fairly tight despite a dip in prices over the last month. US stocks remain light for this time of year and are not building up prior to peak demand in the end-of-year festive season.

At the moment US

demand for ice-cream, so some milk that would have gone to butter has been diverted to ice-cream. Add to this the ongoing shortage of butter in Japan following the earthquake and tsunami, plus a reported butter shortage in India, and momentum appears clearly behind strong butter prices.

From now, the choice facing many manufacturers is not where to sell product, but what products will maximise returns for the milk they collect. The average 10,000 L of milk can be made into butter/ SMP (892kg SMP, 501kg butter, 50kg butter milk powder); WMP (1272kg WMP, 105kg butter, 11kg BMP); or cheddar

(1062kg cheddar, 32kg butter, 3kg BMP and 623kg of whey powder).

So the value 10,000 L of milk can change a lot depending on what products it’s made into.

When planning how to use milk collected, manufacturers will consider such factors as sales commitments, and plant capability and utilisation.

Anticipated supply from competitors – overseas and Australian – and the relative returns across the commodities, will also play a role in determining where milk payouts finish at the end of this season.

• Norman Repacholi is an international industry analyst with Dairy Australia.

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26

Dairy News // august 16, 2011

agribusiness

RD1 on prowl for more stores FONTERRA-OWNED rural retailer RD1 is

on the prowl for more outlets following its takeover of Allied Farmers’ retail business.

RD1 general manager Nick Berry says there are pockets around the country, especially the South island, where it needs stores.

With the Allied Farmers acquisition RD1 has 64 outlets – 11 in the South Island. Strong dairying growth in Canterbury and Southland encourages RD1 to expand there.

“We will be looking at acquisitions or own organic growth,” Berry told Dairy News.

“Part of RD1’s

strategy is to widen its store network to service Fonterra farmers nationwide.”

RD1 also sells to beef and sheep farmers, so buying Allied Farmers stores in lower North Island has boosted its offering, says Berry. It bought Allied Farmers stores at Manaia, Eltham, Pungarehu, Waverley, Inglewood, Piopio and Opunake, and will take over the lease of the Taumarunui store.

Berry expects the rebranding of the new stores to be completed in six weeks.

Plans are to combine staff and assets of both companies to put an RD1 store in each

Nick Berry

centre, meaning RD1 will service most of the wider Taranaki and King Country areas.

Berry gives two main reasons for RD1 buying the retail stores.

“First, we’re continuing to support farmers...

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by ensuring these stores still exist and, second, wherever possible we want to try to keep good rural retail staff employed in these communities.

“In many cases, these rural stores are the hub of the community, and in some cases, the only store available to people. They provide employment and essential services.

Without them those communities would be isolated and agriculture would suffer.”

About 45 staff were affected by Allied Farmers’ decision to sell Taranaki and King Country Farmers, as were many dairy farmers and local communities.

“With the certainty of RD1 and Fonterra behind these stores, there are plenty of opportunities for Allied staff and

customers,” says Berry.

Allied Farmers Rural chief executive Steve Morrison is delighted with the deal.

“It enables most of our stores to continue to operate for the benefit of the local communities they serve and of course retain staff within those communities.”

The sale leaves Allied Farmers to focus on its livestock and real estate businesses.

“These activities will be the focus of our efforts to support and add value to customers’ businesses and endeavours, and provide a robust platform for Allied Farmers’ future,” says Morrison.

The sale of the rural stores will enable Allied to more quickly repay its debt. For the year to June 2011 it reduced debt by $50 million.

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27

agribusiness

Resurgent returns on agriculture is lifting fertiliser spend by farmers.

Fert firm’s result best in 14 years RAVENSDOWN’S PRE-TAX operating profit leapt 260% to $71.6 million in the year to May 31 despite a difficult year in its Australian operations.

Directors last week declared $57m distribution to shareholders: a $15.10/t rebate and a share issue worth $26.86, or 18 shares/t purchased.

Chairman Bill McLeod says it’s the highest distribution of cash and shares in 14 years and reflects continuing gains in Ravensdown’s value. “In the past 10 years shareholder value has increased by $64 a tonne to $184.”

General manager marketing Mike Witty adds the 2010-11 result is a record for the cooperative, the higher distribution 14 years ago being due to a jump in share distribution.

Resurgent returns in New Zealand meat, wool, dairy and arable, and consequent increased spending on fertiliser, drove the 2010-11 figures, revenue increasing 12% to $933m with a 14% increase in fertiliser tonnage sold in New Zealand and Australia at 1.492mt.

Witty says just under 20% of that was in Australia, and about 20% of the cooperative’s fertiliser sales there were of product made in New Zealand.

Total assets grew 14% to $786m, but McLeod says trans-Tasman expansion makes balance sheet comparisons with previous years difficult.

“Our May balance date is in the middle of the Australian fertiliser application season, resulting in stock levels being much higher at this time of year than when we operated only in New Zealand.”

Net operating cash flow is consequently down $13m at $118m, compared

to $131m in 2009-10.

Spending during the year included $3m to improve efficiency and environmental performance at Ravensbourne works, Otago, and upgrading stores in New Zealand and Australia. Ravensdown Shipping Services was established, delivering “significant efficiencies” to international logistics.

First half operations in New Zealand were extremely challenging due to September’s storms and earthquake but “a second half buoyed by excellent growing conditions and good commodity prices” compensated.

In Australia an $11.2m loss before tax in 2009-10 was reduced to $1.6m despite difficult trading conditions in the west and Queensland.

“In Western Australia the droughts continued, breaking only after the end of our financial year....

“In Queensland we had the opposite: the worst rainy period growers could remember, resulting in a lot of sugar cane not being harvested and little fertiliser being applied.”

McLeod say these regions have bounced back post balance date and a substantial improvement in financial performance is expected in 2011-12.

During 2010-11 Ravensdown bought 50% of Direct Farm Inputs, a fertiliser business in south-east Australia, and chief executive Rodney Green says the Australian investments are a “very strong” foundation for the future.

The cooperative continues to look for acquisitions such as the C-Dax deal it announced August 1, but they “have to fit and add value to the business,” stresses Witty.

Ballance profit tops $85m RIVAL FERTILISER cooperative Ballance Agri-Nutrients late last month announced similarly buoyant figures for the year to May 31.

It made an $85.9m operating profit, up from $20.7m in 2009/10, and will pay out $50.29/t in rebate and dividend.

Tonnage was 19% up at 1.392mt with a 9.7% increase in total revenue at $760.1m. Like Ravensdown, net cashflow from operating activities was down, at $84m compared with $155.8m in the previous year, reflecting a decision to carry more inventory to meet anticipated demand increases.

Operating costs were up $15m at $146m, mainly as a result of higher volumes sold.

“Like everyone, we faced higher

fuel prices which drove internal transportation costs up, and with larger sales volumes, the cost of freight also increased, along with the selling and distribution expenses associated with those higher volumes,” said chief executive Larry Bilodeau.

Ballance also says it is well placed to invest in growth opportunities, having reduced debt from $91m to $38m.

“A good example is the recent investment in animal nutrition, Seales Winslow.”

Since its year end it bought 51% of Farmworks Systems Ltd, including its farm management portal, Ag-Hub. During 2010-11 total shareholder assets rose 15% to $527.4m but shareholder equity ratio was down at 63%.

28

Dairy News // august 16, 2011

management

Effluent system face scrutiny MARY WITSEY

SOUTHLAND DAIRY farmers face greater scrutiny as their local regional council raises the bar around effluent management on farm in a bid to improve water quality.

Dairy farmers were given the latest information at DairyNZ effluent field days at Otautau and Edendale this month with Environment Southland compliance officer Chris McMillan saying monitoring is tightening up.

“The council is looking beyond compliance of general dairy effluent consents and focussing more closely on permitted activities, including the disposal of sludges.”

Under the rules of the council’s regional effluent land application plan sludge is effluent and he stresses it needs to be managed.

In the past Environment Southland has not recognised sludge as an issue under consent conditions, but that has now changed as the council moves to improve water quality around the province.

“We’re just acknowledging there’re contaminants coming off parts of farms, other than at the irrigator, and these need to be managed.”

This includes monitoring sludge build-up in stone traps, on lanes, races and stock underpasses, he says.

Sludge is the settled solids from farm dairy effluent that gathers at the bottom of sand and stone traps and pond systems. Such effluent solids will not flow in a pipeline system and have to be scraped off the farm dairy yard, or dredged from storage facilities and spread on to land.

Cutting waste Environment Southland recommends sludge not be discharged: - directly to water - within 20 m of a water body - within 100 m of a water abstraction point, or a dwelling on another property - within 20 m of a property boundary - where there is an odour or spray drift nuisance beyond the property boundary.

“The bottom line is if you’ve got effluent, you’ve got to manage it, and apply it lawfully to land, and that includes sludge.”

He suggests any stored sludge accumulation be drained on a sealed area, preferably concrete, with any

draining going back to the effluent system or applied directly to land at a maximum depth of 7mm, with a minimum return period of 28 days.

“Farmers are managing multi-million dollar businesses they need to be aware of the current rules.”

He acknowledges farmers are busy, particularly at this time of year, “but it comes down to planning and ensuring you’ve got enough bums on seats to do the tasks properly.”

He also encourages farm owners to be hands on, especially when considering using soil moisture information from the council’s website when conditions are wet.

“I encourage them to go out and see what’s happening in their own paddocks when applying effluent when conditions are marginal and confirm that the application is not likely to have an impact on the environment.”

There are a lot of absentee consent holders in Southland, he says, and they often rely on farm managers

Environment Southland compliance officer Chris McMillan.

to keep them informed which can result in communication breakdowns.

“These owners might not even live in the Southland area, so it becomes very difficult for them to be aware of what’s happening on individual farms.”

However, the rules are there to be followed.

“We want to encourage people to do the right thing because farming

practices should not have an impact on the environment” He recommends farmers use the council’s land sustainability staff who provide free advice on improving farm effluent systems.

One of the positives in Southland is the good industry-based training around effluent management.

“However, in a lot of cases we’re getting past the education stage.”

30

Dairy News // august 16, 2011

management

Horowhenua heifers strut their stuff It’s a long way from Kuku, Horowhenua, to a Fonterra dairy farm in Tangshan, China – a journey now being taken by heifers from Rodney Hudson’s Friesian Holstein stud farm. And while those heifers embark on their OE, others strut their stuff in television commercials. Peter Burke explains what makes Hudson’s cows special.

RODNEY HUDSON and I have lived on the same road since he and wife Sarah four years ago leased a 55ha block plus an extra 18ha. He runs 140-150 cows plus 30 replacement heifers.

Hudsons run the farm year-round themselves, with at best a small break at Christmas. They have

a 50/50 spring-autumn system and milk all year.

Hudson was a pupil at Fielding Ag, as were Tom Scott and other kiwi greats. At the time his grandfather was into stud Jersey cows so that led towards farming because, as he puts it, that’s what he could do.

“I was a practical

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person and didn’t mind working outside. So I signed up to a farm scheme and started milking 300 cows.” He and Sarah did other jobs in the dairy sector before leasing their present farm, Rotodale.

Rotodale is not an ordinary stud farm and Hudson is not your Joeaverage farmer. Though his cows are Friesian Holstein, he has used Canadian semen to breed cows larger and producing greater volumes of milk than the average cow. The trade-off for volume is a slightly lower percentage of milk solids, Hudson says.

“The more milk a cow produces, the more solids she’s going to produce.

She may not have a higher quantity of solids per litre in her milk, but if she can produce 3-4 L more per day she will compensate you for the solids she’s not giving you.

“The normal farmer doesn’t understand that.

He’s just been told this is how it works, but my cows would out-produce

Rodney Hudson with special cows at his Rotodale Stud Farm.

most cows no problem.

But because they’re from overseas genetics they don’t get the New Zealand proof because they don’t have enough daughters in milk to gain the proof as do New Zealand bulls.”

By using the Canadian genetics the quality of the cows are better, Hudson says.

“They’re bigger and more functional for a small operation like mine. They have better feet and legs and better ligaments, udders and conformation – impor-

tant because we show our animals.”

Hudson has a simple aim for his small herd of stud animals: a nice herd of cows he can enjoy milking without them undergoing stress and seeing their udders collapse.

And his cows last longer; he has one aged 16 and still milking. “Because we show our cows we are trying to produce a winning cow as well.

So our cows have to milk well and walk well and their conformation has to be good.

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“I’ve got to milk them every day by myself so if they don’t look good I’m not going to like milking them. Essentially I want good looking cows.”

Hudsons raise every calf they produce and sell their bulls through the local yards as weaner bulls. All the heifers are reared and they keep the better calves for

replacements, selling the extras for export to China or Vietnam where both countries are trying to improve their dairy herds.

In China, some Hudson animals will likely go to a Fonterra farm near Beijing. Hudson says he gets good prices for these heifers. The demand for them in China

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31

management

around the world and Vietnam he links to his use of Canandian genetics.

In both countries the milk is for the liquid milk trade in which volume matters most, rather than milk solids. In China Fonterra is using semen from the US to breed cows that produce greater volumes of milk.

Because Hudson has a small herd, the cows are more than just a number to him.

They also have names and at an early age the heifers are taken on a lead and so have good temperament. This has produced another bonus for Rotodale: the cows are in demand for televi-

sion commercials and the woman who trains them for this role lives at nearby Waikanae.

Recently some Hudson animals were the stars in a commercial made for Italian television.

Hudson says they are happy leasing the farm and have no burning ambition to buy.

“I don’t know whether buying a property is the b-all and end-all. I can lease a farm and have my herd of cows as my asset and look at other options like buying property elsewhere or having a drystock property. What I’m doing seems logical and makes economic sense.”

One of the special cows at Rotodale Stud Farm.

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A VETERINARIAN with a key role in identifying possums as a source and the main carriers of bovine TB has been awarded the Queen’s Service Order.

Animal Health Board vet Paul Livingstone recently received the QSO from Governor-General Sir Anand Satyanand during a ceremony at Government House, Wellington.

He has been behind efforts to rid New Zealand of TB for nearly four decades and received the QSO for his contribution to veterinary science. More recently his work in monitoring possum numbers helped to develop the national TB control strategy.

The strategy is aimed at eradicating the disease in wildlife on 2.5 million ha of New Zealand – 25% of the area known to be at risk from TB-infected wildlife.

Eliminating this disease source will require less TB testing by farmers and benefit threatened native plants and birds.

Livingstone, the TB eradication and research manager at AHB, was delighted by the number of colleagues, from New Zealand and abroad, who nominated him for the award.

“I’m grateful to my family who have supported me throughout my career, particularly my wife, father, son and granddaughter.”

Livingstone’s livestock and wildlife TB control policies, plans and operations have been pivotal in reducing infected herd numbers from 1700 in the mid-1990s to 100 today, AHB says.

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33

Management

Clever work lifts compliance rates EFFLUENT MANAGEMENT compliance by

dairy farmers rose in four regions during 2010-11.

Figures released by Canterbury, Waikato, Otago and Tasman regional councils for the 2010-11 dairy season show more farmers complying with effluent rules.

In Canterbury preliminary show 65% of dairy farms complied fully with discharge consents or permitted activity conditions. In 2009-10 the figure was 59%, in 2008-09 it was 43%.

Canterbury has for three seasons seen DairyNZ involved in an industry/council effluent management working group.

The group has passed on practical information to farmers on where they can lift performance.

This has included fact sheets of photos of what effluent ponding looks like, compliance checklists, quick reference training cards and consents printed on waterproof paper.

Waikato Regional Council discovered fewer farms failing to comply.

Only 12% were “significantly non-compliant”, down from 27% the previous season. And 66% of farms fully complied with the rules during the same period, up from 5% the previous season.

In Waikato for three seasons DairyNZ, the

regional council and Federated Farmers have run 20 effluent management field days and other events.

Numbers of farmers attending have steadily increased, showing how dairy farmers are becoming more interested in the practicalities of managing effluent.

In Otago 91.2% of farms were found complying with the regional council’s permitted activity rules and/or their resource consent conditions. And though 34 farms were non-compliant, only seven farms of 389 were “significantly non-compliant”.

Tasman District Council reports similar results. Some 90% of dairy farms were compliant (89% the year before), 7% were non-compliant and 3% significantly non-compliant (4%).

Results like these could be seen as a turning point in the management of dairy effluent.

Farmers deserve the credit for making this a key matter to get right.

And where DairyNZ, dairy companies, effluent equipment makers and Federated Farmers have worked collaboratively with councils to help farmers know how to comply, the results are beginning to show.

The industry has a raft of projects because it is serious about getting it right and encouraging the successes we’re starting to see. It’s essential work for the dairy industry, from economic,

in brief Eagle eye on farms THE WAIKATO Regional Council is this season planning to survey 1000 dairy farms by helicopter for effluent management.

Seven monitoring flights will look at 135 farms in randomly selected locations. Waikato has 4000 dairy farms.

Helicopter monitoring is one of the Waikato council’s tactics intended to lift compliance, says compliance and education manager Rob Dragten.

“We will be working with Federated Farmers, Fonterra, DairyNZ and farmers to make further gains on effluent management this season after last year’s much improved performance.”

DairyNZ is offering a specialist effluent advisory service for farmers who have questions about the set-up and operation of their effluent system.

environmental and reputational points of view.

There are many factors at play and no single reason why performance has improved: hard work

BETTLE8341

THERESA WILSON

Effluent compliance management is improving, says DairyNZ.

by the industry and dairy farmers mostly explains it.

• Theresa Wilson is DairyNZ project manager for effluent.

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34

Dairy News // august 16, 2011

management

Taking stress out of calving HOW CAN you streamline the first few weeks of calving? Be prepared.

As every boy scout knows there is no substitute.

Work as a unit: Employers set the standard of leadership here, and really well thought-out systems which have been explained properly to all staff are key. A clear understanding within the team can avoid some of the breakdowns during stressful times.

Keep talking to staff and write a ‘brass-off’ list together: There are probably half a dozen things that really rip your shorts – don’t expect everyone to guess what they are – tell them. Find out from your team what their ‘brass-off’ lists are too, and respect them.

If your list is long, ask yourself why.

Delegate areas of responsibility to staff:

Be clear and concise with your team on their responsibilities for the calving period. Keep these visible on a whiteboard or poster in the dairy shed.

Get your kit together: Make sure all your gear

comfortable within the shed (followed by a fresh feed). Tag your heifers now rather than during calving.

Simplify systems for drafting out calved cows: If you have a feed pad, use it to draft

A clear understanding within the team can avoid some of the breakdowns during stressful times. is set up and ready to go. Have a kit you leave with the springers for emergencies.

Get up-to-date before calving: Get your herd records up-to-date, make sure the tags in the ears match the records in MINDA. Read the lifetime ID tags of everything if necessary.

Run your heifers through the shed a few times to get them familiar and

calved cows while they are feeding rather than drafting in the paddock.

If drafting cows and calves in the paddock, set up breaks in paddocks on opposite sides of the race for alternate days.

Shift cows onto their new break across the race and you will usually find it simple to keep calved cows back with their calves. Often they will return to them after

grazing if the gates are left open, i.e. they draft themselves. Only make one trip to the paddock to pick up calves, tow a trailer behind the carryall or another trailer, put bobby calves in one trailer, replacements in another.

Minimise mobs: Fewer mobs mean fewer trips, fewer fences, fewer gates to go through to feed out and fewer grazing decisions.

Milk your colostrum mob once a day all through calving: This seems to have very little effect on the cows and a massive effect on the team.

Also, reduce the physical load: Lifting calves and carting milk by bucket are fine for some people but it wears us mere mortals out.

Milk the herd once a day for a short period: Milking OAD does have

Calving can be stressful for workers so its important to work as a unit.

an impact on the potential milk production for the season. However, reducing the workload at peak may have more benefit than the loss in the potential milksolids.

DairyNZ recommends

that a complete systems analysis (operational and financial) should be completed before deciding to milk cows OAD in early lactation.

Teaching calves to drink: If the calves come

in with a full belly (but remember about 1/3 of calves won’t have fed from their dam), don’t teach them to drink until they are hungry. A hungry calf is half as hard to teach as a full one.

36

Dairy News // august 16, 2011

management

Meal quality crucial in calf rearing ANDREW SWALLOW

WHAT COLOUR is your calf meal? And how readily do calves chew into it?

If it is dark and calves are reluctant to eat, something is wrong, says one of New Zealand’s leading rearing researchers.

“It should be a light colour because the major component should be grain or soy; it should not be chocolate colour,” said Paul Muir, of OnFarm Research, at a recent Beef + Lamb New

Zealand monitor farm field day.

Dark colour suggests high inclusion of palm kernel to which calves have an aversion, as many rearers found out to their cost in 2007 and 2008, he says. “There was an awful lot of palm kernel turning up in calf meal.”

As an ingredient PKE is fine up to 20%, Muir says, and he has “no problem with it as a feed for older cattle.”

However, much over that 20% inclusion rate calf intake of meal will plummet,

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“If you’ve got it right, when you put the meal out the calves [on grass] will come running for it. If they are wandering around and couldn’t care less, something isn’t right.” slowing growth, rumen development and transition to grass.

“If you’ve got it right, when you put the meal out the calves [on grass] will come running for it. If they are wandering around and couldn’t care less, something isn’t right.”

Meal is “the bridge” that takes calves from milk to grass, promoting rumen development which in turn allows earlier weaning and cheaper rearing, he explains.

“We know in our [restricted milk] system if a calf has put on 18kg it can be weaned.... A good rule of thumb is 20kg liveweight gain.”

Weight of calf coming into the rearing shed is a good indicator for how it will perform. “Basically the gap [between small and large] gets bigger as they go through. It’s a much better indicator than coat colour of how calves will go.”

As a rearer, Muir’s policy is not to accept any calf under 40kg.

Surveys have shown at least 25% of calves picked up on dairy farms haven’t had colostrum, so Muir’s advice is to

give all calves a mix of day-one colostrum from a number of cows as a matter of routine. “Feed that as soon as they arrive in the shed.”

Time is of the essence as even newborn calves can only absorb 35% of the antibodies in that first milk and within 24 hours the absorption rate is virtually zero, he adds. “That first 24 hours really is important.”

After that, colostrum is a wonderful food but for transferring immunity it’s useless. Similarly a cow’s colostrum two

Feeding calves the right meal is crucial, says Paul Muir.

days after calving has far fewer antibodies, hence the importance of making sure it’s a mix of day-one colostrum that’s administered.

Muir advises using colour-coded neck bands to identify calves to watch, such as those

receiving antibiotics or slow feeding. “It was a quantum leap in how we did our calf rearing.”

Rose tie-up tape is suitable and can be bought for a few cents/ metre from the likes of Bunnings or Mitre 10, he points out.

Slow feeders should be grouped together to prevent them holding up feeding in other pens.

Clean, fresh water is a must for all calf sheds, as is good ventilation.

Sunlight helps with hygiene, its ultra-violet killing bugs.

The cost of raising calves PAUL MUIR says a possible wholemilk rearing regime is 2 L twice/day/ calf for the first 10 days, then 3 L once/ day for the next five weeks. At $8/ kgMS, the equivalent of about 64c/L, that’s about $93 of milk/calf. Meal and hay (or grass) should be offered ad-lib from day one, with the meal reduced gradually post weaning.

However, surveys have shown on average calves reared on dairy farms get 316 L of milk and are weaned at 9.7 weeks – much later and after much more milk than in Muir’s regime. In contrast a survey of independent rearers found they weaned, on average, at

7.5 weeks having used 162 L of milk. “The difference is they have to buy the milk powder.”

For meal, Muir budgets on 25kg of a 20% protein meal followed by 75kg of a 16% meal per calf.

Including $90 of labour or margin/calf for the rearer, and animal health, tag, bedding, power, and grazing costs, he puts the total cost of rearing a 100kg calf at nearly $300 this year.

“And that’s before the cost of the calf.”

Paul Muir

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38

Dairy News // august 16, 2011

management

Afternoon shift brings 8% more milk ANDREW SWALLOW While more nitrogen was secreted in milk, excretion with urine was unchanged, says AgResearch’s David Pacheco.

GIVE COWS a fresh break in the afternoon, rather than morning, and

next autumn you could be harvesting 8% more milk.

Pastoral 21 and FRST-funded work on Massey University’s No.

4 farm found that was the mean milksolids gain in two mobs of 20 cows given a fresh break after afternoon milking, compared to two matching mobs given their daily shift in the morning.

“We observed a strong trend,” lead researcher on the project, AgResearch senior scientist David Pacheco, told Dairy News.

While pasture allocation, as measured by platemeter, was the same, as was total dry matter intake per day, higher intake when pasture quality was higher saw the afternoon-shift mobs average 1.23kgMS/ cow/day compared to 1.13kgMS/cow/day in the morning-shift mob.

The findings are contrary to conventional wisdom that cows will eat less after the afternoon grazing because they stop eating at dusk, which –given the trial was conducted in April – was about 6.30pm, Pacheco says.

Previous work has shown most grazing is done in daylight, however the highest intensity grazing often occurs at dusk.

In this latest work, the highest spot-grazing rates were observed in the afternoon-shift mobs.

Tests during the trial showed the afternoon pasture to be 10.9% water soluble carbohydrate, compared to 7.6% in the morning, while dry matter contents

were 22.7% and 19.9% respectively. Crude protein was lower in the afternoon (20.5% v 22.2%) as was neutral detergent fibre (48.8% v 50.4%).

Notably, DM content of the grass was greater in the afternoon (22.7%) than in the morning (19.9%).

The lower crude protein consumption is a reason to be careful about using the afternoon shift strategy in midsummer if drought is restricting feed availability, says Pacheco.

However, he sees no reason why it shouldn’t be deployed in spring, provided the strategy doesn’t stretch labour unduly, making already long days unreasonable.

“You may get 1-2% [more milk] that in a scientific paper wouldn’t be significant, but if it’s there for the farmer every day, over time it starts to accumulate.”

Improved nitrogen efficiency – i.e. more secreted in milk per unit intake – is also likely. In the April trial, afternoon shifts increased nitrogen use efficiency 18%, though excretion in urine wasn’t significantly altered.

Pacheco says the work, done over 12 days following a 14day adaptation period, didn’t stretch to assessing if there was any negative effect on pasture regrowth given the different composition of the herbage consumed.

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STRONG WORLD commodity prices and increasing demand for dairy support are boosting returns for cropping farmers.

MAF says many arable farmers had a profitable season last year, but there is increasing interest in converting some of land to dairy which is still performing more strongly.

MAF’s 2011 Canterbury arable farm analysis released this month provides a model and overview of the financial performance of a typical Canterbury arable farm. The analysis is based on data from from a sample of growers and the industry.

Stronger cereal prices in early 2011 partly compensated for an average 15% reduction in average cereal yield due to poor weather. Farm profit before tax for 2010-11 fell to $190,400, 28% down on the previous year.

Dairy News // august 16, 2011

39

management

How to tackle low pasture cover KEEP AN eye on average pasture cover (APC) this spring, DairyNZ advises. When APC is below target, break down the problem to manageable bits.

Face your situation: walk the farm, confirm the size of any deficit and develop a plan on how to fill the deficit for the next two weeks. Share your plan, seek advice and monitor actual pasture cover weekly and adjust plan weekly or fortnightly.

Where cover is below target there are options to take providing animal welfare is not compromised.

Do not speed up the rotation, but prioritise intake to the most vulnerable stock: colostrum; milkers; springers then dry cows, feed supplements to build cover, apply nitrogen and minimise pugging damage to protect future growth.

Do not speed up rotation. If the APC on the farm is below the target then the quickest

way to get back on track is to hold the rotation length and not speed up, as per the rotation planner, until APC is back on target.

If APC is below target or there is insufficient feed for the milkers there are three options: 1) supplement the dry cows; 2) supplement the milkers to achieve a consistent, even grazing residual and dry cow intake is reduced to allow more feed to be allocated to the milkers; 3) underfeed: ideally this option should not be chosen (except where there are unexpected weather events that Keep an eye on pasture cover result in pasture being be- this spring. low target or where previous management has not set the prioritising the most vulnerfarm up well for spring). able stock.

DairyNZ does not encourPrioritise feeding and if age systems that consistently cows have to be restricted due need to underfeed cows as the to APC being short of target, target cover at calving is not restrict cows at the start of achieved. However, should calving to minimize the impasture cover be below target pact. Where option three has then the damage must be mi- to be taken then the allocation nimised by recognising and order needs to be reversed

with the order of importance being: 1. Colostrum cows 2. Milking cows 3. Springers 4. Dry cows.

The longer the period of underfeeding, the greater the loss in milk production.

The aim is to feed the co-

lostrum cows and milkers at least 12kg DM/cow for Friesians and 10kg DM/cow for Jerseys grazing to 1500kg DM/ha. However, when the farm does not have the resources to feed to these levels the milkers can graze lower.

Milkers must be offered a minimum of 10kg DM/cow

for Friesians and 8kg DM/ cow Jerseys. These feeding levels will reduce subsequent milk production and pasture re-growth.

The extent of the carry over effect on milk production from underfeeding depends on the length of time cows are restricted and grazed lower than 1500kg DM/ha.

The longer the period of underfeeding, the greater the loss. The dry cows and springers then get the balance of area.

However, these stock must be fed at least 5kg DM/cow.

Where the minimum feeding levels given above cannot be met, supplement must be purchased or stocking rate reduced.

If possible, get late calvers and any dry stock off the farm.

Review cow numbers and cull any cows that are just making up the numbers. However, do not reduce numbers so you limit the potential production for the season.

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Dairy News // august 16, 2011

41

animal health

Dealing with downer cows

Getting ready for spring

WHEN ONE considers the huge metabolic and hor-

tips will help you ensure the team, and the farm, is prepared for the busy spring period.

Start your planning now to reduce the rush and panic of getting everything done when the first cow calves.

• Sign employment agreements for new employees for the new season • Have an orientation plan for new staff and plan Ensure staff are trained to handle training to ensure the animal health issues this spring. whole team knows what they have to do during spring and the standards expected - Iodine/electrolytes etc • Organise time off for the purchased spring – book the relief milker - Meal, hay and fresh water • Make sure the calf shed is • Order everyday supplies set up for the calf rearer for spring - New bedding material - CausMag and limeflour - New teats for calfeterias - Milk fever treatments - Calfeterias and utensils - Mastitis treatments cleaned - Filter socks

monal changes that occur in cows around calving, often coinciding with testing weather conditions, it’s not surprising that some of them go down.

Arrange a ‘spring first aid’ training session with your veterinarian to discuss what to look for and discuss the most appropriate ways to handle downer cow episodes.

Diagnosis The first step in deciding what to do is to establish a diagnosis because not all downers are due to metabolic disease and not all metabolic disease is milk fever. Before reaching for the bag of calcium-boro-gluconate (CBG), always look for signs of:

Arrange a ‘spring first aid’ training session with your veterinarian to discuss what to look for.

• Calving paralysis • Dislocated hip • Sick or toxic cows due to mastitis, metritis (uterine infections) secondary to retained fetal membrane, diarrhoea or pneumonia • Assess the cow’s general demeanor – is she dull, depressed, almost comatose, (indicating possible milk fever) or agitated and behaving aggressively (less likely to be only milk fever)?

Seek veterinary opinion if cow has not improved within 3-4 hours – do not simply keep treating with metabolic cocktails.

Treat early • Treat aggressively and specifically • If milk fever, most cows should respond within one to two hours.

• Provide dry, soft bedding – move into shed • Reduce risk of exposure – cow cover, move into shed.

Provide feed and water • Provide fresh water at all times • Encourage appetite by whatever means – provide high quality, highly palatable feeds.

Move carefully • Regularly roll from side to side to improve blood flow • Use any lifting devices.

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- Detergents • Make sure protective gear is available and has been replaced/repaired or updated if required • Service all motorbikes and machinery, get milking machines checked, order new/ change rubberware – break-

downs take time • Remember human nutrition, particularly for young staff – everyone needs three nutritious meals to get through the day. If your staff are too tired during this time or aren’t capable of cooking, then a plan needs to be sorted out to ensure your staff get fed well to sustain them through the day • Organise a calving pack that stays in the paddock • Communicate often and little to let people know what is going on.

Remember to thank them for their hard work and praise their success Have a meeting with staff before calving to discuss how the spring will go. Discuss topics such as: • Daily routine • Calving spread • Checking springer mobs • Milking colostrum cows • Spring Rotation Planner.

42

Dairy News // august 16, 2011

Animal health

Helping cows conceive CHRIS BURKE, DairyNZ scientist

CONCEPTION RATE

is the percentage of inseminations that result in a confirmed pregnancy and work is underway to find out why conception rates are commonly less than 55%, and sometimes below 40%.

The work is being undertaken with 16 large, case study herds in the Oamaru and Winton regions, and at the Lincoln University Dairy Farm (LUDF), with more than 12,000 cows.

Funding is provided

by DairyNZ, MAF Sustainable Farming Fund and South Island Dairy Event (SIDE).

Chance of conception The average cow in the case study herds had less than half a chance of conceiving to any of the inseminations during the

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2010 AB mating period.

Conception rates to AB averaged 48% among the 16 case study herds, but varied enormously from as low as 35% to as high as 63%.

The conception rate was measurable because each herd generated a detailed InCalf Fertility Focus report, by foetal aging of pregnancies during an early pregnancy test.

As expected, conception rate was a key driver of the six-week in-calf rate – a 5% increase in conception rate resulted in a 3.5% rise in the sixweek in-calf rate. In calf rates were also driven by three-week submission rates.

With an average submission rate of 83%, the case study herds needed to improve the threeweek submission rate by 7% (on average) to meet industry targets.

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Improving submission rates may even be a higher priority for many herds, but the same fundamental issues such as calving pattern, condition at calving and pre-mating cycling rates need to be addressed. A submission rate campaign is being launched

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Pre-mating cycling Overall conception rate at LUDF was 53% percent but a key finding was that conception rates increased markedly the earlier cows started cycling before the planned start of mating (PSM).

These early cyclers were on to their third and more fertile cycle during the first round of AB. Progesterone profiling each of the 670 LUDF cows allowed categorising of cows into early cyclers, late cyclers and non-cyclers.

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cows less than BCS 4.0.

This work, and existing knowledge, led to the conclusion that cows calving within the first six weeks and maintaining a BCS above 4.0 during mating have ‘more than half a chance of conceiving to an insemination’.

Unfortunately, there is no “magic” quick fix to this problem during mating. Cow BCS at mating is a combination of the condition in which she calved and what she is fed through early lactation. Cows that calve thin will be thinner at mating and therefore less likely to conceive to insemination.

For example, cows that calve at a BCS of 4.0 will be 0.5 BCS units thinner at mating than a cow that calved at 5.0.

Feeding a cow 250kg concentrate through early lactation will only add 0.25 BCS units (on

Table 1.

average) because the cow will use the additional energy to produce more milk. In addition, a cow that calves thin will cycle later. She is, therefore, being bred to an early cycle and is less likely to conceive. This cannot be rectified through early lactation nutrition.

The problem of thin cows at mating must be dealt with the autumn before.

In the current season, it is important that noncyclers are identified before the start of the breeding season and treat as per farm policy. Feed offered to cows should be of highest quality possible.

To achieve this and ensure cows are well fed, grazing residuals must be maintained at 1500-1600kg DM/ha through early lactation (to maximise pasture quality during mating) and through mating.

Noncycling

Late cycling

116

116

434

Percentage of herd

17

17

65

Calving to PSM (d)

46

56

69

Three-week submission rate (%)

66

91

94

1st AB conception rate (%)

39

47

57

2nd AB conception rate (%)

49

54

53

Six-week in-calf rate (%)

53

70

76

Empty rate (%)

23

12

10

Number of cows

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cycling cows, early cyclers had an 18% greater chance of conceiving to first AB and a 10% greater chance than cows that started cycling in the last two to three weeks before mating started (Table 1).

Calving pattern influenced this outcome, because cows that calved within the first three weeks were mostly the early cyclers (Figure 1).

BCS Another finding from LUDF was that body condition during AB influenced the conception rate to first insemination.

Cows less than BCS 4.0 after four weeks of mating were less likely to conceive to first AB (44%) than those greater than BCS 4.0 (54%).

A positive association between BCS and the six-week in-calf rate was observed throughout mating, although empty rate was not greater for

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44

Dairy News // august 16, 2011

animal health

Getting cows in calf quickly DAIRYNZ’S INCALF project leader Mark Blackwell says dairy farmers consistently talk about what they want from better reproductive performance.

“They want more cows in calf early, more replacement AB heifers and streamlined calf rearing. This is the basis of genetic gain and herd improvement.”

Compact calving patterns are very important, with fewer late calved cows. And most would prefer to not depend on induction to

your performance against industry targets after three, six, nine and 12 weeks of mating: • After three weeks, a top result is around 50% of cows are early in calf to AB, offering plenty of early born heifer calves • After six weeks, a top result is 75% already in calf. This means lots of early days in milk next season and plenty of time for a high percentage of cows to resume cycling before the next mating • After nine weeks, a top result

achieve that calving pattern.

“Farmers want to reduce the number of empty cows, so they can cull cows that they should be culling,” he says.

But all these benefits depend on very good herd reproductive performance – getting more cows in calf quickly.

“Many farmers know their performance has slipped and want to do something about it, knowing it is costing them money and preventing good farm results.”

Fertility Focus report The benefits of good reproductive performance are seen in the ‘bouncing ball’ graph of the InCalf Fertility Focus report (graphs Herd A and B).

Your Fertility Focus report will have this graph if you have done early pregnancy diagnosis.

The bouncing ball graph shows

is almost 90% of cows in calf with little or no induced calving expected next season • After 12 weeks, a top result is well over 90% of cows in calf, with fewer empties and more choices in culling Measuring herd reproduction Without good measuring sticks, dairy farmers can be misled – especially about herd reproduction.

In 2008 the DairyNZ InCalf programme introduced the Fertility Focus report, with an industry standard six-week in-calf rate – the best measure of overall herd reproductive performance.

The dairy farmers who influenced the Fertility Focus report’s design asked for “the most important measures on a single page”.

But seeing these measures on one page for the first time, farmers may not recognise their own herd perfor-

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mance, says Blackwell.

There is often a gap or mismatch between farmer’s perception and the reality of their herd reproductive performance, he says.

“Yes there are recording issues, and a need to understand Fertility Focus measures. But for the first time, eyes are opened to opportunities and a way forward, rather than problems.

Behind InCalf Fertility Focus

Another way to view reproductive performance is in figure 1, which shows how quickly cows become pregnant in Herd A and Herd B, as estimated by early aged pregnancy testing.

Once mating starts, the cows in Herd A become pregnant quickly to achieve a ‘top result’ throughout the total mating period of 12 weeks.

In Herd B, the cows become pregnant but not as quickly as in

Herd A, and by week three is 10 percent behind industry targets.

After six weeks, Herd B is 11 percent behind industry target and 14% behind Herd A. The space between the two curves in Figure 1 represents the advantage Herd A has over Herd B in generating early born AB heifer calves, days in milk next season, minimising hormonal intervention and more culling options.

THE METRICURE MAINTENANCE PLAN: For top performance A VISUAL CHECK: For leaks and wear Look for all cows likely to be At Risk of endometritis who will have had: • Assisted calvings • Induced calvings • Dead calves/stillbirths • Twins • Retained foetal membranes.

Dairy News // august 16, 2011

45

animal health

Keeping milk fever at bay post-calving of potassium in the diet while supplementing with mineral compounds containing sulphur and chlorine (i.e. altering the dietary cation-anion difference: DCAD).

Classical milk fever is milk fever that occurs 12 to 24 hours after calving.

This is the majority of milk fever cases and the most easily dealt with.

ments for the two to four weeks pre-calving • Making sure that colostrum cows are well fed.

Magnesium – getting the right amount into your cows Here are a few general tips – but always consult your vet or animal health advisor: • Provide an effective

Milk fever is caused by insufficient blood calcium to maintain proper body function.

These cases generally occur because the cow does not have sufficient dietary calcium postcalving and/or because magnesium supplementation was not adequate precalving.

Non-classical milk fever is milk fever that occurs before calving, at calving, or immediately following calving, before a cow can be supplemented with calcium.

This type of milk fever is much more difficult to control and often requires a combination of strategies.

Ketosis generally occurs when well conditioned cows that are accustomed to being fed well are restricted.

Recent data from DairyNZ and supporting data from the USA suggest that you can help prevent ketosis by; • Restricting springer cows to approximately 80% of their require-

magnesium supplement to dries, springers, colostrums and milkers • Cows require elemental magnesium each day in the month pre-calving • Lactating cows need 0.25% to 0.30% of their daily diet as magnesium, and dry cows require 0.35% DM as magnesium • Pasture typically contains around 0.20%

magnesium, so cows need to be supplemented at a rate of 0.05% - 0.10% of daily diet • Magnesium sulphate or magnesium chloride pre-calving is more effective in preventing milk fever than magnesium oxide.

But it can be hard to ensure cows get enough magnesium because magnesium sulphate and magnesium chloride are less soluble and less palatable than magnesium oxide • It’s best to combine magnesium sulphate/ chloride through the water trough and magnesium dusted onto pasture or silage daily. When dusting ensure an even spread throughout the paddock • Supplement with magnesium until after spring pasture growth rates have slowed (December). Use blood tests to determine if contin-

The best approach to preventing milk fever is to increase calcium absorption.

ued supplementation is required from December onward • Magnesium requirements are also affected by the levels of potash and calcium in the diet.

Some farms with very high potash levels in pasture will require high rates of magnesium supplementation • Applying potassium fertiliser or lime within three months of calving can affect cow magnesium levels at calving.

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requires 90 MJ ME/day ‘down the throat’ • 500 kg HolsteinFriesian requires 100 MJ ME/day • Large 550 kg Holstein-Friesian requires 110 MJ ME/day • Consider using starter drenches on high risk cows at calving – 7+ year olds, or very fat, or with history of metabolic problems.

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MILK FEVER is the main metabolic disorder on New Zealand farms, although ketosis is also important.

Pre-calving magnesium management is the most important factor in reducing milk fever.

More complicated cases require specialist advice.

Milk fever is caused by insufficient blood calcium to maintain proper body function.

There are two ways of obtaining calcium – via absorption from the intestine and via transfer from the bones (called ‘bone resorption’).

Dry cows require very little calcium and their absorption mechanisms become “lazy”.

At calving, the demand for calcium increases quickly, and if the cow cannot increase her absorption of calcium from the intestine equally quickly, she will succumb to milk fever.

The best approach to preventing milk fever is to follow guidelines for increasing calcium absorption and priming the cow’s systems to reabsorb bone calcium quickly: • Supplement cows with magnesium precalving and calcium post-calving • Reduce dietary calcium pre-calving • Supplement cows with feeds that bind to calcium pre-calving (thereby, helping create a low calcium diet) • Reduce the amount

46

Dairy News // august 16, 2011

animal health / nutrition

Slow starch can boast milk yield REPLACING SOME

of the barley or wheat in a cow’s diet with more slowly fermentable cereal grain such as maize could offer milk production advantages when high amounts of supplement are fed.

Research results from the Victorian Department of Primary Industries (DPI) suggest that at certain times of the year, a more slowly fermentable starch source can prevent the wild swings in rumen pH that can occur when slug feeding barley and wheat in the dairy.

In turn, this could lead to more efficient rumen digestion of the diet, including the all-important pasture component.

“Our research is about finding better ways to feed supplements to dairy cattle,” project leader Martin Auldist says.

“We recognise that

“Many farmers at times use substantial amounts of supplementary feeds. We want to generate information to help farmers do this in the most efficient and cost-effective way.” grazed pasture will always be important in the diet of Victorian dairy cows.

“Many farmers at times use substantial amounts of supplementary feeds. We want to generate information to help farmers do this in the most efficient and cost-effective way.”

The research team is two years into an extensive three-year program that uses up to 216 cows at a time.

In one experiment, conducted in autumn, the traditional method of supplementing grazing cows by feeding grain in the dairy and providing forage in the paddock has been compared with

feeding supplements as two different mixed rations.

One ration was a simple mix of pasture silage and barley, while the other was a more complicated ration containing maize silage, maize grain, lucerne hay and barley.

Importantly, all diets had the same apparent metabolisable energy concentration.

Within each dietary treatment, cows received their supplements at rates of either 6, 8, 10 or 12kg of dry matter (DM) per cow (75% grain: 25% forage).

“This was done so that the milk responses under the different sys-

tems could be measured,” Auldist says.

“The partial mixed rations (PMRs) were offered to the cows in two equal portions on a feed pad immediately after each milking.

“After eating, the cows returned to their paddock to graze until the next milking.

“We refer to these rations as PMRs because they’re only providing part of the cow’s daily nutrient intake. The rest, about 8kg DM per cow per day or around 50% of dry matter intake, is provided by pasture.”

The results showed no difference in the milk production of cows on the three dietary treatments

Supplement should be fed in an efficient and cost-effective way.

up to a total supplement intake of 10kg/DM per cow per day.

“This shows that that unless you’re at least feeding more than 10kg of supplement, it’s not going to be worth the expense of buying a wagon and setting up a feedpad.

“At that level of feeding, you’re not going to get any benefit of a mixed ration over feeding grain in the dairy and forage in the paddock”.

When cows were fed 12kg DM of supplement

per cow per day (9kg of grain), however, there were some important differences.

The control cows and the cows offered the simple PMR did not produce any more milk (or milk solids) when fed 12kg DM per day than they did when fed 10kg.

Their milk also contained lower concentrations of fat than the cows fed the lower amounts of supplement.

Such diminishing responses at high levels of supplement have been observed many times previously and are related to inefficiencies in rumen digestion due to low rumen pH, as well as substitution of pasture for supplement.

When the cows were fed 12kg DM of the PMR containing the maize grain and maize silage, however, they produced around 2kg of energycorrected milk per day more than the cows on the other two treatments.

Their milk also contained the same amount of milk fat as the cows fed the lower amounts of ration.

“What we saw was that the cows fed high amounts of a ration containing the more slowly fermentable starch were able to arrest the decline in milk fat content that we saw in the other cows,” Auldist says.

“This led to cows pro-

ducing more energy-corrected milk at the high levels of the maize-based supplement compared to cows on the other two dietary systems, including the traditional system.

“We think this result is related to rumen pH not dropping as low for as long in the cows fed the maize-based ration as in the other cows.

“There was also less substitution of pasture for ration, which is important as it means higher pasture utilisation.”

Overall the results indicate that farmers choosing to feed high amounts of supplementary grain and forage may find advantage in optimising the form and composition of those supplements.

“Our results show that under some conditions there is an advantage to feeding cows a maizebased mixed ration over ‘slug’ feeding barley in the dairy,” Auldist says.

“Now our challenge is to figure out exactly what those conditions are.”

One of the next steps is to determine whether the same result could be achieved by feeding maize grain or a formulated pellet in the dairy.

This might have greater application for farmers because it could use existing feeding systems without the need for wagons and feedpads.

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Dairy News // august 16, 2011

47

animal health

Calving on clean pasture will keep mastitis away for bacterial culture as a batch of samples when more information is required to identify the cause.

• Act on machine tester recommendations from the latest milking machine check.

Treat aggressively • NZ studies have established that >60% of mastitis over calving is due to Strep. uberis, and unless milk culture results indicate otherwise, penicillin or its derivatives represent the best therapeutic approach.

• Do not be afraid to treat for longer, extending the milk withholding period as necessary. Set up a standardised animal treatment plan for your herd with your vet.

• Use MRS T – Mark the cow, record her details, separate the cow from the milking herd, before treating her for clinical mastitis.

• Milk infected cows separately for closer observation and attention, while reducing the risk of spreading to others.

Teat spray and monitor teat health • Mix teat spray fresh daily at the HIGH mastitis risk rate, adding extra emollient, up to an additional 10%, to promote good teat skin condition.

• Monitor teat condition. If greater than 5% of cows do not have normal healthy-looking teats consult your vet.

Keep colostrum and antibiotics out of milk tank by observing recommended withholding times.

• Check timing of

the first few calvings in relation to dry off dates and withholding periods of dry cow treatment(s) used, especially if cows were milked on, into a

favourable autumn.

• Withhold colostrum for eight milkings from all animals to reduce risk of contamination by colostrum and dry cow

antibiotics. Heifers can be withheld for an extra two milkings if the risk of bulk milk SCC grading is high.

– DairyNZ

Detect mastitis in cows early.

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DAIRY FARMERS can get hands-on with a new version of the Condition Scoring Made Easy field guide.

For many years this booklet has assisted farmers to make accurate measurements of cow condition, says DairyNZ. Tens of thousands of copies, dog-eared with use, reside in dairy sheds, utes and the back pockets of overalls throughout the country, it says.

First published in 2004, the booklet has been updated as a response to farmer feedback.

“This is a farmer-designed booklet,” says DairyNZ principal scientist John Roche.

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You’ve had a milk quality review prior to dry off, culled the cows with bad udders, repeated high SCCs and recurring bouts of mastitis, invested heavily in dry cow therapy, had the plant checked and look forward optimistically to a mastitis-free spring.

Here are a few reminders of other aspects of mastitis management and prevention that should be part of your spring planning too: Calve cows in a clean environment • Reduce exposure to environmental mastitis.

Calve on clean pasture.

Do not calve cows on stand-off areas.

Detect infection and take action early • Detect clinical mastitis cases early if you want to increase the chances of a good outcome – “if you do not look, you will not find”.

• Seek veterinary advice on the most appropriate mastitis product(s) to use in your herd.

• Screen all colostrum cows at their seventh or eighth milking, as to their suitability to enter the vat (e.g. Rapid Mastitis Test, RMT). Ensure the use and interpretation screening system is standardised among all operators.

• Decide whether to leave and retest, treat, or continue to withhold ‘high SCC’ cows.

• Know your enemy – collect sterile milk samples from the first 10-20 clinical cases of the season, prior to treatment. These can be frozen and submitted

Handy 25kg size means less bags are used compared to some of our competitors.

48

Dairy News // august 16, 2011

animal health

The cost of lameness the cost of lameness is considerable at an average of well over $400 per case, not to mention the growing concerns regarding animal welfare and the effect that lame cows have on staff morale.

Lameness often has many causes and as such,

no single silver bullet will fix it. Instead, it requires commitment and sustained effort to improve, says DairyNZ. For a fresh approach to solving lameness woes, enquire about DairyNZ’s Healthy Hoof Programme. It offers a simple, stepwise

approach to reducing lameness on dairy farms caused by physical factors, through improved management of cows and people. Patience is truly a virtue when it comes to moving cows.

Prepare for spring by checking, and if necessary repairing or upgrad-

ing your facilities for examining and treating lame cows. Guidelines exist for what makes a great restraining area and head bail. Cow safety and operator safety are critical concerns.

Arrange a lameness training day to cover such aspects as:

• Lameness prevention • Safe restraint • Identification of lame limb(s) • Recognition of common lesions • Equipment use and care • Principles of treatment – trimming, paring,

There is no silver bullet for lameness.

preserving weight-bearing surfaces, establishing drainage, relieving pain, hoof blocks

• Managing lame cows • Recording information.

AHB dispels 1080 myth

With Kamar, you don t need an advanced degree in interpreting paint scraping to determine if a cow is ready to mate. If the Kamar is red, she s ready. If it s not, neither is she. Simple, the way it should be.

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Call your local LIC Customer Relationship Manager to order your Kamars this season.

Red Means Go

THE ANIMAL Health Board (AHB) is working to counteract the spread of misinformation about the use 1080 poison in New Zealand.

The board has gone online, encouraging the public to first find out the facts about 1080 use.

Spokesman John Deal says while public petition sites such as Care2 are valuable for raising awareness about issues, they are easily co-opted by people seeking to deliberately mislead by posting unsubstantiated claims.

Opponents of 1080 have recently made emotive claims on Care2, Deal says, e.g. “New Zealand is the only country in the world using 1080” and “1080 is killing our native kiwi.”

Even the briefest of online searches will refute these claims but not all petition signatories take the time to look, Deal says.

“People genuinely interested in finding out more about 1080 are struggling to find factual, sciencebased information amongst the hyperbole, rhetoric and deliberate misinformation out there.”

AHB has created its own Care2 petition: “Stop the ignorance about 1080 poison and save New Zealand’s native wildlife”.

“The idea is to provide objective information to anyone thinking about signing a ‘stop 1080’ petition; to encourage taking a few minutes to research how and why the poison is used first.”

Evidence that 1080 is both safe and necessary, backed up by peer-reviewed scientific research, can be found online, Deal says. He cites a website 1080: The Facts as a good starting point. This is a public education site set up by Forest & Bird and Federated Farmers to give “balanced, factual” information about 1080.

AHB and DOC websites are also said to contain scientifically backed information.

The AHB uses 1080 to kill possums, stoats, weasels and ferrets, with the aim of eradicating bovine TB. It has a three-pronged approach: Disease control, aiming to control and contain the spread of the disease within cattle and deer herds.

Movement control, controlling the spread of the disease between herds.

Vector control, aiming to control and contain the wild animal species mostly responsible for spreading the disease to cattle and deer.

The possum is reckoned the main cause of TB infection in cattle and deer, AHB says.

Check out our free classifieds listings at www.ruralnewsgroup.co.nz/classifieds

Dairy News // august 16, 2011

49

animal health

Reproductive success starts at calving SUSANNE MEIER & CHRIS BURKE, DairyNZ

DAIRY COWS face the enormous challenge of having to get back in calf just 12 weeks after calving.

Many do this pretty well, but some struggle for a variety of reasons. One reason is endometritis – when the uterus fails to clean itself completely after calving and an infection or inflammation sets in.

Cows suffering clinical endometritis are easy to detect using the Metricheck procedure.

Field studies indicate that 10-15% of cows have clinical endometritis four weeks before mating. These cows have reduction in reproductive performance.

However, clinical cases might be the tip of the iceberg, with international reports indicating that two to three times more cows have a subclinical form of endometritis. These

Table 1. Cows with subclinical endometritis have lower reproductive performance and milk production than cows with a healthy uterus.

Healthy uterus

Sublinical endometritis

First service conception rate

54%

31%

Six week in-calf

70%

54%

5%

21%

17.2

16.2

Empty rate after 12 weeks of mating Milk production first 42 days in milk (kg/cow per day)

Burke et al 2010, Journal of Dairy Science 93-5363-5373

cows go unnoticed because there is no smell or discharge.

This subclinical form of uterine disease is the focus of a research project that aims to improve reproductive performance on farm.

In a study herd, 65% of cows were found to be unaffected, 26% had mild subclinical endometritis and 9% had chronic subclinical endometritis (evident at 28 and 42 Not all cows find it easy to get back in days after calving).

Cows with chronic subclinical calf just 12 weeks after calving. endometritis had the greatest reduction in fertility and produced less milk, when compared with unaf- identifying cows with subclinical enfected cows (Table 1). dometritis.

The study’s method to identify Risk factors for cows developing cows with subclinical endometritis subclinical endometritis were: calvwas the presence of immune defence ing at a body condition of less than cells (polymorphonuclear cells) in 4.5, evidence of a liver malfunction the body of the uterus. or general inflammation, and lower It is a highly sensitive method, plasma magnesium concentrations. but cannot be used routinely in the Next, this research will examine field. whether subclinical endometritis is So one aim of the current research a consequence of an unresolved inis develop a more practical way of flammation, explore practical ways

to identify cows with this condition, and evaluate how it can be treated.

This research involves collaboration with the University of Auckland, AgResearch, Victoria University of Wellington, Cognosco (Animal Health Centre Ltd) and DairyNZ scientists. This project is funded by dairy farmers, through the levy, and by the Ministry of Science and Innovation (formerly the Foundation for Research, Science and Technology).

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Dairy News // august 16, 2011

51

machinery & Products

Cows so happy ‘they’re smiling’ TONY HOPKINSON

DAIRY YARD holding of cows during the wet is good for farmer, cow and pasture, says Numat Industries, whose Agrimat products are making life easier on many farms.

One such is Rex Hines (inset), who farms 111ha (eff) at Motuamaho, north of Morrinsville on rolling country prone to summer dries.

He milks 400 Jersey cows through a 30-aside herringbone shed. He is a seasonal supplier of Fonterra and has been on the farm 34 years.

He’s thought at length about matting and looked at several farms where the material was laid.

“I detest cows having to stand on concrete. It’s too hard on them, and the concrete can damage their feet.”

Late May Hines laid 710m2 of Agrimat Kura to cover his whole dairy yard (but not the milking area) and the entry/exit race. The interlocking panels are 850 x 1190 x 24

mm and have holes allowing permanent fastening to the concrete.

“They are straightforward to lay, on the first day we started at 8.30 am and by 3pm had laid but not attached 500 of the 732 panels needed.”

Hines bolted all corners of the panels in the high traffic areas and used two bolts on the remainder. He will finish bolting the rest when time is available. Bolts are supplied with the panels.

Dairy News: “Have they worked?” Replies Hines: “A great big yes! And the capital expenditure is well worth it.”

A great improvement, he says, and some of the cows are ‘smiling’, they seem so contented. He has put his heifers on the yard for several hours at a time during bad weather and they have suffered no feet trouble.

Removing effluent after milking is no harder than washing concrete.

Tel. 0800 686 121 www.numat.co.nz

Simple to feed NEW FROM Agbits comes the Mobile FlexiFeeder skid trough, as seen at National Fieldays. Available as a kitset package, the trough is 1m wide x 10m long (in two sections), and conveniently skids from paddock to paddock or around a paddock.

The developer, Roger Dalrymple, himself a farmer, says the trough is easy to set up and portable – simply hook it onto a tractor or ATV. The two sections allow use as a dry two-feed handler, or as a water/feed trough.

Feed waste reduction on his cattle finishing block was Dalrymple’s prompt to develop the FlexiFeeder, he says. Up to 30% of feed was found going nowhere.

At 33% of the cost of concrete troughs

it is economic. And it’s easy to move, assemble and keep clean. Low cost/metre means long troughs can be set up for large numbers and to cater for shy feeders and less dominant stock.

The FlexiFeeder comes in 20m lengths which fit together. And at 1100mm wide x 400mm deep for cattle or 300mm for sheep they hold a large amount of feed.

Also available is the Agbits Quick Kit. It suits cattle, sheep, deer, pigs and goats. The flexibility in length has helped farmers feed sheep from 20–100m length troughs. It is as simple as driving a four wheeler over the trough and feeding out to the stock, the maker says.

Check out the latest news and information at www.dairynews.co.nz

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52

Dairy News // august 16, 2011

machinery & Products

Fresh challenge in Southland move TONY HOPKINSON

THE RYE brothers are

formerly from Te Aroha, in the North Island, and are now share milking on separate contracts at Tussock Creek and Edendale, Southland.

“There is a lot more rain in the summer and no facial eczema which were both problems we had where we came from,” said Craig who farms at Tussock Creek.

Chris farms 360 cows

at Edendale and Craig and wife Jamie have 950 cows on their contract.

Craig and Jamie have been in the south 12 years and they have had the present contract for four years.

They begin calving August 10th and try to milk through to the end of May. They plant 15ha of swedes for winter feed and this is replanted as new grass as part of a pasture renewal program.

The two farms are 20

km apart. Between the two farms they make about 2000 bales of

baleage a season and with their shared interest

To page 53

Craig Rye, of Tussock Creek, Southland.

Hoof skills noted CONTESTANTS IN the grand final of the 2011National Bank Young Farmer Contest were earlier this month tested on their stock handling and hoofcare abilities during the AgriSkills round of the competition in Masterton.

The seven finalists were scored on their ability to correctly load and secure a cow into a Wrangler (crush) then check the condition of her hoof.

The maker of the Wrangler points out this is a vital job on dairy farms as cows walking to the shed each day are prone to getting lame. They then cost the farm in lost production, treatment expenses, and associated costs such as reduced fertility.

Locally designed and manufactured, the Wrangler enables cows to be held safely so the farmer can work on the hoof without fear of being kicked.

Judges of the the Young Farmer Contest were watching carefully to ensure contestants loading the cow used the girths under the cow to prevent her falling while the hoof was raised. Contestants then needed to winch the backleg onto the supporting bar and the front hoof onto a supporting block so as to check the condition of the hoof.

Other tasks for the finalists included measuring the eye muscle mass of 10 stud rams, making a steel gate, identifying meat cuts, calibrating a seed drill and making a ‘Taranaki gate’.

The Wrangler had been used previously in Young Farmer Contest district finals but never at a grand final. The AgriSkills winner, Mike Croad, representing East Coast, won $14,000 worth of Ravensdown products. Will Grayling took first prize.

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Dairy News // august 16, 2011

53

Machinery & products

Rapid turnaround in dispenser care TONY HOPKINSON

AUTOMATIC IN-LINE

Se-Tech dispensers, because of the nature of the material they handle, need annual servicing to maintain their efficiency, points out the maker, Singh’s Engineering Services.

General manager Hurb Singh says the resulting downtime – during which animals will not get their doses – need not be a problem.

“We have several options to reduce this downtime to a minimum while farmers’ dispensers are being serviced,” Singh says.

The family firm has been in business for 30 years and has been making automatic in-line liquid dispensers for 15 years. The dispensers are driven by water flow and take a range of minerals from adjacent containers and dispense them into the water lines supplying water troughs.

Material dispensed can include zinc, magne-

sium, and copper solutions, bloat oils, minerals and chemicals.

The dispensers can also handle wash system detergents and horticultural chemicals.

Se-Tech dispensers are supplied in two sizes: the 32mm dispenser for farms and water lines up to 32mm, and the 50mm model for larger farms and water flows up to 13000 L/h. Both models can also be supplied with a respective sized manifold to allow for water bypass and inlet water filtering. Both sized pumps can work at 10-210 psi.

Says Singh, “With the dispenser, any material supplied to the water system maintains the correct ratio to all the stock, unlike some manual trough treatments where the material available to the stock can vary in its availability and chemical ratio.”

Three years ago there was a major upgrade of the dispensers, reflecting new materials available.

The series one is still

Fresh challenge From page 52

in machinery do most of their own tractor work for cultivation, mowing and baling.

“We communicate and so there is generally no clash with machinery use and we are only 40 minutes apart,” says Craig.

In December 2010 they bought a Feraboli Omnia baler wrapper from local dealers Webbline in Gore.

Over the years they have owned several different brands of balers, and had been looking at the Feraboli with a view to changing and upgrading.

They got the new baler under a different set on circumstances.

“We had 40 ha cut and ready to bale and we had a major breakdown and were told by the local dealer they could not get parts for several days.”

With bad weather forecast they contacted Webbline at 10 pm on a Friday night and ordered the Omnia and they had

it working in the paddock at 10 am the next morning.

First impressions were good: by the Sunday afternoon they had baled 800 bales and Craig says he only left the tractor seat to change the plastic and net.

“Webblines service was excellent and even though we were new to the machine it went without a hitch from the start.”

The brothers like the dense bales the machine makes and the wrapper’s ability to keep up with the baler. Craig says the bales are like “feeding out tobacco” onto the crops.

Webbline Agriculture sales manager Glen Malcolm says the Feraboli balers are increasing in popularity because of bale consistency.

The Rye brothers use a SAME 120 hp Iron to drive the baler. It “gobbles up” the combined 9m windrows.

Tel. 0800 932 254 www.webbline.co.nz

being manufactured and parts are available. The series two are built to handle water in harsher conditions such as higher particle levels from sandy and pumice soils.

They are also built for the higher throughput to cater for larger herd sizes.

Singh’s Engineering Services has a system to turn around their dispensers following servicing as quickly as possible.

“For local farmers who can bring their dispensers to our Hamilton premises we can do a complete service in 2 ½

hours.

“And with overnight couriers the units can arrive early in the morning, we service them and have them on a courier later in the day, back to any town in the country for farmers to collect.”

Tel. 07 849 3108 www.ses.net.nz

Hurb Singh

Save Power and Lower SCC Count!

“Maree and I would like to let you know how pleased we are with our Varivac. Not only does it save power, but as you promised it dramatically reduced our SCC. Prior to installing the Varivac we were grading at every pickup for SCC (the kind of stress parents of young children can do without in spring). I have enclosed a copy of our Fonterra SCC graph clearly showing the day the Varivac was fitted. We now average 130,000 SCC and life is good.

We would not hesitate to recommend Varivac to anyone else in our situation.

The farm had serious Somatic Cell Count figures and mastitis problems. We installed a Varivac vacuum control system and the problems are now gone.

Quite simply it works.

Steven Robb, Dairy Farmer, Morrinsville, NZ

Best wishes and thanks again”

Hamish & Maree Tong 06 272 6349

We have had many years of high SSC. In fact, since putting in a new milking plant 10 years ago and no one being able to fix the problem and having culled heavily because of this we didn’t know where to turn next.

We saw the article on Varivac and decided to give it a go. Well, we are delighted with the results. Proof is in the graph taken off Fence-post.

Our SSC compared with the company average. Coupled with the added power savings we couldn’t be more pleased. Thanks Varivac

(Last pick-up dried off.)

Varivac installed here!

Gil and Jill Hall, Dannevirke, Hawkes Bay, NZ

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54

Dairy News // august 16, 2011

tractors & Machinery

Earth worker and engine speeds to remain constant regardless of the workload, even during travel.

“It’s easy to operate and is user friendly,” Matt says. “The airconditioning, suspension seat and auto idle are all great.”

The U55-4 is powered by the maker’s 47.6hp direct injection

diesel engine. It has single-side servicing and auto idle, which reduces fuel use and noise.

Floatable blades are offered as standard equipment, making cleaning up and backfilling quicker and more efficient.

Tel. 0800 KUBOTA www.kubota.co.nz

Rations gain on us TONY HOPKINSON

GADGET7170

KATIKATI CONTRACTOR Matthew Tyrrell, already a dab hand with a Bobcat, has extended his earthmoving and shaping capacity with a Kubota U55-4 excavator.

Tyrrell bought the U55-4 in November for his Matt’s Bobcat and Digger Services which does earthworks for lifestyle farmers and others.

It is the first Kubota he has owned in his 14 years of business, and he bought it after looking at several other brands, the company says. (Kubota engines power his Bobcat skid-steer loaders.)

The Kubota 5.5-tonne U55-4 is a tight tail-swing excavator that handles heavy work. It’s powerful and compact, good for tight areas.

Comfort, visibility and hydraulics meet his expectations.

Load-sensing hydraulics allows hydraulic

TOTAL MIXED ration feeding is gaining on the dairy industry, says the Irish feed wagon maker Abbey Machinery.

Its vertical mixer-feeder wagons were on the Farmgard site at National Fieldays in the care of Abbey sales manager David Carty. The company makes feed mixers from 8-33 m3 with one, two and three vertical augers.

Says Carty, “The augers carry out the dual function of chopping and mixing, while lifting up the material to the top for cycling again.”

Power requirement is minimised by gentle flighting of the auger and there is less floor stress when adding whole bales, placing less strain on parts.

“They can handle all types of feed ration including hay, silage, straw and some root crops if needed along with liquids such as molasses,” says Farmgard salesman Scott Capper.

He comments on the mixer’s strength: a 20mm base plate carries the load being mixed, and replaceable serrated knives on the auger quickly and thoroughly blend materials. Retractable

counter blades hold bales in position to reduce chopping time.

Four weighing points are connected to the mixer’s Digi-Star weighing system. At each fill the indicator clock is zeroed with a push-button and loading can begin immediately. A help facility will lead an inexperienced operator to the next step during diet programing.

There are several options for discharging the ration to troughs and/or floor or pasture. The side door option enables feed to be discharged left, right or both sides simultaneously. Side discharge elevators can be fitted to feed into troughs or bunkers.

The front door option has a variable speed conveyor to feed to left or right.

It is standard with a chain-and-slat conveyor with PVC available as an optional extra.

Two rear door openings enable feeding along a narrow drive, ration being fed within the width of the machine.

With two doors, feed can be fed on either side if needed.

An independent chassis helps stability.

Tel. 09 275 5555 www.abbeymachinery.com

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Dairy News // august 16, 2011

55

Tractors & machinery

Concepts draw keen interest MANY FARMERS are said to be admiring Agco’s “workhorse” concept embodied in its new Massey Ferguson 5400 series tractors launched in March.

The company says the range has strengthened Massey Ferguson’s position in the livestock and mixed farming tractor sectors. All four machines are “entirely new”, ranging in power from 82 to 107hp.

“Once we released the new range, the inquiry was great,” says Massey Ferguson New Zealand manager Peter Scott.

“We’ve consistently taken orders for the new models as customers become aware of how well they suited their requirements.”

National Fieldays was the ideal launch backdrop; the 82hp MF5420 was the model chosen for display.

“Having the MF5420 at Mystery Creek was a real plus,” Scott says.

“We could give many customers the opportunity to get up close with the new model.”

The four MF 5400 tractors use proven features from previous models, such as the Dyna-4 transmission, re-engineered to suit specific customer requirements for this size and type of tractor.

This makes for an “unbeatable combination” of manoeuvrability, stability, visibility and access, Scott says.

All are powered by Perkins 4.4 L, 4-cyl.

1104D-44T mechanically injected engines “renowned for reliability and economy”. Maximum power is achieved at 2000rpm, reducing fuel consumption, noise and wear. Torque is “impressive” at just 1400rpm, so consequent lower engine speeds cut fuel consumption and noise.

The bonnet design is new, allowing high visibility forward and to the sides. But its shape does not compromise cooling efficiency. View is good to the loader and optional front linkage.

Agco says it has invested “huge amounts in the R&D of a completely new transaxle for exclusive use” on these new MF tractors. It

Dual Purpose Deck

SX24

the flow of the swath.”

Four intake rollers create maximum compression and a reliable and even in-feed of the crop. The Profi model is equipped with an electronic metal detector on one of the intake rollers to shut down the in-feed immediately a metal object is detected.

The 1300 mm flywheel with 10 knives and 5 blowing paddles maximises chopping quality. Low power requirement for chopping and transporting saves fuel – thanks to the huge flywheel.

Onboard hydraulics make its oil flow independent.

A built-in oil pump with its own oil reservoir supplies the hydraulic power for raising the pick-up and reversing the drive and spout rotation.

All parts of the system are integrated with electrohydraulic in-cab controls.

Tel. 0800 535 969 www.lely.com

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LELY HAS added a trailed forage harvester to its range. The Lely Storm 130 P – originally a product of Mengele Agrartechnic AG – has proven reliability and long life. High trade-in values prove its quality, Lely says.

A notable feature is the machine’s large flywheel, a fuel saver the maker says.

The Lely Storm works efficiently, saves energy and gives a maximum output.

Capacity is high but maintenance is low, making the machine ideal for contractors and large farmers, the company says.

The 1800mm pick-up leaves no grass behind thanks to five tine bars with tine spacing of 54mm.

“Even wide, bulky or uneven swaths with short crop are easily managed by these properties,” Lely says. “The pick-up accurately follows the ground contours giving a smooth lifting action without breaking

Pre-Rippers

Great finish on a fine lawn.

Handles long grass on dairy lanes, around sheds, roadsides, etc.

Ring the importer:

starts with the Dyna-4, 16F/16R transmission, with clutchless operation after starting. Left-hand power control, clutchless reverse shuttle is ideal for loader work.

“Dyna-4 has gained a great reputation for reliability and efficiency, by combining a wide choice of speeds with low mechanical losses,” the maker says. “For the new, lower power MF 5400 series, the transmission has been made lighter and refined.”

All models are standard with 540/540E/1,000rpm PTO, with engagement and speed selected electro-hydraulically with a button in the cab.

Ground speed PTO and super creeper are options.

Big flywheel saves fuel

Contact us for your local dealer...

Phone (03)688 2031

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56

Dairy News // august 16, 2011

Tractors & machinery

Back on the paddocks TONY HOPKINSON

THE SIGHT of large quantities of effluent going back to pasture on European farms prompted Bindra Farms Ltd, Waikato, to buy its latest slurry tanker.

The family company founded by Daulat Singh in 1970 bought 100ha on the Morrinsville-Gordonton road, later adding another 100ha then 80ha.

The first two blocks milk cows and are run by sons Mohan and Duhman and they share the use of the dry stock block. The original block is run by Mohan

and his son Gurnek and milks 250 Friesian cows through an 18-aside herringbone shed.

“This farm was already dairying when it was bought, It is 50% consolidated peat and 50% rolling clay,” says Mohan Singh.

The area dries out in the summer so calving starts June 25. “This is a better system and it works well here.”

The herd can be dried off in a dry spell without production suffering and supplements can be fed to the herd in the winter to help then get a good start to the new season.

All milk supplied till

July 15 each season qualifies for Fonterra winter milk supply incentive.

They fertilise with Ballance and Ravensdown products, with extra lime to the peat soils and strategic use of urea. Singh crops 7ha of maize for silage, 2.5ha of turnips for summer supplement, and 10ha of grass are harvested for grass silage. He also makes 200 large round bales of hay.

With his peat soils Singh has problems using his slurry tanker to dispose of shed effluent in the winter and early spring. He has adequate storage and only begins

spreading the material to pasture when the ground starts to dry out.

“For the first major emptying for the season, as much as possible is spread onto the paddocks about to be cropped and the balance can be spread on the rest of the farm.”

From then on Singh spreads twice a week and with his capacity can store in times of inclement weather. “Our family had a trip to Europe last year and seeing the great pastures they have there and the amount of effluent being spread made me more determined than ever to return all the

Mohan Singh favours returning more effluent to pasture.

effluent to pasture.”

Singh recently upgraded to a Nevada MB 80 EX slurry tanker (8000 L), imported by

Euromarc and supplied

by Mid-West Machinery, Hawera.

It has a vacuum/pressure pump with a capacity of 8000 L/min and is PTO powered. The tank has a single axle with one implosion ring in the tank and one baffle. It is fully galvanised.

“They supplied a 4m hose so I can place it well out in the storage area for

filling but keep the tank away from the edge.”

The intake hose is 150 mm which Singh says is easy to attach to the tank with its levered locking arm. Other features include sight glass and gauge and flotation tires.

It has never been stuck.

Tel. 0800 278 6006 www.euromarc. co.nz

Keen interest From page 55

MS1200

The new rear axle is specific to these models. Lift capacity is 4300kg, with a 10% lift speed increase, compared with current tractors.

A dual pump, open-centre hydraulic system has flow of 42 L/min plus 57 L/min, at a pressure of 200 bar. Further, an (optional) 100 L/min twin flow feature combines the flow from both pumps.

A new front axle casting is designed using experience gained on larger Massey Ferguson tractors.

Operating features include exceptional turning angle and ground clearance. It allows front linkage and loader to be fitted at the same time.

The cab is a “spacious, quiet workplace [with] features found on the larger models”, such as (optional) cab suspension. Standard specs includes vertical side exhaust, tinted glass with opening side and rear windows, heater, radio/CD player and air conditioning. www.masseyferguson.com.au

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Dairy News // august 16, 2011

57

Tractors & machinery

Digger, grader A DIGGER with a dozer blade is just the shot for farm cleanups and excavations, says AB Equipment.

It sells the the Sumitomo SH130 and finds it popular with contractors wanting good performance at lower operating cost.

Farmers are now catching on to the Sumitomo SH130-5DZ as a good all-rounder, the company says. The SH130-5DZ is essential-

ly the standard SH130 but with the optional extra of a dozer blade.

Marton based Graeme Greer, of Central Excavators, is using a SH130-5DZ excavator mainly for hill work around Hunterville.

Some 90% of the projects are on dairy farms.

Specific applications include clearing and building tracks and dams and repairing of slips.

“The extra dozer blade function has sped up the tidying process and allowed us to push the earth around, making building dams in particular a much easier task,” says Greer.

Quiet, smooth operation of the control functions, and a comfortable, roomy cab are noted design features.

Tel. 0800 30 30 90

ENGINEERED TO SET YOUR HEART RACING

NEW MF 5400: SUPERIOR DNA www.masseyferguson.com/dna

Ditching made easy PADDOCK DRAINAGE is made simpler and easier by Schouten Machines’ Ridder ditchers.

Three models are offered: TK25, TK45 and TK650, with cutting wheels to produce the desired ditch size.

“Ground friendly” is how Schouten describes these machines, which prepare the way for quick draining of excess water from flats, especially.

The TK25 starting model is the most-sold model for all types of farms.

Then there is the TK25V – the same machine but perpendicular. This makes a ditch in the rear right wheel rut, so is useful for crop farmers in a seeded or planted field. The TK25 is deliverable with a wheel FW0 or FW8.

The Ridder TK45 (heavy duty) suits work in heavy soils. Especially it suits larger tractors with broad wheels. It is deliverable with wheel FW8 or FW12.

The TK650 suits the heaviest work possible. It is deliverable with wheel FW8super or FW12super.

All drive units have over-sized gear sets in quality materials.

In operation, the cutting wheel turns in the direction opposite the rotation of the tractor wheels. So it ‘mills out’ ground, dredge, plant remains, etc. in front of itself. No drag power is needed and there are no ruts from the tractor wheels and a well finished ditch.

A hinged drag foot on the rear side determines depth. Adjustment is simple and optimal.

All Ridder ditchers have adjustable guide and protection plates. The tractor stays cleaner and the ground stream is adjustable.

Power requirement is 40-100hp. Prices start at $8000.

Tel. 03 208 8059 www.schoutenmachines.co.nz

Exceptional power-to-weight ratio for the ultimate agility and response Innovative technology delivers outstanding results from 80 – 110 hp Intelligent design and unique styling for enhanced visibility Precision engineering for a dynamic all round performance

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is a worldwide brand of AGCO.

58

Dairy News // august 16, 2011

motoring

World-car plan delivers new goods FORD WILL begin selling its all-new Ford Focus in October. Two models will go on show: a five-door hatchback and a four-door sedan.

The wagon bodystyle will arrive March 2012.

The Focus includes a new titanium variant, offering convenience and comfort “that will please buyers shifting from larger and luxury vehicles,” Ford says.

About 10 million Ford Focus have sold since

1998.

“The new Focus raises the bar for expressive design, affordable innovation, superior quality, responsive performance and exceptional fuel economy,” says Chris Masterson, marketing manager, Ford New Zealand.

Sleek, sporty design and more technologies and features than previously offered by Ford in this market segment distinguish the car.

Developed in Europe, for sale in 120 markets with 80% parts commonality, the Focus is the “hero model” from Ford’s new global small car platform. This platform will underpin at least ten vehicles around the world and account for two million units of annual production by 2012.

Volume production has begun at the lead Ford Focus plants in Germany and US. European production

Nimble new ‘Rangie’ PRODUCTION OF the Range Rover Evoque in England has begun and the first to New Zealand will go on sale in November. The first car off the line was donated to the British Motor Industry Heritage trust.

The Halewood factory building the vehicle has doubled its work- Jaguar Range Rover bosses force to 3000 employees. And 75% love their new Evoque. of production is destined for export to 170 countries, expected to add £2 car looks, lightweight technologies billion to the UK economy. and [able to achieve] 6 L/100km fuel Moreover, 50% of the components economy,” the maker says. are made in Britain, with contracts “Yet it’s still a true Range Rover worth another £2 billion awarded to that’s agile, nimble, designed [for the 40 UK supplier businesses. city] and capable of tackling tough “It is a Range Rover with concept- climates and terrains.”

The all-new Ford Focus is a product of an ambitious plan.

will be expanded in mid2011 when the assembly plant in St Petersburg starts building the four-door and five-door models. New Zealand Focus models will be sourced from the lead European assembly plant in Germany.

The sedan has a drag coefficient as low as 0.295, compared to 0.320 for the current model.

The streamlined Focus shape and steeply raked windscreen contribute to less drag; best aerodynamics help reduce wind noise at speed and con-

tribute to fuel efficiency.

Noise, vibration and harshness (NVH) levels have been reduced and driving dynamics improved by the increased stiffness of the body structure, with 30% greater rigidity than the previous Focus model.

The global scale of Ford’s small car scheme makes extra technologies and features more economically viable for cars in this segment. Many Focus features are generally found only in larger, more expensive vehicles.

They include Active Park

Assist, cruise control with Adjustable Speed Limiting Device (ASLD), keyless entry with push button start and Adaptive Cruise Control.

Passive safety features include a new generation of advanced airbag restraint systems with driver and front passenger airbags, side front airbags and side curtain airbags for front- and rear-seat occupants, as well as an exceptionally strong and light steel bodyshell.

High strength steels comprise 55 per cent

of the body shell and more than 26 per cent of the vehicle structure is formed from ultra high-strength and Boron steels.

The Focus’ cornering stability and agility is better with an advanced Torque Vectoring Control system, fitted as standard. This behaves like a limited-slip differential to constantly balance the distribution of torque between the front wheels, which results in reduced understeer, improved traction and better turn-in.

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New Zealand’s Dairy industry has an international reputation for quality and reliability that is second to none.

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